HL Deb 01 November 2001 vol 627 cc1518-630

3.34 p.m.

Baroness Symons of Vernham Dean

My Lords, I beg to move that this Bill be now read a second time.

The Bill will allow the United Kingdom to ratify the Treaty of Nice, which was agreed by Heads of State and Government at the Nice European Council in December 2000. It was signed on 26th February this year, but it will not enter into force until it has been ratified by all 15 member states of the European Union. When that happens, we shall have put in place the final institutional reforms that the European Union needs to be ready for enlargement.

Enlarging the EU to take in the applicant countries of central and southern Europe has been a strategic aim of successive British governments for more than a decade. Britain is renowned as the champion of enlargement, but let us be clear: our Government want enlargement just as much as any of the candidate countries do—not just because we have strong ties with the candidates, although we do; not just because it is in their interests to be in, although we believe that it is; but because it is also in British interests to have them in. Enlargement is not a favour that we are doing the candidates; it is a favour that we are doing ourselves. Let me try to explain why.

First, we want enlargement because it is an historic prize. It will reunite Europe at long last after the bitter divisions of World War Two and the Cold War. It is extraordinary to think that a few years ago those countries in central and eastern Europe were still under the communist yoke of the old Soviet bloc. Enlargement is our opportunity to bury for ever the artificial divide that for too long disfigured our continent.

Secondly, we want enlargement because it carries for us, and for all the rest of Europe, immense benefits for the future. It will make us all richer, safer and stronger. It will be good for British companies, which will be able to benefit from access to the largest single market for trade and investment in the world, with up to half a billion consumers—more than the US and Japan put together. It will be good for British consumers, who, as a result of that huge single market, will have access to a wider range of goods at cheaper prices. It will give us more allies to help us to counter the cross-border threats that we all face—organised crime, drug trafficking and illegal immigration; and it will give us a cleaner environment, because candidate countries are making major improvements in their air and water quality to meet EU standards.

After the horror of 11th September, we need enlargement more than ever. If we are to defeat the terrorists, we need the bigger, stronger Europe that enlargement will deliver and the practical co-operation across the continent that enlargement will allow.

A bigger EU will mean a stronger European defence policy, too, with more troops able to handle the peacekeeping, humanitarian and crisis management operations that Europe may need to run in the future. It will be a European Union better able to stop the kind of instability, on its borders or further afield, in which terrorists can hide and thrive.

The Treaty of Nice is necessary to make enlargement a success. Twelve countries are now negotiating to join the European Union. A 13th, Turkey, has been confirmed as a candidate for accession. Some have argued that the Nice Treaty is not necessary for enlargement. Many of your Lordships are no doubt ready to brandish a quote from the Commission President Romano Prodi to substantiate that claim. But imagine how an EU of up to 28 member states would work without reform. Unreformed, it would be paralysed. Decision-making would be extraordinarily difficult and often impossible. That is not in British or European interests. The remarks by the President of the Commission that Nice was not legally necessary were, of course, widely reported. What some people were less keen to report, however, was Romano Prodi's later comment that Nice was politically necessary for enlargement.

Let us be in no doubt: without this treaty, enlargement would cripple the EU, not enrich it. That is why we need the Nice Treaty. It reforms the institutions and procedures of the European Union so that it can operate efficiently and effectively after enlargement.

It reforms the Council's decision-making procedures so that the larger member states—Britain included—will have more voting weight in the enlarged Union. That is right. Without that reform, we would reach a point at which countries representing a minority of the European Union's population could outvote countries representing a majority of that population.

The treaty streamlines the Commission, and that is right, too. Without that reform, the number of Commissioners would grow to a point at which the Commission college would resemble a mass meeting. It introduces more qualified majority voting. Again, that is right because, without it, an enlarged Union would grind to a halt. It simply cannot make sense to hold up the business of the European Union in order to achieve unanimity for measures such as the appointment of members to the Court of Auditors.

The treaty makes it easier for groups of member countries to act in areas covered by the EU treaties without requiring all member states to do so. Again, that is right. An enlarged EU must have that flexibility if it is to thrive and accommodate the differing interests and capacities of a diverse membership. We set out to deal with all those problems at Nice, and we believe that we did so.

However, we set out to do more than simply open the door to enlargement by reforming the European Union's institutions. This Government also sought to ensure that the measures that we agreed were of direct benefit to Britain. Here, too, we believe that we succeeded.

We secured more voting power for Britain. For the first time since we joined what was then the Common Market in 1973, we won an increase in the United Kingdom's voting weight. Our voting power in the Council will go up relative to smaller and medium-sized member states. For example, where previously we had three times as many votes as Denmark, under the Nice arrangements we shall have four times as many.

At Nice we also succeeded in securing our objective of a leaner and more efficient Commission. From the year 2005 there will be one Commissioner per member state. Once the EU has 27 members, a decision will be taken to cap the number of Commissioners at a number below 27, and we shall move to a system of equal rotation. That prevents the Commission from becoming unduly unwieldy and unfocused.

Nice introduces other reforms to the Commission that we in the UK have sought, such as the explicit right of the President to sack a Commissioner if necessary. We secured more qualified majority voting in areas where that is in Britain's interests; for example, in measures to enhance the single market, open up trade in services or improve the efficiency of the European Court of Justice. Majority voting has been vital to the advancement of the UK's interests. Without it, we could never have built the single market.

But, before Nice, we also made clear that there were certain areas of vital national interest where we were not prepared to accept majority voting and where we would insist on retaining unanimity—that is, our veto. We spelt out those areas—tax, social security, defence, the EU's own resources (its revenue), border controls and treaty change—before the negotiation. And we maintained our veto on all of them, just as we said we would.

We have also delivered another long-standing United Kingdom objective—a more flexible European Union. We agreed at Nice on new arrangements which will make it easier for groups of member states to move ahead in areas covered by the EU treaties without requiring all to do so. We achieved that through amendments to the so-called "enhanced co-operation" arrangements which will make them easier to use.

But, in return for making them easier to use, we insisted on proper safeguards to protect the interests of member states which may decide to remain outside a particular activity. The safeguards are that enhanced co-operation must, indeed, be a last resort; it must remain within the existing powers of the treaty; it must not distort the single market; it must be compatible with the acquis communautaire and not become part of it; and enhanced co-operation may not harm the rights of those who choose not to participate. Therefore, let us be clear. Nice is not a price that we must pay for enlargement. Nice brings its own substantial benefits to the UK.

Of course, the treaty has its critics. Recently, we have heard three specific criticisms of the Nice Treaty. The Opposition raised them during debate on the Bill in another place. Perhaps I may now address them with your Lordships. The first charge is that Nice failed to reform the common agricultural policy. Indeed, that is a criticism that I have heard from a number of your Lordships in the past. Let us be quite clear. The common agricultural policy is what it says it is: it is a policy of the Union. It is the details of the policy that need reform and not the modest references in the treaties. One does not need treaty change in order to reform the common agricultural policy. Indeed, mixing up CAP reform with the messy business of IGC negotiations would make beneficial reform less and not more likely.

However, the important point is that we are reforming the CAP. An important package of reforms was secured by the Prime Minister at the Berlin European Council in 1999. That was an important step forward. As a result, spending on the CAP will decline in real terms from the year 2002. In the 1980s, spending on the common agricultural policy was more than 60 per cent of the European Community budget. In 2001 it will be approximately 45 per cent.

Of course, these reforms do not go far enough. We need to go further towards a comprehensive reform of the common agricultural policy. The Government have made it clear that that is what we want to see. We want to reduce the overall cost of the common agricultural policy, and we want to align European Union and world prices more closely; and we want to target support measures better on the rural economy and the environment. Our objective is to secure changes that will benefit consumers, taxpayers, the rural economy, the farming community and the environment. There is recognition within the European Union of the need for reform, and we are discussing with our partners how best to achieve it.

Lord Clinton-Davis

My Lords, before my noble friend continues, perhaps she will cause her mind to reflect upon the position of the applicant countries. In her view, how would they consider a rejection of what she has so eloquently described as the benefits of Nice? Also, how would they regard the issues not being dealt with at all?

Baroness Symons of Vernham Dean

My Lords, I agree with my noble friend that the applicant countries would find it extremely difficult to understand such a rejection. I hope to be able to persuade your Lordships that such a rejection would be not only against the interests of the applicant countries, many of whom are close allies of the United Kingdom, and not only against the interests of the members who are already part of the European Union, but very much against the interests of this country as well.

Perhaps I may complete my remarks on reform of the common agricultural policy. The point that I want to make is that reform of the CAP must go ahead in parallel with enlargement. Insisting on CAP reform before enlargement would risk delaying enlargement and making it hostage to the member states which, frankly, are least enthusiastic about such reform.

The second charge that we heard in another place was that the "No" vote in the Irish referendum on Nice means that we should scrap this Bill and the Nice Treaty itself. The Government disagree with that assessment. Of course, we respect the outcome of the Irish referendum. It is fundamental to the democratic legitimacy of the EU that changes to the founding treaties do not take place until and unless the constitutional procedures of all 15 member states have been satisfied. If Ireland does not ratify the Treaty of Nice, it will not enter into force. The position is as simple as that.

The Irish Government have made clear that they will need to consider how to respond to the "No" vote and, in particular, how to address the issues of concern which prompted their electorate to vote as it did. The other 14 member states have said that they are ready to help Ireland to find solutions without renegotiating the treaty. In the meantime, all member states, including Ireland, have agreed that we should proceed with the enlargement negotiations and our own ratification procedures. Only by doing so will we be ready by the end of next year to admit new members. That is why it is important that we in Britain, and all other member states, continue with our own ratification procedures.

I recall in passing that the Opposition, when they were in government, were confronted with a similar situation: the Danish "No" to Maastricht. They did not practise what some of them now preach. They did not tear up the Maastricht treaty or seek to renegotiate it. On the contrary, they worked assiduously with the Danes to clarify what the treaty did and did not mean, so as to permit a second referendum, in which the Danish people voted "Yes".

The third charge that we have heard from the Opposition is that Nice itself is not really necessary for enlargement. As we made clear in another place, it would be theoretically possible to proceed with enlargement without Nice—but only in theory. In practice, Nice is necessary for enlargement. It is necessary, first, because the enlarged EU that we want cannot work effectively without the changes that Nice makes to its institutions and procedures. Secondly, it is necessary because all the other member states are agreed that it is Nice that opens the way for enlargement, and that only when we ratify Nice will we have completed the institutional changes that are necessary for enlargement.

The Treaty of Nice will deliver the stronger, more prosperous and bigger European Union that I believe we all want to see. That is why the other member states support Nice. That is why the candidate countries support the treaty. That is why this Government support it; and that is why I urge noble Lords to support this Bill today.

Moved, That the Bill be now read a second time.—(Baroness Symons of Vernham Dean.)

3.52 p.m.

Lord Howell of Guildford

My Lords, I begin—not, I hope, improperly—by referring to the speaker who comes directly after me in this debate; namely, the noble Baroness, Lady Williams of Crosby, who I understand has just been elected by a large majority to lead the Liberal Democrat group in your Lordships' House.

Noble Lords

Hear, hear.

Lord Howell of Guildford

My Lords, I am sure that we all wish the noble Baroness well. She proves that there is always a future in politics, which is reassuring for some of us!

I want to raise a procedural point. The Bill was approved with the usual very large majority on Third Reading in another place. It is not our custom or job to oppose it on Second Reading. It is, however, our job to scrutinise, to seek to amend and to improve it as best we can; perhaps we could also make it a little more accessible to the millions of people who, although they may not know it, will be affected by some of its provisions. That is what we seek to do.

I suggest to noble Lords that there is nothing whatever that is anti-European in the constructive but undeniably quizzical approach that we take. On the contrary, we believe that by looking critically at the Treaty of Nice and the Bill—and at the Bill's widely acknowledged ineffectuality, to which I shall come—we are the better Europeans for our scepticism. We are sceptical about certain current trends in Europe and we understand better the true dynamic and requirements of the modern European nexus and what is our best place within it. So I may strike a slightly jarring note. When people describe those of us who have spent half a lifetime committed to greater European unity and freedom—and whose parents and grandparents fought for and, in some cases, gave their lives for, this unity—as being "fundamentally unpatriotic" and "isolationist", that shows a deep ignorance among those critics and it is also insulting. I cannot understand why the Foreign and Commonwealth Office allows its Ministers to utter such nonsense. It certainly does not help the tone of the debate. I am sure that we shall hear none of it in your Lordships' House this afternoon. I am afraid that the situation was different in another place.

Baroness Symons of Vernham Dean

My Lords, I hope that the noble Lord is not imputing those remarks to anyone in your Lordships' House.

Lord Howell of Guildford

My Lords, am most certainly not. I am sorry if there was the faintest suggestion of that. The remarks were made some days ago by a Minister of State who does not sit in your Lordships' House.

I turn to the treaty and the Bill. First, although the Minister made great efforts to extol the treaty's virtues, it has to be admitted objectively that it had a pretty poor reception, has been deeply unpopular and has been widely criticised throughout the European continent. The most frequent phrase that we hear about it from many sides is that it was a botched job. I refer to the words of Phillip Stevens, the leading columnist of the Financial Times, which is certainly not in any sense a Europhobe paper. He wrote that the Nice agenda was a Eurocrat's dream and a citizen's nightmare. The Centre for European Reform here in London—-it is an impeccably pro-European organisation that maintains a very good output of work—spoke of widespread dissatisfaction. The Prime Minister himself sighed and said, "We can't go on like this". It is a friendless treaty and our contention is that it represents a tragically missed opportunity for Europe to change direction after many years of success and achievement. We are now coming to a time at which we need an entirely new approach.

My second point is that, despite what has been said, the provisions are clearly not the unlocking key to the process of enlargement that the noble Baroness and other Ministers have suggested. We take that view for various reasons. First, the enlargement content of the treaty is pretty marginal—it occurs mainly in the annexed declarations and protocols. There are other ways forward—via accession treaties, as has been done previously. Secondly, we come to the views of Mr Romano Prodi, who is much criticised—sometimes, I think, unfairly so. I shall read all of the quotation that he gave to, I believe, the Irish Times. The noble Baroness was right—we are going to produce this quotation from the President of the Commission; it is very important. He said: Legally, ratification of the Nice Treaty is not necessary for enlargement. It is without any problem up to 20 members"— that is an important qualification— and those beyond 20 members have only to put in the accession agreement some notes of change, some clause. But legally it is not necessary". There are those who make claims about what is necessary for the next stage of enlargement, although we do not know how many members will be involved; Mr Prodi's comments show that those claims fall o the ground. Either that is the case or the President and his advisers do not know what they are talking a bout; in this case, I believe that they do.

Thirdly, as the noble Baroness fairly and rightly said, the treaty obviously did not address the common agricultural policy. She argued that that is not a treaty matter but a technical matter. It certainly has to proceed in parallel; it is a potential torpedo that could sink or seriously delay enlargement. It is wrong to suggest that it is just the Nice procedures that are unlocking the gate to the flow of procedures that will lead to enlargement.

Fourthly, we on this side go further and suggest that the treaty as it has turned out actually stands in the way of enlargement by adding numerous centralising commitments that have nothing to do with enlargement, by pushing forward various questionable projects and by increasing generally Community activism in areas in which people question whether that is the proper role of Community institutions. I point, for example, to Article 137, which is full of new adventures for the Community in areas in which I should have thought the national competences were perfectly adequate. We should have accepted a treaty that simply contained provisions about the mechanics for the weighted majority of the Commissioners, and so on; that would have involved a perfectly competent but perhaps not a vital treaty. We forecast that such tagging on of additional measures—I shall come to some of them in a moment—would slow down acceptance of the more relevant aspects for enlargement. That is exactly what happened with the Irish referendum. It had the effect of slowing down the whole process. If the intention was to get the measures through quickly in order for enlargement to go ahead, that intention was frustrated by the Irish referendum. There is bound to be delay; that is what we said would happen, and it has. Why has it happened? All sorts of reasons were put forward in the Irish referendum case, but we believe that one of the reasons was the attempt to ram into the treaty, which should have been about paving the way to enlargement, matters such as 29 new areas of qualified majority voting, which in the context of modern Europe is going the wrong way.

I am never totally sure whether the Government regard the QMV provisions in the Nice Treaty as so important that we are wrong to question them or unimportant and therefore not worth questioning. The provisions actually come out as a pretty mixed bag. One distinction might be between QMV arrangements that help to create a single market—which have done so in the past, so we would not immediately dispute them—and those that are designed for something quite different, such as building a European Government and a single authority of a central, and in our view outdated, kind. Even market building QMVs can be devastating, as witnessed by the ruling that is killing the London art market at present, or the ruling on workplace consultation, which was bad enough, but made worse by the efforts of the European Parliament, even with the heroic but fruitless resistance of Conservative MEPs.

At root, we believe that the Nice thinking is based on the flawed perception that Europe can be shaped simply by replicating the nation state on a larger scale. That is what lies behind the passionate search for identity, for a so-called Demos, for all the related symbols—a flag, a hymn, an autonomous military force, a currency, a constitution, a projection of Europe on the world stage and a single jurisdiction.

Yet as Frank Vibert of the European Policy Forum argued recently in a brilliant book, those are false goals, guaranteed to undermine European stability and cohesion. As he pointed out, instead of following the tramlines suggested at Nice, the task of organising Europe's future should be quite different from organising the traditional state. Europe's prime need now is not for more central power but more legitimacy. Trust and democratic faith in the whole project needs to be restored as it has been draining away. The time is up for élite-driven initiatives with national involvement as an afterthought.

That means a flexible Europe that is more tolerant of diversity. It means much more involvement by national legislatures in the scrutiny of initiatives at a much earlier stage, before they go to the Council of Ministers or become legal instruments. It means re-involving national Parliaments seriously, which of course means giving them power.

Everyone talks about a citizens' Europe—there was much talk of that at Nice, but a citizens' Europe means handing power to citizens and not just placebos about more transparency and better communication. I agree that all that may be very tiresome and may mean prolonged arguments in various national political settings. It may mean loss of the famous momentum, but the other side of the coin is more democracy and openness, which European institutions really need if they are to carry weight both within and without.

At Nice there was a distinct flavour of the big nations muscling in at the expense of the smaller ones. The principle of double majority by both weighted vote and population weaken the negotiating position of smaller states. Yet the smaller states once looked to Britain for their guardianship and patronage. Indeed, the founding principles of the European Community related to the idea of all states being equal. The move away from that is not good, and it should be recognised that that is a trend in the wrong direction.

As for enhanced co-operation, the Nice Treaty recognises the need for that by removing the veto, or brake, on the idea of a core of countries getting together. That could work out well, but if it is not handled carefully, it could lead to a two-core Europe with the outer group being dragged along towards integration or exclusion. That is not the path to European unity either.

As for the common foreign and security policy and common defence—items that are examined and promoted in the treaty—there too, it seems that the limits have been pushed somewhat far. Far from solidifying a common European approach, the recent world terrorist crisis has obviously led to back-biting and quarrels. The Belgian Foreign Minister said—this is most unfortunate—that the Prime Minister, Mr Blair, was too bellicose and that his work for the coalition left, a bitter taste in the mouth". Such comments are not only grossly unfair to the Prime Minister, who by common acclaim has fought a marvellous battle for the coalition, but a miserable waste of European energies. There is no better example of the need for flexible and layered relationships between countries and allies and the extreme danger of an over-institutionalised common foreign policy. A "me-too" foreign policy from Brussels adds nothing whatever to the network of coalitions and alliances which this crisis demands.

Lord Wallace of Saltaire

My Lords, I am now a little confused. I had understood the noble Lord to be saying that Britain should stand up for the rights and influence of the smaller states within the European Union, rather than giving the larger states the lead. His criticism of the Belgians suggests the opposite. Does he think that the larger states should lead on common foreign and security policy or that we should let the smaller states have the undue influence that he was suggesting rive minutes ago?

Lord Howell of Guildford

My Lords, the concept that I was trying to convey was that foreign policy—certainly in times of crisis, though perhaps not for humdrum everyday events—should be shaped by the pattern of historic relationships, alliances and coalition, which can carry things forward, such as the present relationship between London and Washington. The attempt to latch on to that a fifth wheel of a policy that runs along behind is a waste of energies.

Earl Russell

My Lords, I hope that the noble Lord is not suggesting that historic patterns are immutable.

Lord Howell of Guildford

My Lords, no, I would not do so. Nevertheless, they are significant. We are all shaped by our history to a considerable extent.

The European Charter of Fundamental Rights has also been given a glad hand by the treaty document. We have recently seen the dangers of extending rights-based doctrines too far into national life at the expense of political authority. The charter is far too intrusive with its assertion of rights to detailed matters such as placement services, environmental protection, consumer protection and so on. Those are admirable aims, but are they the business of the Union and will the charter be mandatory? If not, what is the point of their incorporation into the treaty?

There will be many other points to discuss as we consider the Bill in Committee. There is the question of the funding of European political parties. How can we be sure that the moneys are not used for national political activity, which Declaration 11 of the treaty forbids? These are dangerous waters and we shall need much more openness about the way in which the regulations governing these areas are made.

Out of the treaty there looms the Snark-like search for a constitution for Europe. The forthcoming summit in December at Laeken will set the clock ticking on this, and a so-called convention will prepare the ground for 2004. All democrats should view that with some foreboding. The whole idea of constructing a pyramid or hierarchy of competence is inappropriate in the network world into which we are moving. Even the lawyers realise that trying to push all the treaties into one new treaty—a constitutional document—is a hopeless case. Generally the treaty fails to reflect the fact that the whole of Europe is now in deep transition, that the Monnet era is over, and that much of the Community method has now been invalidated. Genuinely good Europeans should be seeking other ways of carrying forward European ideals.

The other day the Home Secretary said this: If we do not have a system where people are clear on who makes decisions—and why they are the people who make the decisions—democracy fails". That may be true in our own society—Mr Blunkett was criticising the growing power of judges—but it applies 10 times more strongly in the institutions of the European Union. Until that lesson is learnt, the great cause of Europe will not prosper and neither the Nice treaty, nor this Bill, will take us one inch along the way to the new common ground and the restoration of trust in the European institutions that is so badly needed.

4.10 p.m.

Baroness Williams of Crosby

My Lords, I thank the noble Lord, Lord Howell of Guildford, for his kind remarks on my accession to the leadership of this party, following the distinguished leadership of my predecessor, my noble friend Lord Rodgers. Perhaps I can repeat the famous remark of the well-known actress, Rita Hayworth, who said I am not sure if I have a future, but I sure have a past". Perhaps I may take up the noble Lord because I read what is happening in the world at the moment rather differently from him. I cannot help noticing that one of the great problems we confront in this and many other countries, is the profound asymmetry between the challenges presented to us, especially the economic, environmental and sometimes the military challenges, and the structure of politics which is still essentially the structure of an ancient state—what academics calls the "Westphalian system".

We can all clearly see that the exigencies of those challenges are compelling us to think beyond the nation state in ways that take us towards closer cooperation and in some ways also towards regional integration. That is not only characteristic of Europe, though Europe was the pioneer in this respect; it is now notably true ranging from NAFTA in North America and Mexico, through to Mercosur in Latin America and elsewhere. Everywhere in the world there is an attempt to try to create political structures that can deal with the challenges of globalisation that confront us.

If we look at the way in which British governments have eventually confronted these challenges. however reluctantly, it has to be said that we confronted the trade challenge through the Single European Market Act at the time of Mrs Thatcher, as she then was; we confronted the issues of speculation through the Delors committee on monetary union; and we confronted the problems of what appeared to be the difficulties presented by the former Republic of Yugoslavia by creating the concept of the common foreign and security policy.

In every instance, whoever the government of this country may have been, they have been compelled to address the real issues that confront us and in some cases that has meant addressing those issues by closer co-operation and even integration with other like-minded countries. I say that because, in the long weariness of discussing the Nice Summit and the Nice treaty, we tend to forget the sheer historic scale of what that treaty is all about.

It is just worth saying that the concept of uniting western and eastern Europe in a single great market with a single great structure and framework of political co-operation, is a major historic goal and one that will shake the beginning of this new century. We are continually liable to be led away by the endless trivialities of the issues of the treaty from that huge historic objective. I simply want to underline that.

The Treaty of Nice, as such, is not a major treaty. My right honourable friend in another place, Menzies Campbell, described it as being at most a framework treaty; and that is correct. It falls far short of the historic ideal about which I spoke because it is not intended to do more than make possible the achievement of that goal. But I have to confess that, with respect to the Shadow Foreign Secretary who spoke at Third Reading in another place, Mr Michael Ancram, unavoidably one has to recognise that if we are to meet the timetable pledged to the candidate countries of eastern Europe, there is no alternative to the Nice treaty. Following the road of an accession agreement and an accession treaty, by every one of the candidate countries, would be inexplicable and incomprehensible to those countries. They have already waited much too long. At every point we have seen further delays in the date at which they are intended to join as full members of the European Union. In this country there is no profound division between the parties of the desirability of that aim. The Shadow Foreign Secretary said at Third Reading in another place, we remain strong supporters of enlargement";—[Official Report, Commons, 17/10/01; col. 1184.] and I believe him. The noble Lord, Lord Howell, said much the same thing. But those who will the ends must will the means, and I can see no more effective means, despite the fact that the Nice treaty has many flaws, than this treaty as a way to bring that about.

I agree with the noble Lord, Lord Howell, that the treaty of Nice is roughly as obscure as the statement of a brilliant lawyer with a guilty client. It is profoundly obscure. We must find ways—I commend what the Government are suggesting for the IGC of 2004—to simplify what has become a tangle of briar forests of almost incomprehensible phrases. As a simple test I gave a small section of the Treaty of Nice to my reasonably intelligent family, one of them being a lawyer, and they all found it virtually impossible to discover what it meant.

The second objection raised by the Shadow Foreign Secretary at Third Reading in another place, to which the Minister referred, concerned the common agricultural policy. Let me, as strongly as I can, echo and agree with what she said. It would be quite wrong to try to present a candidate country, at least one of whom is heavily dependent on agriculture, with a fait accompli as part of our attempts to resolve the issue at the stage of the Nice treaty. It has to be a negotiation.

It is easy simply to dismiss the common agricultural policy and in many ways it is a bad policy. But anybody who is concerned with the agricultural community in this country, or any other country of Europe, recognises that we have to find alternative structures that enable our environment to be preserved and our rural areas to be cared for. That alternative will have to depend on some element of public support and cannot simply be limited to the destruction of the common agricultural policy with nothing in its place.

I for one do not want to see again in Britain the kind of desolation that occurred in the years between the wars. We have to think of proper ways of recognising farmers as stewards of our rural environment and as having many roles to play other than simply producing the most amount of crops at the lowest possible cost.

The third objection raised in another place was that the European Union, and in particular the Nice treaty, was not an effective mechanism for dealing with terrorism. While there were a number of things that the noble Lord, Lord Howell, said with which I agreed, on this he was uncharacteristically less than generous. On 21st September, with an amazing degree of speed and determination, the European Union decided on a range of steps to be taken against terrorism which went all the way from moving extremely fast on extradition procedures, on speeding up the directive with regard to money laundering and on recognising the importance of closer intelligence sharing between the countries of the Union than one could ever have expected, given how slow some other procedures have turned out to be.

It is important to put on record our appreciation of what the fellow members of the European Union have done to try to support Her Majesty's Government and the government of the United States in dealing not only with the symptoms, but also with the sources of terrorism. I do not need to say to noble Lords in this place, who are extremely knowledgeable, that unquestionably in parts of eastern Europe, the drug trade, the trade in people trafficking and the trade in money laundering has been deeply disturbing. Nothing could be more helpful than to bring those countries within the ambit of a European Union in which they can, at long last, feel reasonably secure.

I turn to the Minister's comments on institutional change and shall briefly mention one or two. It will not surprise your Lordships to know that we on these Benches strongly support the extension of co-decision making. We should like to see greater extension of co-decision making; in other words, the willingness of the European Parliament to go along with directives, and that they should fall if it is not so willing. We should like to see that extended much more widely because we believe that democracy has to be at a European level as well as a t a national level.

In that context I issue a brief warning. I was disturbed by the willingness at the Nice discussions to accept yet a further increase in the size of the European Parliament. Can the Minister reassure the House that the further increase in size will not be followed up as a result of expansion? Frankly, a legislative chamber of over 700 members is unlikely to be effective and could rapidly turn into a mob scene.

My second point on enlargement with regard to institutional change concerns the question of qualified majority voting, which we have discussed in this House. We on these Benches accept that an extension of qualified majority voting is an essential part of making a larger community work. The Minister will not be surprised that in that context I want to raise one problem about which we feel strongly. I refer to Article 229A. The noble Baroness does not need to look up the treaty. I shall continue to paraphrase it momentarily. Article 229A concerns the agreement that the affirmative procedures will be sufficient to corroborate decisions made by the Council of Ministers.

As I understand it, at present that particular proposal relates to only the mechanisms of establishing a European patent. We understand the importance of that. However, we seek an assurance that that would be seen as an exceptional procedure, not as a first step towards a general procedure of agreeing to decisions made by the Council of Ministers without a procedure through the European Parliament, which simply takes the form of an affirmative procedure in this House.

Before I conclude, I should like to mention two other matters. First, the substantial extension of the part of the European inter-governmental treaty dealing with justice and home affairs raises great questions of accountability. My noble friend Baroness Ludford will speak about that in greater detail. It is important that we in this House should recognise that there has been a steady movement of the United Kingdom Government towards opting into J1–1A, especially with regard to visa and asylum policy.

That requires, in terms of democratic accountability, that this House and the other place should have a full opportunity to debate the gradual shift of visa and asylum policy from the United Kingdom to the European Union. That is not because there may not be arguments for it, especially in the case of visa policy, but because it should be transparent, open and fully debated as it takes place. There are few better tests of the commitment of a country to civil liberty as well as to law and order than asylum policy, immigration policy and visa policy. We on these Benches believe that it is crucial for those matters to be fully debated before any final decision is made about where they should lie.

Finally, I refer to the IGC that is to take place in 2004. We on these Benches believe that a European constitution, far from representing a further step towards an unclear integration, would be the best possible way of defining correctly the responsibilities of national government" and protecting them as the responsibilities of national government and of the European Union. I can think of few ways of better confusing our citizens than for that distinction to be perpetually blurred as it is today.

We should also like to see—as well as a move towards a constitutional structure of competencies, an array of competencies between the national and European levels—a full citizens' debate in this country running up to 2004, which among other things would enlighten the discussion on the simplification of European treaties and, we believe, on the role of national Parliament.

I conclude by saying that we on these Benches wish to see good British citizens who are also good European citizens. The crucial key to that is that our citizens are allowed to discuss, consider and debate European issues with the kind of freedom and thought that they bring to issues about national policy.

4.25 p.m.

Lord Grenfell

My Lords, after listening to the speeches of my noble friend the Minister and the noble Baroness, Lady Williams of Crosby—I warmly congratulate the noble Baroness on taking the leadership of her party in this House—those of us in favour of the ratification of the treaty and the passage of the Bill must be sorely tempted to say, "We rest our case". There is precious little to add. None the less, with a desire to express my support for what my noble friend on the Front Bench has said, I shall venture a few remarks.

Winston Churchill once said of Stanley Baldwin, rather unfairly, that he occasionally stumbled on the truth but would rapidly get to his feet and hurry on as if nothing had happened. Her Majesty's loyal Opposition have certainly stumbled on the truth that a failure to ratify the Nice treaty will have serious consequences for the enlargement of the Union to which, they have told us often—I have no reason not to believe them—they are firmly attached and fully supportive. Yet they hurry on down that path of opposition to the treaty as if it would have no consequence for enlargement. Of course, it does, as has already been said by both my noble friend and the noble Baroness, Lady Crosby.

What are we to make of that? The Official Opposition, who rarely miss an opportunity to criticise Romano Prodi's conduct of the presidency, now, somewhat ironically, pray in aid his statement following the Irish referendum that ratification is not necessary for enlargement. They seize on that technicality's narrowly legalistic validity but wilfully ignore the political reality, which is that enlargement cannot go ahead as planned and agreed without the passage of the treaty. Those opposing ratification appear to care not one jot that their objective puts at high risk the target date set for 1st January 2004 for completing the accession of the next wave of entrants.

This modest treaty does what should have been done at Amsterdam to make enlargement feasible, both for members and accession states, in a single negotiated document. Opponents are presumably content to see the whole process drawn out by a one-by-one negotiation with each member state within the framework of the individual accession treaties. Why is it that the opponents to the Nice ratification, whose commitment to enlargement I have not so far doubted, insist that this much longer drawn out, more cumbersome path to a successful and timely enlargement is taken instead of the more efficient process offered by the treaty? It is blindingly obvious why that is. There are reforms in the treaty which, as Eurosceptics, they do not like and they wish to be accommodated on those issues, even though it is to the serious disadvantage of the accession states. That is not mere cynicism; it is selfishness. Let us be blunt about that.

The opponents of the treaty have seized on a treaty that essentially is a facilitating treaty and have erected it into a vast conspiracy to further federalist aims—aims that find no resonance whatever in the text of the treaty. The loyal Opposition is, therefore, using the ratification of this treaty as a Christmas tree on which to hang their every Eurosceptic objection to the European project. Not content with dismissing the treaty as failing to deliver on all the issues left over from Amsterdam, they even vilify it for failing to deliver on objectives that the treaty was never intended to address.

Heaven knows, we all want to see a reform of the CAP—that is essential—but as my noble friend has pointed out, no rational mind ever sought to lumber this treaty with the reform of policies that required no treaty change. As long ago as the Berlin Council, CAP reform was given a modest push. It is being, and must be, pursued on a separate track. To make enlargement conditional on a prior CAP reform is to throw overboard the 2004 target. With an eye to the next financial perspective following 2006, enlargement is a powerful spur to CAP reform. However, to make CAP reform a condition for enlargement is to make enlargement its hostage, with all the uncertainties and delay that that implies.

The Conservative Opposition claim that Nice has more to do with deepening integration than with helping enlargement and that it could be a disincentive to enlargement, as the noble Lord, Lord Howell, suggested. Maybe the pleasures of the Summer Recess dulled my senses, but I do not believe that it dulled them that much. I certainly do not recall any cacophony of claims from the accession countries that the treaty had dulled their enthusiasm for accession to the Union as soon as possible—quite the opposite.

Why do the opponents claim that the modest extensions to QMV are eroding our sovereignty? They talk much of their devotion to flexibility within the Union—the word "flexibility" came up again and again in the other place—yet, ironically, they would maximise the use of a procedure under which a single country can block a sensible proposal. Is that flexibility?

At Nice the Government agreed only to extensions that are in our real interest. Where they manifestly are not, they would most firmly oppose them. Opponents of these sensible extensions of QMV refuse to judge each extension on its individual merit. They are simply against extension, period. They seem to forget that without QMV the single market would have been a non-starter. Their hostility to the extension of QMV on principle is, to say the least, unintelligent. By what twist of logic do they see enhanced co-operation as the antithesis of their famous "flexibility"? In an enlarged Union, not everyone can do everything at the same time. The treaty has made the provisions already enshrined in the Amsterdam treaty more practical while strengthening the safeguards against its use in ways that would harm the legitimate interests of nonparticipating states. What could be more sensible than that?

I could continue in this vein, but many noble Lords are yet to speak and already many points have been well made. I hope that I have reinforced the points made by the Minister. The agenda of the opponents of Nice is perfectly clear. As was said in another place, if this were an à la carte Bill, they would pick the bits that they thought were better for Europe and say no to the rest. In other words, they would vote against the Bill because parts of it did not please them. In simple language, that is throwing out the baby with the bath water.

The treaty is not a perfect treaty. Show me one that is. I have never seen a perfect treaty. But it is not a botched job. I have serious doubts about at least one part of the treaty: the reform of Council decision-making. The system is now hopelessly complex and risks making the reaching of decisions even more difficult than before. Maybe at 4.30 in the morning of Monday, 11th December, when I suppose they were all a little tired, those responsible did not quite know what they were doing. The point is that such shortcomings can be remedied; there are means of doing so. The 2004 IGC offers a perfect opportunity and I hope that the preparatory convention, which will be set up at Laeken next month will address that need. I hope that there will be the political will to realise that room must be created on the agenda to straighten out the decision-making process that was not successfully dealt with at Nice.

Do not throw out the baby with the bath water. That is not the way to proceed. Such a desperate act may appeal to people within a party that is riven with dissension about Europe and that is clinging precariously to its ideological hang-ups about the European project. In the world outside, in the world of geo-political realities, such a desperate act would be simple lunacy.

4.36 p.m.

Lord Howe of Aberavon

My Lords, I shall follow the example of others and commence with a word of congratulations to the noble Baroness, Lady Williams, on her emergence in such a distinguished position. I look forward to hearing her in that enlarged capacity on future occasions.

With great regret, I offer the House an apology because I may not be able to be present for the windup of the debate. I have a long-standing commitment with the former US Secretary of State, with whom I worked in partnership for some five years, George Schultz. I hope that that may be a reasonable, if not wholly convincing, alibi.

I thank the Minister for the extremely lucid way in which she presented the essentials of the argument that we have to consider. I cast a rather quizzical eye at the noble Lord, Lord Grenfell, for the disagreeable caricature that he painted of my party. The position is nothing like as grave as that, as we have seen from the way in which my noble friend Lord Howell of Guildford addressed the issues before us. I hope that some of the earlier expressions of profound hostility that characterised the last election campaign may represent the high watermark of opposition on that scale to the institution to which my party still wishes us to belong. We cannot overlook that essential feature.

As every speaker has identified, there are reasons for being anxious about some aspects of the treaty. One example given by my noble friend Lord Howell of Guildford is the charter of fundamental rights. A characteristic feature of the Union is to generate texts of that kind with perhaps a benign intention, which acquire a life of their own and find their way towards the status of Community law. That is one example which is highly undesirable.

I believe that the treaty itself and the Bill now before us are necessary, and necessary now, although I would not go so far as to say that I welcome the provisions as they stand. That is much too emotionally enthusiastic a word for such a complex farrago of words. As has been said already, the important point is that ratification of this treaty and its endorsement by this Parliament signals a necessary and important step towards enlargement. That, after all, has been the long-declared objective of every party in this country, clearly reaffirmed by both Front Benches in both Houses, even today.

I shall not go over the ground covered by the Minister in that respect, except to emphasise that the treaty is clearly important in its own right because of the prospective changes that it makes so far as the United Kingdom is concerned. The re-weighting of our votes is of crucial importance; the reconstruction and the limiting of the size of the Commission is also important. I do not believe that I am wrong in recollecting that we proposed giving up our second commissioner when my noble friend Lady Thatcher and I circulated documents as long ago as 1985. I see a nodding assent from wearied former officials on the other side of the House who are now noble colleagues here.

One other reason for rejecting the invitation to set aside a treaty and to proceed country-by-country is the importance of those provisions already agreed in the treaty. If we were to set them aside, as it were, and begin to try to reconstruct them country by country, we would risk opening either a can of worms or Pandora's box. One way or another, we would not know what might happen.

The picture presented of this treaty being a hugely centralising, mammoth-creating, omnivorous document greatly exaggerates its nature—I part company on that point with my noble friend Lord Howell of Guildford. Of all the treaties that we have had to consider relating to the European Union, it is probably the least centralising and the least integrationist. Of course there is room for argument about aspects of it, but, granted the difficulty of concluding negotiations in the fog and miasma of European Councils as they run into the night, what has emerged is not a bad compromise. I am anxious for the Bill to be passed.

As I recall, for many years at Conservative Party conferences back in the 1980s, long before the iron Curtain was lifted, we welcomed with enthusiasm leaders of centre-right parties throughout Europe—those who were able to reach us—from beyond the Iron Curtain and everywhere possible. All of them in the following years have been looking forward to the opportunity to join the European Community, now the European Union. Whatever the subtleties of the argument against ratifying this treaty now, it would be hard to explain to them that this party, which was always looking forward to welcoming them, no longer wanted to do so, or appeared to be rejecting their advances.

I turn to two or three of the wider topics that have been discussed. The prospect of yet another intergovernmental conference, looming, as it does, three or four years over the horizon—whether or not preceded by a preparatory convention—does not excite me with enthusiasm. I wish that I could share the optimism of the noble Baroness, Lady Williams, that somehow from that will emerge a constitution shining bright and pure, as though it had come from North America in 1776. She may remember the clarity of the Stuttgart declaration of 1983, a text produced by academics for academics or political enthusiasts but which has not arrived at a constitution. Much though I would like that to be the case, I doubt that it will be possible.

I hope that, when the convention that precedes the inter-governmental conference meets, it will at least avoid producing the sort of document that emerges from a short-lived, random group of representatives—namely, a farrago of less than adequate insights. I hope that it may, as the Government suggest that it should, produce an intelligent set of options for wider consideration by those of us who are concerned with the future.

The inter-governmental conference itself must avoid generating anything that is not strictly necessary. Again, I return to my experience of European Council meetings. I cannot imagine a less auspicious place— tired political leaders faced in the middle of the night with extremely complex issues and being required to choose this, that or the other solution. It is no wonder that mistakes are made, as the noble Lord, Lord Grenfell, pointed out. The smaller the agenda, the more firmly we can distil it to the essential and the less that we are carried away by bright new ideas, the better. More important is to make head-way in filling in the gaps and hitting the targets of actual cooperation that have been so clearly identified for so many years. Of course, the common agricultural policy cries out for reform, but that is certainly not going to be achieved as a condition or precedent for anything. As the noble Baroness, Lady Symons, pointed out, the percentage of the budget devoted to agriculture has fallen steadily as a result of the hours that we spent trying to insert this, that or the other safeguard. That must continue.

On the common foreign and security policy, I begin from much the same position as does the noble Baroness, Lady Williams. Recent events show that the European Union has now become an indispensable dimension of international affairs. It is playing—and needs to play—a key role in forging the multinational partnerships that are a necessary response to the more grisly aspects of globalisation. The fact that the European Union exists alongside NATO provided the stage on which our Prime Minister was able to knit together and consolidate the necessary partnership to stand alongside the United States. That is an improvement beyond recognition on the CFSP as it was not that long ago. Commissioner Christopher Patten said the other day that political co-operation in the old days used to be, all strong nouns and adjectives and weak verbs. That is an accurate insight, but we are making progress on that. An example that is worth recalling in the latest response to the Balkan crisis is the continuing military presence designed to maintain confidence in the former Yugoslav republic of Macedonia. That is crucially important, and our American friends have positively championed the idea that that presence should be supplied by a European-led force within NATO. So it has been, with the latest, welcome development of the United Kingdom's role being taken over—increasingly if not completely—by our German partners. That is clear proof of the importance of developing a common and effective foreign and security policy.

The real risk to NATO and to the Europe-American relationship as we develop that common foreign policy comes not from Europe trying to do more but from Europe doing less. If Europe tries to do more and succeeds, nothing could be better for the Europe-American partnership. That is true not just for the CFSP but for security and defence policy, and for the conclusions set out in Annex VI, I think, of the presidency conclusions to the treaty. That is the latest stage in our progress from St Malo in 1998 to Helsinki in 1999, based on trying to locate and allocate fresh efforts firmly within the European Union.

I have no doubt that the noble Lord, Lord Owen, will speak on the matter shortly, and will rightly warn us of the risks of the process going wrong. Of course, there are risks to the transatlantic relationship and to NATO itself if we get the balance wrong, but developments so far, with all their glitches, suggest that those risks are being contained. Needs and targets have been identified; but in many respects, delivery still lies ahead and will require firm, sustained commitment by our political leaders. Germany's performance in that respect will be crucial.

However, the positive advantages of a successful, properly fulfilled ESDP for the European Union and its members—new as well as old—would surely be substantial and highly desirable from the point of view of both sides of the Atlantic. If we can achieve that—if we can ensure a better, stronger, more integrated European contribution—the Atlantic alliance will be strengthened and much better balanced.

My closing point is that no possible purpose can be served by a continuing disposition to pour cold water on what looks like the only available project with a politically credible prospect of inspiring and mobilising European willingness to take on, as we should, a larger share of our defence burden—of the burden of NATO as a whole. I hope that we shall see an end to the mockery, ridicule and cynicism with which the project is sometimes treated, and recognition that it is an important objective for Britain, as much as for Europe and for the United States as much as for Europe.

As was clearly pointed out in a booklet, European Defence Co-operation: Asset or Threat to NATO?, recently written by Sir Michael Quinlan, former Permanent Secretary at the Ministry of Defence and director of Ditchley, the stark truth is that if this endeavour fails, the damage to Europe and to the Atlantic alliance as a whole will be severe. If it succeeds, as I hope it does—and the proof of that will come in enhanced, actual and proved performance—the benefits to us all will be correspondingly wide.

4.50 p.m.

Lord Taverne

My Lords, I agree with almost everything that was said by the previous three speakers, particularly the remarks made by my noble friend Lady Williams of Crosby. Her speech indicated the likely success she will bring to the leadership of these Benches.

I shall not try to add to those remarks. I shall not speak directly to the Bill, but about some parallels which the European Communities Bill of 1972. Today I want to make the speech which I should have made on the Third Reading of that Bill. I abstained on the Third Reading and did so quietly to avoid causing embarrassment to my Labour colleagues. If a small handful of us in the Labour Party had not abstained, our entry into the European Community in 1973 could well have been frustrated. Abstaining was not a brave act. Instead I was cowardly, despite abstaining against a three-line whip, and I was unduly cowed by the prevailing ethos of Westminster. I should have voted with the Government and I should have spoken out.

Some of my colleagues did speak out in favour of the Bill. The best speech, typically, was made by a brilliant colleague, John Mackintosh, who, tragically, died young. But then he and other pro-Europeans in the Labour Party duly conformed with the unwritten rules of Westminster politics and voted with their party against a Bill which they knew was necessary for achieving the aim which they all supported.

So what are these unwritten rules of Westminster? They require that except on very rare occasions you must put party before principle. If you feel that your party is doing harm to the country's interests, and you stick to your principles and leave your party, you are reviled as a traitor. That happened only recently to my noble friend Lady Nicholson, who is not here today. If you vote against your principles and stick to your party, you are praised by all and sundry for behaving honourably.

Chris Patten recently said on the radio that he had always been a Conservative; that he always would be a Conservative; and that he would never leave the party. That, despite the fact that be believes the party's policy on Europe, about which he clearly cares passionately, is fundamentally wrong. That is his belief. He actually admitted that it was because he was a tribalist. And he might have added, "Proud of it, too.".

The noble Lord, Lord Heseltine, for whom I genuinely have immense respect, once told me that there is one golden rule in politics: never leave your party. That rule dismisses the contributions of Peel, Gladstone and Winston Churchill for a start. But to put it another way, it means that if the interests of your party clash fundamentally with what you believe to be the interests of the country, you must always put the interests of party first. I am not blaming the noble Lord, Lord Heseltine; that is the current ethos of Westminster. Tribalism rules and certainly it seems to rule inside the Conservative Party at the moment.

I left the Labour Party in 1972, soon after the Third Reading. I should say at once to those on the Benches opposite that it was a very different party from the Labour Party today. I left not only because it was anti-Europe, anti-NATO and pro-unilateral nuclear disarmament. I also opposed Clause 4—that was then a undreamed of heresy—and I felt that the party was too dominated by the unions. Again, I should add that those were not the days of John Monks and today's sensible union leaders but of a union movement run by Hugh Scanlon, Clive Jenkins and Jack Jones. Today I find the Labour Party, if anything, not radical enough.

When I resigned—

Lord Acton

My Lords, is this in order? Is this about Nice?

Lord Taverne

My Lords, it is relevant because the way in which people vote on Bills of this kind is determined by the unwritten rules of Westminster. If one looks at the vote on the Second Reading of the Bill in the House of Commons, one will see that one Conservative Member voted in favour of the Bill. It is highly relevant.

Lord Tebbit

My Lords, I thank the noble Lord, Lord Taverne, for giving way. I wanted to hasten him through this passage so that he could express his great admiration for those members of the Conservative Party who voted against their party and against the Maastricht treaty. It would seem in line with what he is trying to say.

Lord Taverne

My Lords, I say at once to the noble Lord that I completely respect those who feel that the most important issue in this country is our relations with the European Union and then vote according to their conscience.

When I stood as an independent social democrat in a by-election, I felt a great sense of liberation and a breath of fresh air. I believe that the same was felt by those who founded the SDP some eight years later. They could no longer pretend to believe in what they opposed or continue to support a party which they felt did not deserve to win.

However, let me return to the position of the Conservatives who are pro-European today. On the whole, with honourable exceptions, they have not—at least so far—been as outspoken as the Labour pro-Europeans were in the early 1970s. People such as Kenneth Clarke, the noble Lord, Lord Heseltine, and the noble and learned Lord, Lord Howe, have made their position clear and they must be applauded. But the pro-Europeans in the Commons have, with some exceptions, been discreet They have done everything they can to avoid embarrassing their party. And now they face the same dilemma: a choice between party loyalty and principle.

Lord Lamont of Lerwick

My Lords, I thank the noble Lord for giving way. As he is being so free with his criticisms of those not standing up and declaring what they believe, can he explain why when it comes to European elections his party, which is so pure and righteous, issues manifestos in London which hardly mention the subject of Europe?

Lord Taverne

My Lords, I was absolutely appalled by our party's manifesto issued in the course of the European elections. In fact, the whole thing was a farce because most of the Labour candidates, particularly in my constituency, declared which football club they supported and said nothing whatever about Europe. I do not always support my party but, on the whole, I do at the present time with great enthusiasm.

If the pro-European Conservatives stay within the party, they are saying implicitly that they want the Conservatives to win the next election. Some of them say so explicitly; others say so implicitly. But probably the biggest issue in politics today is the future of Britain in Europe. There are important other issues, too, but the divide on other issues is not as clear, nor are the issues as central to the future of Britain. For example, almost everyone now agrees that the public services must be improved and that their quality matters more than tax cuts. There are differences, but they are not absolutely fundamental. On Europe, and in particular the euro, the divide runs deep. The pro-European Conservatives know that if their party wins, the issue which they care about most—our joining the euro—will suffer a serious, possibly a fatal, set back. Which is more important: a Conservative victory or the cause of Europe as they see it? Party or country? Tribalism or principle?

In approaching these fundamental issues, is it not time that we abandon the unwritten rules of Westminster politics and realise what parties are? They are not a religion. They are not something you are born with and cannot change, like the colour of your eyes or the shape of your nose—although some people do change that. We are not tied to a party by ties of blood. Parties are combinations which exist to achieve particular aims and which normally share certain beliefs and principles. But parties change and sometimes they abandon their previous aims and modify their principles.

If one is convinced that the cause of party and country conflict, the path of honour and duty to one's country is to abandon party, not to stick to it—unless, that is, one believes that tribalism is and should be the basis for our politics. I hope that we can reach a higher level of civilisation than that.

My Lords, I wish I had said that on the Third Reading of the European Communities Bill in 1972.

5 p.m.

Lord Owen

My Lords, I rise to speak in support of ratification of the Treaty of Nice for a number of reasons. I believe that on all of the essential issues relating to retention of qualified majority voting, this and other governments managed to hold the line and ensure that this unique Union kept the balance between supranationalism and intergovernmentalism. If the treaty was not ratified there would be a deep psychological problem in some of the countries which hope to join the Union as quickly as possible. The delay has already been mentioned in some of those countries. Poland now bites on some of the more difficult aspects of the negotiation. Already in the Czech Republic there are signs of public opinion becoming restless. I believe it is extremely important that an enthusiastic signal is sent out to those countries that we want to enlarge rapidly, which means that the main candidates join the Union in 2004.

I believe that it would be extremely unwise for the Government to call a referendum on the euro at least until we know the outcome of the IGC in 2004. I am delighted that the noble Baroness, Lady Williams, has become the new Leader of the Liberal Democrats, while I am sad that her predecessor felt it necessary to retire on grounds of health. The noble Baroness quite rightly called for a serious and wide-ranging debate in the run-up to the intergovernmental conference. One of the issues that she singled out was the attempt to achieve a better definition in the competencies within the Union, particularly the Commission and the supranational element, and its member states. That is now the most important debate inside the European Union. If we get it right the EU can make a major global contribution in the next few decades of the 21st century; if we get it wrong and force through a rather elitist design for the European Union and do not reflect the diversity of the different member states, and also the wish of many citizens to retain self-governing nation states, we shall do great harm to the European Union. If from time to time there are criticisms about the euro or some other aspects, I hope people understand that often they are made in what people believe to be the best interests of the European Union.

I am not sceptical about the European Union; I am a strong and consistent supporter of it, and I want it to grow in strength and stature. But I do not support the argument, on which the noble Baroness, Lady Williams, touched in a way which caused me some anxiety, about the change in the nation state. Of course the nation state has changed throughout the centuries, particularly in the 20th. For very sensible and rational reasons, we began to pool sovereignty. In certain areas, for example the environment, there are good reasons why we should continue to pool sovereignty inside the European Union. But the EU is a unique union and we would be extremely unwise to try to base it on some rather old-fashioned federal model.

I move on to the global questions which underlie the Treaty of Nice. We have gone some way towards correcting a number of very disadvantageous aspects of the proposed European Security and Defence Policy. Fortunately, that document was not annexed to the treaty; otherwise, almost certainly we would have to vote against ratification. It has, therefore, no treaty status. Fortunately, already changes are being made to that document. Only recently the German Government, in an extremely interesting and detailed document, dealt with the role of NATO's Deputy Supreme Allied Commander Europe. That is the crux of it. If we can deal with the responsibilities of the senior European commander in NATO and allow him in effect to be double-hatted between the EU and NATO we shall make the European defence identity and ESDP a powerful and important addition to European responsibilities.

To be blunt and open about it, we got it wrong before Nice. The criticism did not come simply from America but from very senior military commanders inside NATO who were extremely anxious about what was going on in the two or three months prior to the treaty. Fortunately, it is being corrected and, I believe, we shall begin to see a readjustment.

I look now to what I have always hoped we would achieve. I have been a long-standing supporter of a European defence identity and the capacity to operate when the United States or Canada does not wish to do so. Where could it go in future? What I hope will emerge from the debate to define ESDP, which presumably will be part of the treaty following the IGC in 2004, is a free-standing vehicle to allow countries to join that part of the European Union when they cannot yet join other aspects, such as the single market.

The first of the two countries which immediately springs to mind is Turkey. If we so designed it that Turkey could be a member of ESDP in its own right that would be a very flexible, new way in which the European Union could evolve. It would allow Turkey more time before it was willing or able to make the necessary changes to enter the single market, and even CFSP. I draw a distinction in relation to CFSP which must have quite a lot of Commission involvement, if not for anything else the involvement of development policy in the creation of foreign policy.

The other country which is a possibility is Russia. We must do something about the consistent way in which under President Putin Russia wants to join the western democracies. There have been discussions about whether it could join NATO in the French way; namely, in the political committee, not the integrated command structure. I believe that that gives rise to problems, particularly in the United States. NATO, which was written off by some only five years ago, is a successful organisation of proven value in military operations in the past two to three years. One must be very careful not to jeopardise the decision-making structure of NATO. I do not rule out the entry of Russia into NATO, but in a military organisation it would be easier as a first step to join ESDP.

At the Centre for Policy Studies in London last night Henry Kissinger made a very interesting speech. In almost a passing aside he said he believed that one of the areas in which Russia could be brought more formally into the defence, intelligence and military structures was counter-terrorism. I believe that here there is the seed of an extremely interesting idea. It is one thing for all the heads of government to move around in bilateral meetings, but what is needed to counter terrorism, since many people believe that we shall be embarked on this struggle for years, not months—often a period of two to four years is referred to—is a more formal structure within which particularly foreign and defence Ministers can try to co-ordinate some of these policies. I do not believe that over a sustained period it will be satisfactory for everyone to be part of an American-led alliance. Inevitably, America will be the dominant leader now and in time to come.

What should be the grouping? I do not want a great infrastructure but meetings at which Ministers meet privately, with very few officials, to discuss the complexities of the problems. It seems quite reasonable to use G8 as the basic structure comprising four EU countries, Russia, Japan and the two powerful North American countries, the United States and Canada. Missing from G8 is China, and one will not be able to deal seriously with terrorism without the involvement of that country. President Bush has already recognised that. The other three significant military powers that immediately come to mind—two of them are Muslim countries—are Turkey, Pakistan and India. Such a grouping of 12 countries would make a significant contribution in developing a counter-terrorist strategy over the next two to three years. One way would be to add that matter on to planned G8 meetings. However, I am not sure that we have the time to wait until the next G8 meeting.

The formalising in some way of Russia's role in this area of defence, intelligence and strategic questions would have considerable benefit. One additional benefit is that it would be a good thing for India and Pakistan to be around the same table discussing issues. I do not therefore relate it only to Afghanistan. It needs to relate to other troubled areas and other countries which support and sustain terrorist activities with training and other things. That is an interesting possibility.

Finally, on the question of the Treaty of Nice, it is fair to say to the Government that if one looks at the issues on which we have a veto—it is not a long list—it would be hard to pare that away. I am not saying that I would die in the ditch for every single one of the vetoes that are left, but if one gives up those vetoes one is treading close to a line in which one ceases to be a self-governing nation. That is the fundamental issue.

I have my doubts about the wisdom of the euro. Unlike some people, I personally say that I do not know. It may be the lever which pushes us irrevocably towards a single federal state. It may not be. Under a unique Union it is possible to envisage a situation where one had reserved—clearly and quite deliberately—defence, foreign policy, some of the big judicial questions and border control issues for the nation state; and they were inviolate. One then had voluntarily—out of their own free will—all the countries of the European Union deciding that they could operate within a single currency.

One of my problems with the single currency is that its political complexion meant that some countries already within the zone probably should not have been admitted at that juncture. They were not ready for the discipline of the European Central Bank. As Europeans we must be very careful that this does not happen again and that there are not too many political entries. It is not in our interest, even outside the euro, for the euro zone to fail. It would have serious repercussions on our economy.

We must, however, be very flexible. That is another aspect of the Treaty of Nice. Those of us who have decided to stay outside the euro zone, but still to be a party to the monetary union—it is after all a European Union treaty—when they come to us and want changes made to it, we must be flexible. We are not in it. If they want these flexibilities to make it work, frankly, it will have to be adjusted. The ECB will need its mandate changed. There will have to be a bigger political element in making the decision about setting the inflation target for the euro zone. That is effectively making an impact on unemployment levels. There are some other aspects about the stability pact that will need to be changed.

Therefore, for those of us—Denmark, Sweden and the United Kingdom in particular—of the 15 outside but also new countries coming into the EU, there will need to be flexibility about this issue. Again, it is right that this area does not come under enhanced cooperation. It is right that this should remain an EU decision. So my feeling is that thus far I feel content to go. Much greater erosion of the power of veto and further introductions of qualified majority voting would be to me quite unacceptable. I rule it out absolutely without reservation in any area of the ESDP. I rule it out any further than the wording that we currently have on the break mechanism in CFSP.

I personally think that it was a wise decision to have an inter-governmental pillar dealing with the judicial and some of these other questions, covering immigration and border control. These decisions as to how much one will have intrusions in secrecy and into the rights of the individual are judgments that are far better made within the nation state and not within the context of the Commission or a decision which would be subject to the European Court of Justice.

So I think that the balance is all right at the moment. But anyone negotiating in 2004 will have to say no to quite a large number of claims to abolish the veto and to increase qualified majority voting. So long as that is understood and the people of this country can make that view firmly and clearly heard in the next two years leading up to it, perhaps we shall have a successful IGC in 2004. Until I see what is there I certainly think that, quite apart from the economic arguments, it could be politically foolish to make a decision on the euro.

5.15 p.m.

Lord Tomlinson

My Lords, I begin by congratulating my noble friend Baroness Symons on a clear and concise explanation of the Treaty of Nice. During the course of the debate we seem to have strayed from that subject. I shall try to take us back to it.

I agree with the noble Baroness's remarks about the reform of the CAP: that it should not be pursued in the context of the IGC. I further agree that such reform needs to be fundamental. I am somewhat less persuaded about the reforming nature of the conclusions at Berlin. It is almost axiomatic that if one gets from the Commission an agreement on reform of agriculture which is watered down first by agricultural ministers and then further by heads of government, it is a fair bet that there is something fairly deficient in that agreement in the long run. It may well be as good an agreement as was available to my right honourable friend the Prime Minister in Berlin, but clearly the issue needs to be revisited.

Agricultural reform needs to be revisited for enlargement, for farmers, for taxpayers, for consumers, for third world countries and for liberalised world trading systems. But it is not on the agenda today.

I readily agree with the noble and learned Lord, Lord Howe, that the noble Lord, Lord Howell, in his remarks today was much more moderate than some of the voices that we have heard from Conservative politicians since the Treaty of Nice was negotiated. Certainly the noble Lord was much more moderate than Mr William Hague was in another place when he threatened to campaign against ratification. That kind of attitude, had it persisted, would have betrayed the hopes that successive governments in this country have created among the applicant states with aspirations to join the European Union. It would at the same time have betrayed our own political and economic self-interest.

We are left with a simple but, nevertheless, important Bill. It is simple in so far as it proposes the ratification of modest treaty reforms. They are reforms which will improve the institutional operations of the European Union. It is important in so far as it is the necessary basis for the European Union to operate with a reasonable degree of efficiency and effectiveness following enlargement.

The noble Lord, Lord Howell, prayed in aid the words of President Prodi—someone who must wish that people would hang on to some of his other words with such assiduity—that it is "technically possible". But that is a somewhat pedantic approach. Of course it is technically possible to have enlargement, but what kind of Community would we have? We would have a Community that is condemned by that decision not to work.

We have to pause only briefly to imagine what kind of larger European Union it would be without reforms to the size and organisation of the Commission, without reforms that lead to a revision of the system of weighting of votes in council, to the extension of qualified majority voting, to allow the development of enhanced co-operation, to redistribute the seats in the European Parliament, and to implement essential reforms to the Court of Justice and the Court of First Instance.

We can all agree with Commissioner Prodi—I would even agree with the noble Lord, Lord Howell—that enlargement might well be technically possible, but it would be politically disastrous. It would create a European Union which would be neither efficient nor effective and which would be almost an open invitation to greater cynicism and greater scepticism felt by the public as to whether it would ever be able to satisfy their needs and wants.

It is on the basis of the Treaty of Nice, signed by the United Kingdom in February this year and being ratified by this Bill, that our commitment to enlargement will be firmly made. That is because the treaty is not simply a broad and general agreement to enlargement. By the process, we are specifically committed to complete negotiations, by the end of next year, 2002, for the candidate countries—which are ready. That must be done so that they can be ready properly to participate in the elections for the European Parliament to be held in 2004. That is part of the commitment that we are making to them.

Politically, the Nice Treaty reforms are, I believe, the essential preconditions of successful post-enlargement institutional operation. At the same time, they give a signal to the applicant countries that each of the member states of the European Union has accepted its internal reform obligations with the same degree of seriousness as we have expected applicant countries—quite rightly—to accept their extensive obligations under the Copenhagen criteria. If we were to be seen to be expecting the Copenhagen criteria principles to be adopted by the applicant countries, although for ourselves we were not able at Nice to pick up the Amsterdam leftovers and come to an agreement, we would be sending an incredibly bad signal to those applicant countries.

The Treaty of Nice is a modest treaty—a bit of institutional tidying-up; not much more and not much less. I believe that it was well described in another place by Menzies Campbell when he said that it, is little more than housekeeping. It justifies neither euphoria nor hysteria".—[Official Report, Commons, 4/7/01; col. 286.] We have not heard much euphoria, but we have noticed in some quarters that a little hysteria has crept in.

It is appropriate to remind ourselves that the Nice IGC is not a special or unique process. There have already been three IGCs. Each has led to significant changes, including changes made to sacred cows such as qualified majority voting. In the past I have felt it totally appropriate, and I am happy to repeat it today, to offer my congratulations to the noble Baroness, Lady Thatcher, on the important role she played in securing the necessary treaty changes for the Single European Act. That Act involved 12 extensions of qualified majority voting and no truck whatever with demands for a referendum.

The noble Lord, Lord Lamont of Lerwick, knows that I am one of his greatest fans when it comes to examining the history surrounding the Maastricht Treaty. He was heavily involved in the negotiations on that treaty., where I believe that he displayed due diligence as regards securing our national interest. A further 30 extensions of qualified majority voting were agreed and, again, there was no demand for a referendum. With the benefit of hindsight, when the noble Lord was able to reflect on his actions in his hook—here I must assure the House that I am not receiving a commission for advertising the noble Lord's writing—he reveals that at the time he had a very different view of the agreement for which he had a high degree of responsibility. He recounts in great detail for the reader how at the time he did not want to sign the treaty, so he got Francis Maude willingly to volunteer for that task. But of course when Francis Maude went off to sign in place of the noble Lord, Lord Lamont, what did he sign? Among other things, he signed Article J41 which states: The Common Foreign and Security Policy shall include all questions related to the security of the Union, including the eventual framing of a common defence policy, which might in time lead to a common defence". The noble Lord, Lord Lamont, was indeed foresighted both in what he negotiated and perhaps in showing his reservations by demonstrating his unwillingness to have his signature attached to it for posterity.

Lord Lamont of Lerwick

My Lords, I am grateful to the noble Lord for his praises, but to be strictly accurate, I did not negotiate the parts covering foreign policy.

Lord Tomlinson

My Lords, I happily accept what the noble Lord has said, but if that is the only piece of confession that he is making today, then I am happy that he has accepted everything else I said.

I believe that our interests are served by the extensions of qualified majority voting that have been negotiated at Nice. The extension of QMV serves us well as regards trade liberalisation and better financial controls. I congratulate our negotiators on those improvements. Equally, however, we can praise them all the more when we recognise that, in those negotiations, there was a defence of essential national interest for unanimity on questions such as treaty changes, defence, border controls, own resources, taxation, social security—a long list of all the matters that were promised to be ring-fenced before negotiations on the Nice Treaty began.

I believe that we have here a set of circumstances on which we can all agree: that the European Union is here to stay; that the procedures need to be improved; that the Treaty of Nice helps to improve them; enlargement is imminent and cannot wait; and the ratification of the Nice Treaty which is necessary for the efficient enlargement of the Union. On that basis, those who are looking for more in terms of issues such as those raised by the noble Lord, Lord Howell—how we defend the interests of national parliaments—should start preparing now the parliamentary input for the 2004 IGC and, in the mean time, persuade parliaments to embrace the existing powers and responsibilities they have, which are better to monitor and control the activities of governments.

Lord Howell of Guildford

My Lords, the noble Lord has made a very sincere and characteristically well-informed speech. However, does he feel that the decision reached in the Irish referendum, which did not concern enlargement—that was already broadly accepted—but rather everything else that had been bunged into the treaty, will slow down the enlargement process?

Lord Tomlinson

My Lords, that is a matter for the Irish people. Clearly it is not the result I wanted to see in Ireland. I hope that a significant outcome of the result of the Irish referendum will be that the Irish Government will take somewhat more seriously their responsibilities in explaining the benefits of what they agreed to at Nice than apparently was the case during the referendum campaign.

In conclusion, I believe that we have before us a modest Bill to ratify a modest treaty which will bring about essential institutional changes to create the conditions for enlargement. As the noble Baroness, Lady Williams of Crosby, so cogently described to us, enlargement is a great historic goal. All noble Lords ought to consider very deeply what responsibility they will bear if they do anything to hold it up.

5.30 p.m.

Lord Waddington

My Lords, I disagree with the noble Lord, Lord Tomlinson, about the contents of the treaty and the contents of the Bill. The treaty, and consequently the Bill, is not in the main about enlargement—except in the sense that some European politicians, vigorously supported by the Commission, were determined not to allow enlargement to happen unless there was first more integration. Not for the first time, continental politicians have been a lot more frank than our own about what has really been going on.

The German Foreign Minister said, frankly, Nice paves the way for deepening of the EU". More so, he thought, than Amsterdam. What he said was EU speak for, "As a result of Nice, authority will continue to drain away from elected national governments to be bestowed on the unelected bureaucracy at Brussels".

No one will quarrel with the fact that the treaty includes institutional changes necessary to accommodate new members, but those changes take up only a fraction of the final agreement. Qualified majority voting, however, replaces unanimity in about 30 policy areas—not only in trivial and technical areas, as the Prime Minister at one time suggested—not to complete the single market; not to encourage trade; not to make enlargement work—but in important areas of domestic policy which have nothing whatever to do with enlargement. Some other changes are made which will limit enormously our ability to shape the future of the European Union.

Does anyone seriously suggest that Article 137 is unimportant—Article 137, which gives the EU a role in combating social exclusion and the modernisation of social protection systems? It could, of course, well open the door to the EU meddling in our own social security system, but one thing that no one can disagree with is that it has absolutely nothing to do with enlargement, except in the sense that some states are determined to curtail the competitive advantage which applicant states may have as a result of lower labour costs.

Article 100 is not trivial. It gives the EU power to hand over taxpayers' money to states in difficulty, while Article 191 provides for taxpayers' money to go to political parties. I know that that issue will be dealt with by my noble friend in some detail. It is certainly not an unimportant matter, still less is the power to make regulations governing political parties, with the danger of discrimination being practised against those who do not agree with further integration.

Lord Grenfell

My Lords, I thank the noble Lord for giving way. Does he not agree that there is a significant difference between what he says is nothing to do with enlargement and what we say is everything to do with an enlarged community? The noble Lord is talking about process; we are talking about consequence.

Lord Waddington

My Lords, I am talking about the fact that these measures are all part of deepening the community; they are all part of increased centralisation; they are all part of the process of transferring power from elected national governments and handing over that power to Brussels.

Article 13 seems to assume that states will be racist unless the EU is there to act. Article 144, with its social protection committee to monitor the social situation and the development of social protection systems in member states, is surely an integrationist measure. It has nothing to do with enlargement but a lot to do with limiting the power of elected national governments and placing that power elsewhere. Surely these are glaring examples of the European Union seeking to meddle in matters with which MPs of member countries are particularly well qualified to deal.

Baroness Ludford

My Lords, I thank the noble Lord for giving way. He talks about the transference of powers from elected national governments to Brussels. I take it that he is aware that the major decision-making power in the European Community and the European Union lies precisely with those member governments in the Council of Ministers. The European Parliament, of which I have the privilege to be a member, does not have nearly the same amount of power—let alone the Commission, which proposes legislation but does not decide it.

Lord Waddington

My Lords, the noble Baroness knows perfectly well that the Council of Ministers can look only at proposals which emanate from the Commission; it cannot itself initiate policy in any way at all. Therefore I was entirely right to say that it was a transference of power from elected MPs to unelected bureaucrats. I do not detract from that for one moment.

There is then Article 159, which deals with economic and social cohesion outside the Social Fund. That is certainly important, as are the provisions for support for industry and economic co-operation with third countries But they are certainly not provisions necessary for enlargement.

Finally, there are the articles on foreign and security policy: Articles 63 to 67 on asylum, refugees and immigration policy; and Article 7 which gives the Council power to interfere in the affairs of a state which it considers is at risk of breaking the principles of the Union. Everyone must agree that that has deep constitutional significance. It is not a housekeeping matter nor a matter necessary for enlargement; it has deep constitutional significance, as has Article 40, which states that proposals for enhanced co-operation are no longer to be subject to unanimity.

Since Nice, Brussels has not paused for a moment in its plans for further integration. Indeed, today in The Times we read that President Prodi and his officials, like Jo Moore at the Department of Transport, look upon the international crisis as "beneficial" as it favours further integration. Virtually on the nod, EU Ministers have reached agreement on a whole raft of proposals—which again have serious constitutional implications—such as the EU arrest warrant and much more. The EU arrest warrant is seen in Brussels as a "quantum leap" towards judicial union.

It is extraordinary that after the Danish referendum and the Irish referendum on Nice—not to mention the events in Gothenburg—and when there is more than enough evidence of people in Europe feeling more and more alienated from what the elite is doing in their name at Brussels, the EU and its leaders should be bashing on regardless, telling us all that they do not intend to alter the text of the treaty by one comma; telling the Irish, with extraordinary arrogance and in a perversion of democracy, that if they had voted "Yes" to Nice that would have been an end of the matter but as they voted "No" they had better keep on voting until they get the right result.

I could say much more in that vein but I wish to concentrate on the applicant countries. What of those whose entry into the EU this treaty is supposed to facilitate? After the terrible events of the last century, it is not difficult to understand why they should wish to join the family of European nations. But is it not rather shameful that while they have been waiting at the door, the EU has been devoting its energies not to making it easier for them to join but to increasing the number of rules they will have to obey; in effect, to increasing the cost of admission. There is more than enough evidence that they, like most of us, look with some dismay at the attempts of some to force us down the road of super-nationality.

Perhaps I may say a very brief word about what was said at Nice in regard to the European security and defence policy and the charter of fundamental rights. Noble Lords will be glad to hear that I am not going to reopen the arguments about the rapid reaction force and the threat that some of us feel it poses to NATO. To quote the oft-used words of Labour Ministers in holes, "It is time to move on".

If people were not worried before 11th September about what may happen if the European Security and Defence Policy blossoms in the way the German Chancellor says he wants—and, national sovereignty in foreign and security policy finishes up as no more than a product of the imagination"— they should certainly be worried now.

Europe is an essential part of the coalition that has been painstakingly put together to fight international terrorism. It has been put together and, it is hoped, will stay together simply because states have been able to respond in different ways, and some more enthusiastically than others. What chance would there have been of an EU that was responsible for defence and security giving the kind of support in the fight against terrorism that Britain has given—with Belgium refusing even to co-operate with the FBI in the interviewing of key witnesses, Italy calling for an end to the air strikes before they had hardly begun, Sweden wringing its hands, and Ireland agonising about its neutrality? The answer is obvious.

I am glad that my noble and learned friend Lord Howe of Aberavon spoke as he did about the Charter of Fundamental Rights. I shall use slightly stronger language. According to Mr Vaz, it was no more important than a Beano comic, and the Prime Minister thought it a mere political declaration, a showcase of existing rights which would not impact on national law.

Scorn was poured on those of us who begged to differ and pointed out that both the Commission and the Senior Vice-President of the European Court of Human Rights, Judge Palm, had said that the charter would become mandatory as a result of the Court's interpretation of it. But it is instructive to look at the recent decision of the ECHR about night flights at Heathrow. I pass over the absurdity of Article 8, drafted to protect people from totalitarianism, being used to give people a quiet night. I merely point out that in that case one of the judges, Judge Costa, actually cited with approval the environmental provisions of the charter which so short a time ago a Minister of the Crown was telling us was of no more significance than a comic cut. That should be a lesson to those who take seriously this Government's forecasts of the likely effect of developments in Europe. Sometimes the effect of these measures can be very different from what the politicians who entered into such bargains imagined at the time.

Much of the Bill has nothing to do with enlargement. For that reason, it must be examined with great care, and parts of it will clearly have to be opposed.

5.43 p.m.

Baroness Ludford

My Lords, we must say "Yes" to the Nice treaty because it prepares the way for enlargement. Its rejection would send a political signal that we are not keen on enlargement.

As justice and home affairs spokeswoman for the European Liberal Democrats in the European Parliament, I am especially conscious of the importance of admitting the countries of eastern and central Europe, and Cyprus and Malta, in order to extend our co-operation on fighting organised crime, terrorism, and trafficking in arms, drugs and people—especially women and children for sexual exploitation; and to co-ordinate our immigration and asylum policies.

As enlargement is central to the Treaty of Nice, I make no apology for mentioning Cyprus. I returned only last night from a fact-finding visit there. I met, among others, the Foreign Minister of the Republic of Cyprus, Mr Kassoulides, and the Turkish Cypriot President, Mr Denktas. I make my remarks with humility—I was about to say in the presence of experts like the noble Lord, Lord Hannay, but he is no longer in his place. I am a firm supporter of the accession of the island of Cyprus and all its peoples to the European Union. However, I am concerned at the consequences of accession taking place in the absence of a political settlement. As the noble Baroness, Lady Symons, said, enlargement is the opportunity to end divisions. The perpetration of the division of Cyprus is undesirable both for the EU and for all Cypriots. I hope that accession will be a catalyst for a political settlement.

The assertion that the Government of the Republic of Cyprus are negotiating accession on behalf of all Cypriots is, I am afraid, merely a legal fiction. There are no Turkish Cypriots in the negotiating delegation, and no one knows how they would be incorporated even if they accepted any such arrangement. Most Turkish Cypriots want to join in EU accession and their isolation is sad to behold.

Much of the deadlock in the UN efforts at political talks is down to the obstinacy of Mr Denktas, who is as stubborn as he is charming. But the sense of frustration cannot be directed at only one side. There is also an onus on the Greek Cypriots, who presently hold many of the trump cards. They must make bridge-building efforts in order to demonstrate their firm attachment to the concept of a new partnership between two politically equal communal entities on which a bi-zonal federation must be constructed.

I regret that neither the European Parliament's rapporteur, Jacques Poos, nor the Commission's president, Sr Prodi—who were both in Cyprus last week—saw their way to actually crossing to the North, even if they met some Turkish Cypriots during their stay. There is a need for creative and imaginative thinking whereby acknowledgement of and respect for the equal status of the Turkish Cypriots, and pragmatic acceptance of the reality that a separate administration exists in the North, is not immediately pounced on as being equivalent to legal recognition of the "Turkish Republic of North Cyprus".

Although the Helsinki European Council said that a political settlement between the Greek and Turkish Cypriots should not be a pre-condition for accession, it also said that, when deciding on accession, all relevant factors would be taken into account. I urge Mr Denktas and Mr Clerides to provide some such relevant factors in the form of progress towards a settlement in the next crucial 18 months. This will be good for Cyprus and good for security in Europe.

Returning to the Nice treaty, I agree with others that it is necessary but flawed. Judged by the criteria that the Government claim to share with the Liberal Democrats—namely, that EU decision-making should possess the qualities of transparency, efficiency, accountability and legitimacy—we are still falling a considerable way short of that goal.

Decision-making is made even more confused, and therefore less transparent. I do not know whether I am disappointed or relieved that none of my constituents, let alone any member of my family, has so far asked me to explain the proposed complicated new voting arrangements. Democratic accountability has barely improved since co-decision with the European Parliament has hardly been extended, even to matters where qualified majority voting will apply in the Council.

In reference to the Council, our own Government's grasp of the importance of openness is distorted by their view that the European Union is no more than an organisation of sovereign states—or in the words of Mr Peter Hain yesterday in the Financial Times, a "Europe of independent states". We are surely interdependent. We are not a diplomatic League of Nations. The fact that the Council will, under the Nice treaty, continue to legislate in secret reflects a completely wrong perspective on the demands of democracy and accountability in the Union. The Council may not yet be a representative assembly, but with a membership of 28 it cannot continue to operate as a cosy club shutting out the citizen.

Similarly, the Government do not seem to grasp the fact that the European Parliament's primary role is to ensure, in partnership with our colleagues in national parliaments, that legislation is decided democratically. The European Parliament can do this by having coequal power with the Council whenever the Council votes by QMV.

This Government failed to fight hard to minimise the loss of UK Members of the European Parliament. Germany will keep 99; Britain's membership will be reduced from 87 to 72. But on both the money laundering directive and the take-over directive in the European Parliament, to which co-decision applied—both very important measures, including to the Government—the views of German MEPs were less liberal than those of British ones. Surely the Government have allowed what can only be called their disdain for the European Parliament to undermine our national interests.

On the topic of disdain, I take the opportunity, as the noble Lord, Lord Owen, has spoken, to recall with amusement the occasion in 1984 when he chaired an SDP/Liberal Alliance press conference in Brussels. With myself and my SDP colleague on the platform, both candidates for the European Parliament, he declared that he was opposed to direct election to the European Parliament. Well, I got there eventually.

As my noble friend, and, I am delighted to say, my new leader, Lady Williams of Crosby has said, the situation in the area of justice and home affairs is lamentable. First, in the area which is under Community competence—that is, asylum, immigration and borders—there is something of a mess. Member states as well as the Commission can make proposals, which they do like confetti, usually when they take over the presidency of the European Union and want a new initiative for a press conference. The Nice treaty gives a modest boost to qualified majority voting in this area of the treaty, but mostly we shall have to wait until 2004 for generalised majority voting, let alone for a European Parliament power of co-decision.

The United Kingdom has a supposed opt-out from that area. However, the research paper in the Library has three pages of proposed legislation in respect of which the UK is opting in. I suggest that the Government's intentions are less than transparent in relation to that supposed opt-out. For the part of justice and home affairs which is exclusively intergovernmental—that is, policing and criminal judicial co-operation and now the co-ordination of prosecutions through Eurojust—the Nice Treaty does no thing to improve democratic accountability. The European Parliament is barely consulted on these so-called third pillar measures and the protection of the European Court of Justice cannot be invoked. This Parliament, as my noble friend Lady Williams indicated, needs to be watchful that the Government do not seek to escape scrutiny here by slipping through third pillar decisions by affirmative procedures.

The Treaty of Nice shows that the purely intergovernmental method of weaving the fabric of European institutions and policies has had its day. I am glad that it has been agreed to hold a convention starting in early 2002 comprising members of the national parliaments, the European Parliament, the Commission and member governments whose task will be to submit to the intergovernmental conference in 2003 a proposal for a constitution as the basis for its work. We can then take the opportunity to rectify the errors of Nice and to scrap the Byzantine system of qualified majority voting in favour of a simpler one that we can all understand. There must be co-decision whenever there is majority voting. I welcome the surge of activity since 11th September to tackle crime and terrorism, but there must be democratic control to ensure that the breach of civil liberties is minimised. We need to settle on the European Union relatively few but very important powers at the supranational—federal, if you like—level, including not only asylum, immigration and free movement of people but also cross-border crime.

But in those areas of justice and home affairs the European Court of Justice must also have full powers of judicial supervision which is currently lacking. It would be guided by the entrenched fundamental rights guaranteed in the treaty through the incorporation of the Charter of Fundamental Rights. I am, I am afraid, surprised that noble Lords such as the noble Lords, Lord Howell and Lord Waddington, and the noble and learned Lord, Lord Howe, dislike the fact that European Union powers would have to be exercised within a framework of respect for individual rights. I think that is a gain for the citizen against the bureaucracy and I am reassured by it.

Finally, the objective of being able to tell our fellow citizens who does what, why and how, which is all that a constitution does, has moved a little nearer with some parts of the Nice treaty, but, I am afraid, farther away with others. We must achieve such a clarified constitution in 2004, but in the meantime we must ratify what is an imperfect treaty but one whose rejection would set back enlargement.

5.54 p.m.

Baroness Park of Monmouth

My Lords, I too wish to congratulate the noble Baroness, Lady Williams of Crosby. I welcome her as leader of her party.

We shall have many opportunities to debate this Bill in detail in Committee. I want only to ask sonic questions. The first concerns the provision of national intelligence to the EU. According to a useful memorandum from the Foreign and Commonwealth Office to Sub-Committee C on 28th June: Nothing in the development of the ESDP will undermine the uniquely close and important intelligence relationship between the UK and US. Arrangements are being defined that will allow EU member states and other sources to feed intelligence assessments into the EU decision-making process just as we do in NATO, and just as in NATO this will be voluntary". That is reassuring particularly because, as with NATO, we are presumably speaking of assessments. However, while we are keeping the front door so firmly bolted, what is happening at the back door? On 17th October the Foreign Secretary attended a meeting in Luxembourg to discuss the EU's overall counterterrorism policy in response to the tragic events of 11th September. Either then or at an earlier meeting of Home Office Ministers in September it was reported that EU Ministers agreed that all EU intelligence and security agencies were to pass all relevant information on terrorism to Europol. Also approved was the creation of a Europol anti-terrorist unit to be staffed by intelligence officers. It is that very intelligence which is one of our most vital contributions as a country to military operations. We have a serious and immediate need, therefore, to ensure that that does not happen.

The House may ask why I am raising an issue which post-dates the Nice treaty. I do so because want to know where in the treaty this decision was agreed. I can find something only in Article 30 of the preceding treaty. Article 30.1.b. speaks of the collection, storage, processing, analysis and exchange of relevant information. Intelligence and information are not the same thing. So why was this decision made, and was it made by QMV rather than by unanimity? Had this issue arisen under the rubric of the CFSP unanimity would have been required. This decision, if implemented, could have serious consequences both for our relationship with the United States and for the safety of our own soldiers and our agents. No one should deceive themselves about the risk. Europol is a leaky sieve and there is no mechanism for member states to control it. As long ago as 1994, when the Select Committee in this House reported on Europol, it said how vital accountability would be for a body about to be given, formidable powers to acquire and manipulate secret and highly sensitive information". That referred only to information on organised crime. There was concern about the protection of sources and the then Home Secretary gave an assurance that any future amendments would require ratification by Parliament. At that time terrorism was expressly excluded from Europol's mandate but in the Nice treaty it appears in a new Article 31. Europol has lost no time in extending its reach from organised crime to terrorism.

As there is no effective oversight, control over, or scrutiny of Europol—its members are appointed by an EU committee, not the nation states, and report only to that committee—I ask what the position is and what power of scrutiny or control we have? We were told in June that at Luxembourg it was agreed that there would not be any renegotiation of the Treaty of Nice, notwithstanding the result of the Irish referendum, and that the other 14 states would continue with the ratification process. It is all the more important to know what we are ratifying when it is an area of the treaty where QMV, not unanimity, may be the procedure for decision on some issues. In my view we shall live to rue the day we did not retain unanimity for issues of justice.

The CFSP is being amply reported on by the appropriate committees so I shall state only my belief that we have created an unnecessary mechanism which may grow, in terms of resources, to become a seriously expensive dinosaur. We could and should have secured the increased defence spending needed to keep the Americans in Europe through NATO. As it is, no nation has yet put any serious money or, in most cases, any money at all into defence. We now have an unnecessary and quite expensive duplicate command and control system and political institutions to match which depend for any purely EU Petersberg tasks on being run by our own joint HQ. This happens, as we always warned it might, to be fully committed to operations in Afghanistan.

When we create an unnecessary institution, it soon finds work for itself in order to survive. Which country in the EU other than France will inevitably be required to contribute the bulk of the troops? The UK. I believe that the Government have a healthily pragmatic view of the position. It is nevertheless yet another example of the EU's genius for mission and institution creep. We shall pay dearly for our tolerance of a number of weasel words in the CSFP text. Not least, we must watch carefully Mr Solana's proclaimed technique of using enhanced co-operation and the implementation of common positions with common strategies to move from decisions by unanimity to decisions by QMV. Articles 27b and 27d are contradictory. They, and Article 24, are the critical articles. I hope that we shall discuss them fully in Committee.

6 p.m.

Lord Harrison

My Lords, may I, too, take this opportunity to add my congratulations to the noble Baroness, Lady Williams of Crosby, on her new duties?

The Nice Treaty is a nice treaty, not only in the sense that it is agreeable to me, but also because it is nicely judged and finely tuned to Europe's current needs and aspirations. Like Amsterdam, it lies between the ground-breaking Maastricht Treaty and the forthcoming 2004 IGC. It is a modest treaty, containing much good housekeeping for the European Union, but it is also a treaty that acclimatises us to the important step of the enlargement of the Union from 15 to perhaps 27 countries. I warmly welcome the fact that the Hungarian Foreign Minister has been next door in the Moses Room this afternoon and the Romanian Prime Minister visits the House of Lords next week.

However, for our Eurosceptics, the Nice Treaty is not a nice treaty. For them it is a front, like Halloween—a trick, not a treaty. As ever, our Eurosceptics want to make a mountain out of this relative molehill of a treaty and, as ever, confronted with Nice they find the concept of building a European Union as difficult to negotiate as climbing the north face of the Eiger.

It is hard to see why this piece of summitry should excite fears in our opponents. Are they for or against enlargement? In voting against the Bill in the Commons over the summer, the Conservative Party seemed content to leave the EU applicant countries kicking their heels in the waiting room of Europe until such time as the EU is remodelled wholly in the shape of Conservative thinking. I for one am impatient to open the doors to our natural allies in eastern and central Europe, who, having thrown off the yoke of Communism, deserve better than the cold shoulder of English Conservatism.

We are told that we must wait until the common agricultural policy—the CAP—is reformed, but in their 18 years of rule the Conservatives signally failed to do just that. I am bound to say, if the cap of indecision fits, I suggest to colleagues opposite that they should wear it.

We are also told that we must wait until a referendum has been conducted among the British electorate—this in the wake of a resounding general election result, when the forces of Euroscepticism were roundly routed, and from a party that studiously eschewed referendums at the time of the Single European Act and the Maastricht Treaty.

We are told that we must not increase the powers of the European Parliament in co-decision-making, even though that would deepen democracy without undermining the supremacy of the nation state and the European Council. The European Parliament is a key institution in holding the Commission to account and has hitherto done a good job. Are the Conservative Front Bench for or against that sensible extension of democratic scrutiny?

Almost as reprehensible as the snub offered to applicant countries by any rejection of the Nice Treaty is the threat offered to Britain's business people, who wish to trade in a simpler and freer single European market. The extension of QMV to important areas, helping small businesses and promoting research and development for industry, will help to cut the red tape that can currently frustrate even the boldest of Britain's business buccaneers.

However, that does not meet with the approval of the sceptics. I quote that tireless, Vulcanised champion of free enterprise, Mr John Redwood, who said in another place: We are told that the Community will come to a halt without qualified majority powers—but if, as a legislature, it slows down, that is not bad news; it is good news".—[Official Report, Commons, 11/7/01: col. 848] We may legitimately ask our Eurosceptics whether they believe in fair and free markets, and in a single European market in particular. We should be told.

Àpropos of Mr Redwood, I am reminded of Basil Fawlty in "Fawlty Towers", who is enjoined in the presence of German guests not to mention the war. That nostrum has been changed by our contemporary Eurosceptics, whose new self-denying ordinance seems to be, "Don't mention the peace". How refreshing it would be to hear our Eurosceptics acknowledge that if the European Union existed for no other reason, its role in preserving peace in Europe would justify it on its own.

In Committee, there will be ample opportunity to welcome the cautious but important advances in developing the CSFP, to highlight the re-weighting of national votes in Council and to underscore the changes proposed for the community courts, the COR and ECOSOC—a tasty sandwich of acronyms, but also a substantial repast of reforms.

I conclude by highlighting the unfortunate message that Britain would send to the world were we to reject Nice. First, to the applicant countries we would be saying, "Yes, you can join the Eurovision Song Contest, but not our markets, not our community and not our Union". Secondly, the message to British business would be, "Yes, we want you to be the entrepreneurs and to go out as modern merchants, market-making, but be very careful beyond the Straits of Dover, for here be dragons speaking in forked foreign tongues, breathing fire and waiting to ambush you". If we as politicians cannot be bothered about Europe, why should our business men and business women? The constant drip-drip of Euroscepticism serves to demotivate, not inspire, British commerce. Such loose talk will cost Britain jobs and prosperity.

What of our young people—tomorrow's ambassadors of British culture and commerce? We implant in them a latent xenophobia at our future peril. What of Britain in a wider world, where it is imperative as never before to fill in our own global address book? If we cannot make friends in our own back yard, how can we make friends and allies beyond Europe?

The Nice Treaty is not a hop, a skip or a jump, but it is a quiet footfall forward to a purposeful Europe on a perilous planet. We should back it.

6.8 p.m.

Lord Blackwell

My Lords, I cannot agree with the noble Lord, Lord Harrison, that objections to the Bill amount to making a mountain out of a molehill. Like my noble friend Lord Waddington, I have serious misgivings about the treaty, because I believe that in a number of areas it continues the process of ceding sovereignty to a European entity.

A total of 39 vetoes will be replaced by QMV or co-decision-making. Either some of the changes are significant or they and the whole treaty are unimportant. The Government cannot have it both ways by arguing that the whole treaty is vital and yet at the same time saying that individual changes are all as uncontroversial as the reference to the Court of Auditors that the Minister mentioned—an example that I seem to remember featured prominently in the Prime Minister's press release at the time.

My view is that a number of the changes are much more important than that example and that many of them are not in our national interest. We should not dismiss the small changes either. Over time, the accumulation of small changes adds up to big change, as well as setting a precedent for the direction of institutional drift and for the interpretation of the all-important acquis communautaire.

The Government argue that these changes are essential to enlargement. Indeed, that has been the drift of all speakers who are in favour of the treaty. But, as others have said, there has been no serious attempt alongside the IGC to deal with CAP reform in anything like the time-scale that would be required to meet the planned admission of members. Yet without it, any attempt at enlargement is doomed to failure. As noble Lords will know, the scale of the CAP budget is such that admission of members without such reform would, to quote the Minister, "cripple" the European Union.

Therefore, I am led to the conclusion that the enlargement argument is merely window-dressing for forcing through a range of unrelated measures that have other motivations behind them. The noble Lord, Lord Grenfell, accused the Opposition of creating a Christmas tree of opposition. I believe that the European Union created a Christmas tree by trying to drag through a whole range of changes on the coat tails of the enlargement argument. We must point out those changes.

If the European Union is, as I believe it should be, primarily about fostering the economic benefits of free trade within a single market, we conceded as long ago as the 1980s substantial areas of QMV decision-making in order to facilitate that. I am not convinced that we need more QMV in order to extend the common market to new members; nor, frankly, do any of the proposals in this treaty seem to relate to that.

Therefore, if the changes proposed in the treaty are not related to the common market, they must relate to other areas of sovereignty which, until now, we have not regarded as necessary to concede. Therefore, why should we concede them now? I do not find it a compelling argument that enlargement means that we should now regard existing areas of sovereignty as less vital simply in order to make it easier for a European entity to reach decisions and impose common laws in areas outside those related to the single market objective. That is what it must mean.

Enlargement goes hand in hand with ceding sovereignty only if one has a model of the European Union as an increasingly powerful political government acting across much wider fields. As my noble friend Lord Waddington said, much of this is about deepening the European Union, not about enlarging it. If, like me, one does not accept that vision but sees the European Union as being about cooperation between nation states, then the argument that these changes are needed for enlargement is simply bogus.

Therefore, at stake here is not only the specific changes and the consequences that hang upon them but whether or not, in these changes and the trends of argument as we move towards 2004, we accept the principle that the proposals signal an increasingly powerful European entity.

Perhaps I may take a few examples, many of which were quoted by my noble friend Lord Waddington, to illustrate the points that I am making. I start with Article 137, to which my noble friend has referred. It already contains quite dangerous powers for the European Union to impose policies on what are called "the social rights of workers" in the UK where those social rights are defined by the European Union through a majority vote of its members. To the existing list of areas where the common European political judgment is regarded as superior to our own democratic process, the treaty now adds two new areas. I quote: the combating of social exclusion", and, the modernisation of social protection systems". I ask what intent lies behind those words. I doubt whether the phrases have been added merely to provide warm feelings.

I believe that historic experience should warn us of the manipulation of meanings. Such manipulation was used in relation to the health and safety regulations when there was an attempt to impose the Social Chapter through the back door. That experience should teach us to be very wary of creating, by adding new words, new openings through which EU regulations that are harmful to our national interest can leak.

If those are not simply warm words, what is the intent? What new regulations, impositions and constraints are on the shelf in the European Commission, ready to be unleashed on the UK once we grant them this power? Why should we believe that the European Union has anything to add to our own deliberations on these topics? And why should the majority view of European governments be superior to the views of our democratic process on how we might develop our own policies for social exclusion or social protection systems?

Therefore, I ask the Minister whether, in her response, she can set out exactly what changes she expects to come about through the addition of these clauses to Article 137, and why this accession of power to the European Union is so vitally important? What does it have to do with enlargement?

I move on to Article 144, which establishes a new social protection committee to monitor and report on social protection policies in each country. That committee will have the right to establish direct contacts with national trade unions and national business groupings in order to do its work. How long, I ask, before that body seeks to position itself as a centralised and corporatist negotiating body which seeks new powers to give teeth to its proposals? What is it there for if not, with the intent of the European Commission behind it, to take more responsibility and more powers? Again, what has any of that to do with enlargement?

What about Article 157, which is a charter for industrial meddlers? Under that article, the European Union is empowered to: take any action that it decides is appropriate to speed up the adjustment of industry to structural changes; foster initiative and the development of businesses; encourage an environment favourable to co-operation between industries; and foster better exploitation of industrial potential. All that will be moved to QMV and co-decision-making.

The issues that I have raised may sound harmless. They may be harmless. But there are very few policies that any past socialist, communist or interventionist government in the European Union or, indeed, eastern Europe and beyond have ever pursued or taken that could not be justified under one of those headings. I fear that there are still many political advocates across Europe for just such intervention. Yet, under this treaty, our national veto to protect us from such folly is removed, and the decision-making is moved to co-decision-making with the European Parliament. Again, I ask the Minister: why do we want to do this; how can it possibly be in our national interest; and what does it have to do with enlargement?

I do not have time to review all the other areas, but perhaps I may mention a few other concerns. I am concerned about the articles which surrender national decision-making on the mechanisms for controlling movement of people across borders and for dealing with external immigration. I cannot believe that, while not formally adopting the European Charter of Fundamental Rights, an attachment can simply be brushed aside as having no significance. The treaty would allow a majority of members to vote that the UK was at risk of a serious breach of the principles of freedom and law, based on their interpretation of those principles.

Under the treaty we would greatly increase the scope of the European courts in their jurisdiction over British courts and British justice. An extension of co-decision-making of itself implies a further shift of power towards Europeanised institutions, as opposed to national governments and national parliaments. Therefore, in this treaty, major shifts in power are intended which I do not believe have yet been fully understood in this country.

Finally, I am concerned that the treaty concedes the right of a small group of countries to move ahead in enhanced co-operation without extracting all the concessions that we might seek to win in return. I certainly do not object to a small group moving ahead towards political integration without us. Indeed, if that is what they choose to do, I prefer that they do so without us.

However, we must understand that, for those countries, this is a major prize, and our consent is an important bargaining chip. If we really were concerned about enlargement, should we not argue, for example, that such consent should be given only once we had also agreed a new and more sensible framework for the common agricultural policy? There are many other arguments that we could have extracted in return for that concession. There is a one-off opportunity to use it for that purpose, but it appears to be a missed opportunity.

For all those reasons, this is a Christmas tree treaty and, as such, it is a mistake. It is a dangerous addition to the flow towards a decentralised Europe, it concedes new transfers of sovereignty and it fails to protect or enhance our national interest. We have previously seen the danger of soothing words about the meanings of certain passages in treaties—those passages have come to have significant meanings and interpretations that were not appreciated at the time.

Given that constitutional significance, I ask the Government whether they would consider putting the treaty to a referendum of the kind that they used in relation to constitutional change in Wales and Scotland. I raise that because I do not believe that the British people have had a proper explanation of or debate about what is involved. It is not just about appointments to the Court of Auditors. If the British people had that opportunity for understanding and debate, I believe that, like the Irish, they would reject the proposal. If the Government do not volunteer that action, we should consider whether the Bill should be amended in Committee to achieve it.

6.21 p.m.

Lord Hannay of Chiswick

My Lords, over the years there has tended to be a rule of thumb for judging European treaties. If they are criticised by those I should call maximalists (the supporters of a European federal state) and by those I should call minimalists—although, listening to their rhetoric, it might be better to call them nihilists—(they regard any step towards greater European integration as an unacceptable surrender of national sovereignty), the treaty that is in the middle between those two extremes is thought to be a modest, cautious but necessary step forward. The Treaty of Nice, whose ratification requires the approval of the Bill, certainly fulfils the first of those conditions. It has been assailed vigorously by the maximalists both for the lack of ambition in its content and for the somewhat messy way in which it was negotiated. It was criticised by the minimalists for being one more step towards the inexorable construction of a European super-state. I believe that the treaty fits neither of those caricatures and is indeed a modest, cautious and necessary step forward. That is why I support its ratification.

There is perhaps more to that rule of thumb than first meets the eye. It is not just some cynical diplomat's observation. In the politics of Europe, just as in national politics, the battle for the middle ground is what really counts. There is plenty of sound and fury from the two wings; but neither of them determines the consensus outcome, which is what every European treaty has to be, because it has to be approved by unanimity; that was the case with this treaty. That is surely just the sort of pragmatic approach that is part of our national political heritage.

It is odd that so many critics of the European Union in this country are now such ideologues at a time when our continental European partners, who were often held guilty of that sin, have become quite pragmatic. A treaty such as this one is not, of course, light or easy reading. Indeed, it is that incomprehensibility that creates an obstacle to a proper understanding of and sympathy for what the EU is all about. Yet the purpose of the treaty is crystal clear and is of the greatest importance for the future of our Continent—it is to make the EU ready to welcome up to 12 new candidate countries and to ensure that it can function effectively when they have joined.

The political and diplomatic significance of this major enlargement can hardly be exaggerated. It will transform the EU from a body that, for all its use of the European label, is in fact not much more than western Europe, into something that is worthy of the title. It will heal the wounds of Europe's division during the Cold War. It will underpin the democracies and market economies of those countries that languished for so long under the dead hand of Soviet domination. It will greatly enlarge the single market and transform Europe's common foreign and security policy. Those objectives have been shared by all the main parties since the end of the Cold War first made such an enlargement a real possibility. That is the wood of which we must not lose sight when examining individually the trees of which this treaty is made up.

Enlargement on that scale inevitably requires substantial adaptation to the functioning of the Union's institutions. It cannot make sense to try to run those institutions in a union of 27 member states in exactly the same way as we have run them in a union of 12 or 15 member states. Are we to allow the Commission to expand far beyond the number of tasks that are available for its members? Are we to allow the European Parliament to expand to a point at which one would have to hire a football stadium to accommodate its members? Are we to allow the voting weight of the smaller member states to become more and more preponderant over that of the larger member states? I should have thought that the answer to all of those questions has to be, "No". But that is exactly what one would get if one said "Yes" to enlargement and "No" to the changes that are set out in the Treaty of Nice.

So far as the weighting of votes in the Council is concerned, it must surely be in Britain's interest to reverse the steady drift, through recent enlargements, towards a situation in which our votes count for less and less in the composition of a qualified majority. That is precisely what this treaty does. As more decisions are taken by qualified majority, this reversal—this shift back—is all the more important: to us. Of course it is easy to mock the complex formulae for voting—to point out that one would need a sophisticated calculator to work them out. But that conceals quite a simple point. Is Britain's voice to have more or less weight in the taking of decisions?

I should like to pause for a moment on the question of majority voting. It engenders a good deal more heat than light. It is argued that the extension of majority voting represents some fundamental sacrifice of our national sovereignty. When I listen to some of the views expressed from the Opposition Benches—the phrase, "extension of qualified majority voting", is always used with the word, "concession"—I have to pinch myself. How on earth can it be a concession by Britain to extend qualified majority voting to the trade in services, in which we have been prevented, in various trade rounds, from getting the liberalisation that we wanted and in which we should now be able to do so? That cannot by any stretch of the imagination be described as a concession. It might be a concession by France but it certainly was not a concession by the United Kingdom.

Qualified majority voting has been a crucial part of the European treaties from the outset. The original treaties provided for it in 1958—important policies such as agriculture, trade policy and the budget fell within its scope. Those were the treaties that we accepted in 1973, when we first joined. Those who object to majority voting as such must object to Britain's membership of the European Union as such.

If majority voting was needed to run a community of six—it was—how much more is it needed now that we are contemplating a union of 27? We found that out for ourselves when our early efforts to make progress towards a single market were continually frustrated by the requirement for unanimity in the relevant parts of the founding treaties. That was what led us to accept the single biggest extension of majority voting in the history of the EU in the Single European Act 1986. The fruits of that were not long in coming. Between 1986 and 1992, a series of measures of deregulatory legislation laid the foundations for a single market, which has brought huge prosperity, economic security and job growth to this country and our partners.

In examining that single market, I add that we owe a great debt of gratitude to a Member of this House—to the noble Lord, Lord Cockfield, who did a great deal to ensure that that was not just a few words on paper but a real, living single market. If anyone doubts the case for majority voting, I suggest that he compares the amount of single market legislation that was adopted before 1986 with that adopted after that date; it is quite a salutary comparison.

The extensions to majority voting contained in the Treaty of Nice are modest compared with those contained in the original treaties, the Single European Act and in the Maastricht Treaty. There is a simple reason for that. The extension of majority voting is now bumping up against the natural limits for it. It is coming up against a determined reluctance in a whole range of member states to allow such decisions to be taken in matters of great national sensitivity such as tax and social security. No doubt there will continue to be those who will argue for an extension—the maximalists will do that—but I doubt whether the extension of majority voting will ever again be the centrepiece of a treaty revision conference, as it has been hitherto. In that view, I join the noble Lord, Lord Owen, although I would not go as far as him in opposing any such move on any such matter.

Already the focus of attention is moving towards what Europe does rather than how it does it. In the war against terrorism, people will be far more interested in results. Are we more secure? Is Europe able to throw its considerable weight into the struggle? Can we clamp down effectively on the activities that terrorists have been carrying out in our midst? When euro notes and coins are introduced in the Eurozone in two months' time, people will want to know whether that has been achieved without undue dislocation or a boost in inflation. Will it reduce costs and make price comparisons more transparent? Will it contribute to stability, jobs and investment?

So it should be with the Treaty of Nice. The key objective is to bring in as many of the 12 candidates as possible and as are ready to accept the burdens and responsibilities of membership of the Union by 2004, with the accession negotiations having been completed as near as possible to the end of 2002. That is the purpose of the treaty and why its rapid ratification is an important signal for us to send both to our partners in the Union and to the candidate countries themselves.

6.32 p.m.

Lord Lamont of Lerwick

My Lords, like other noble Lords, I strongly support enlargement of the EU. I have had the opportunity of seeing how the prospect of membership of the EU encourages economic reform in eastern Europe, the building of civil society and the ability for those countries to put communism behind them. Without the prospect of EU membership, many hard decisions would be avoided in these countries. I certainly look forward to the day when the wholly artificial division of Europe is ended.

It is said, and has been repeated endlessly in this debate, that by opposing the Bill and the treaty, one is opposing enlargement. If I thought that the Bill was essential for enlargement, I might well be in favour of it. There was an earlier exchange about the precise significance of the words used by Mr Prodi. In that exchange, we lost sight of the fact that Mr Prodi referred to up to 20 members—that is, five more new members. There is no problem in running the institutions of the EU. That is what he said. All this business about amending the accession treaties of each country, which, as the noble Baroness, Lady Williams, rightly pointed out, would be laborious, would be after five more countries had joined the EU. Mr Prodi's point was not just a narrow, technical one, but highly significant.

The real point, made forcefully by my noble friend Lord Waddington, is that there is so much more in the treaty other than the provisions dealing with enlargement. Brian Hindley, in his brilliant pamphlet on the treaty, pointed out that the part dealing with enlargement is in the annexes dealing with the votes in EU institutions and accounts for only 5 per cent of the contents of the treaty and the presidency conclusion.

The most depressing feature of the treaty is that it schedules yet another treaty and yet another constitutional conference in 2004. I know that my good friend the noble Lord, Lord Wallace, who loves these things, will enjoy it, and his wife will enjoy it, too. They will be going to many conferences. But for many others, our hearts sink. Why do we have to go on this never-ending journey? Why is the EU never complete? Why are we always told by the noble Lord, Lord Ashdown, that if we do not carry on bicycling we will fall off the bicycle?

Why is there another treaty in prospect? It is not, as the noble Baroness, Lady Williams, said, because the EU is responding to specific problems. It is not that at all. It is part of the endless process of salami slicing in the building of a European political entity. Each small step is small enough to be difficult to object to. We are told to consider everything on its merits and to consider the next step only when it is taken. But when the next step comes, we are asked, "How can you disagree with this when you have agreed to so much already?".

The treaty is rightly described as modest, but it takes small and significant steps towards the creation of a full political union. Because they are modest steps, perhaps there would be no loss in dropping them. The treaty also contains potential threats, as I shall try to illustrate, to our own rights and freedoms.

I agreed with much of what the noble Lord, Lord Hannay, said. It is not the changes in qualified majority voting that I most strongly object to, although I should prefer an EU that did less with less majority voting. Like my noble friend Lord Blackwell, I note the contradiction between the Government's insistence that all these changes are technical and unimportant but simultaneously vital for enlargement.

I agree with the noble Baroness, Lady Symons, about the removal of the right of veto on enhanced cooperation. It is made crystal clear that that does not apply to military or defence matters. To object to other countries going ahead with integration in certain areas that we might not want to participate in would be a dog in the manger attitude. Removing the veto makes it easier for Britain to say no to proposals that it does not like.

I am more concerned about Article 100, which allows the EU to take appropriate measures, including financial assistance that may be agreed, to aid member states in financial difficulty. There was some discussion about that in another place. Peter Hain claimed that it did not undermine the "no bail out" rule, which is central to maintaining budgetary discipline behind the single currency. It is clear from the amendments made at Nice that Article 100 refers not only to national catastrophes but to other circumstances beyond the country's control. Perhaps the Minister can explain the purpose of Article 100.

It is all very well for Peter Hain to assert, without offering any reason, that the provision could not be used to bail out, or compel countries to bail out, other countries with financial problems. We remember how health and safety provisions combined with QMV were used to force through the working time directive. It is right to be suspicious about anything in the treaty that is widely and vaguely drafted. There is plenty of that in this treaty.

An important veto removed by the Treaty of Nice about which I am concerned covers breaches of fundamental rights by a member state. Under Article 7 the determination of the existence of a breach of fundamental rights by a member state still requires unanimity. However, the article, as modified at Nice, allows action in the event of so-called "risk" of a breach of fundamental rights. It allows the Union to put forward appropriate recommendations. If a state is judged to be in breach of fundamental rights, it can be punished, and that includes suspending the voting rights of that country.

Last year we saw the hysterical, alarmist overreaction to the inclusion of Mr Haider's party in the Austrian Government after democratic elections and perfectly normal negotiations to form a coalition. I have no time for Mr Haider; I dislike his politics. But the EU's reaction was dangerous, counterproductive, an insult to Austria and simply plain silly. The EU knew it was silly; otherwise it would have taken more serious action than it did before it found a way of climbing down.

But one of the most adolescent scenes I have ever seen in politics was that of EU finance ministers with badges of Mr Schusses bow tie and a big cross through it saying "No". That may be appropriate for student politics when running for the rectorship of Edinburgh University; it does not seem the right way for people to behave in the Council of Ministers. It does not give one confidence about how additional powers of this kind will be used in the future.

Another dangerous area with potential for more politically-correct meddling comes with Article 191 covering political parties. At Nice it was decided that the Council, shall lay down the regulations governing political parties at European level, and in particular the rules regarding their funding". That was the addition. I appreciate that it refers to political parties at a European level. But it is not always logical to distinguish between European political parties and national political parties; the two may find themselves opposing each other at European elections. I would be grateful if the Minister can confirm one point, which I believe to be the case; that is, that any EU funding of political parties requires unanimity.

The merits of Article 191 depend on the detail. But one is not encouraged by the letter to Mr Prodi from the leaders of the four main groups in the European Parliament who proposed that political parties which did not respect fundamental rights might be subject to suspension proceedings—yet again, the Haider approach: "We do not like you; we will ban you". There is not much of the spirit of Voltaire there.

It is easy to imagine certain political groups proposing similar measures against parties seeking to defy the conventional consensus on Europe. They will be called "xenophobic". Is that exaggerating? I wonder. Look at the Commission proposal for a regulation on the financing of political parties. I acknowledge that it is designed to deal with the leakage largely of Community funds from MEPs to European political parties. None the less, it provides for funding from the EC budget for European political parties. To qualify for such funding, guess what? Parties must not be xenophobic. They must not be intolerant. They must not be opposed to fundamental rights.

There are arguments for and against state funding or European funding of political parties. I am not always sure which side of the argument I am on. But of one thing I am certain. If we are going to have state or European funding of political parties, it cannot be decided on the basis of whether we approve or disapprove of those parties. That is wholly and completely wrong.

To qualify for funding, parties also have to have elected representatives in at least five member states, or have received at least 5 per cent of the vote in the most recent European parliamentary elections in at least five member states. When Mr Hain appeared before the European Union Committee of this House, he said to me that the Government did not want to see parties which are not part of European-wide groupings prejudiced in their ability to fight European elections. With respect to the Minister, that is exactly what the proposed rules do. National parties which are not part of wider groupings will be at a huge disadvantage. They will not receive financial support.

We have already had the Government putting forward a rigged proposal for any referendum on the euro; now apparently we are to have rigged European elections in terms of finance. It is no answer to say parties are free to join another pan-European grouping. What if they do not want to? The whole purpose is the use of EC money to create something completely artificial: European-wide political parties designed in turn to create something else that is completely artificial—a European public opinion.

Another area where bland, innocuous sounding proposals may turn out very differently, is police and judicial co-operation; the so-called "Eurojust" under Article 31 in Title VI. The Belgian presidency's website announces that, Eurojust is a permanent unit of magistrates with power of enquiry established in Brussels". What use is going to be made of that? The noble Baroness, Lady Williams, talked about the response of the European Union to the events in New York on 11th September. We have seen the introduction of a European arrest warrant which would largely replace extradition proceedings. The proposals would make it compulsory for a person wanted for an offence punishable by at least a year in prison to be handed over to the authorities in the member state that requested extradition. Although it was claimed initially that the warrant would only cover terrorist offences, it seems from the draft text that it could be used for any offence carrying the minimum sentence. Perhaps the Minister would comment on that.

With respect, it is no answer to say that the details, which are being negotiated, are not in the treaty and are separate. They stem, if not directly from the provisions in the treaty, from the same idea of judicial co-operation and if we are to be asked to give our approval of that we have to know what use will be made of it. I put it to the Minister that the proposals being negotiated are ones that go very far in removing the rights of an individual in resisting extradition.

What use will be made of the Charter of Fundamental Rights? M Jospin hoped it would be, an integral part of the pact uniting the nations of Europe". Enthusiasts wanted it to have legal force. That did not happen; but it is only delayed. The presidency conclusions note that the question of the charter's force will be considered again later. And the declaration on the future of the European Union made clear that the charter will be on the agenda at the next IGC in 2004.

So much of the charter just reflects social democratic orthodoxy reflecting the political complexion of Europe as it is at the moment. A true charter of fundamental rights would not reflect passing political whims and fashion.

One wonders what is the point of articles like Article 29 giving everyone the right of access to a free placement centre. What is the point of asserting the right of everyone to marry and start a family. It all sounds like a PR effort for the EU, trying to imply that our right to marry or our right to have children somehow derives from the European Union. Indeed, Mr Vaz, in his short period in the Foreign Office, appeared before the Select Committee of this House and said, "We are going to give out plastic cards with the rights of everybody on them so that they know what their rights are". Fortunately we have since heard little of that proposal.

I would also be interested to know if the Minister can tell us whether the Government intend to uphold the right enshrined in Article 19.2—the right not to be extradited to a country with the death penalty. Are we really going to refuse to extradite to the United States anyone arrested here and accused of involvement in the 11th September atrocities? I gave the Minister advance warning of that question and hope she will be able to comment on it.

Some of the articles are strangely illiberal, such as the article which says that no one is entitled to engage in any activity or to campaign against any of the rights enshrined in the charter itself. So if I wanted to campaign against the right to refuse to extradite someone to the United States, by doing that, according to the charter, I would be doing something against the charter.

We have seen in this debate that the Bill and the treaty contain many strange things which have nothing to do with enlargement. If the issue was enlargement, my welcome would be very different. But so much is about political correctness and about extending the powers of Europe into areas where it need not go. There are many provisions in this treaty that we would be better off without. In my view it would be no great loss if Britain followed the example of the Irish.

Baroness Farrington of Ribbleton

My Lords, for the benefit of noble Lords, perhaps I may inform the House that there is a firework display nearby.

6.49 p.m.

Lord Lea of Crondall

My Lords, I thought that it was divine disapproval for the line being taken by the noble Lord, Lord Lamont.

Perhaps I may add my congratulations to those already given to the noble Baroness, Lady Williams of Crosby, on her elevation. I often wondered what the "gang of four" was all about. In that connection, I noted with great interest the remarks of the noble Lord, Lord Owen, on the case for the referendum on the euro being—I hope I get this right—not before but maybe in, 2004. That would tie in with Berlin. I assume that he would not necessarily vote against it at that time; otherwise I may have missed his point.

Some people say that we are rushing our fences on Europe; others that we are proceeding too slowly. Every step in the EU since the 1950s has been damned with faint praise in some sections of opinion in Britain. Sometimes that is because, it is claimed, it is overambitious and will fall flat on its face; it has not. It has been a remarkable success story, the leading model of regional integration with the nation state in the world. We are certainly not slavishly following the constitutional model of the United States, which is the main alternative. Europe is its own model, sui generis.

In that kind of setting, Nice should be seen, as my noble friends Lord Grenfell and Lord Tomlinson have dubbed it, as a careful, modest, necessary but permanent addition to the construction of a larger EU. I am afraid I do not understand—here I echo the noble Lord, Lord Hannay—how the noble Lord, Lord Howell, concluded that it is not necessary for enlargement. The new formula for votes in the Council of Ministers is surely self-evidently a pre-requisite of enlargement. The agreement on voting weights was not an easy one and I think that the French deserve congratulations on hanging in there. I hope that congratulating the French does not infringe any ancient Act of Parliament which entails being sent to the tower.

On qualified majority voting, enlargement means that we cannot, surely, have a national veto on the range of EU work. It is surely a fact that the EU would grind to a halt if we allowed every country—to be concrete about that, Latvia and Malta—to exercise a veto on the sort of issues extended to QMV in the Nice treaty. On the question of enlargement, perhaps I may add that the challenge of adding countries with an average GDP per head of only 30 per cent of the average EU GDP is daunting. That is a good deal lower than it was when countries of low GDPs, such as Greece, Portugal and so forth, came in.

I suggest that the real reason why anti-EU opinion is miffed by Nice is not that it is inadequate, but that it has destroyed the illusion, popular with some sections of opinion, that widening, to use the jargon, is at the expense of deepening. It is becoming more and more apparent that the two go hand in hand. That must come as a shock to the illusions of those who seriously thought that enlargement would water down the whole thing.

I turn to defence and the European rapid reaction force. Does my noble friend the Minister not remember well the support she received on that, not only from these Benches and the Liberal Democrat Benches, but from noble and gallant Lords on the Cross Benches who pointed out that they had been working on that for many years? The problem of Turkey has been cited. Nothing has prevented Turkey from participating in assistance in the Balkans, for example, as it has done recently, having committed some 1,000 troops to Kosovo. Am I right in saying shat in such cases the appropriate umbrella would be available as now but the rapid reaction force would bring additionality to that? I may be on the same line as the noble Lord, Lord Owen, in that respect.

As regards the importance of the social and employment dimensions of the EU, Nice should be the signal for a great number of countries to think in a more practical way about how they will transpose the acquis, not just by passing laws—closing the chapters as it is called in the jargon—but by engendering people to take responsibility on the ground in implementing the changes. In my experience in a number of countries in the past few weeks, from Lithuania to Macedonia, that has to receive a great deal more emphasis. The trade unions of Europe are now working together at a practical level as they never did before. That is partly because we can create a better life and a better society together, rather than if we act on our own. That has always been the spirit of trade unionism.

I turn to agriculture. My noble friend will correct me if I am wrong on one point which has not so far been mentioned. I believe that the next step is for agriculture to be dealt with in the WTO negotiations in parallel with internal EU discussion. That is inevitable, and that is why I am pleased that Qatar will go ahead—I hope I am right on that—and that the two timetables will therefore be expected to dovetail in about 2004.

Before concluding, perhaps I may mention the second front, which is not in Berlin but here in Westminster. Nice sets out a clear job of work to be done in national parliaments, including Westminster, which means us. When we criticise the EU for sins of omission—for not streamlining its procedures, and so on—let us remember the injunction, "first remove the mote from thine own eye". The European Union Select Committee structure does an excellent job, but we need to think about how it should be supplemented in relation to the convention.

Page 78 of the blue treaty document states that there will be discussion leading up to Laeken—we have missed that—and after Laeken with national parliaments, and all those reflecting public opinion, in four areas. First, it refers to delimitation of powers between the Union and member states; secondly, the status of the Charter of Fundamental Rights; thirdly, simplification of the treaties; and, fourthly, the role of national parliaments. I suggest that it is apparent from that that we in this House do not move at the speed of a greyhound in adopting new procedures. We are moving forward to the convention and on this occasion we really do need to have consultation in depth.

Perhaps I may say to my noble friend the Minister that we must get the right combination. Can she indicate whether that is how she would see it? As a Foreign Office Minister, she will know that the relationship between the Executive and the legislature is a delicate one. To make discussions work, should not we have a combination of formal and informal procedures for the involvement of this Parliament in feeding back what is happening as regards the convention?

Along with other noble Lords present I welcome the initiative of my noble friend yesterday in arranging an informal meeting, open to all Members, on the work of the convention. That complements well the formal procedure. The range of those who attended yesterday made good use of an hour's question and answer session, which was far freer and, perhaps I may say, more illuminating than that which is often the case when everyone is prepared to make a speech on the record. After Laeken we need a new type of future scoping paper, perhaps along the lines of a discussion document and perhaps one notch down from a Green Paper.

Now is the time to stop being the theatre critic who often gives the play a bad review and to get out there on the stage. I am sure that our representatives on the convention would also benefit greatly from that. There is one point on which I believe we would all agree with the noble Lord, Lord Waddington; that is, one would not find much understanding of the Nice treaty in a public bar either in London or Dublin. A point follows from that. As we start to use more popular language and endeavour to meet the point, I trust that we will not then be said to be simply making propaganda. I hope and believe that getting the euro into people's pockets will be an example of how we have to take risks in getting popular understanding, and that when people then look back in a few years' time they will ask what all the fuss was about.

7 p.m.

Lord Biffen

My Lords, the entrance fee for this debate is to pay a tribute to the noble Baroness, Lady Williams, and to congratulate her on being appointed Leader of the Liberal Democrats. I happily make that payment. My noble friend Lord Howell of Guildford has explained the modalities that prevent us from voting on this legislation this evening, which I understand. If I were still in the other place, I would happily have joined the Conservative Party in voting against this legislation on the occasion of their consideration of Second Reading. As we no longer have a vote, we can concentrate on our voices.

I shall reflect on where we have come from and where we hope to go. To my mind, the debates on Europe that were initiated in the late 1950s and in the 1960s, when the Rome Treaty prescribed a homogeneity of the original six that made the term "closer union" have a certain understanding, are of recent recollection. One great protagonist of the debates on Europe in this country was inspired to talk of "Europe, a nation".

Since then we have gradually seen the enlargement of Europe into its present state, both in terms of its ambitions and its territorial commitment. We have seen that the pursuit of "Europe, a nation" has encountered a number of serious considerations that should make us all ponder and reflect at this time on Europe and her institutions. I shall choose—not in any sense of malice, but with a sense of significance—three areas where, on any tolerable judgment, I do not believe that the European Union and its institutions stand well regarded.

The first, and perhaps the most important, is popular endorsement. Europe, seeking the consent and the endorsement of the European people, stands in a very sad situation. Direct elections were initiated in 1979 and on five occasions such elections to the European Parliament have taken place, starting with a turn-out of votes of 63 per cent, which during the 1999 election fell to 49 per cent. Each election has recorded a drop in the number of votes over the preceding election.

There is no sign whatever of a popular enthusiasm and a popular endorsement, above all a popular understanding of what sacrifice means in governmental authority as far as the European population is concerned. I believe that to be a profoundly dangerous situation. At the end of the day, popular voting and popular involvement give those who take authority, and who require discipline, the tolerance that comes with popular participation. If you take that away, you will not take away conflict; you will almost certainly ensure that eventually conflict will be taken to the streets. In my view, it is evident that that is the danger, although it lies over the brow of the future.

Lord Watson of Richmond

My Lords, I am grateful to the noble Lord for giving way. Does he view the fall in turn-out during the last British general election and the ever-decreasing turn-out in the American presidential elections as signifying a real distance and a real lack of commitment to democracy?

Lord Biffen

My Lords, of course I do. If we are to bandy about statistics, the United Kingdom component of the European Union direct elections is one of the biggest and most profound challenges of all, as the figure has fallen to 24 per cent.

I turn to the second consideration. For many across the spectrum of those who endorse membership of what was then the Common Market, the prospect of open trade was particularly attractive. It included the prospect of the dismantling of tariffs, of our own industrial base being subject to more competition and of access to a wider European market. I have no doubt that in the early years that was a satisfactory consequence. However, when one looks at the position of the economy across western Europe today, it is not characterised by a growth in the dynamic of open trade and of liberal principles; it is characterised by a growth in regulation, in harmonisation and in bureaucracy of one sort or another that has made the balance within the: European Union considerably different from that anticipated by the pioneers. As ever, it was put graphically by my noble friend Lady Park when she talked of "institutional creep". Throughout Europe there is a subterranean growth in governmental involvement in regulation, which is a serious challenge.

Thirdly, I turn to the agricultural policy. There is something Augustinian about the agricultural policy. Its reform always lies just over the brow of the future. It is a relatively reasonable situation to analyse. Agriculture has been a subject of social considerations, environmental considerations and food production considerations. They have been held in a balance. The agricultural policy has never been purely a farming consideration. It has problems and difficulties, which I shall not chronicle because they are well known and they have been acknowledged by practically every noble Lord who has spoken. The ability to resolve them appears to be beyond our reach. At the end of the day, the politicisation of the price mechanism prevents those three factors adjusting themselves to the changing national and world conditions.

I have identified three great issues—popular commitment, the liberal ethos of economic policy and the common agricultural policy—that are still at the top of the agenda in demanding major and fundamental reform within the European Union. I ask one simple question: will enlargement help the solution of those three issues? I shall quote only one witness, my noble friend. Lord Renton of Mount Harry, whose views on these matters are close to those of my noble and learned friend Lord Howe, and somewhat distant from my own. My noble friend Lord Renton gave evidence to the Lords Select Committee that considered enlargement. He said at page 37 of the evidence taken on 21st October 1999: We are all in favour of enlargement in general terms but when it comes to the principles of how do you create a European Union Commission, Council, Parliament that is actually going to work with 26 members we do not really see an end result that is either acceptable to us individually or acceptable to the members generally". That is the problem. The enlargement of the European Union is seen as an extension of the institutions which were fashioned in the late 1950s and which still stand central to what is now proposed. The noble Lord, Lord Hannay, made an argument, with the hauteur and self-confidence that I would expect of the Foreign Office, based upon the continuation of the central features of 1959, as though one could proceed without a major change. Yet we are now compelled to consider a major change. I say that because the nature of Europe, the threats to Europe and the challenges to Europe are being transformed.

From now on, 11th September will always have an imprint on our considerations and judgments; it is not a quick, dramatic situation that will diminish as we adjust to it. It is bringing a greater reality to the words of Charles de Gaulle in 1959, when at Strasbourg he talked of a wider Europe. I can quote de Gaulle's words only in French—I apologise to my audience on that account. He said: Oui, c'est l'Europe, depuis l'Atlantique jusqu'àl'Oural, c'est Europe, c'est toute l'Europe, qui décidera du destin du monde". Of course, he was right. The Europe that we think of today is one that now stretches to the Urals. It is a Europe in which, if we were to ask the applicant countries, "Look, for the moment, you can have one or the other: NATO or the European Union", my money says that they would choose NATO. There is an increasing anxiety for the wider Europe to be seen primarily in terms of defence. We can then consider all the other challenges to do with trade and the issues that properly occupy this debate but which are none the less secondary to defence.

Once we talk of NATO and its extension to involve Russia, as the noble Lord, Lord Owen, mentioned, we must negotiate a whole series of subtle relationships that relate to Russia, defence and terrorism with our partners in the wider Europe who want NATO, but originally wanted it on rather different terms.

That is the challenge. I am not in the slightest upset that those on my Front Bench have been somewhat restrained in how they have approached the topic of this debate, because it misses the realities and challenges of today. In her opening speech, the noble Baroness, Lady Symons of Vernham Dean, talked about the treaty "increasing our wealth". It might increase our wealth, but today we are not concerned with the argument of shopkeepers; we have totally different considerations. The old-fashioned arguments about domestic product, trade and the rest of it, which may have served 20-odd years ago, do not hold central relevance to the kind of Europe that we should be considering today.

7.13 p.m.

Lord Watson of Richmond

My Lords. I must congratulate the noble Lord, Lord Biffen, on adding to the linguistic pluralism of the House. This week, we have heard Gaelic, French and a strong Canadian accent, so we become more varied every day.

We heard a wise judgment from the noble Lord, Lord Hannay, about the Treaty of Nice—that it is, if not a minimalist treaty, a necessary and modest one. None the less, it gives rise to strong emotion and raises several important issues of principle. I should like to address both an emotional context and an issue of principle.

However, I shall begin by sharing an experience with the House, like the noble Lord, Lord Lamont, who, as we heard earlier in the debate, played such a critical role in the more important conference and Treaty of Maastricht. I was present in the modest role of a journalist and remember being briefed with other journalists in the early hours of the rooming in the British briefing room. A chap came across and told us in tones of hushed urgency that the Prime Minister was across the road in the other building, "surrounded by foreigners". Indeed, so he was, and rightly so. The emotional issue, as in all debates on Europe, concerns the basic feelings of the House and of individual Members about the nature of sovereignty. There is clearly a deep, instinctive divide. Some of us in the House and in the other place, in essence, take the view that in an increasingly interdependent world—since 11th September, the democracies of the world are interdependent to an unparalleled degree—the way for democracies to hold sovereignty is to find the right levels and the right subjects on which to share sovereignty. There is another feeling, which is that that path leads to the abolition of the nation state, and with it the freedoms that Parliament and our democracy represent.

We all find a position somewhere between those two extremes. Increasingly in the European debate, our fundamental instinct guides us to a detailed position on this or that clause, paragraph or next step. I wonder increasingly whether, if the Conservative Party could turn the clock back or forward—I do not know how that would be done—it would vote for the Single European Act or for Maastricht. Has some kind of hindsight now taken over the Conservative Party that says, "All this was a disaster; we should not have done any of it"? It is sometimes alleged that the fault lies with the noble Baroness, Lady Thatcher, because she did not read the Single European Act, or that others did not foresee what might be its consequences, that it was all a terrible mistake and that we should never have gone down that road.

The Nice treaty is a modest step, but it recognises that, in a world of increasing danger and increasingly obvious interdependence, it is important that in our geographical area of Europe we decide on which matters by sharing decision-making and sovereignty we can increase the real quantity and quality of sovereignty. The Treaty of Nice, although a modest treaty, a somewhat inelegant treaty—born of an extremely fractious and inelegant summit, despite where it was held—is nevertheless a step in that direction. Why? What is the most important thing about the treaty? Its most important consequence relates to enlargement.

Interestingly, the noble Lord, Lord Lamont, acknowledged the beneficial impact on the modernisation of eastern and central Europe and the movement of economies and democracies there into the full modern age of the acquis communautaire. Countries have had to adapt in such a way. If we did not ratify the treaty, Mr Prodi might feel that we could still get five countries in. I am not reassured by his confidence about the five; I am aware of the fact that 12 have applied. However we argue it, the message that we would send to east and central Europe if we refused to ratify the treaty would be: delay. We would be saying that we did not recognise the real historic dimension of this moment and that our own internal, domestic argument was of greater importance. And what is the result of delay? The result of delay is dismay. It inevitably will put a break on the process of modernisation and on the urgency and the focus of meeting the chapter in the acquis communautaire which exists and which from my experience of travelling in eastern and central Europe is a factor of the greatest importance.

My plea would be that in approaching the treaty and its ratification we should not bat our way into the 21st century with our eyes fixed longingly on the 19th. We must view this treaty in the context of the challenges that we in the European Community and Union face and are likely to face in the next decade. In that context, the Nice treaty is a modest but necessary step.

7.20 p.m.

Lord Williamson of Horton

My Lords, I am pleased to intervene from the Cross Benches today, although I feel a little like a Motherwell supporter at a Celtic v. Rangers match. It is an essential protection for our sovereignty that the United Kingdom Parliament must take the decision on the ratification of any changes to the Treaty on European Union and the treaties establishing the European Communities. Those treaties are, in a sense, the constitutional basis for the United Kingdom's position, its rights and obligations within the European Union and the European Communities. The need for the ratification of any changes, just like the earlier ratification by our Parliament of the existing treaties, is therefore once again the clear demonstration to our citizens that in the European Union it is the member states which rule, okay!

Bureaucrats cannot change the treaties; Eurocrats cannot change the treaties; Commissioners cannot change the treaties; Ministers cannot change the treaties; only Parliament is sovereign. For that reason, even if some of the changes may not seem too important, we need to be attentive to the changes which are now to be given effect in domestic law.

That was always the case when past intergovernmental conferences led to treaties, such as the most recent Treaty of Amsterdam, which were added to the treaties listed in the 1972 Act. But in the case of the Treaty of Nice, which we are discussing today, there is another element; a genuinely political element which should also weigh heavily in the balance. From the early days of the discussions and negotiations between the member states which led to the Treaty of Nice, it was widely understood that an acceptable agreement there on some institutional questions would clear the way for the completion of the negotiations now taking place with the countries of central, eastern and southern Europe which seek membership of the European Union. That has been clearly stated in this debate and we cannot avoid the obligation that that imposes on us here in the UK Parliament. There are about 108 million people in those countries which are currently negotiating accession and we all know that that will be a step-change in the nature of the Union.

When I spoke in this House immediately after we knew the results of the intergovernmental conference at Nice, I stressed the importance of the political perception of the completion of Nice for the enlargement of the Union not only within the present Union but within the acceding countries themselves. I believe that we must make our further contribution to that political perception by ensuring that the United Kingdom ratifies the Treaty of Nice.

Of course, I am well aware that Ireland has not ratified, but we must take our own responsibilities and not make the mistake made after Maastricht by allowing our attention to be too much diverted to what another member state has done or is likely to do. As far as the United Kingdom is concerned, I do not want us to lose the momentum of the enlargement of the European Union. Enlargement is a political change of high importance; the creation of a new type of Union because of its diversity and the traditions and priorities of the new members states. All that is, for me, positive. And we must also wake up to the greater prospects for trade, commerce and contacts between citizens within the enlarged Union.

That is what is opening up in central and eastern Europe and in parts of southern Europe. It has little or nothing to do with bureaucracy or technocracy, but it has a lot to do with enlarging our community of interests. We must recognise the even greater responsibilities which the Union will take on in the wider world as it enlarges within, I hope, the near future.

With the ratification of the Treaty of Nice by the enactment of the European Communities (Amendment) Bill, I would like to see the message go across the Channel to the Council of Ministers and to the European Commission: let us work to finish the negotiations with the applicant countries by reducing those chapters—already few, I am pleased to say, for some countries—which require the final decisions of Ministers and let the Ministers decide.

I turn to some of the specific changes included in the Treaty of Nice, in particular to the institutional changes. I am not very interested in institutional changes but I have a lot of experience of the European institutions and some changes were signalled beforehand as of importance in themselves and for the further enlargement of the Union.

The first is the voting weight; that is, the number of votes available to each member state for use if there is a vote in the Council or, for example, in the management committees. There are three elements in the changes agreed at Nice. First, there is the most important point; namely, the United Kingdom's own position. That position is improved as the United Kingdom will in future have a greater percentage of the total votes. Of course we must welcome that.

Secondly, it makes a qualified majority slightly more difficult to achieve because there is a small lift of the threshold. In addition, it introduces the requirement that at least half the member states must agree and the favourable votes must represent at least 62 per cent of the population of the Union. I see no difficulty whatever in the new criterion of a substantial percentage of the population, which is a democratic approach. As regards the higher threshold for the votes, I would personally have preferred to leave it as it was, but the difference is slight.

Thirdly, in Declaration 20 on the votes, we now have the application of the votes in a Union of 27 members, thus avoiding a potential argument at the conclusion of each acceding country's accession negotiation. I should say that in the final stages of negotiation of the earlier Treaty of Amsterdam, heads of state and government were close to an agreement on the revised weighting of votes for the current member states. I was present on that occasion and I believe that had that point not come towards the end of long and exhausting negotiations they might have concluded then. But the fact that we now have that agreement plus the agreement on votes for the new acceding states shows the added value of Nice.

Furthermore, there are a number of changes to the prospective number of commissioners to take account of enlargement. It is well known that some smaller member states which were less well treated as a result of the changes in voting weight were all the keener in consequence to retain their commissioner while other member states wanted to set a strict limit to the number of commissioners. It was therefore necessary to reconcile the view, particularly in the light of the forthcoming enlargement.

The result is not exactly glorious, but it has the great merit of taking the issue out of the disputed domain, at least until 2010 when, no doubt, your Lordships' House, having settled a number of contentious issues about its own composition, will be able to return to the question of the number of European commissioners. We can assume that in the shorter term the number of commissioners will rise because, for example, in the period up to 2005 one will be added for each acceding country—and I hope that there will be a good number of such countries. It is only in 2010 that that number will be definitively reduced.

The treaty also contains a number of small changes which will increase the role of the President within the Commission. It will none the less remain a body which takes its positions on a collegiate basis.

A good deal has been made of the other areas of change; those concerning the areas subject to qualified majority voting and the so-called "enhanced cooperation". It is perhaps difficult to convince oneself that the change to QMV in those areas will make much difference in practice, although I would signal the potential effect on some measures; for example, the procedures for checks at external borders (Article 62)—it has not been mentioned in the debate, which rather amazes me—where the United Kingdom now has an opt-out which is rather charmingly described as an "opt-in".

When I went to Brussels in 1987 I made what I believed to be a very good speech which was immediately attacked on both sides. One British newspaper featured it under the heading "Thatcher adviser goes bush". Enthusiastic Europeans attacked it because I suggested that in some important areas the Community was, or shortly would be, at cruising speed and it did not need a spate of legislation or other changes. I hope that we are now at cruising speed on QMV and that in the coming years it will not be necessary to reopen the balance achieved between areas subject to unanimity and areas subject to QMV. In that respect I am exactly in line with the observations of the noble Lord, Lord Owen: if it works, don't fix it.

As to enhanced co-operation, it is a little odd to amend the text agreed so recently at Amsterdam before it has ever been used. It is said that that text was difficult to operate, which was why I liked it. I am not too concerned if there is some variation of pace between member states in the intergovernmental areas, such as the common foreign policy. But I am glad that there are still important safeguards and hurdles to protect the coherence of the Community and the rights of non-participants.

Although declarations do not have the force of treaties, it is right to recognise the importance of Declaration 23 on the future of the Union. That declaration highlights certain subjects—for example, the role of national parliaments—for a future intergovernmental conference in 2004 and the preparation for it, including the association of representatives of national parliaments. I am sure that that method of preparation will be better than that which I suffered in the three major IGCs before Nice. With the huge increase in the legislative role of the European Parliament in recent years, a better association of national parliaments and, I hope, more transparency in the Council's role as legislator, we can say that if there were a democratic deficit this would be the way to deal with it.

Some matters are not in the treaty, in particular the agricultural policy. However, as others have said, the existing treating contains only broad objectives for agriculture. All the market mechanisms and prices, already much reformed and reduced—although not noticed over here—do not require treaty amendment. Some future changes may be needed but not in the treaty that we are examining today.

It may be thought that I have damned this treaty with faint praise, but that is not so. I have praised it but only very modestly.

7.33 p.m.

Lord Tebbit

My Lords, we have had an interesting debate. Perhaps the noble Lord has added more interest than other speakers. It is not my business to sum up. I know that that task will be performed extremely competently by the noble Baroness, Lady Symons. Perhaps I may say how much I admire her stamina and resilience. She has sat in her seat almost unmoved except for one moment. It is strange that these days very few Members of this House can tell the difference between fireworks and gunfire. I believe that that was the only occasion on which I saw the Minister move, not in any sense of panic but curiosity.

There are two speeches about which I must say something. I see that the noble Lord, Lord Taverne, is now back in his place. All I say to the noble Lord about the speech which he said he should have made 30 years ago is that I do not think that it has improved with the keeping. I regret that the noble Lord, Lord Harrison, is not in his seat. He criticised Conservative governments, of which I was a member, of the 1980s for not getting on with enlargement. I gently remind the noble Lord, perhaps through the columns of the Official Report, that at that time several of the applicant nations were members of the Warsaw Pact and the leader of his party was dashing backwards and forwards to see his wife around the boundaries of Greenham Common. Things were rather different at that time. Had it not been for a robust government I do not believe that those countries would now be free to apply for membership.

I return to the Bill. I believe that there are three main objections to the measure which come under the following headings: what the treaty contains, what it does not contain, and the Irish decision. First, as to what it contains, there are new provisions for the voting system in the Council. It is important for both Eurosceptics and Eurofanatics to remember that there are times when the United Kingdom wishes to get decisions made or unmade. We who are attached to the unanimity rule must remember that effectively it can give one Parliament a veto over its successors. For example, the decision by this Government to submit to the Social Chapter can be reversed only with the unanimous agreement of our fellow member states or renunciation of the Treaty of Rome, regardless of the wishes of the people of this country, however expressed and in however many elections.

Therefore, we need to remember that the unanimity rule is a double-edged sword. So, too, are the provisions of the Treaty of Nice on blocking votes. I believe that the best solution to the difficulty is not to muck around with unanimity rules and percentages of blocking votes but to reduce, not increase, the size of the policy competence of the European Union. That is the way in which we help to resolve that difficulty.

The detail of the treaty is not the material of a Second Reading debate, but on this issue it is sufficient to say that the ability of Germany to block proposals coming forward under QMV would be greater than that of any other power. We all accept that Germany must have a privileged position in this respect because of the greater size of its population, but we must also remember what powers are being given to one particular nation within the European Union.

On this matter the noble Baroness, Lady Symons, and the noble Lord, Lord Williamson, produced some rather dodgy arithmetic. They both asserted that we were gaining influence in the number of votes that we would have under the treaty. As I understand it, we now have 11.49 per cent of the total voting power in the European Council. After the accession of all the candidates we shall have 8.41 per cent. That is a bit of an Irish increase, if I may say so. It is also worth noting that at the moment we have about one-sixth of the votes necessary to carry a proposition under QMV. Sometimes we do want to carry a proposition; we are not always against a proposal on the table. On my arithmetic, after 1st January 2005, in the absence of accession, we shall still have about one-sixth of the votes to carry a proposition. However, after the accession of the applicant states we shall have about one-ninth of the votes. I do not regard that as an increase in our voting power. I am rather surprised that the arithmetic of both the noble Lord, Lord Williamson, and the Minister goes in that direction; mine does not.

One matter that emerges from a careful reading of it is that the structure of Nice either before or after enlargement facilitates blocking minorities. It makes it easier rather than more difficult for a minority to block a proposition. It is said that that is in order to make the European Union more governable. I am not a federalist or Europhile, as the House will be aware. To make it easier to construct blocking minorities is a strange way to make it easier to govern. That is one of the fascinating but puzzling aspects of this treaty.

We find that the extension of co-determination not only increases the power of the European Parliament but the difficulties inherent in European Union decision-making. The loss of the national veto in another 39 areas is more serious in some than others. We find that industrial policy is to be subject to co-determination. Have noble Lords seen the miracles worked by the European Union's agricultural and fisheries policies? I regard a proposed European Union industrial policy only with grim foreboding.

The provisions on enhanced co-operation are entirely perverse. The way forward for member states who want, for example, to merge their tax systems, their police forces, their armed services or any other functions, or to agree that they will have a common foreign policy, is outside the Treaty of Rome. So long as that does not involve in any way the Commission, the Council or the Parliament, that can be accomplished without breaking or bending the treaty.

Why should we object if the French and the Germans wish to join into some kind of European republic? If the French want to be governed by the Germans—we have shed enough blood and treasure trying to save them from it—we should now say, Well, do go ahead but outside the treaty. You can come back again into the European Community, into the European Union, as the Franco-German Republic with your place at the table and your appropriate number of votes and everything else". There is no barrier to that, any more than there is a barrier to the United Kingdom as a union of four nations being a member at the table.

There are some objectionable attachments to the treaty. The charter of fundamental rights is one. Although it appeared in the presidency conclusions of the IGC rather than in the treaty, we should bear in mind the annex entitled "Declaration on the Future of the European Union". That is placed on the agenda for 2004. Like other moves—outside the treaty but at the IGC—towards a European defence force, this should be borne in mind as we consider the case for ratification.

Secondly, I turn to what is not in the treaty, nor in the presidency conclusions. As other noble Lords have observed, there is nothing in it about the common agricultural policy. That has been brushed off. One does not need to amend the treaty in order to amend the common agricultural policy. But one needs to do something to amend it. It has been slightly amended, but it has been broadly the same policy for the 30-odd years that we have been in the Community. We have been trying to reform it. But that will not come about until one or more member states goes to an IGC and simply says, We are not going to agree to anything until the heads of government have agreed on the bones of a proposition to reform the CAP". If that comes nearer to abolishing it than reforming it—it may be incapable of being reformed—so be it.

There is nothing about the fisheries policy either. That is another of the European Community's great achievements. It is one which has devastated fish stocks and our own fishing industry.

Thirdly, like other noble Lords, I must refer to the Irish decision. This treaty cannot come into effect because it has been rejected by one member state. There has been a great deal of talk about it having been agreed at Nice by all member states. It was not agreed at Nice by all member states. It was agreed at Nice by the heads of government. When it was put to a member state—that is the people of the Irish republic—they said "No". They disagreed with it. They have been told one way and another, and they have been told again today: Oh, don't worry about that. Sooner or later we'll sweet-talk you into changing your mind, as we did the Danes over Maastricht. We will put some pressure on. We will make some threats and offer some inducements. We'll say that you have misunderstood it. We've all misunderstood and you'll come round". You can vote as often as you like as long as you vote "Yes". Once you have voted "Yes", there are no second votes after that. That is it. The door of the trap goes snap.

It is an insult to the people of Ireland that we are all pressing on with the process of ratification as though they had not spoken. How would we feel if we had been granted a referendum and everything pressed on as though we had not spoken? Is that how the referendum on the euro will be regarded by the Government if they lose?

Lord Wallace of Saltaire

My Lords, I thank the noble Lord for giving way. Is he aware that Sinn Fein had a leading part to play in opposing the ratification of the Nice treaty in Ireland? Is he happy that that badly conducted campaign was led by a political party that many of us do not regard as democratic and in dealing with which I know the noble Lord has had much bitter experience?

Lord Tebbit

My Lords, perhaps the noble Lord will tell me whether he thinks that the Sinn Fein campaign in support of the Good Friday Agreement invalidated that too.

We must give the Irish people credit for knowing what it was that they were voting on. If we are prepared to give credit to the people of Northern Ireland on the Good Friday Agreement, then we must give it to the people of Southern Ireland on the Nice treaty. I am surprised that the noble Lord has come up with such a weak argument.

I noted that it has been observed that Mr Major's government treated the Danes in the way that the European Union is prepared to treat the Irish. I thought that was disgraceful. I said so at the time. I opposed the Maastricht treaty. I voted against my party. Unfortunately, the noble Lord, Lord Taverne, was not able to do that 30 years ago. I hope that the noble Lord has learnt to do it now, because there are a good many occasions when he should be voting against his party.

The question we should ask ourselves is: would it really matter if this treaty were consigned to the trash can? Of course it would not. It would not, or it need not, hold up enlargement. It would not take very long to fillet out those parts of the treaty which are objectionable and then resubmit it as an enlargement treaty to the people of Ireland. I have a feeling that they might say, "That's fine". They were not voting against enlargement any more than if I vote against this treaty at Third Reading I should be voting against enlargement.

It was the other bits to which they objected. It is to the other bits which I object. In any case, as Mr Prodi has so clearly said, the treaty is not essential to the first stages of enlargement. We could get the first four or five countries in. Indeed, we could go further than that by ensuring that the treaties of accession carry the changes in weighting of votes in the Council and the other things which are essential.

Lastly, perhaps I may refer to an argument which has been developed more outside this House than it has inside; that is, to ratify this treaty would be both contrary to Magna Carta and a breach of the Coronation Oath, which sprang from the settlement of 1688. I find many of those arguments extremely persuasive. We are no longer being governed, as our constitution requires, in accordance with the traditional laws of England.

But I have to say to those who think that that is an insuperable bar to progress on this treaty: forget it. The courts of this country have always had an acute political perception. I am quite sure that if it was ever taken to court, the acute political perception of the members of our judiciary would ensure that, no matter what facts were laid before them, they would conclude that Parliament could do exactly what it liked, even signing its own death warrant. Of course this treaty is not Parliament's death warrant. It is just another instalment on the way towards it.

7.50 p.m.

Baroness Crawley

My Lords, perhaps I may add my congratulations to those offered to the noble Baroness, Lady Williams of Crosby, on her new role. She will bring great style and substance to her duties. When looking at the Liberal Democrat Benches, I am reminded of the interesting discourse offered by the noble Lord, Lord Taverne, on the meaning of "party". That in turn reminded me of when my daughter was three or four years old. One day she solemnly asked, "Mummy, when is the Labour party? Can I have a new party dress to wear, and will there be chocolate cake?".

A trawl through the Second Reading speeches on this Bill in another place unveils some colourful name-calling of the Nice treaty which, even on a bad day, it really does not deserve, but which epitomises the all too familiar polarisation that we have wearily come to expect during important debates on Europe. I am glad to say that so far in this House our debate has been more measured and rational, due in large part to the excellent lead given by my noble friend in opening it.

On 4th July in another place, the treaty was referred to as, "puny and paltry", "wide-ranging and far-reaching", "not perfect and fairly modest", "a missed opportunity", "lousy and messy", and, a treaty with immense practical benefits for Britain". It cannot possibly be all those things but, as a PE—Euro-jargon for a "practical European"—I shall opt for the final description. That is because I believe that the Nice treaty will indeed benefit Britain, our European partners and, most important, the applicant countries in a number of modest but significant ways.

It will further reform the EU's institutions so that enlargement can operate effectively. Putting our house in order so that the accession of the applicant countries can take place has been, in the words of the Foreign Secretary, Mr Jack Straw, a strategic aim of successive British Governments and our allies for more than a decade".—[Official Report, Commons, 4/7/01; col. 263.] Given all the necessary work and detail of revising the current system of weighted votes in Council, changing the size and organisation of the College of Commissioners, the extension of QMV and the increases and changes to the distribution of seats in the European Parliament—some might say that you can never have too many MEPs—it would be easy to lose sight of the reason why we started down the road to enlargement in the first place. The noble Baroness, Lady Williams of Crosby, put the same point most movingly in her contribution.

It was to put behind us the European wars and dictatorships. Furthermore, as my noble friend Lady Symons pointed out earlier, it will leave behind the suffocating Iron Curtain dogmatism of the previous century and open up more and more European countries to greater opportunities for peace and prosperity within a wider Europe. Those who absolutely oppose the treaty are, in effect, opposing the real possibilities that it promises for accessing the world's largest single market for trade and investment. They are opposing the opportunity for British companies far more readily to reach the prize of half a billion consumers; much greater co-operation within the European Union to fight the drugs trade and organised crime; and the requirement in the treaty that applicant countries must clean up their act on air and water quality. It is hard to understand such opposition to the opportunities.

As my noble friend Lord Grenfell remarked, it is no use paying lip service to the idea of enlargement but then opposing the means by which enlargement can take place. Opponents will say that the treaty does not solve all the problems of enlargement—and nor does it. Being an advocate both of the idea and the practice of enlargement does not mean that I dismiss the very real difficulties in areas such as agricultural reform, where, as many noble Lords have said—the point was put eloquently by my noble friend Lord Tomlinson—we still have a long way to go. But that reform is under way in many important details, in particular as regards the budget. I do not dismiss the difficulties surrounding external border security, as has been detailed effectively in the House of Lords Select Committee report on Enlargement and EU External Frontier Controls.

However, the call for blocking the treaty altogether because of such difficulties must be resisted because it is a call that masks a far more fundamental antagonism to any further European integration by and through any means. It is not helpful to Britain or to the accession countries, which are making great strides in their preparations to be welcomed by the agreed timetable.

In my former capacity as a Member of the European Parliament, chairing the European Parliament Women's Rights Committee, and in my present role as chair of the Women's National Commission, I have met and worked with many women from the applicant countries. Many of them are acutely aware of the European Union's positive record on equal pay and equal treatment in the workplace. They have followed the agendas of the Social Chapter; the agendas for better maternity and paternity leave; for the right to parental leave; and for better working hours and conditions for European workers. What right have we to delay their access to such improvements? They wish to access the economic opportunities and stability that they believe enlargement will bring for them and for their families. I believe that those women's voices must form a part of our debate on the treaty.

We are aware that the Nice treaty, through an attached declaration, points the way forward for future action in matters such as simplifying the treaties. Again, noble Lords have referred to this matter. Of course there is an enormous need to ensure that the treaties are made more understandable. They will never become the talking point of pubs and clubs in my former constituency, but it is a problem for democracy when it is almost impossible to make sense of the treaties. Simplification is long overdue.

Addressing the role of national parliaments in the European Union is also a matter for the future. It is needed because all noble Lords know that, increasingly, we see that the national electorate is not engaged with European policy and policy making. It is a policy process that often seems entirely remote from the national electorate, despite the best efforts of the European Parliament and the European Commission. And, of course, there should be an opportunity to review the status of the Charter for Fundamental Rights, on which eminent colleagues in this House have worked so assiduously and which should not be dismissed, as the noble Lord, Lord Lamont, dismissed it, as so much political correctness. That would provide an opportunity for us to look to future action aimed at bringing to the fore, in a clear and understandable way, people's rights and responsibilities within the European Union.

In our support for this important Bill, none of us would dismiss the gap that currently exists between citizens and the European Union itself. That gap cannot be tolerated if we are to have a rational, grownup debate about our future in Europe—particularly if we are to have a debate about our future and the euro. I shall be supporting the Bill because, ultimately, its successful passage will be good for jobs and security, environmental progress and citizens' rights—not only the rights of British citizens but of our European partners—and, particularly, it will be good for the citizens of the accession countries, who have waited long enough.

8 P.m.

Lord Willoughby de Broke

My Lords, like my noble friend Lord Tebbit, I am not quite sure why we are spending so much time discussing this mish-gnash of a treaty. After all, the treaty is effectively dead in the water following the decision of the Irish electorate to reject it in a referendum in May this year.

But, of course, the reaction of the Commission and some other member states was all too predictable: the Irish vote would change nothing. The Irish Government will simply be told to go on asking the same question ad infinitum until they get the right answer—that is, yes, the Irish do want to give over more of their powers to the centrist bureaucracy in Brussels.

That is what the treaty does; that is what it is all about. Emphatically it is not uniquely about enlargement. As has been said many times by other speakers, enlargement can go ahead without: this treaty. I make no apology for citing the President of the Commission in this regard. He has been quoted several times on both sides of the argument, and he has said that enlargement is possible without Nice. I am grateful to my noble friend Lord Lamont for pointing out that that was not a slip of the tongue. It is a highly technical matter. But the first five candidate countries could come in without this treaty. Therefore, enlargement is possible without Nice. Noble Lords opposite should not take issue with those of us who quote Mr Prodi. They should take Mr Prodi behind the bicycle shed and have a word with him; they were his words, not ours.

If the treaty were about enlargement it would have to deal with the common agricultural policy. It is not good enough simply to brush it aside and say that it will be dealt with at inter-governmental conferences or, as the noble Lord, Lord Lea, said, leave it until the negotiations with the World Trade Organisation five years or four years hence.

Currently, the common agricultural policy takes 45 per cent of the EU budget. Poland, one of the candidate countries, has more farmers than all the current members of the EU put together. We cannot go on pretending that we can have enlargement without a serious, deep reform of the common agricultural policy. So far there has been absolutely no desire to do that. There has been tinkering at the edges, but that is not serious reform.

So if the treaty is not about enlargement, what is it about? Once one has agreed that it is not about enlargement, it becomes clear that it is about transferring powers from member states to the Commission and to other supranational organisations. It seems to be common ground that that is what the treaty is about. As far as I can see, there is nothing in the treaty which states that it will give more powers back to the member states. It does not work like that. Indeed, every EU treaty has stated that the ratchet towards a federal state cannot be reversed. That is what the acquis communautaire is all about.

I mistakenly used the word "clear" in relation to the treaty. I withdraw it unreservedly. Like the noble Lord, Lord Hannay, I believe that, like other treaties, this one is impenetrable. If I were a conspiracy theorist, I might say that it is deliberately impenetrable to all but specialists in the field.

However, the one thing that emerges from the treaty is the irrevocable, continual transfer of powers. The national veto is to be removed in 39 areas, of which 14 are subject to co-decision by the European Parliament. I wish to touch on only three of those areas today.

The first area is the loss of veto over enhanced cooperation. Like my noble friend Lord Lamont, I have no difficulty in accepting that if certain member states wish to join together to build a socialist Utopia under the highly restrictive conditions set out in the treaty, it would be churlish to stop them doing so. However, the fact that the Government played their hand so incredibly badly in those negotiations was a mistake. The gift of enhanced co-operation was an ace in their hand which they simply threw away. We could have extracted some meaningful concession if the Government had had a poker player in their team, which they obviously did not; they simply threw away the best card they had. There are a number of areas in the treaty which could have been improved in return for giving away the veto over enhanced co-operation.

I turn now to Article 157, which deals with industrial policy. This article is—and always was—a meddler's charter. It is even more likely to be a meddler's charter now that it is subject to co-decision by the European Parliament.

To get the flavour of the European Parliament's attitude to enterprise, business acumen and energy, we need look no further than one of its recent decisions in a vote on 23rd October—to which my noble friend Lord Howell referred—when it backed a new law which will effectively give workers a veto over company decisions. Originally, the proposed law would have affected firms with 50 or more employees; now the European Parliament has watered it down—or strengthened it, according to one's taste—so that it will affect firms with 20 or more employees in a single site, or 50 or more in scattered sites. It will require those firms to consult employees during the early stages of business negotiations. Employees would have access to market-sensitive and commercially-sensitive information.

Lord Lea of Crondall

My Lords, is the noble Lord saying that he does not like the present composition of the European Parliament? The parliament was elected by people, so what is his beef against it?

Lord Willoughby de Broke

My Lords, I am in the middle of explaining my beef against the European Parliament. The Government pretend to be pro-small business, pro-enterprise. The noble Lord, Lord Harrison, said that the European Parliament is pro-enterprise. This proposed law gives the lie to that. The European Parliament is stifling enterprise. Worker participation and worker co-decision in commercially-sensitive areas will stop people making a success of their business. So that is why I have a beef with the European Parliament.

That is but one example of the kind of rubbish of which the presidency conclusions in Annex 1 are so proud, calling the European social agenda, a major step towards the reinforcement and modernisation of the European social model, which is characterised by the indissoluble link between economic performance and social progress". In fact, the European socialist model is characterised by massive unemployment, especially among the young and ethnic minorities, and by low economic growth. Quite the opposite of what is stated.

Article 191 has already been referred to. This article could be used to refuse funding to political parties which do not meet the acceptability criteria at European level. That seems to mean that any party which is rude about Europe will not get any funding. I believe that that is what it means. Perhaps the noble Baroness will clarify the matter in her reply.

Finally, under Article 7, the Council may now decide, by a majority rather than by unanimity, when it deems that there is "a clear risk" of a breach of fundamental rights in a member state, that the state can be ostracised, thereby losing its voting powers and its power of veto. We saw an example of that last year when Austria was effectively stripped of its rights and ostracised. Even members of the Government who were questioned on the matter admitted that Austria had done absolutely nothing wrong. It was thought that Austria might do something wrong, so it was better to ostracise it early on—a kind of pre-emptive ostracisation.

Is that really acceptable? I do not think that it is in any kind of democracy. A lot of hot air is spoken about democracy in the European Union, but the decisions of governments—particularly those elected by universal suffrage—should be respected and not simply overturned because members of the European Union do not like them.

The treaty as it stands simply will not do. The Irish have rejected it. According to the EU's own rules, that, as I understand it, is the end of the matter. So why are we discussing the Bill? Are we to spend endless hours and days in Committee discussing a treaty which is legally invalid? I hope that someone may contradict me on that point. No one is contradicting me—so the treaty is technically dead.

I conclude by reminding your Lordships that whenever the voters of Europe have been asked for their opinion on whether they want more EU or not, their answer has been very clear. First, there was the Danish referendum: Denmark gave the thumbs down to the single currency. There was the Swiss vote in March this year in which 77 per cent of voters indicated that they did not want the Swiss Government even to open negotiations with the European Union. And in May there was the Irish referendum. Those are three very clear messages. Why do we not listen to them?

8.11 p.m.

Lord Dahrendorf

My Lords, one of the notorious problems with debates on Europe is the gap between visions (or nightmares, as the case may be) on the one hand, and the often grubby reality of the European Union—or, to put it a little less dramatically, the gap between a discussion of objectives and a discussion of the issue at hand, which is usually much more prosaic.

I would describe myself as a "Euro-realist". I therefore find myself close to the noble Lord, Lord Williamson of Horton, without wishing to invoke his support for the slightly more colourful language that I am likely to use.

This is not a very good treaty. It is not one that I should like to use in order to persuade people of the great merits of the European Union. It is procedural, and technical. It is hard to explain and often difficult to understand. It is the result of a rather unseemly wrangle. It is a pretty miserable little treaty.

The purpose of some of the key measures proposed is to reform institutions in order "to improve their efficiency" and, to enable the EU to operate effectively". I take those phrases from the Explanatory Memorandum to the treaty. They have recurred throughout the debate.

One of the questions that I have asked myself for some time is: "Efficiency and effectiveness for what?". What exactly is it that cannot be done in the European Union unless these minor measures to improve its efficiency are introduced? To put it in historical terms, the last time there was a set of important objectives which many wanted to implement was when Jacques Delors translated the Common Market into the single market, with all the implications of that notion. Did the institutions prevent M. Delors or others who supported the objective from doing what they wanted to do?

I begin to wonder whether the institutional debate about the European Union is taking place almost in a political vacuum; and, worse, whether interest in institutions has taken the place of interest in substance. In these terms, I confess that I even worry about the next intergovernmental conference We may have years of discussion on institutional changes without any sense of where the European Union is supposed to move or what its next major themes in substance will be.

If, however, one examines its institutions—contrary to the remark of the noble Lord, Lord Williamson of Horton, I do not mind doing that every now and then—one sees that the problem of the European Union is not one of efficiency. It cannot be stated too often that the problem is one of democracy. The joke is so well-worn that one almost does not want to repeat it, but it is a fact: if the European Union applied for membership of the European Union, it could not be admitted. Its institutions do not comply with the principles laid down for the accession countries. Those principles describe in considerable detail—and I am pleased about that—the democratic qualifications that countries must have to become members.

I am not naïve about democracy in institutions such as the European Union. I would argue that, so far, we have not been able to develop truly democratic practices and institutions for those wider spaces which transcend the space of the nation state. So far, truly democratic parliamentary institutions have worked only within nation states. What we are doing beyond these spaces is almost a desperate attempt to introduce at least some of the principles that underlie our belief in parliamentary democracy in these areas too. Elections to a parliament do not solve the problem of democracy.

I wonder whether we may have to settle for unsatisfactory or half-satisfactory institutions. The rule of law is of critical importance. It is highly desirable that the European Union should be described as a union of law and that it should practise adherence to law. But there are other issues. Transparency is important. I find it unacceptable that a legislative agency—the EU Council of Ministers—can legislate in private. There may be other things that the European Council has to do, but as a legislative body it should accept at least the basic first principle of democratic government; namely, to be observed in what it does. There are other checks and balances to be discussed, but I argue that it will remain democratically unsatisfactory, and that what we invent will be second-best. That is why I agree with those noble Lords who have insisted on the role of national parliaments in scrutinising and controlling decisions that are taken beyond the space of the nation state.

That is in some sense by the way, because none of these issues appears in the treaty that underlies our debate. The efficiency argument is most often related to enlargement. I sometimes wonder whether the historic moment has not gone. When I visit my friends in Poland or in other countries of east/central Europe, I realise that they have gone quite cool on some of the demands made by the European Union and on the EU more generally. There are now those who say: "It was more important to join NATO first and we can now think about the European Union at our leisure". I definitely agree with those—notably my noble friend Lady Williams, who is now the Leader on these Benches—who have spoken emphatically and warmly about our responsibility for uniting Europe and having the former Communist countries in as soon as we can.

I think that President Prodi probably spoke the plain and rational truth when he questioned whether we needed to have the Treaty of Nice to achieve enlargement in the early phase. But I am also convinced that the noble Lord, Lord Williamson of Horton, used an important term; that is, "political perception". Now that the political perception, not the rational reality, is that without the ratification of the Treaty of Nice we cannot go ahead with enlargement, we are faced with a different set of facts and we have to react to that different set of facts. Political perceptions are themselves important facts.

While I cannot see from reading the text that any great harm would be done to the European Union or to member states if the treaty did not come into force, I appreciate that political perceptions suggest that ratification is necessary. Therefore, I propose to shrug my shoulders, let it pass and turn to other more important matters such as the completion of the enlargement or accession negotiations and the principles of democracy in their application to the European Union and other decisions taken in international spaces.

8.21 p.m.

Baroness Ramsay of Cartvale

My Lords, I believe that by now the noble Baroness, Lady Williams of Crosby, must be aware that right across the House great pleasure is felt at her new office. I gladly add my good wishes to those already expressed.

As others have commented, it is a different world we live in after 11th September from the one in which the Nice treaty was formulated. But the very changes in our world reinforce the need for this treaty which brings about the necessary changes to the EU's institutions and procedures to enable enlargement to proceed as planned to admit the first wave of new members by 2004. As it was not known exactly when and in what order the applicant countries would join the Union, the new distribution of seats in the European Parliament, the new composition of the Commission and the new definition of qualified majority within the Council are all determined by the Treaty of Nice for a Union of 15 member states. The treaty restricts itself to setting out the principles and methods for changing this system as the Union grows.

Enlargement is not just about the economic and general political advantages that have been well aired in various debates here and in another place and in the media, but enlargement also brings stability and cross-border co-operation in the fights against terrorism which we now have to wage probably for years to come.

EU members are already tackling cross-border crime and the smuggling of drugs and people. They have agreed a European arrest warrant, speedier freezing of assets, better intelligence sharing between members, et cetera. All of these will be the more powerful and effective when they apply not just in the 15 member states but in the much wider and stronger Europe that enlargement will bring. The new challenge to our democratic societies makes it all the more imperative that our co-operative fight is by the widest possible Europe, co-operating and pooling resources.

There are many aspects of the Nice treaty which one could treat at length at Second Reading, but, in addition to enlargement, I should like to touch on two other subjects: enhanced co-operation and common foreign and security policy (CFSP). The Nice treaty amends the arrangements for enhanced co-operation (which is a procedure introduced in the Amsterdam Treaty) to allow groups of member states to cooperate within the EU treaties in a specific area. The Nice amendments extend the scope of the enhanced co-operation to the implementation of the common foreign and security policy, although not to defence. They require the participation of at least eight member states. The enhanced co-operation can be launched by a decision of the Council by QMV, must not undermine the single market and must be open to all member states wishing to participate.

It is therefore the case that the provisions have been comprehensively overhauled although the essential characteristics of enhanced co-operation are largely unchanged, such as the principles whereby enhanced co-operation can be undertaken only as a last resort and must be open to all member states.

I find those changes entirely positive. They will allow flexibility inside an enlarged European Union for a substantial group of member states—at least eight—to proceed in subjects without everyone being required to join in. In fact I agree with my honourable friend Denis MacShane who said in another place on 17th July that the improved enhanced co-operation arrangements are a valuable feature of the treaty. Along with my noble friend Lord Grenfell, I believe that the Nice treaty makes the provisions for enhanced co-operation easier to use while strengthening the safeguards.

I turn to the common foreign and security policy. The only element of the European security and defence policy (ESDP) to be included in the Treaty of Nice is the establishment of the Political and Security Committee (PSC) under amended Article 25. I shall confine myself therefore to speaking about the PSC and not the wider subject of the ESDP or other EU military structures or the Rapid Reaction Force which I have expanded upon before in this House and which are subjects about which I care a great deal but which are not covered by the Bill before us today.

The PSC is the new designation of the political committee and may be authorised by the Council, in order to manage a crisis and for the duration of that crisis, to take the appropriate decisions under the second pillar in order to ensure the political control and strategic leadership of the crisis management operation. It has been rightly commented that the establishment of the PSC is the first time the EU has institutionalised security and defence policy. The PSC will also play a major role in consulting with NATO and any third states involved.

The PSC and the North Atlantic Council (NAC) met for the first time on 5th February 2001 and the PSC and the NAC met again in March to discuss the safety of EU monitors in southern Serbia. The PSC has been actively involved with NATO in dealing with clashes between Albanian rebels and Macedonian forces on the Kosovo/Macedonia border.

The Secretary General/High Representative—currently Javier Solana—may chair the PSC, especially in a crisis, and during an operation would keep the Council informed through PSC reports. The chair of the European Union Military Committee (EUMC)—currently General Gustav Hagglund of Finland—will attend PSC meetings when necessary.

I am pleased that the British Government supported and argued for the proposals on the PSC. I agree completely with the argument for the creation of a permanent committee based in Brussels to act as the primary forum for preparation of advice to Ministers on common foreign and security policy matters.

Ratification of the treaty seems to me to be self-evidently in the interests of this country economically, politically and for our future security and indeed in the interests of both our current fellow member states and our future partners in the European Union. The treaty paves the way for a widening and a deepening of the European Union and as such should be heartily endorsed.

8.30 p.m.

Lord Norton of Louth

My Lords, I, too, congratulate the noble Baroness, Lady Williams, on her election. That is the first statement that I shall make that evokes a positive response from all of your Lordships. The second is that, given the hour, I intend to be brief. I fear that that exhausts the statements that fall into that category.

I shall begin by offering the criteria that I think are useful for assessing a Bill of this nature. There are essentially five criteria for judging any Bill dealing with the European Union. First, does it provide for the accession of new member states? Secondly, does it constitute a significant shift towards achieving European integration? Thirdly, does it address fundamental faults in the structure of the European Union? Fourthly, does it address the democratic deficit in the EU? Fifthly, does it provide for some incremental but necessary adjustment to the existing arrangements of the EU? That fifth criterion should not be seen as independent or free-standing. It must be accompanied by the fulfilment of at least one of the other four criteria. The first four thus constitute the principal criteria for assessment.

The Nice treaty is not an accession treaty. It therefore has to be judged against the other three principal criteria. I shall take each in turn. The second criterion—making a significant move towards European integration—is a contested one. There is a fundamental divide between those who favour greater European integration and those who do not. I appreciate that the two sides take very different views of the Nice treaty. Those committed to further European integration believe that it does not go far enough. Those opposed to further integration believe that it goes too far.

It is possible to find the treaty objectionable without accepting that it marks a significant shift—certainly not a paradigmatic shift—towards achieving further integration. If one objects to decision-making competences being transferred from national governments to the EU, the Nice treaty is objectionable because it marks an extension of that development. If it marked a novel departure on the road to European integration, it would be even more objectionable than it is. However, it is an amending treaty, not a primary one. As such, it does not meet the second criterion.

Whereas the second criterion is a contested one, the other two principal criteria are not. Few could object to attempts to address structural faults in the EU or to diminish the democratic deficit. To what extent does the treaty address basic structural faults in the EU? It clearly makes some adjustments to the existing institutional arrangements of the Union to facilitate enlargement. However, when we look in detail at the provisions, one has to ask to what extent the treaty adds much to that which it appears could have been achieved in the negotiations leading up to the Treaty of Amsterdam. The Nice treaty is designed to deal with the leftovers of Amsterdam, but it is not clear what has been achieved that could not have been achieved earlier. Perhaps the Minister can enlighten us.

The treaty is obviously the product of compromise. Some see that as a virtue that is necessary to make progress. However, I see two particular inter-related problems with this particular compromise. First, it may not be the best compromise for the purpose of facilitating enlargement. We can infer that from the response to the Irish referendum on the treaty. The Minister has conceded that this particular treaty is not necessary legally to allow negotiations for enlargement to proceed. Signor Prodi and others concede that a treaty will be needed, but not necessarily this treaty.

The second and related problem is that the treaty does not address basic structural problems in the EU. We know that from those responsible for its negotiation. The intention is that the next IGC should address those problems. Speaking in the other place on 4th July, the Foreign Secretary said that, for the purposes of the 2004 IGC, we must ask certain questions. He said: We have to ask what exactly is the European Union for? What precise purpose does it serve? To get the answer, we need to look at what the EU actually does, and analyse rigorously and frankly the tasks it does well, those it does less well and those that it does badly. Once we have a clear sense of our citizens' and constituents' priorities, only then can we sensibly ensure that the EU's institutions are properly organised and equipped to deliver them".—[Official Report, Commons, 4/7/01; col. 272.] Let me repeat that last sentence. Once we have a clear sense of our citizens' and constituents' priorities, only then can we sensibly ensure that the EU's institutions are properly organised and equipped to deliver them. It is clear from the Foreign Secretary's words that we do not have a clear sense of the priorities of the peoples of the European Union. It flows from that that we cannot at present sensibly ensure that the EU's institutions are properly organised and equipped to achieve those priorities. Yet here we have a Bill designed to give effect to a treaty that changes the institutional arrangements of the EU. Surely we should be proceeding from first principles in agreeing to change the structures of the EU. What if we find that the changes introduced by the Nice treaty do not accord with citizens' priorities—or rather, do not provide the means for delivering what the peoples of the EU want the Union to achieve? The clear implication is that the provisions of the treaty may prove to be short-lived.

We thus have a treaty that changes the institutional arrangements of the EU, but does so independently of any fundamental consideration of what the EU is for and what form its structures should take in order to meet the needs of the peoples of Europe.

The fourth criterion is the extent to which the Bill addresses the democratic deficit. That there is a democratic deficit is widely conceded. That recognition is at the basis of the debate about the future of Europe and it will underpin the 2004 IGC, although I strongly share the views of the noble Lord, Lord Dahrendorf, on the approach likely to be taken by that IGC. That the problem underpins the next IGC is apparent from the declaration in Annex IV of the treaty. The IGC will consider how the treaties can be simplified in order to be better understood. It will also be an opportunity to see if national parliaments can be given a more defined role. The Foreign Secretary said in the other place: We are determined to improve the democratic legitimacy and transparency of the EU".—[Official Report, Commons, 4/7/01; col. 272.] That is fine, but it is something to be addressed in the future; it is not addressed in the Bill.

The Minister may well say that the Bill is not intended to address the democratic deficit. She would be right. However, the problem is that the Bill exacerbates the democratic deficit in two ways. First, far from simplifying the arrangements of the EU, it adds to the complexity. The decision-making process of the Union is extremely complex and difficult to follow at times, even for those who are engaged in the process. We now have further complications, including in the method of voting in the Council of Ministers. The 62 per cent rule adds to the complexity of the rules, as do the provisions governing voting in the event of accession or non-accession by applicant states. Those new complex rules will take effect in 2004 and 2005, at the time of and following the IGC that has the task of simplifying the treaties.

The second way in which the treaty exacerbates the distancing of the EU from the peoples of Europe is by its very existence. It constitutes one more treaty amending the existing treaties or creating new structures and powers. For the past 20 years, there has been no significant steady state period—no time when citizens could learn what the Community, now the Union, was about and know that that knowledge would remain current for some time. For most of the time, some negotiations have been taking place for a new treaty. That almost Trotskyist approach of continual revolution does nothing to allow citizens to understand what the EU is about. The more treaties there are, the greater the difficulty that people have in keeping pace with what is going on and understanding what the Union is for.

Given that, one has to ask whether the changes to be made by the treaty are really worth it, bearing in mind the potentially negative consequences that I have just identified. Indeed, the Bill appears to fail the four principal criteria that I have identified. The treaty makes some adjustment to existing arrangements but, as I said, I believe that this should not be a freestanding criterion. It needs to be allied to one of the principal criteria.

My reasoning for that is implicit in what I said about those criteria. There are significant dangers of distancing people from the EU if treaties are negotiated on an apparently relentless basis. I also believe that member states cannot continually be asked to ratify treaties. We need to address fundamental problems within the EU and, having done that, we need to seek some stability—cruising speed, perhaps—in institutional arrangements.

I fear that this treaty is neither one thing nor the other. It does not really advance much beyond what could have been achieved at Amsterdam. It does not address the fundamental questions to be tackled at the next IGC. It is a holding, compromise measure, and not a very good one at that. I know of the argument that the treaty is necessary for the applicant states. But I believe that in this measure we have not done our best for those states; we certainly have not done our best for the people of the European Union.

8.41 p.m.

Lord Stoddart of Swindon

My Lords, this is the first speech that I have made in your Lordships' House since I was summarily suspended from the Labour Whip on 16th July. Therefore, noble Lords should be aware that I am speaking from these Benches as an independent Labour Peer.

One person whom we have missed this evening in our debate is our former colleague, the late Lord Shore of Stepney. His death has robbed British public life of a decent, upright, intelligent man, dedicated to the improvement of the lot of ordinary people attained through fairness, freedom, democracy and self-government. The Eurorealist movement, in particular, has lost a great leader whom it will be difficult, if not impossible, to replace.

I thought that the remark of the noble Lord, Lord Norton of Louth, that the EU, or its treaties, are Trotskyist was one of the best that I have heard. It is true that perpetual revolution is occurring; it never seems to stop. And the Nice treaty is just one further part of the continual revolution which never ends. I suppose that eventually, if it goes on and on, the only place that we shall come to is back where we started in the beginning. Of course, that may be all to the good.

What we must ask—many noble Lords have already asked this question and I shall ask it again—is: why is this Bill before us today? Why was it rushed through the House of Commons on a guillotine? All constitutional Bills seem to go through on a guillotine no matter what government are in power. There is no real need for hurry because, as we have already heard from many speakers, the people of the Irish Republic have voted in a referendum against ratification. There may be no resiling from that under the Irish constitution. Until that decision is reversed, the treaty cannot come into force. There is no question about it. Mr Prodi has told us that that is the case; therefore, it must be right. It cannot come into force, so there is no need to rush along the road for ratification.

We are now open to the charge that we are pressurising the Irish people to change their mind. As we know to our cost, the Irish people do not like to be pressurised, and they resist it. They have been resisting certain pressure for hundreds of years and we should keep that in mind. As Mr Prodi told the Irish people, eventually they will have to reverse their decision. But, unfortunately, he does not know the Irish people, and they may very well not listen to what he says. By rushing this Bill forward, not only are we insulting the intelligence of the Irish people but we are appearing to behave like Prodi's poodles. I do not believe that that is good for this country or for democracy.

Noble Lords have said tonight that the Major government introduced the Maastricht treaty Bill before the second Danish referendum had taken place. I am not sure that that is true. I believe that the Major government delayed the introduction of the Maastricht. Bill until that referendum had occurred. I may be wrong, but that is what I believe to be the case. I hope that we shall be able to check that fact. However, I believe that we should have delayed the introduction of this Bill until the outcome of a second referendum in Ireland.

Therefore, the haste cannot be justified on the basis of urgency. Again, we have heard that ratification is not necessary for enlargement to proceed. Nothing that I have heard in the debate has convinced me otherwise. Indeed, our friend Mr Prodi confirmed that it was not needed for the purposes of enlargement.

The treaty is simply the latest in a long line which have increased the scope and powers of the European entity. First, it was to be a common market, and that was what the British people voted to remain in at the referendum. Then it became the European Economic Community and, after that, the European Community. Now we have arrived at the European Union. Whether or not that is the final stage, I do not know. Indeed, the Single European Act started us on the path on which we are now embarked. That path is not towards a federal Union. Let us not be under any illusions about that. The path upon which we are embarked is for a European unitary state.

The ensuing treaties of Maastricht, Amsterdam and Nice were consolidations and extensions of the powers conferred by the Single European Act. The Nice treaty, which is promoted as being only a small tidying-up treaty, devolves further powers from national governments and parliaments to the institutions of the European Union. That means less accountability of government and the House of Commons to the people of this country who elect them in the belief that it is Parliament and the Government who make the major decisions affecting their lives.

With every new treaty, including this one, decisions on major parts of our economic, social and political life are being transferred to a group of states which can outvote the British Government but which are not accountable to the British people in any way. Indeed, they may be of a political colour of which the British people would never approve. We should keep that in mind. As we have already heard, it is completely undemocratic that decisions are taken in secret so that the British people and, indeed, the British Parliament do not know what is happening. They certainly do not know the details of the discussions which led to those decisions being taken.

Although this is not the time to discuss the treaty in detail, it is necessary to counter the idea that it is of little consequence. For example, the treaty abolishes about 30 vetoes. I shall not go into the details because we have already discussed them. There is one article that concerns me and it should concern other noble Lords; namely, Article 100, which concerns the financial assistance that may be given to member states facing severe financial difficulties. There is much concern about the fact that the treaty could be used to finance pension deficits in many European countries, whose deficits in relation to pension accounts sometimes amount to as much as 120 per cent of GDP. Our pension liabilities amount to only about 20 per cent, and we could find ourselves helping to finance the deficits of those other countries. That may not be so, but the threat is implicit. I hope that the Minister can offer some reassurances in that regard.

Also foreshadowed, but not part of the treaty, is the European Charter of Fundamental Rights. It will become a treaty if other countries have their way. That will be tantamount to the imposition on this country of a written constitution. That is inimical to the English and the United Kingdom constitution, which evolved over many centuries.

I understand that there will be a constitutional conference to prepare for the 2004 IGC. What arrangements will be made to have representatives who are opposed to further integration and who wish significant powers to be returned to individual nations? I sincerely hope that those views will be represented at the constitutional conference; it is important that they should be. After all, opinion polls in this country have consistently shown that 33 per cent of the British electorate would come out of the EU if they were given the chance; on occasion, that figure has been even higher.

I turn to the military annexe to the treaty. I had better not refer to a European army; otherwise, I should get into trouble with the Minister. When I was her noble political friend, she smashed me around the Chamber when I dared to mention the European army. Unfortunately, we again come back to Mr Prodi. On 4th February—not long after the relevant Question was taken on 26th January—Mr Prodi's comments appeared in an article in the Independent under the heading: EU is becoming the 'European government', says bullish Prodi". He is quoted as saying: When I was talking about the European army I was not joking. If you don't want to call it a European army, don't call it a European army. You can call it 'Margaret', you can call it 'Mary-Ann', you can find any name". Who is right? Is my noble friend the Minister right? She is nodding her head, and I sincerely hope that she is right. If she is, she should go to Brussels and take Mr Prodi apart in exactly the same way that she took me apart on 26th January. Then I should be satisfied. I hope that she will report to me that she had a very satisfactory and positive result with Mr Prodi. I also hope that she will write to the Independent and tell it about the matter.

This treaty is more important than it seems; we should make no mistake about that. I sincerely hope that the House will have the time and energy to ensure that the treaty receives the proper treatment—it should be dealt with properly in Committee, on Report and at Third Reading. It did not receive such proper treatment in the House of Commons. I hope that the House will not be impatient with those of us who want to probe the treaty very closely indeed. I sincerely hope that in this regard we will be led by the Official Opposition, who have made known their opposition to the treaty.

8.55 p.m.

Lord Clinton-Davis

My Lords, In her absence, I congratulate the noble Baroness, Lady Williams, and the party that had the good sense—it does not always demonstrate such good sense—to elect her as its leader. I always knew that my noble friend Lord Stoddart, who has just spoken, was independent but I never knew that he was an "Independent Labour Peer". I agree with him in one respect—in relation to Lord Shore, who was a close friend of both of us. He was my first Secretary of State and I shall always cherish his friendship, as I know my noble friend will.

At the beginning of the debate, the Minister asked a very pertinent question that no noble Lord has properly answered. She asked: how would applicant countries view the rejection of the Nice treaty? That was not answered by the noble Lord, Lord Tebbit, who was devastating in his criticisms of the Nice treaty—he skilfully side-stepped that question. However, one cannot side-step it for ever.

Lord Tebbit

My Lords, the noble Lord, Lord Dahrendorf, may have given a hint of the answer when he said that in his experience of travelling in central Europe these days, people in many of the applicant countries were beginning to doubt whether they wanted to join the EU because of the extent of the obstacles that were being placed in the way by the acquis communautaire.

Lord Clinton-Davis

My Lords, not one bit of evidence has been adduced in favour of that question by the noble Lord, Lord Tebbit, or by the noble Lord, Lord Dahrendorf. All that the noble Lord, Lord Dahrendorf, said is that he believes that the people of eastern Europe do not accept the ideas of the Rome treaty; however, that is not proof. Not even the noble Lord, Lord Tebbit, can accept that as being true.

This remarkable debate occurs just weeks after the seismic events of 11th September. My personal belief is that it is incumbent upon us more than ever to do our best to strengthen the EU. That is basically what the Nice treaty is about. It will broaden, and thereby strengthen, our links with each other's countries. It is about sharing this continent in such a way that disagreements are hammered out as a result of the political process and do not spark into conflagrations. By itself the Nice treaty is modest, but it is important, too. Unless we talk about enlargement and do something about it, it will not happen.

There has been a great deal of talk around conflict resolution. I wonder where we would be today in the Irish conflict, which has been mentioned by a number of noble Lords, if Ireland and Britain had not been members of the European Union, meeting regularly, enjoying cordial relations and mutually benefiting from common economic and trade policies. I think that it was that relationship, forged in Europe, which helped to foster the Anglo-Irish Agreement, leading to the historic movement for peace in the island of Ireland.

I remain firmly of the view that ultimately—with no degree of pressure from us—the Irish people will come round to believing that it is essential that they, too, support the Nice treaty. I may be wrong, but that is my firm belief.

If we are to move forward together, it is essential to create political structures so that dictators cannot get a handle on power, as has happened in the past, and terrorise their people. The Treaty of Nice is also important for our economy. British companies should be able to avail themselves of the opportunity of the enlarged markets that eastern and central Europe will bring. It is a market of 500 million consumers and we cannot ignore it. It will bring about an expansion in jobs and an expansion in growth. Jobs and growth are what the European Community is all about.

Qualified majority voting, which is widened, is of special significance. It broadens trading opportunities and provides for a corresponding reduction in the possible use of the veto, which can stall progress. In addition, under this treaty Britain will have 29 votes instead of 10 in the Council of Ministers. I dispute the arithmetic of the noble Lord, Lord Tebbit, but I promise to look in Hansard carefully tomorrow at what he said. Yes, the total votes will also increase, hut, nevertheless, we obtain an advantage. It has not been easy. Sometimes the contest has been acrimonious, but it has been decided—dare I say it democratically.

Co-operation in the fight against crime and drugs and, it goes without saying, against terrorism, has increased. We shall have a smaller but, hopefully, more efficient Commission from 2005. There will also be changes in the European Parliament and the European Court of Justice. It will be a fairer solution and greatly to the advantage of this country. Overall, Nice will bring benefits to the citizens of Europe. In particular, they will gain more jobs and a safer environment. I am very much concerned with the environment because I had responsibility for the European Environment at one time.

The new situation will not mean an end to the freedoms that we currently enjoy. It certainly will not mean a federal European state. It is undoubtedly an important step for the future, but that is all. So why is the Tory leadership now demanding a referendum? After all, before the general election, while the Tories were arguing about what is being proclaimed at Nice, they did not call for a referendum then, so why call for one now? In government, the Conservatives agreed to no less than 42 extensions of QMV—12 in the Single European Act and 30 in the Maastricht Treaty. Why did they agree to those extensions?

In fact, an extension of QMV worked in Britain's interest in the past. The loosening of the stranglehold of the veto led to moves to improve the management of structural and cohesion funds, financial regulations and changes for the better in industrial and environmental policies. Undoubtedly, all that resulted in the enhancement of stability and security.

Why not build on those precedents? Why should we fear further advances in that direction? Of course it is important to bring the citizens with us. We cannot ignore them; we ought to listen to their concerns and to what they have to say. I accept that the Nice treaty is far from ideal, but it is infinitely better than anything that is envisaged by the Opposition. The changes it brings in its wake can also bring about immeasurable benefits.

The Conservatives want a European enlargement, but only on their terms, and those terms include a watering down of everything the European Union stands for. I believe there are clear advantages in enlargement for stability, jobs, prosperity and peace. The treaty may not be perfect—nothing which is a compromise is ever perfect—but it is the best move forward for Europe in many years and I wish it well.

9.8 p.m.

Lord Phillips of Sudbury

My Lords, I shall eschew the temptation to talk about political party arrangements under the treaty, Article 7 sanctions on member states, the Charter of Fundamental Human Rights, police and judicial co-operation. If I may I shall concentrate on the issue of democracy, not as so eloquently spoken of by my noble friend Lord Dahrendorf and the noble Lord, Lord Norton of Louth—that is to say, looking at democracy in terms of the institution—but looking at democracy on the ground. I refer to the perception among the public at large of the European Union and its institutions here and now.

There is a real scepticism in the country as to how far we any longer have control over our own destiny. Some believe—I am among them—that the time for us to have made a formative input into the major issues decided at Nice was long before the negotiations began. Others may share my sense that the die has already been cast and that it is too late to remove even a few rotten apples from the Brussels apple cart, let alone overturn it, even if we wanted to.

That fatalism is added to by the complex technicality of the Bill and treaty to which other noble Lords have made reference. It is a clever lawyer's nightmare; impenetrable even if, like me, you are a lawyer. Although the Explanatory Notes are helpful, they only take us so far. It is long overdue that we had available in the most ingeniously accessible form the text of the existing treaties with the articles of the Nice treaty marked on them—additions and subtractions—annotated and cross-referenced to the provisions of this Bill. It is forbidding to have to hack one's 'way through documentary undergrowth in order to be confident that one has married the right article in the new treaty with the right provision in the old one—that is before one evaluates the same in political terms.

All that is a severe disincentive to the participation of fellow parliamentarians in these vital matters, let alone the wider world. Most of the people to whom I talk—I did a lot of canvassing at the last election—feel that politicians and civil servants show arrogance and studied indifference to what people know and think about Europe. The arrogance comes in our assumption that where Westminster and Whitehall go, the public must eventually follow. As regards our indifference, many feel that their fundamental rights, vis à vis Westminster in relation to Europe are ignored by the political establishment.

Surely it is a fundamental right for so-called "ordinary citizens" to have the chance broadly to understand major sovereignty developments in the European Union and to have the opportunity to express a view, not after the deed is done, but at a time when that view might just influence the outcome. Taking public involvement seriously has not really happened since the referendum of 1975, and that is a long time ago. We politicians, by and large, only show any interest in what the public think when we want something from them—I do not mean their opinions; I mean their votes. From that I exempt most MEPs who struggle valiantly against hopeless odds.

Many people compare the righteous zeal with which the Government and indeed most of us brought in the new Human Rights Act with the way in which we deal with their greater right, as many see it, not to have the sovereignty of their Parliament diluted year by year and treaty by treaty without so much as a word to or from them, the people. I say nothing of the merits of such one-way ratcheting, but I believe that the process by which that has occurred has been consistently undemocratic and high-handed.

Surely there is no more fundamental right in our ancient democracy than the right to have one's say where Parliament is taking effectively irreversible steps towards ever closer union, even when we are doing such a good thing as enlargement. Yet the public have not been consulted since 1975. Not only has there been no referendum such as most other countries have had, but there has been no objective, effective public information campaign and no national debate. That is a fact.

In the other place the Home Secretary said that it would be "absurd"—that was his word—to have a referendum. I believe that the temper of that remark is revealing and not untypical. The Irish did it, and it may be that they do not think they were so absurd.

I do not argue with the right of the euro-integrators to pursue their ends relentlessly, but I challenge their right to do so by means which, to say the least, can be cavalier and unthinking in terms of the true spirit of democracy. An argument advanced by some of them is that the ordinary citizen cannot be expected to understand all of this. Insofar as that point is not self-serving it is a condemnation of the impasse we have already reached: ever closer union by ever less democratic means.

I revert to the justification for forging ahead willy-nilly; namely, that the electorate will eventually catch up. But what if the good people of this land are no longer following? We must remember that at the European elections in May last year, fewer than one in four voters even went to the polls. That needs reflection. Given that as many as one-third of under-25s were not registered to vote, and the even lower turnout of that age group who had registered, it would seem that as few as one in eight of the upcoming generation cast their precious and only vote. What does that say about the European Union and democratic adhesion in this country?

It is not even as if this disconnectedness from politics is borne of indifference. It is the predictable fruit of long years of public non-involvement for which we here are significantly responsible. Despite that, some in the "full steam ahead" party have the temerity to say that it is not really worth bothering about and is largely illusory in any event. I confess that, while I think I understand most of the other arguments of the "press-on" brigade, I cannot get my head round the idea that those who have least, value what they have least. Human psychology works precisely in reverse.

There is then the "efficiency and effectiveness" claim. Comparable arguments have been used over the past 30 years to justify the endless transfer of local powers to central government with disastrous results for local autonomy, democracy and community cohesion, which is all around to see. The fact is that whatever may work for other member states, our old organic democracy already has severe EU indigestion.

The greatest danger to the EU, a potentially mortal one in due course, is that a loveless union, as it is, is the loveless union it will remain. The little-by-little political integration of the EU on a continental scale is perceived by probably the majority of people in this country to run directly against the grain of their own lives; against their feelings and fears in terms of its huge scale, its control, its impersonality, its uniformising pulse and its apparent siding with the big battalions, who are also its main protagonists. That underlines just how remarkable was the decisive defeat of the entire forces of the Danish establishment, business and political, in its most recent fourth referendum.

When the big political crises come, as come they must, now that the European monetary system is in place, what shared loyalty among member states will see the crises through? What common sentiment will permit the massive transfers of tax which will then be needed from the countries doing well out of the "one size fits all" monetary policies to those doing badly?

It is only if the hearts and minds are rooted and engaged that the EU will be able to cope with the intense pressures which must inevitably come. Perhaps I underrate the common loyalty which already exists in the original member states. However, what I am certain of is that it does not exist or come near to existing in this country. Such feelings here grow slowly. Those who look to the United States may reflect that they took well over 200 years to develop into a country and had a civil war en route.

I make one final point. It is what the people want that will ultimately decide whether the European Union sinks or swims, not what we want or think. Many noble Lords have made nodding reference to the importance of speaking to the ordinary people of this country and gaining their support for the European Union. I am profoundly pro-European Union and profoundly in favour of extension of membership. However, I am profoundly convinced that if we proceed along the path we are taking, disregarding the substantial fears and anxieties of the British people, the fact that they do not own the community and do not feel that it is theirs, those of us who set so much store by its future could see its implosion in 10 to 15 years.

9.20 p.m.

Lord Monson

My Lords, the noble Lord, Lord Phillips, as so often, made some interesting points that will be well worth studying. Being open-minded like most Eurosceptics, I readily acknowledge that there are one or two good points in the Nice treaty: the re-weighting of votes in the Council and the redistribution of seats in the European Parliament, so that the larger countries become less disadvantaged and the smaller countries less over-privileged, which is long overdue. However, that is as far as my approval goes. Given the lateness of the hour, I shall skip to the most important objections.

What really sticks in the gullet is the further erosion of the national veto and the extension of QMV. As Mr Denzil Davies, speaking from the Government Benches in the other place, said on 11th July this year, once the veto goes the democratically elected British Government can be outvoted by a group of states whose governments are not accountable to the British electorate. From the other side of the House, Mr John Redwood, argued that changes in QMV, will lead directly to more Community activism, orchestrated by the European Commission".—[Official Report, Commons, 11/7/01; col. 848.] The noble Lord, Lord Biffen, quoted General de Gaulle. How horrified de Gaulle would be today by the integrationist agenda and the erosion of national self-determination. Our ideal is a grouping of friendly, freely co-operating, but totally independent nation states. After all, a good neighbour is one who gives help when help is required but otherwise comes into your house only by invitation. A bad neighbour is one who forces his or her way in and starts to bustle about ostensibly for your own good, the sort of individual who creates bad feeling and hostility between people and, by extension, between nations.

I submit that not only are the British Eurosceptics de facto Gaullists, but in a low key way most ordinary people on the European continent are as well, although they may not acknowledge or realise the fact, in sharp contrast to their political elites. The one exception may be the people of the Benelux countries, in particular the Belgians, given the chronic tensions and hostility between the Flemings and the Walloons. Some of them believe that only by subsuming themselves into a larger entity will those tensions be dissipated.

Clause 3 of the Bill approves an increase in the powers of the European Parliament, and it is claimed that increasing those powers will enhance democracy and bring the European Union closer to the people. It does no such thing. It is extremely difficult for the European Parliament to monitor, to interpret and ultimately to reflect public opinion for two main reasons. The first is that constituencies are inevitably far too large—nothing can be done about that—and the second is the iniquitous closed-list electoral system. A closed-list system means that MEPs have to be more attentive to their parties' demands than to the demands of their constituents if they are to have any hope of selection the next time round.

Originally it was hoped that the European Parliament would block, or water down, some of the inane control freakery emanating from the Commission. Alas, at the moment the exact opposite appears to be happening. The parliament is gold-plating two of the Commission's proposals: the directive relating to employee consultation, mentioned by the noble Lord, Lord Willoughby de Broke, and that which would restrict the driving of tractors and the operation of vibrating machinery to only two hours a day to the enormous detriment of British business and to future job opportunities in this country.

It is argued that the further erosion of the national veto is vital for enlargement—a point made by the noble and learned Lord, Lord Howe—and taken for granted that enlargement is an unmitigated good thing for all concerned. To suggest otherwise is considered heresy and unthinkable. However, scepticism is no longer considered heretical in most applicant countries. I think that it was my noble friend Lord Owen who mentioned Czechoslovakia, where only 40 per cent of the electorate now want entry to the EU. It is some time since I last visited the Czech Republic, Slovakia, Hungary or Slovenia, but during the past 18 months I have visited Malta twice, as well as each of the three Baltic states. My, admittedly totally unscientific, conclusion is that about 40 per cent of those electorates now oppose EU entry. Of course, that 40 per cent mainly comprises conservative elements—in the cultural, not the political sense—but they are increasingly joined by others who are more progressive, again in the cultural, not the political sense.

Those who still favour entry—apart, of course, from the political elites, who form only a small proportion of the population—are, first, young, educated people who see the EU as an avenue of escape from their relatively backward countries. For the most part, they aspire to work permanently in the heart of western Europe, returning, perhaps, once a year to holiday homes—log cabins in Saaremaa or apartments in Gozo. From their own, selfish—I do not use that word in a derogatory sense—point of view, they are making a sensible decision but one that will be to the great detriment of their country, which will lose their skills.

The second group comprises older people who have no desire to leave their country but who, with reason, fear the Russians or, in the case of Malta, the Libyans. However, I suspect that those fears have to an extent been over-ridden by a dawning realisation that EU entry will not bring them the benefits that they once expected. Those countries will have much less political clout than the Republic of Ireland, Portugal, Greece and, above all, Spain have enjoyed during the past 15 years or so because they stand to have proportionately fewer votes in the Council and fewer seats in the European Parliament than anticipated and are faced with the prospect of eventually losing a commissioner. They will not benefit from the enormous largess showered on those four countries because there is no more money in the kitty. Spain has made it clear that she does not intend to give up a single penny of the structural funds and cohesion payments that she receives in favour of poorer applicant countries.

Lord Lea of Crondall

My Lords, I am grateful to the noble Lord for giving way. Does he agree that the hypothesis that Spain will not give up a penny and that the structural fund will not change undermines the hypothesis that Malta would not benefit? Arguably, the reason why Malta would not benefit is that in order to get 75 per cent of countries into category 1, under the ongoing formula we would have to redistribute money to all the countries below 75 per cent, and Malta would not then qualify. Is the noble Lord's hypothesis on Spain not totally different?

Lord Monson

My Lords, it is possible that the noble Lord is right. He has obviously studied the matter in great depth. All that I know is that evidence shows that, over the years, Spain has been an enormous thorn in the flesh of the rest of the Community. When it has objected to something or other, it has usually got its way.

The applicant countries feel understandably insulted at the restrictions to be imposed—mainly at the behest of Germany, it appears—such as the seven-year ban on freedom of movement, the freedom to travel to work in other EU countries.

Finally, they have woken up to the implications of what one might term "obsessive centralisation". The noble Lord, Lord Dahrendorf, once spoke of obsessive harmonisation and I have always agreed with him about that. Obsessive centralisation is a variation on it.

The noble Lord, Lord Howell, in his excellent speech, said that Europe should be much more tolerant of diversity. Indeed, I wholly agree with the noble Lord that it should. But all the movement seems to be in the other direction. Only the other day I read of a proposal that a uniform 75 miles an hour—I suppose 120 kilometres an hour—speed limit should be imposed right across the EU, thereby ensuring that the proud ancient nations of Europe have less freedom to decide their own traffic laws than Rhode Island or Delaware. The nations of eastern Europe did not endure 45 years of communist tyranny for that kind of thing.

It may be that, like Norway, their electorates will conclude that NATO membership, which will provide the physical security that they desire, combined with membership of the less restrictive European Economic Area, would suit them better. It would preserve their agriculture to the extent they want it preserved, and it would boost them economically while allowing them to retain their independence to a greater degree than would be possible were they to join the EU. Moreover, they would have achieved their aim of being in a common market in so far as industrial goods and services are concerned.

9.31 p.m.

Lord Bruce of Donington

My Lords, I am in the very unenviable position of knowing what the pressure is for me to conclude my remarks as speedily as possible so that everyone can get home. I am sorry about that but at the same time I feel I have a duty to put forward some thoughts to which I hope the House will pay a little attention, if only in return for my being present throughout the debate from its beginning, except for about 10 minutes.

I joined the Labour Party in November 1935, which is an awfully long time ago. I can, therefore, possibly be attacked on the basis that I am completely out of touch with what is happening at the present time and that all I am entitled to is a good natured and friendly reference to my advancing years, with the possible hope that I may go on.

One of the things I learnt in politics, particularly as a member of the Labour Party, was how important people were. I learnt how important it was to meet them; how important it was to talk with them; and how important it was to argue with them. The most enjoyable moments of my political life have been spent in trying to persuade my fellow human beings to join the Labour Party and to agree with me on the ideals for which it has always stood, although temporarily perhaps it may now have abandoned them.

The other thing I learnt was the value of the British Parliament. That was made quite clear to me very early on—and I go back to 1945. One of the things which impressed me most was the fact that the right honourable gentleman Mr Winston Churchill, as he then was, worshipped Parliament. He spent his life defending Parliament and for him Parliament was the supreme arbiter. That view was shared by Clement Attlee, another devotee of Parliament. As long as they could get things through Parliament, they were happy about it.

Another lesson I learnt was that the whole system of parliamentary democracy depended on the universal acceptance of the validity of dissent. The parties had to be separated by stipulating a certain distance between Benches so that Members could not attack one another with swords. Inevitably, dissent was then considered to be a valued attitude to take. I was always taught that progress came from dissent, and that remains my view.

I shall not bore the House by dragging matters out unnecessarily, but ever since I entered Parliament in 1945 I have taken very much to heart, first, the importance of people, and, secondly, the validity of dissent; that is, the ability to disagree amiably with others without being virtually howled down as someone who has long since taken leave of whatever senses he has in the political sense of that term.

Noble Lords will recall that occasionally even in your Lordships' House I have obtained official Labour Government assent to my proposition that no Parliament can bind its successors and that a future one can change direction. That is now seriously challenged. I am also bothered about the interpretations of law. I was always brought up to believe that a person is innocent until proved guilty. Even that principle is now being assailed, and I do not much care for that.

When one comes to European legislation handed down to us to put on our statute book, one finds that the UK is subordinate to an entirely different system of law. We do not operate in the same way as the European Court of Justice. The ECJ, whether it be the Court of First Instance or another level, relies on an altogether different principle. Instead of taking the letter of the law, which we debate in this House and in another place in very great detail, the ECJ takes into account when arriving at its judgments the numerous preambles and recitals at the beginning of legislation. Therefore, the objectivity of a decision of the European Court of Justice, which then becomes binding on the United Kingdom under Article 21, contains an ingredient that is completely foreign to the UK, and also to me. I could elaborate as to how this comes about.

We now have a new draft treaty at the conclusion of an intergovernmental conference. That treaty was concluded and, presumably, signed under conditions that are well known to all noble Lords. We know that very often our Ministers have insufficient time to read the papers relating to any particular draft proposal until they are on the aeroplane. They are too tired when they arrive. They are often fallible. They are subject to tiredness so that they are quite inadequately equipped under conditions—I well know because I have been in them—in the rooms of the Council and of the Commission. So they find themselves confronted quite frequently with the conclusions of the president in office, even before the meeting has started. Therefore, the meeting starts off with what the final communiqué is going to be. It is then up to Ministers, on the assumption that they have been able to read and understand the legislation or proposed legislation, to arrive at an objective judgment.

We all know these defects exist. They have been described in papers. I was a member of the European Parliament from 1975 to 1979. I do not claim any particular distinction for that, except that I tried to exercise due diligence in the duties that I performed. I know what happens. I know, for example, how the Commission even then was in a position to allocate and apportion expenditures under the budget to the various countries concerned. The Commission could do it. In fact it was the only body that could do it. The Commission had enormous powers even in those days.

The case of Ireland has been mentioned. There have of course been others, including Spain where, as Mr Brian Connely has pointed out, without contradiction, the votes were literally bought by extra allocations of European money, which is partly our money anyway, to them by way of a bribe; otherwise the Maastricht Treaty would never have got through—as many of us, including my noble friend Lord Stoddart, thought at the time.

So it is not all quite as easy as one might think. I turn to the Commission. The Commission was given wide new powers. It already had them. The president of the Commission was given the power under Article 219 to be responsible for the political direction of the rest of the Commission. That has now been changed. Article 217 on page 23 of the treaty states: The Commission shall work under the political guidance of its President, who shall decide on its internal organisation in order to ensure that it acts consistently, efficiently and on the basis of collegiality". That was already in the treaty. It has been repeated. The following has been added under the new Treaty of Nice: The responsibilities incumbent upon the Commission shall be structured and allocated among its Members by its President. The President may reshuffle the allocation of those responsibilities during the Commission's term of office. The Members of the Commission shall carry out the duties devolved upon them by the President under his authority". It further states: After obtaining the approval of the College, the President shall appoint vice-Presidents from among its Members". It continues: A Member of the Commission shall resign if the President so requests, after obtaining the approval of the College". Those are quite extensive powers for the Commission. Indeed, the views of the president of the Commission, Senor Prodi, who has held the position for some time, are well known. It is his view that the Commission should become the government of Europe. He has gone on the record on that point. Unless we have taken leave of our senses, we should have regard to that. It may be that my right honourable and noble friends think that that would be a good thing. They may think, in effect, that British law, practices and politics ultimately should be subordinate to the president of the Commission. However, I do not see any reason why that should be the case or why we should agree with it.

I do not think that I need exercise more than normal discretion when I come generally to consider the role of the bureaucrat. I refer both to Brussels bureaucrats and to English bureaucrats. It is increasingly obvious that, week by week and month by month, to an ever-growing extent, we are being governed by the bureaucracy of Europe in alliance with sections of our own bureaucracy. There are very good reasons for that. Ministers are human and need to sleep. They do not have the time to read everything, or even to think. So we have come to accept bureaucracy. Believe me, if at any point I am challenged to do so, I can prove it. It is what I have been told by some of our own bureaucrats.

When we consider legislation being put on the statute book, we should not be under the illusion that every bit of it has been personally authenticated by a Minister. Ministers could riot do it because they do riot have the time. I devote more or less all of my time to reading the documents, and even I cannot get through them all.

I do hope that we shall not pay undue attention to this treaty, in particular in light of the fact that, so far as enlargement is concerned, the willingness of other states to join the European Community depends on their acceptance of the acquis communautaire. When we joined Europe, do noble Lords know that we had to absorb and to enforce some 32 volumes of acquis communautaire in our own country? That, I think, should act as a sufficient deterrent.

In my view, there is no question that the most sensible move would be this: a withdrawal from Europe. Many matters can be dealt with by agreement between member states. The function of the Commission could be that of co-ordination of the views of those various member states that were willing to undertake their obligations as agreed between them. It would be a voluntary association rather than one laid down by sheaves of directives, decisions and regulations emanating from Brussels and becoming enforceable without any parliamentary control whatever. EU orders do not go through Select Committees; they are placed straight on to the statute book. If noble Lords would like to verify that, I am quite sure that the government departments concerned—the Foreign Office and the Department of Trade and Industry—would be only too pleased to grant them the facilities to do so.

I come back to the views expressed by the noble Baroness, Lady Williams of Crosby. I congratulate her on her new appointment. I refer to her statement that she found the treaty to be incomprehensible. I have never been able to bring myself to rely on the incomprehensible, much less to pass on any conviction for an incomprehensible treaty to those who may seek to be persuaded to follow it.

I apologise for the length of my speech. I hope that some of it may have found tolerance with your Lordships. After all, one of the benefits of democracy is supposed to be tolerance of one another's views, pleasantness to one another when arguing, and making due allowance for the excesses of oratory. I thank your Lordships for the honour of listening to me.

9.50 p.m.

Lord Wallace of Saltaire

My Lords, this has been a very constructive debate on a very modest treaty. It is a treaty which would not have been necessary had the heads of government had a little more stamina in the middle of the night in Amsterdam in 1997 when they could have taken the decisions which were put off to the Nice inter-governmental conference.

But European co-operation operates through an almost continuous process of negotiation as governments struggle to hold the balance between their commitments to national sovereignty and national accountability and their recognition of the necessities of closer international co-operation. We all recognise that this leads to unsatisfactory, uncomfortable compromises, and to what my noble friend Lord Dahrendorf said are often half satisfactory solutions. He also recognised—I agree strongly with him on this—that we should talk about what needs to be done, at what level, and then decide what institutions we need, rather than getting ourselves caught up in wonderful institutional architecture of the kind which, sadly, some of our continental colleagues wish to wrap us up in.

This is a treadmill that we cannot get off. The noble Lord, Lord Lamont, half suggested that we could get off it but, as he well knows, finance Ministers nowadays necessarily work together multilaterally—within the European Union, within the Bank of International Settlement, within the G8—far more actively than they had to 20 or 30 years ago. That is one of the consequences of living in a global world.

The noble Lord, Lord Howell, suggested that in a network world we do not need these kind of things. I think we have all discovered that we do need international regulation in order to cope with globalisation, and international institutions to provide the international regulation that we need. The EU is not particularly satisfactory in this regard, but when one compares it to the World Trade Organisation or to the United Nations, it does not work all that badly.

As the noble and learned Lord, Lord Howe of Aberavon, said, if we look at the necessity of dealing with the more grisly aspects of globalisation, as he very nicely put it, the evolution of the third pillar of justice and home affairs policies in the past 10 years, of a common foreign and security policy and now of a defence policy are necessary, constructive and useful responses to that sad need.

We have gained an open and peaceful Europe. We are now in the process of extending security, prosperity and democracy across central and eastern Europe through enlargement. It is a tremendous achievement which, sadly, the younger generation across much of western Europe now takes for granted, thinking that the whole thing is run by a bunch of bureaucrats.

The achievement of that level of open-spaced, trans-border co-operation has consequences in terms of transnational crime, migration and so on. Therefore multilateral responses, new institutions and new regulations are necessary. That is what this modest treaty is about. It is an interim agreement preparing for future enlargement.

Again, I agree with a number of speakers from the Conservative Benches who have said that this will be a very different institutional structure from the original Community of Six of 1958. It will need further reform to cope with 25 member states, 470 million people and a GNP which will probably be a third larger than that of the United States. It will be very different.

If the noble Lord, Lord Biffen, had read, as I did the other week, a document that emerged from a group of "grand old men" in Brussels entitled A Wake Up Call for Europe—which had all the elements of the "bicycle" theory of European integration and how we need to rediscover the old religion—he would have been even more horrified than I was at the extent to which there are some within the European Union who still do not accept that the world has changed and will change a great deal more.

This treaty is a half-way house. The next intergovernmental conference will be much more important. I note that there is now an overlap between the ratification process in this country and the debate about how we prepare for the next inter-governmental conference. I thank the Minister for the useful consultation meeting that we had yesterday. I regret that many of those who declared themselves most committed to national sovereignty and national accountability were not able to join us on that occasion.

If one looks at Declaration 23 attached to the Nice treaty, which looks forward to the Laeken Declaration which heads of government are supposed to produce in three months' time and sets out the agenda for the next inter-governmental conference, it gives us something to discuss further. It declares that we need a more precise delimitation of powers according to the principle of subsidiarity. I think that that would command general agreement in this House. It talks about clarifying the status of the Charter on Fundamental Rights, about which some doubts have been expressed. I share some of those doubts. It talks about simplification of the treaties, and about the role of national parliaments. It aims to set up a convention to prepare for the next inter-governmental conference.

I agree strongly with my noble friend Lord Phillips that one of the things most lacking in this country has been adequate public debate, or adequate public explanation of where we are going. I ask the Government to ensure that this time we do have a full public debate. Indeed, the Government were committed by the European Council nearly a year ago to promoting a full public debate during the past year. For some reason, they do not quite seem to have got round to it. When the Laeken Declaration is published, can we have a full debate on the implications of that declaration in government time in this House and, I hope, also in the other place? Can we also be much more transparent this time on the process whereby we appoint what are supposed to be the UK Parliament representatives for this rather important and long-term convention? Can we also ensure—this is a question to the Whips—that those representatives receive effective support from Parliament itself? I found absurd and shocking the remarks yesterday by the noble Lord, Lord Bowness, on how he had printed out the papers from the convention through his e-mail at home because he had been given no support from this House. Can we have a regular report-back process to the committees of this House and to this Chamber during the 18-month process, so that no one in this House has the chance afterwards to say, "We did not know what was going on. We weren't informed. It's another conspiracy".

If we were to assess the Nice treaty by the criteria set out in Declaration 23, we should see that in some ways it is deficient. On the delimitation of powers, I agree with those who say that Articles 137 and 144 take us too far. I also wish the Government—as some of us attempted to persuade them—had used the Nice treaty to claw back some of what has shifted to the European Union on education and culture. These are clearly matters that should be dealt with at a subordinate level. If we believe in subsidiarity, that is the kind of thing that we should be doing: to aim to return some powers, including much of the chapter on social policy and much of the chapters on education and culture.

As to the status of the charter, it is not by any means a perfect document. However, I hope that we all agree that the preservation of the protection of fundamental rights above the level of the nation state is itself a desirable principle. Indeed, when the sub-committee that I had the honour to chair examined the Article 13 directives one of the most striking things was the memorandum from the CBI strongly supporting the implementation of the directives, on the grounds that executives of British companies who happen to come from ethnic minorities need to have their rights secured throughout the European Union as they pursue their careers across the European Union.

Simplification of the treaties can easily be decried as a constitution for Europe, as I believe the noble Lord, Lord Howell, suggested. But simplification seems to me a useful and important objective. The treaty is far too large. It contains a large number of subjects that are matters of policy and should be negotiated as policy and not as a treaty. I remember the Belgian permanent representative who negotiated the Maastricht treaty, whom the noble Lord, Lord Williamson, will well remember, saying that if someone had told him that, at the end of the process they had negotiated, copies of the document would be distributed to every voter in Denmark he would have understood that he was doing something entirely different. One of the reasons the Danish referendum was lost was precisely because the Danish Government made the mistake of distributing to everyone the almost incomprehensible lengthy document which, not surprisingly, they did not understand.

Treaty simplification is a highly desirable process. It is also possible. The Schuman Centre of the European University Institute has made a decent job of first drafts. I declare an interest, as my wife is now the director of the Robert Schuman Centre. I am grateful to the noble Lord, Lord Lamont, for making such generous remarks about her continuing and future active employment. Let us try to ensure that the next inter-governmental conference is well prepared on all these issues and tries to achieve a more stable treaty framework. After the messy final negotiations at Nice the Prime Minister was right to say that we cannot and should not go on like this. The convention that is planned in the three year lead-up to the 2004 IGC gives us the opportunity to get the treaty framework better next time although, as with all international negotiations, no doubt we shall not get it entirely right and we shall have to have another go in a few years' time, as that is the nature of all forms of multilateral negotiations among governments.

There are many other matters on which the Nice treaty is only a halfway house. As some speakers have suggested, we have an extremely messy triple majority system. It would have been much simpler to have a clear dual majority that one could explain to schoolchildren. We could have got it if the French had not become so paranoid about recognising that Germany is larger than France.

We have taken a small first step to limit the size of the Commission. I am in favour of taking a much larger step next time and having 11 or perhaps even nine commissioners. Then we would have a proper executive and not the triple forms of representation in Brussels. As regards the overlap of the Commission and the Council secretariat, we now have, as the second and third pillars expand, a dual bureaucracy operating in Brussels with the Council secretariat growing alongside the Commission and duplicating much of its work. Non-treaty reform is also important. What Commissioner Kinnock is doing about Commission reform deserves our active and full support, but he has a good deal further to go on that.

There is more to be done also on the common foreign and security policy and defence policy where clearly we are in a highly transitional period with people learning on the job. In three or four years' time we shall need to look again at the institutional structure. As regards justice and home affairs, matters have developed extremely rapidly over the past 10 years in response to the fall of the Iron Curtain which kept western Europe so secure from a whole host of problems of people smuggling and so on because the Red Army kindly guarded the frontier for us. We now clearly need further institutional checks on that. The British police and other law enforcement agencies are extremely enthusiastic participants in all of these transnational European networks, but, like all police forces, they prefer to do that informally and without proper scrutiny. We need to ensure that there is accountability both at the national and European level. The obfuscation of Her Majesty's Government on that matter in wishing it to be known that they are opting out and then half opting in, so that none of us can quite understand which bits we have opted into and which bits we have opted out of, does not contribute to any intelligent debate and manages to escape effective accountability both at the national and European level.

I have two or three other rapid points to make. I welcome the reforms of the European Court of Justice and the extension of the European Court of First Instance, because European integration was running into the problem of the immense overload of the legal system. The rule of law is fundamental to an effective European Union.

I am deeply sceptical about the area of enhanced cooperation. It is highly theological. The French, Belgians and Luxembourgers want it in the treaty because they would like to believe that somehow they could have a cosy core with the Germans that would exclude the awkward British and lots of others. They had this principle in the Amsterdam treaty and have not done anything about it, so I think it highly unlikely that the enhanced co-operation process will ever go into effect. Conservatives in this House and elsewhere should be familiar with the use of theological arguments over Europe. This is another theological argument over Europe on a slightly different basis.

On Article 100, we heard again the pension deficit bogey. I have read and re-read Article 100 and cannot see how the pension deficit bogey gets into it. Natural disasters are there, as are "severe economic difficulties, especially in the supply of certain economic products", but that is very different from bailing out countries if their pension arrangements fall down. We need to avoid conspiracy theories. I believed wholeheartedly in the idea of those clever foreigners who were determined to outwit the honest, straightforward Englishman when I was 14, having read the complete works of John Buchan and G. A. Henty. But I now understand that the world is not quite like that.

We have long suffered in this House and in the other place from Gresham's law of European debate—that Eurosceptic speeches drive out reasoned scrutiny of detailed proposals. Tonight, thankfully, that has not happened. We have had some high quality and well informed speeches from all over the House.

We need to domesticate the European debate, given the necessary interaction between European and domestic legislation that is now so intense. We need to ratify this modest treaty, which wraps up the leftover, uncompleted decisions from the Treaty of Amsterdam, and then move on to prepare for the unavoidably more ambitious reforms needed for 2004, to adjust to an institutionalised Europe of 25 states and 470 million people.

10.7 p.m.

Lord Astor of Hever

My Lords, I agree with the noble Lord, Lord Wallace, that we have heard some outstanding speeches from all sides of the House and from varying viewpoints. That reflects the reality of the European debate in this country. The division on Europe cuts across parties.

The combination of today's subject—the Nice treaty—which represents another milestone in the development of Britain's relationship with the European Union, and the eminent speakers, including eight former Cabinet Ministers, a former EU Commissioner, two MEPs, five former MEPs and other noble Lords with extensive knowledge of the European Union, has meant that this debate has been informed and constructive. I hope that the noble Lord, Lord Bruce of Donington, agrees that any disagreement has been amiable.

I join my noble and learned friend Lord Howe in being a little disappointed that the noble Lord, Lord Grenfell, described these Benches in terms of selfishness. He and I have worked constructively to improve British-French relations through the parliamentary group, so I hope that he does not have me or my noble friend Lord Howell in his sights.

My noble friend Lord Howell made it clear at the beginning of his speech that we shall not oppose the Bill but shall do our duty to seek to amend and improve it. However, I agree with him and with my noble and learned friend Lord Howe that we should consider carefully how decisions were reached in those all-night sittings. Keeping heads of state and their exhausted staff up most of the night over three days does not seem the best way to build a workable democratic structure.

The noble Lord, Lord Harrison, described the treaty as "finely tuned", which made me think of a sleek Ferrari. The noble Lord, Lord Watson, said that it was "inelegant", and my noble friend Lord Lamont called it "modest".

There was much debate about the treaty giving more power to Brussels. At a time when the divide between the attitude of the people and the politicians of Europe grows ever wider, we consider that the Nice treaty was a missed opportunity. We believe that the negotiations should have been used more effectively to return some of those powers to national governments, where national interests can be pursued most effectively.

As my noble friend Lord Howell said—

Lord Tomlinson

My Lords, perhaps the noble Lord will give way. If he believes that some powers should have been repatriated, will he provide us with a few clues as to which ones?

Lord Astor of Hever

At this late hour I do not want to go into details. I shall be quite happy to do so at Committee stage, when we shall come forward with a number of amendments.

As my noble friend Lord Howell said, that does not mean that we are anti-European but pragmatic and realistic about the European Union. People do feel disconnected from what is happening in Europe. My noble friend Lord Biffen pointed out the very low turnouts in European elections. When a country as traditionally pro-European as Ireland votes against the treaty, it is time for Europe's leaders to listen to their citizens.

My noble friends Lord Tebbit and Lord Willoughby de Broke speculated on what might be done to make the Irish "get it right next time", as did the noble Lord, Lord Stodd art of Swindon. I share the warm tribute paid by him and by the noble Lord, Lord Clinton-Davis, to the late Lord Shore. I agreed with much of what the noble Lord, Lord Phillips, said in a very powerful speech. I look forward to reading that speech in Hansard.

We on these Benches will support moves to strengthen democratic accountability, and I hope that we shall find some common ground with the Liberal Democrat Benches on the issue during the Committee stage. I join other noble Lords in warmly congratulating the noble Baroness, Lady Williams, on her election.

I agree with the Minister that it has been the strategic aim of successive governments to welcome enlargement. We remain strong supporters of it. Enlargement will mean that British companies will be able to benefit from access to the largest single market in the world for trade and investment. Enlargement is a way of stabilising countries that have recently experienced turbulent times. There was much debate on both sides of the argument as to whether the Nice treaty is necessary for enlargement. To the disappointment, I am sure, of the Minister, Commissioner Prodi's comments were widely brandished.

A number of noble Lords mentioned the European rapid reaction force. We have long supported the concept of pan-European defence co-operation under NATO command. The Anglo-French Air Corps and the Anglo-Dutch Amphibious Force are examples of that. But we have firmly registered our opposition to the proposed EU rapid reaction force. We must do nothing that would undermine our relations with NATO and with the non-EU countries within NATO.

The noble Lord, Lord Owen, said that a serious rethink and adjustment is taking place. I should be grateful if the Minister could add in any way to the noble Lord's comments.

There can be no benefit from duplication between NATO and the EU of military and political staffs and analysts. We need one clear chain of command. We do not need two interpretations of a crisis as it develops—one by NATO and one by EU staffs.

I am also concerned, as was my noble friend Lady Park, that there will not be sufficient commitment to providing financial support to ensure military capability, particularly because few EU governments have the appetite to expand defence expenditure.

My noble and learned friend Lord Howe and my noble friends Lord Waddington and Lord Tebbit mentioned the European Charter of Fundamental Rights. In the context of funding political parties, my noble friends Lord Lamont and Lord Willoughby de Broke raised the possibility of the EU banning political parties of which it disapproved.

My noble friend Lady Park made some important points about Europol and terrorist intelligence. The House will want reassurance on that point from the Minister.

Many noble Lords mentioned the IGC. I agree with the noble Baronesses, Lady Williams and Lady Crawley, that one area that should be discussed is the simplification of treaties. I also agree with the point that the noble Lord, Lord Phillips, made about paperwork. We on these Benches will come forward with positive and constructive proposals for the IGC in order to create a modern, forward-looking and flexible Europe.

The CAP has been a recurring theme throughout the debate. Enlargement cannot succeed with the CAP as it stands. As the noble Lord, Lord Tomlinson. said, the reforms that were agreed at the Berlin Council in March 1999 were inadequate for that purpose. The Prime Minister said in 1995—in his early days as the leader of the Labour Party—that, reforming CAP is a necessary precondition to enlargement to include the countries of central and Eastern Europe". Bearing in mind the changes in European governments, particularly of the German Government, does the Minister agree that we have a real chance to build up an alliance for agricultural reform to save the EU from bankruptcy?

We heard many arguments about QMV. The noble Lord, Lord Owen, said that enough is enough, and the noble Lord, Lord Hannay, chided these Benches for our views on QMV. I have carefully read the Hansard reports of the Bill's progress through the other place, and several Back-Bench Members in the Minister's party were very critical of QMV.

My noble friend Lord Blackwell asked some important questions about Articles 137, 144 and 157. If the Minister is unable to answer them tonight, maybe she could write to the noble Lord and place a copy of the letter in the Library.

One example of a directive being passed against the vote of our Government is that of the art levy directive, which my noble friend Lord Howell described. The practical effect of that will be that most valuable works of art will no longer be sold in the EU—they will be sold not in London but in New York, Japan or Switzerland.

We on these Benches are keen to learn from Europe. We accept that some European countries arrange things—in particular, their public services—better than we do. Plans are well ahead for members of the Opposition health and education teams to visit different European countries to learn from their successes.

We want the EU to work. We want to help the accession countries. However, we do not believe that the Bill will help enlargement. It fails to achieve the aims that were set out by the Government and it fails to advance the vision of a flexible Europe that lies at the heart of our policy. The Opposition will table substantive amendments in Committee and I look forward to contributing further to our debate at that stage.

10.20 p.m.

Baroness Symons of Vernham Dean

My Lords, this has been a wide-ranging and an extremely well-argued debate. The judgment of your Lordships has been varied. Most of your Lordships have welcomed enlargement, but have raised fundamental questions as to whether any comprehensive treaty, or this one in particular, is necessary for that enlargement to take place. A huge range of other issues has also been raised, and I can only hope to touch on the arguments that I venture to suggest we shall discuss in greater detail in succeeding stages of the Bill's passage.

I join others who have participated in the debate in congratulating the noble Baroness, Lady Williams, on her election as Leader of the Liberal Democrats. She is an extremely gifted and highly persuasive parliamentarian, and I wish her well in her new role.

I now turn to some of the arguments and shall start with enlargement. The noble Lord, Lord Howell of Guildford, fulfilled all my hopes and expectations by quoting Romano Prodi. Frankly, I was not entirely sure why he did so, as I did not believe that there was any difference between us. The President of the Commission said that Nice is not a legal prerequisite for enlargement, and I made very much the same point in my opening remarks. In theory it is possible to proceed with enlargement without the Nice treaty, but only in theory. The point that I made was that the treaty was a prerequisite for successful enlargement. In a practical sense, the treaty is necessary for enlargement to take place, but I did not hear the noble Lord dissent from that proposition. Indeed, he did not go on to address what would happen in a practical sense were we not to have the treaty and still go for enlargement.

Lord Lamont of Lerwick

My Lords, will the Minister say what she thinks Mr Prodi meant when he said that up to 20 members was not a problem?

Baroness Symons of Vernham Dean

My Lords, I am in no position to interpret Signor Prodi's remarks, but the noble Lord knows very well that he went on to qualify those remarks by making it absolutely clear that he was speaking in a legal sense. The Government have not challenged that position. In my remarks, I was addressing the far more important point of successful enlargement.

The points made by my noble friend Lord Grenfell were eloquently and persuasively argued, as were the wise words of the noble and learned Lord, Lord Howe of Aberavon and the noble Lord, Lord Watson of Richmond. If we do not ratify the treaty, we shall at best delay, and at worst entirely wreck the enlargement that most of your Lordships have said is desirable. We cannot, as my noble friend Lady Crawley made clear, pay lip service to enlargement and then oppose every practical means of achieving it.

Lord Howell of Guildford

My Lords, on a slightly different point, I think that the Minister said in her opening remarks that there was no cause to delay the Bill in the light of the Irish referendum because the Conservatives had not delayed the earlier treaty after the Danish "No". The noble Lord, Lord Stoddart, triggered something in my memory, which is not as good as it was, but I checked and found that the Minister was wrong. The government of the day, led by John Major, decided to delay the Bill after the Danish referendum. It was delayed for several months and then brought back a few months after the famous Monday in June when the Danes delivered their vote. Would the Minister like to correct that for the record?

Baroness Symons of Vernham Dean

My Lords, I am not in a position to correct it because unlike the noble Lord, Lord Howell, I have not had the opportunity to check it. If I find that there is a need for correction, I shall of course correct what I said. But the point that I was endeavouring to make is that the Opposition believe that the treaty should be renegotiated. As far as I know, the Maastricht treaty was not renegotiated as a result of the Danish vote. I shall check what the noble Lord has said and if it is necessary to correct what I said, I shall do so.

The fact is that we are arguing about what other changes are needed in order to facilitate enlargement. Our first priority was to obtain more voting strength for the United Kingdom; that is what we got. The treaty increases the relative weight of Britain's vote in the Council of Ministers for the first time ever, as the noble Lord, Lord Williamson of Horton, made clear.

The noble Lord, Lord Tebbit, took issue with us on the arithmetic. I have no doubt that we shall be able to pursue all these issues in further stages of the Bill, but it is only logical that if the number of members increases, the proportion of the vote we cast is less. I made the point that what increased was the relative vote, relative to the greater proportion of the small and medium-sized countries such as, Denmark and Sweden. I am sure we will have an interesting time looking at the arithmetic of that at future stages of the Bill.

Lord Tebbit

My Lords, I am grateful to the noble Baroness for giving way but she should not spend too much time worrying about this. The arithmetic is perfectly clear. Today we have 11.49 per cent of the votes; after accession of the other candidates we will have 8.41 per cent. A reduction from 11.49 to 8.41 cannot be an increase even after the Government's spin doctors have got at it!

Baroness Symons of Vernham Dean

My Lords, I did not say it was an absolute increase. I said it was an increase relative to other countries and I made the point in relation to small and medium-sized countries. I am sure the noble Lord is extremely good at arithmetic. But it behoves him to listen to the premise upon which my remarks were originally made rather than the premise he would like us to believe.

I turn to the question of the size of the Commission. As the noble Lords, Lord Williamson of Horton, and Lord Wallace of Saltaire, said, we have agreed to a smaller and we believe better Commission. Nice means that there will be fewer commissioners relative to the number of member states, so the Commission will be able to function more effectively after enlargement; it will be reformed and streamlined.

I turn to a. point made by the noble Baroness, Lady Ludford, who was concerned about the number of seats in the European Parliament. There will indeed be a reduction from 87 to 72 seats for the UK, but that reduction wall be gradual and the increase in the EP ceiling from 700 to 732 ought to ease the position. Perhaps I should make clear that in representational terms the United Kingdom will have one seat for every 791,000 people in this country, as compared with one seat for every 818,000 people in Germany. So person for person we shall have better representation than Germany.

I turn to another topic which excited much comment: that of qualified majority voting. The noble Lord, Lord Howell, expressed misgivings about QMV and its expansion. But I felt that the noble Lord, Lord Owen, was rather nearer the mark in his comments. We have retained unanimity where necessary and have extended qualified majority voting only when it is in Britain's interests.

As my noble friend Lord Tomlinson pointed out, in what I felt was a very robust speech, the Opposition ought to have no difficulty with that either. They agreed to move from unanimity to QMV; they gave away the veto, as they now like to call it, in the Single European Act under Mrs Thatcher, as she then was, and at Maastricht under John Major. They did so on some fundamental articles; for example, all general single market legislation and on almost all the environmental provisions. So the Opposition cannot claim to be against QMV in principle, as my noble friend Lord Harrison pointed out.

Many extensions of QMV are, as the noble Lord, Lord Hannay of Chiswick, made clear, very much to our advantage; others are relatively minor. Appointment of EU social representatives on foreign policy where unanimity could clearly hold up important work is an example, and where those envoys allow one member state to hold out against the best candidate for the job cannot be the sort of situation with which we want to continue. Similarly, the salaries and pension of the Registrar of the Court of First Instance; I am bound to suggest that the Opposition cannot have the British people trooping off to the polls for a referendum on an issue such as that, and then argue about not having a referendum on the euro.

As for financial regulations on probity, it will now be easier to carry out reforms and to tighten up financial management, again now subject to qualified majority voting, something which the Opposition on other days say that they would be happy to see.

My noble friend Lord Grenfell said—I think he agreed with the noble Lord, Lord Hannay, on this issue—that the Opposition's argument about the extension of QMV seems to be an argument in principle, but when faced with practical arguments about the extensions and how they would really operate, it is far more difficult to rationalise their position. Perhaps I may say that I shall not apologise to the noble Lord, Lord Monson, for what happened over the veto. The Government did exactly what they said they would do. We maintained the veto where in our judgment it was in the national interest so to do. That is what we said we would do and, indeed, what we went on to do.

I turn to some of the questions on ESDP. ESDP helps to ensure that European nations can make a stronger contribution to crisis management operations both within NATO and where NATO is not engaged. Perhaps I can assure the noble Baroness, Lady Park, and, indeed, the noble Lord, Lord Astor of Hever, that its purpose is to tackle peace-keeping and humanitarian and crisis-management tasks. Despite the assertions of some noble Lords opposite, it is not war fighting or, indeed, a territorial defence and it really is no competitor to NATO. NATO remains the basis of our collective and territorial defence. That is an uncompromising statement. The ESDP is focused on the so-called Petersberg tasks, so it really is not a choice between the EU on the one hand and NATO on the other. The two complement each other. I am afraid I thought that the question raised—

Baroness Park of Monmouth

My Lords, I thank the Minister for giving way. Does she not agree that the Petersberg task, separation by force. does involve war fighting?

Baroness Symons of Vernham Dean

My Lords., I have never argued that the Petersberg tasks do not involve military conflict; of course they do. They not only involve peace-keeping but peace enforcing. By their nature, therefore, that must involve military engagement. The question raised by the noble Lord, Lord Biffen, in trying to juxtapose the two positions was, therefore, somewhat artificial.

As my noble friend Lady Ramsay of Cartvale made clear, one of the aims of the initiative on which real progress has been made is to develop the relationship between the EU and NATO into a strategic partnership. My noble friend said—indeed, she was right—that deep and detailed links have now been set up to allow that. They have been used. We can witness the way in which the two organisations worked hand in hand in the Balkans. That was a point which the noble and learned Lord, Lord Howe of Aberavon, was kind enough to make.

We are talking to our American allies all the time about all aspects of the proposals. They strongly support the EU's efforts to increase its ability and responsibility to act in times of crisis. I am grateful to my noble friend Lord Lea of Crondall for reminding us about the judgments of our noble and gallant friends and, indeed, in particular the noble and gallant Lord, Lord Bramall, a former Chief of Defence Staff, on this subject.

Perhaps I may say gently to the noble Lord, Lord Howell, that I was disappointed by the point that he made on the Belgian Minister's remarks about our own Prime Minister and the attempt that he made to link the ESDP with the current conflict and a less than altogether satisfactory European attitude to that. Perhaps I may remind the noble Lord that the Declaration by Heads of State of Government at Ghent on 19th October stated that, The European Council again unequivocally states its full support for the action being taken against terrorism in all its aspects within the framework defined by the United Nations and reaffirms its total solidarity with the United States". We cannot get better than that as a full-hearted statement of solidarity from the European Union. To portray Europeans, or, indeed, those who support ESDP, as somehow anti-alliance was uncharacteristically a little unfair of the noble Lord.

I turn to the points on intelligence raised by the noble Baroness, Lady Park of Monmouth. Intelligence will not be passed to EU bodies unless we are absolutely satisfied that it will be dealt with as it would be if it were to be passed to NATO. There is an interim security agreement now agreed with NATO on those points. The noble Baroness also asked about the EU statement which was issued on 17th October. Part of an action plan discussed at the Ghent European Council will again be discussed at the Laeken Council, to which noble Lords have referred, though the details have yet to be finalised. When they are, I shall do everything I can to ensure that the noble Baroness receives the details on a subject in which I know she is not only interested but at which she is extraordinarily expert.

The noble Baroness, Lady Williams, raised questions about asylum from a rather different point of view, as did the noble Lord, Lord Waddington. The Government are determined to stamp out the evil trade of people trafficking. Therefore, we have raised this issue as a matter of urgency with our European Union partners and we are putting forward concrete ideas for co-ordinated EU action. For example, we are leading EU efforts to station immigration liaison officers from EU countries in the Western Balkans and other key transit countries to assist with training and to help to disrupt people trafficking networks.

The noble Lord, Lord Waddington, raised questions about the European arrest warrants. Mutual recognition is not about Europe having a single legal system; it is more about the process whereby a judicial decision made in one member state is enforced in another member state with the minimum of formality. The aim of the European arrest warrant is to speed up extradition procedures by introducing more simplified procedures. I am sure that the noble Lord will agree that that is worth while.

Baroness Williams of Crosby

My Lords, I thank the Minister for giving way. Am I right in thinking that some procedures are being discussed in case there should be a sudden refugee emergency, of the kind that we are seeing in Asia at the moment, and that that will bring about a common discussion with the European member states?

Baroness Symons of Vernham Dean

My Lords, a number of such issues are being discussed at the moment. A number of additional points on the various issues are being discussed under the JHA pillar. I shall look into the detailed point raised by the noble Baroness. I was also about to say to her that I shall write to her in relation to the questions that she raised on Article 229A. The position is quite complicated. As she was the only speaker to raise the matter, perhaps she will be content if I write to her.

The noble Lords, Lord Lamont and Lord Willoughby de Broke, raised questions about the funding of the European political parties, a subject on which they both had concerns. To qualify for funding a European political party must respect the principles of freedom, democracy, human rights and the fundamental freedom of the rule of law. There are a number of other qualifications. Perhaps the noble Lords will forgive me if I give them a fuller answer in a letter. I shall place a copy in the Library so that all noble Lords may see it.

The noble Lords, Lord Howell of Guildford and Lord Lamont, and the noble and learned Lord, Lord Howe of Aberavon, raised questions about the charter of rights. I should make it clear that the charter is a political declaration. It is not legally binding. It was neither incorporated nor attached. It is not referred to in any of the treaties. The questions raised by the noble Lord, Lord Lamont, about extradition to countries that use the death penalty comes back to the point that the charter is not legally binding. It was not incorporated; it was not even attached to the treaty; and it is not referred to anywhere within the treaty. I fully accept that the EJC has referred to it, but the ECJ is free to refer to it. It is an important political guide, but it does not follow that the charter is legally binding on any country. I hope that clears up that particular point.

Lord Howell of Guildford

My Lords, I am grateful to the noble Baroness for giving way. This may be a pedantic point, but the charter is referred to at page 78 of the treaty.

Baroness Symons of Vernham Dean

My Lords, tomorrow I shall give my officials a hard time about that! If that is the case, I apologise. I am grateful to the noble Lord for giving me special leverage with the officials when I speak to them about this on a future occasion.

Lord Tebbit

My Lords, I am grateful to the noble Baroness for giving way to me once again. Having said that it had no effect in this country, she went on to say that, of course, the European Court of Justice could take account of it. But the findings of the European Court of Justice are binding upon this country, so, in effect, if they so choose, the convention is binding upon this country.

Baroness Symons of Vernham Dean

My Lords, I did not say that it had no effect. I said that it was not legally binding. There is a great deal of difference. The noble Lords, Lord Lamont and Lord Stoddart, referred to Article 100, which is an important one. That article cannot be used to bail out countries in the Eurozone that cannot live up to their responsibilities. That is guaranteed by the treaty. The article is there to assist member states following natural disasters or other circumstances beyond their control.

I turn to the questions on the common agricultural policy.

Lord Lamont of Lerwick

My Lords, the question that I precisely asked was: what is meant by "other circumstances"? That was the phrase added at Nice.

Baroness Symons of Vernham Dean

My Lords, I shall have to write to the noble Lord about what are "other circumstances", but I believe that they would be along the lines of natural disasters or including circumstances that were beyond the control of the countries concerned, not the sort of mismanagement issues that, I believe, were at the root of the noble Lord's concern.

Baroness Ludford

My Lords, before the Minister turns to the CAP, may I save her—or, more precisely, her officials—by pointing out that the only reference to the charter of fundamental rights is in the declaration, which says that the next IGC will consider the status of the charter. The Treaty of Nice does not say anything about the legal implementation of the charter. As a. former civil servant, I should hate to see officials skewered and kebabbed tomorrow.

Baroness Symons of Vernham Dean

My Lords, they know very well that they would not be skewered and kebabbed in any case. I, too, have been a civil servant in my time, and know about the exigencies of dealing with such issues.

If I may say so, I think that this is a teeny bit OTT. The noble Lord raised the question; he said that I owed the House an apology for having misled it on something. The noble Baroness takes a different view. I have already undertaken to consider the matter; I will do so. If I need to write to anyone as a result, I will of course do so, as your Lordships would expect.

If I may, I will pass on to the common agricultural policy. I reiterate to the noble Lord, Lord Blackwell, that we continue to press the case for CAP reform with our partners and we will work with them to deliver changes that benefit consumers, taxpayers, the rural economy, the farming community and the environment. The on-going debate in Europe is increasingly in favour of such changes.

I remind the noble Lord, Lord Biffen, that the reform process we are undertaking to reduce European spending on the CAP was secured by a Labour Prime Minister at the Berlin Council in 1999. My noble friend Lord Lea of Crondall is absolutely right: agriculture will be on the agenda for discussion at Doha, although I cannot of course predict what is likely to be the basis of a new trade round. If I may, I shall write to the noble Baroness, Lady Ludford, about the questions that she asked about Cyprus, because there were several of them, and I think that a letter would be appropriate to do her justice.

I thought that the noble Lord, Lord Howell of Guildford, spoke movingly about the importance of a real vision for Europe—having more confidence in Europe, a more tolerant Europe, a better vision of what Europe should be about. I agree with much of what he said. As he pointed out, it is also a case of having more trust in the European institutions. I also agree with the extraordinary and impressive argument laid out by the noble Lord, Lord Hannay of Chiswick.

However, I make no apology to the noble Lord, Lord Biffen, for stressing that part of the UK vision will be that Europe should be more prosperous. Like my noble friend Lord Clinton-Davis, I believe that national wealth is not only a legitimate but a praiseworthy aim of government. Without safeguarding and growing national wealth, we cannot improve our living standards, our schools or our hospitals—which, after all, is the basis on which the British people voted for the Government in June.

As my noble friend Lord Grenfell and the noble Baroness, Lady Williams of Crosby, said, the next IGC in 2004 will discuss exactly the kind of issues that the Prime Minister identified in Warsaw: how to define and delimit the EU's competence, simplifying the treaties to make them easier to understand, improving accountability and transparency and involving national parliamentarians—a point with which I know that my noble friend Lord Bruce of Donington is especially concerned—more closely in EU decision-taking. I hope that the debate has given us all the opportunity to consider these important issues, difficult and complex as they are, and I shall welcome further debate.

The noble Lord, Lord Norton of Louth, went so far as to argue that the very existence of a new treaty worsened the democratic deficit. I hope that he and the noble Lord, Lord Phillips of Sudbury, will interest themselves in the fundamental issue, which we shall address. We want to make the European Union more transparent, more accountable and more relevant to the issues that concern people. They are very much the concerns which my right honourable friend raised in his Warsaw speech and they were reflected most lucidly today by my noble friend Lord Bruce of Donington.

I strongly agree with the noble Baroness, Lady Williams, and the noble Lord, Lord Wallace of Saltaire, about the importance of the forthcoming debate. It is one which the Government welcome and one which we intend to continue to lead. Indeed, we discussed the arrangements for it with Members of all parties in your Lordships' House yesterday. I was very interested in the suggestion for informal channels of communication in the run-up to the next IGC and I shall undertake to discuss the matter with my ministerial colleagues. I hope that the very fact that we had the meeting yesterday indicates my view on that issue. As regards the debate post-Laeken, the noble Lord, Lord Wallace of Saltaire, knows that I am not in a position to make undertakings about that at the moment.

Perhaps I may say gently to the noble Lord, Lord Tebbit, my noble friend Lord Stoddart and to other noble Lords that as regards the Irish referendum, although it was suggested that we should not even be debating the Bill, the Irish Government urged us to go ahead. They have said as the democratic leaders of their country that we and other EU partners should proceed with our ratification process. Furthermore, the treaty was in the public domain before our general election. It was published on 26th February this year. Perhaps it is worth reminding all noble Lords, including the noble Lord, Lord Blackwell, that the treaty was published, we stated in our manifesto that we would be pursuing it and we believe that we have the mandate from the people so to do.

Since the Government came to power four and a half years ago, we have tried to build British policy in Europe to get the best out of Europe for Britain while shaping Europe's future in the interests of the whole continent. We have shown that positive engagement with the European Union and our European partners really can work; that we can win the arguments; and that we can exercise real authority and real influence in Europe.

On a previous occasion I indicated how very much we shall miss my late noble friend Lord Shore in our forthcoming deliberations. Notwithstanding that, I look forward very much to our debates on the Bill. I look forward to them with considerable relish. I commend the Bill to the House.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

House adjourned at twelve minutes before eleven o'clock.