HL Deb 20 November 2001 vol 628 cc1036-77

5.11 p.m.

House again in Committee on Clause 1.

Lord Howell of Guildford moved Amendment No. 23: Page 1, line 9, after "10," insert "other than Article 2, paragraph 22, revising Article 214 (2) of the Treaty establishing the European Community,

The noble Lord said: This amendment may superficially appear the same as Amendment No. 22, but it raises very different issues, although they were touched on in the previous debate. The central concern is the application of qualified majority voting to the appointment of the President of the European Commission, which is a highly significant role. The process—which has been changed, for reasons that are not totally apparent to us—is germane to the appointment.

As I understand the technicalities, the Commission President is now to be nominated by the member state governments acting by qualified majority voting rather than unanimity. The Council would also adopt the list of nominees for members of the Commission by QMV and by common accord with the nominee for president. The European Parliament would still approve the Commission as a body, but the final appointment by the Council would be by QMV instead of unanimity.

Some of your Lordships may be keen to point out that past procedures for finding the best person to be President of the Commission have not been entirely happy. That point has already been made. One might say that the results have been mixed—not all bad and not all good. The views of member states on the best man or woman for the job reflect their concerns and interests on the future shape of Europe.

The proposition that the system is bad and ought to be changed will not stand up by itself. The system has produced some great figures who have performed their role superbly. My earliest memory is of the widespread approval in the EEC, as we then called it, for the work of Walter Hallstein, whom Jean Monnet greatly admired. Walter Hallstein fulfilled the role that Jean Monnet saw for the Commission in its early days: he should be a low-profile individual with not too large a dose of political ambition and not too high a profile on the political platforms of Europe, but dedicated to sewing together the European unity that Jean Monnet sought and of which he was the magnificent and visionary architect. Other great people followed: Jean Rey, Franco Maria Malfatti, Sicco Mansholt, Francois-Xavier Ortoli, who was most impressive, then the superb Roy Jenkins, now the noble Lord, Lord Jenkins of Hillhead, who acted as president from 1977 and is universally regarded as having done an excellent job, then Gaston Thorn, Jacques Delors, Jacques Santer and now Romano Prodi.

Latterly, there has been increased unhappiness. That may be because larger accumulations of power appear to be in the hands of the president. Perhaps that is an illusion, but it may still he why people have become more jealous and concerned about how this important role should be fulfilled. I would not like to say. The unease is there and after Mr Delors left there was a great deal of in-fighting.

It could be argued that qualified majority voting would cut out all the in-fighting, but I doubt whether it would. Those of us who watch these things closely—and I know that there are people in your Lordships' House who have been much closer to the issue than I have—could not sustain the argument that bringing in qualified majority voting will clean up and swiftly refashion the entire procedure. There will always be jostling for the job. The answer of the true Europe-builder is not so much to reform how the job is sought, but to be a great deal clearer in defining the purposes and limitations of the role of President of the Commission.

I worry more for the future because people talk now about electing the President of the Commission, not just through QMV, but maybe, under a new constitution, by a Europe-wide poll. In other words, the aspiration exists to turn the job into a presidency more along the American political lines than anything that was intended by Jean Monnet. That is a great worry and should on its own cause us to be very cautious about tinkering in any way with the methods by which the succession of presidents have found their place in the job.

Then there is a worry that is particularly associated with the Nice Treaty and the Bill. It covers areas that we shall come to in later debates: how QMV will work under the new weighting systems. The new arrangements are significant and involve a pretty hefty advantage for the big states and some difficulties for the smaller states, should they wish to hold out for their own candidate against whoever was wanted in Berlin or Paris—or maybe in London.

My view—I do not necessarily claim that it is universally accepted by my party—is that our nation is at its best and pursues its true longer-term interests best when it is looking after the smaller countries of Europe. There is an inclination for us to be gung-ho and claim that we have fixed Britain's interests and made sure that we cannot be outvoted by the smaller countries, but I do not think that that is a healthy way for European democracy to develop. There should be strong circumscribed limits on the powers of the central institutions so that the arrangement of rules at the centre can be more democratic and less of a threat to the interests of individual states.

I do not want to compare the European Union with the United States, but I have always been fascinated that from the start the United States has managed a system that has full population-weighted representation in the lower House, but an upper House with two senators from every state regardless of size. Some of those states are so vastly different in size as to make any differences of size in Europe look quite modest—unless we consider Luxembourg. The difference between Rhode Island and California is colossal. So it is possible to have a fair and balanced democracy without huge weightings here and there. If such weightings are to be applied, I should tremble at what may be in prospect if I were a citizen of a smaller state.

That is a worry, but our broader worry is that we see no reason why QMV is necessary in the matter, despite the ups and downs and bumps of previous appointments. We are not convinced by the usual efficiency argument. Every time that I hear high officials talk about more efficiency and momentum in Europe, I check myself, because in a democracy we need checks and balances, and they often lead to inefficiency and loss of momentum. Perhaps the other side of the coin from momentum is more democracy, argument and tiresome disagreement. Perhaps those who are so eager to have momentum, efficiency, rapid appointments and rapid moves forward in Europe-building should occasionally pause, after the great success of the past half-century in building Europe to realise that once democracy is introduced, everything will—and ought to—slow down. That is why I move Amendment No. 23, with which Amendments Nos. 28 and 31 are grouped. I beg to move.

Lord Pearson of Rannoch

I am sure that we do not need to rehearse the arguments on qualified majority voting that we had when discussing the previous amendment, but it may be worth putting on the record how the particular example of Euro-creep to which the amendment relates occurs.

When the Treaty of Amsterdam was introduced, the President of the Commission was, in effect, given a veto over the other members of the Commission appointed under him. Until then, the whole Commission had to be approved by the member states. Under Amsterdam, the relevant provision is at Article 214—thoughtfully renumbered by the Brussels bureaucrats to muddle any of us who may have known it as Article 158 under the Treaty of Maastricht and earlier versions of the treaty. Article 214(2) of the Treaty of Amsterdam states: The governments of the Member States shall nominate by common accord the person they intend to appoint as President of the Commission; the nomination shall be approved by the European Parliament". The new provision there was getting the Parliament's agreement, but the President of the Commission was still appointed "by common accord".

We then have one of the real beauties of European drafting—one must say that it is clever. The Amsterdam Treaty continues: The governments of the Member States shall, by common accord with the nominee for President, nominate the other persons whom they intend to appoint as Members of the Commission". So that is how they did it: they slipped in three little words—" by common accord"—that in effect gave the President of the Commission a veto, because no one could be appointed to the Commission without common accord with the president-elect.

We now see the process stalking on an extra step in the Treaty of Nice—as usual, it never goes backwards, always forwards—under which the president himself is to be appointed by qualified majority voting. I support my noble friend's amendment. I do not want to sound monotonous, but the treaty provision is yet another example of the ratchet moving eternally in the same direction.

Lord Tebbit

During the previous debate, my noble friend Lord Howell of Guildford presented the argument, "If it ain't broke; don't fix it". What he perhaps neglected to recognise was that, so far as the European federalists are concerned, the treaty is "broke" until it becomes a treaty for a European state. That is what they are trying to fix each time that they fix new amendments to the treaty.

However, as we are a bunch of reasonable people in this Chamber, and taking my noble friend's point that, "If it ain't broke; don't fix it", will the Minister tell us which appointment as President of the Commission he believes was so unsatisfactory as to justify a new system? Which one was it? Is it the present president or one of the previous ones? I ask him to name names, because unless he does, we should all conclude that the present system is working perfectly well, in the Minister's opinion.

Lord Tomlinson

I invite my noble friend, before he replies to that question, to reflect on the fact that many members of the population of this country, many Members of the Committee, and certainly many members of the European Community think that President Delors was an excellent president. In him, we managed to get as President of the European Union a good federalist who pursued a good federal line. He was there by virtue of a British Prime Minister exercising a veto. I am in many ways grateful for the exercise of that veto. We got a splendid President of the Commission as a result. The only problem was that he was frequently abused once we had got him, because he managed to do what he had said that he would do.

On the other hand, a British Prime Minister used his veto later, when the excellent candidature of Mr Jean-Luc Dehaene, the President of Belgium, who was a rather robust individual—certainly one who would have controlled his Commission—was blackballed. As a result of that use of unanimity and of the veto that arises from it, we had President Santer. By common consent, President Santer was a nice man—in many ways, an amiable man—and I had much regard for him, but not even his best friends would call him a successful President of the Commission.

I ask Conservative Members of the Committee to reflect on the two stories of the use of the necessity for unanimity, and to determine of which of those two events they are most proud. I am certainly more proud of the former than the latter. Especially as we now have a treaty that looks beyond the Community of 15 to a Community of 25, 26, or 27 member states, that process of horse-trading, which has not automatically served us well in the past, is now past its sell-by date. It is now appropriate that we move to qualified majority voting.

Lord Pearson of Rannoch

Before the Minister replies, will the noble Lord, Lord Tomlinson, confirm that he said what I think that he said? I understood him to say that he thought Mr Dehaene from Belgium would have made a good President of the Commission. Did I hear him correctly?

Lord Tomlinson

I had already sat down, but I think that the words that I used—Hansard will confirm this tomorrow—were that he was certainly a robust individual who would have led his Commission

5.30 p.m.

Lord McIntosh of Haringey

I am no more tempted into history by the noble Lord, Lord Tomlinson, than I am by the noble Lord, Lord Pearson. I am lost in admiration for the historical overview of the presidency since the time of Walter Hallstein given by the noble Lord, Lord Howell, but I shall not follow him in that direction either.

However, in the light of what the noble Lord, Lord Pearson, said, it is worth saying what Article 214(2) provides, as amended by the Treaty Of Nice: The Council, meeting in the composition of Heads of State or Government and acting by a qualified majority, shall nominate the person it intends to appoint as President of the Commission; the nomination shall be approved by the European Parliament. The Council. acting by a qualified majority and"— I hope that the noble Lord, Lord Pearson, is paying attention because the words by common accord with the nominee for President are not new. They are as they were in the previous treaty.

Lord Pearson of Rannoch

I hope that I shall not irritate the Minister but that is actually what I said. The three little words "by common accord" were introduced at Amsterdam. I was merely giving an example of "Euro-creep".

Lord McIntosh of Haringey

I apologise to the noble Lord; I misheard him. The article continues, shall adopt the list of the other persons whom it intends to appoint as Members of the Commission, drawn up in accordance with the proposals made by each Member State. The President and the other Members of the Commission thus nominated shall be subject as a body to a vote of approval by the European Parliament". All that is as it was in Amsterdam. It then states: After approval by the European Parliament, the President and the other Members of the Commission shall be appointed by the Council, acting by a qualified majority". That is another of the new bits.

I do not have much more to say about qualified majority voting in these appointments. I believe that I have said it all. I think it is clear that we take the view that in these circumstances we support qualified majority voting for appointments because it will mean greater efficiency. As regards what is meant by efficiency, I think that it means less inefficiency. It means getting quicker decisions on the right person regardless of nationality.

We do not think that it would be right for one country to be able to block appointments, as has been possible in the past, or, worse, to hold policy decisions to ransom by insisting on its own candidate. I cannot promise the noble Lord, Lord Howell, that such a step will cut out all infighting; that is idealism. However, we want the best person for the job chosen on merit and experience not on nationality and we believe that this is the way to get it.

Lord Tebbit

Before the noble Lord sits down I hope that I may press him on the following point. Does he think that this change will get us a better quality of president in future than we have had in the past?

Lord McIntosh of Haringey

We have a better chance of getting a better quality of president. I do not promise that every single nominee will be better than every single nominee in the past, which is how the question of the noble Lord, Lord Tebbit, could be interpreted.

Lord Howell of Guildford

The Government have agreed to this change in signing the Nice Treaty. However, the argument always cuts both ways. It may turn out that the measure will not make much difference at all, and judging by what we have just heard, that is one possibility. Life will go on with all its complexities and, therefore, one may ask why we oppose the measure as it is not important. Alternatively, the measure may be considered an immensely significant part of the new European system and, therefore, one may ask why we oppose it as it is so important.

I refer to those of us who believe that we see a vision of Europe ahead which is modern, not centralised, in which there is not too much power at the centre; in which the laws, rules and procedures of the network prevail over the laws, rules and procedures of the hierarchy; and in which European unity is not constructed as a kind of ersatz scaled-up nation state with all its symbols and so on, but is something much more gentle, tolerant and flexible. Therefore, every time we are faced with the proposition that there should be more power at the centre we are concerned.

The Commission—we debated this matter on earlier amendments—may or may not be losing power to the secretariat. The European institutions are, of course, enhanced by every QMV move. We shall discuss later the substantial list—these matters have been somewhat belittled in earlier debates—which comprises considerable and important areas where QMV is to apply under the Nice Treaty. However, as regards the matter that we are discussing, this is one more area where we are not persuaded. The case for taking this step seems to me to be minuscule, but the principles involved in taking it, however small it may appear, are gigantic.

I was interested to hear the fair assessment of the noble Lord, Lord Tomlinson, of past presidents. I thought that he was fair even with regard to President Santer. I, too, shall be fair in that regard. It seems to me that President Santer was defeated by the system. He was an extremely decent man who intended to do good but he was dealing with a Commission system which has defeated others and may not yet have been put back in its box.

I hope that Commissioner Kinnock will win through with his reforms. However, when one examines the detailed progress of those reforms, Commissioner Kinnock must occasionally be rather cast down as there has been little progress as regards the Commission making big reforms and adopting the role of servants, which the Members of the Commission are. They are servants of the people of Europe and of the nation states rather than their masters. As I say, there has been little progress in that regard despite the tribulations which poor President Santer experienced. I do not blame President Santer for the situation; I blame a system which is bad and which is not in any way improved by what we are being asked to do in the Nice Treaty in this respect. Therefore, I suggest that we would be far wiser not to tinker with this area, but to look for other deeper reforms to make a better Europe than the one we have today. I wish to test the opinion of the Committee.

5.37 p.m.

On Question, Whether the said amendment (No. 23) shall be agreed to?

Their Lordships divided: Contents, 116; Not-Contents, 174.

Division No. 2
Alton of Liverpool, L. King of Bridgwater, L.
Anelay of St Johns, B. Kingsland, L.
Astor, V. Knight of Collingtree, B.
Astor of Hever, L. Lamont of Lerwick, L.
Baker of Dorking, L. Lane of Horsell, L.
Bell, L. Lindsay, E.
Belstead, L. Lyell, L.
Biffen, L. McColl of Dulwich, L.
Blackwell, L. MacGregor of Pulham Market,
Blaker, L. L.
Blatch, B. Mancroft, L.
Boardman, L. Masham of Ilton, B.
Brooke of Sutton Mandeville, L. Mayhew of Twysden, L.
Brougham and Vaux, L. Miller of Hendon, B.
Burnham, L. Monson, L.
Buscombe, B. Montrose, D.
Byford, B. Mowbray and Stourton, L.
Caithness, E. Moynihan, L.
Campbell of Alloway, L. Murton of Lindisfarne, L.
Carnegy of Lour, B. Naseby, L.
Cavendish of Furness, L. Noakes, B.
Chadlington, L. Northbrook, L.
Clark of Kempston, L. Northesk, E.
Colwyn, L. Norton of Louth, L.
Cope of Berkeley, L. [Teller] O'Cathain, B.
Craig of Radley, L. Oppenheim-Barnes, B.
Cuckney, L. Palmer, L.
Dean of Harptree, L. Park of Monmouth, B.
Denham, L. Parkinson, L.
Dixon-Smith, L. Pearson of Rannoch, L.
Eccles of Moulton, B. Peel, E.
Eden of Winton, L. Perry of Southwark, B.
Elliott of Morpeth, L. Plummer of St. Marylebone, L.
Elton, L. Reay, L.
Feldman, L. Renton, L.
Ferrers, E. Roberts of Conwy, L.
Fookes, B. Rogan, L.
Gardner of Parkes, B. Rotherwick, L.
Geddes, L. Ryder of Wensum, L.
Goschen, V. Saltoun of Abernethy, Ly.
Gray of Contin, L. Seccombe, B.[Teller]
Hambro, L. Selborne, E.
Hanham, B. Selsdon, L.
Harris of High Cross, L. Sharples, B.
Harris of Peckham, L. Shaw of Northstead, L.
Henley, L. Skelmersdale, L.
Higgins, L. Soulsby of Swaffham Prior, L.
Hodgson of Astley Abbotts, L. Stewartby, L.
Hogg, B. Stodart of Leaston, L.
Howe, E. Stoddart of Swindon, L.
Howell of Guildford, L. Strange, B.
Jenkin of Roding, L. Strathclyde, L.
Jopling, L. Swinfen, L.
Kimball, L. Tebbit, L.
Thatcher, B. Waddington, L.
Trefgarne, L. Wade of Chorlton, L.
Weatherill, L.
Vinson, L. Wilcox, B.
Vivian, L. Willoughby de Broke, L.
Acton, L. Haskel, L.
Addington, L. Hayman, B.
Alli, L. Hilton of Eggardon, B.
Amos, B. Hogg of Cumbernauld, L.
Andrews, B. Hollis of Heigham, B.
Bach, L. Holme of Cheltenham, L.
Barker, B. Hooson, L.
Barnett, L. Howe of Idlicote, B.
Bassam of Brighton, L. Hoyle, L.
Berkeley, L. Hughes of Woodside, L.
Bernstein of Craigweil, L. Hunt of Chesterton, L.
Billingham, B. Hunt of Kings Heath, L.
Blackstone, B. Irvine of Lairg, L. (Lord
Boothroyd, B. Chancellor)
Borrie, L. Janner of Braunstone, L.
Bradshaw, L. Jenkins of Putney, L.
Bragg, L. Jones, L.
Brennan, L. King of West Bromwich, L.
Brett, L. Kirkhill, L.
Brooke of Alverthorpe, L. Laird, L.
Brookman, L. Lea of Crondall, L.
Brooks of Tremorfa, L. Lester of Herne Hill, L.
Burlison, L. Levy, L.
Campbell-Savours, L. Linklater of Butterstone, B.
Carter, L. [Teller] Lipsey, L.
Castle of Blackburn, B. Livsey of Talgarth, L.
Chan, L. Lockwood, B.
Clark of Windermere, L. Lofthouse of Pontefract, L.
Clement-Jones, L. McCarthy, L.
Cobbold, L. McIntosh of Haringey, L.
Cohen of Pimlico, B. McIntosh of Hudnall, B. [Teller]
Corbett of Castle Vale, L. MacKenzie of Culkein, L.
Crawley, B. Mackenzie of Framwellgate, L.
David, B. Maclennan of Rogart, L.
Davies of Coity, L. McNally, L.
Davies of Oldham, L. Maddock, B.
Desai, L. Mar, C.
Dholakia, L. Mar and Kellie, E.
Dixon, L. Mason of Barnsley, L.
Donoughue, L. Massey of Darwen, B.
Dormand of Easington, L. Merlyn-Rees, L.
Elder, L. Miller of Chilthorne Domer, B.
Evans of Parkside, L. Milner of Leeds, L.
Evans of Temple Guiting, L. Mishcon, L.
Ezra, L. Mitchell, L.
Farrington of Ribbleton, B. Morgan, L.
Faulkner of Worcester, L. Morris of Aberavon, L.
Filkin, L. Morris of Manchester, L.
Fyfe of Fairfield, L. Newby, L.
Gale, B. Nicol, B.
Geraint, L. Northover, B.
Gibson of Market Rasen, B. Oakeshott of Seagrove Bay, L.
Gladwin of Clee, L. Orme, L.
Golding, B. Parekh, L.
Gordon of Strathblane, L. Paul, L.
Gould of Potternewton, B. Pendry, L.
Grabiner, L. Perry of Walton, L.
Graham of Edmonton, L. Peston, L.
Greaves, L. Pitkeathley, B.
Greengross, B. Plant of Highfield, L.
Grenfell, L. Plumb, L.
Grocott, L. Radice, L.
Hamwee, B. Ramsay of Cartvale, B.
Hannay of Chiswick, L. Rea, L.
Hardy of Wath, L. Redesdale, L.
Harris of Haringey, L. Rennard, L.
Harris of Richmond, B. Rodgers of Quarry Bank, L.
Harrison, L. Roper, L.
Russell, E. Tomlinson, L.
Sainsbury of Turville, L. Tope, L.
Scotland of Asthal, B. Tugendhat, L.
Serota, B. Turner of Camden, B.
Sharman, L. Uddin, B.
Sharp of Guildford, B. Varley, L.
Sheldon, L. Wallace of Saltaire, L.
Sheppard of Liverpool, L. Walmsley, B.
Shutt of Greetland, L. Warner, L.
Simon, V. Warwick of Undercliffe, B.
Smith of Clifton, L. Watson of Richmond, L.
Smith of Leigh, L. Whitaker, B.
Stone of Blackheath, L. Whitty, L.
Strabolgi, L. Wigoder, L.
Symons of Vernham Dean, B. Williams of Crosby, B.
Taylor of Blackburn, L. Williams of Elvel, L.
Thomas of Gresford, L. Williams of Mostyn, L. (Lord
Thomas of Walliswood, B. Privy Seal)
Thomson of Monifieth, L. Williamson of Horton, L.
Thornton, B. Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.48 p.m.

Lord Howell of Guildford moved Amendment No. 24: Page 1, line 9, after "10," insert "other than Article 2, paragraph 36 (b),".

The noble Lord said: Once again, we are dealing with changes in the procedures by which important officials of the European institutions take office. On this occasion, the amendment concerns the Court of Auditors. I confess that, having read the details of the treaty, I am not 100 per cent clear as to how the QMV system now introduced into Article 247 operates. The details are set out in that article. In replying to the inquiries behind the amendment, perhaps the Minister will clarify some of the issues.

It appears that member states produce a list of people in accordance with the proposals of each member state. Those people are then appointed for six years, but the Council, acting by a qualified majority after consulting the European Parliament, shall adopt [that] list". However, if the list already exists, what does the QMV adoption process involve? It is possible that, as in relation to other matters, that process will not make very much difference. In that case, the same question arises: why do we bother?

That aside, the work of the auditors is of vital and central importance to the processes, decisions, actions and activities of the European institutions. If there was any doubt about that in the past—I do not believe that there was; we and, indeed, all parties in Britain have always favoured very much the work of the auditors—it will have been eliminated or wiped out by the latest report from the auditors. That report, regrettably, found that a further £5 billion had been lost through fraud and mismanagement in the dispensation and implementation of Community programmes.

That is extremely disturbing. It indicates that the Court of Auditors is doing a very good job indeed and that someone else is doing a very bad job. It indicates that the Court of Auditors provides a mechanism that really works and, therefore, again raises the question of why it needs to be changed or why we came to agree in discussions on the Nice Treaty that it needed to be changed. I make those short remarks simply to explain why the amendment has been tabled. I beg to move.

Lord Bruce of Donington

I have a short query to put to the Government. I understand from the Official Report of a week ago that the latest report by the Court of Auditors was published last Tuesday. My application to the Printed Paper Office for a copy of that report has so far proved fruitless. I do not blame its personnel, but no one knew where the report was. My latest information is that the report, which was referred to in the other place a week ago and which was reviewed in The Times last Tuesday, will not be available to noble Lords for another couple of months. I should appreciate it if it were possible to obtain a copy; the matter is of more than considerable interest to me—I have been following it for some time.

The excellent report on the Court of Auditors by the European Union Committee, which has been published for some considerable time, has not yet been debated in your Lordships' House although it was recommended for debate in the House. I advise Members of the Committee that it would be premature to place any particular valuation on the Court of Auditors or on the procedures that it adopts in accordance with certifying whether a true and fair view is presented before having that debate. I do not doubt that those who arrange the business of the House can adequately explain why this excellent report has not been brought before the House before now. A debate on the report would enable the House to arrive at a more objective judgment on the value of the provisions and of the amendment.

I hope that the Government can enlighten us a little further on what is happening in the whole audit field. Fraud there undoubtedly is. The Leader of the Opposition in your Lordships' House put the view adequately. I do not know what Senor Prodi has done about the matter, but such cases come before the Commission.

The European Union Committee report would reveal the precise extent to which the Commission is involved with the Court of Auditors. I do not know how far the matter will ultimately prove to be relevant. I hope that the situation will be clarified; otherwise, I venture to suggest that my observation about debating the unintelligible—that is roughly what the treaty and the amendments are—is perhaps a little more apposite than many may have thought.

Lord Tomlinson

Unlike the noble Lord, Lord Bruce of Donington, I have had the benefit of obtaining a copy of the Court of Auditors report on the last financial year, which was published last week. I do not pretend that my bedside reading has necessarily led me to read it cover to cover but I have read it substantially. There is no reference to fraud amounting to £5 billion. As ever, there is a fairly substantial reference to irregularities and the continuing reminder to member states in the Court of Auditors that 90 per cent of the EU budget—primarily the budget for the common agricultural policy and structural funds—is expended by the authorities of the member states. It states that most of the irregularities occur within member states, where accounting principles are inconsistent with those that are laid down at the centre. We should not put too much credence on the bold figures that have been quoted. There should be an attempt to distinguish between fraud and irregularity, and the report by the Court of Auditors does that.

I agree with the comments of my noble friend Lord Bruce on the valuable report by the European Union Committee. It has now been around for several months—I believe that it was published in April or May of this year—and it should have been debated in your Lordships' House. It does not heap paeans of praise on the Court of Auditors; it makes substantial criticisms of the court—about the way in which the court is structured and works, about the lack of professional audit capacity in it and about its unpreparedness for enlargement, which is the major challenge for the EU. I am sure that the proposal about applying QMV in this case makes no substantial difference whatever to the competence of the Court of Auditors or its role.

Lord Biffen

I want to take up the point that was made by the noble Lord, Lord Bruce, about the availability of the European Union Committee's report on the Court of Auditors, which was proposed by this House. It was widely acclaimed and should be central to our discussions. The way in which the amendment is drafted inevitably prevents a wide-ranging discussion—it would be similar to the discussions that we have at Second Reading—of the topic. The situation is a commentary on the way in which we treat EU legislation. We treat it quite differently from our own domestic legislation; less determination—less precision—is involved. If ever there was a case for paying more attention to European legislation, this matter demonstrates that need.

I echo the remarks of the noble Lord, Lord Tomlinson. I cannot pretend that the question of whether the appointment is made by QMV or not is a ditch in which one is prepared to die. I have a purely practical request: how will the effective work of the Court of Auditors be improved as a result of its being appointed by QMV? How will the decision to choose the members of the court be improved by undertaking qualified majority decisions? If a change of this character were essayed in our domestic legislation, it would be subject to the most relentless examination of exact cause and effect. That would be done not as a result of partisan politics but with a desire to ensure that whatever the House of Lords or Parliament fashioned as law should be justified and effective.

Lord Monson

The £5 billion may consist mainly of fraud or as the noble Lord, Lord Tomlinson, suggested, of irregularities; whichever is the case, is it not sinister that there seems to be so little concern about it on the Continent and within European institutions? It appears that if one draws attention to it one is considered almost a "bad" European. If the amendment does anything to reduce that vast sum, it will be well worth supporting.

6 p.m.

Lord Pearson of Rannoch

I feel that this amendment is unlikely to reduce the vast sums. As I hope that I shall explain to your Lordships, this is likely to make for a weaker Court of Auditors. If we follow, for the record, the Euro-creep at work in this amendment to the TEC, we need to look at what was said before the Treaty of Nice and before the Treaty of Amsterdam. The original wording that we are now changing may go back to the Treaty of Rome. Article 247. as it became at Amsterdam, was previously Article 188b. It is illuminating to see how much more rigorous the court was supposed to be under the original treaty.

Article 188(b) simply said: The Court of Auditors shall consist of 15 members". We then have the same qualification that they should be chosen, from among persons who belong … in their respective countries to external audit bodies or who are especially qualified for this office. Their independence must be beyond doubt". That is not altered, although sometimes one wonders. The wording that we are changing with this treaty says: The Members of the Court of Auditors shall be appointed for a term of six years by the Council, acting unanimously after consulting the European Parliament". That was the position.

I submit to your Lordships that the fact that it did not matter from where these auditors came but that they had to be approved by unanimity by the Council must be a point in their favour. On the other hand, we now move to an arrangement whereby there must be one national from each member state. I suppose the Treaty of Amsterdam masquerades as preparing the European Union for enlargement. The draftsman of this new clause had in mind one national from each of the new member states which, it is alleged, will one day join the European Union.

Paragraph 2 of Article 247 continues as it was before and as I have quoted, and paragraph 3 states: The Council, acting by a qualified majority … shall adopt the list of Members drawn up in accordance with the proposals made by each Member State". I am sure your Lordships will be grateful for the elucidation that my noble friend Lord Howell has asked the Minister to give the Committee on exactly how that will work.

Before, it did not matter where the auditors came from, but they had to be approved by unanimity and, therefore, they had a stronger chance of being the best people for the job than if one of them had to come from each member state. They were appointed for six years only and now their appointment is renewable. In view of the fraud or irregularities, or whatever one wants to call it, I believe that this is a serious situation.

As we are talking about the Court of Auditors, perhaps I can ask the Minister whether he can tell the Committee what has happened in the wake of the mass resignation of the Santer Commission. I know that Mr Kinnock, a Commissioner, is in charge of cleaning up the place, but is there any evidence that the Court of Auditors' report has found great improvement as a result of Mr Kinnock's efforts? Is the £5 billion that is at stake any less than it was before?

I have a question for the Minister that I could have tabled as a separate amendment. Of course, I could do so at the next stage of the Bill. However, it appears to me—I do not know what the Minister will think of this—that instead of having one person from each member state of the European Union, many of which are recipients and many of which caused the problems referred to by the noble Lord, Lord Tomlinson, with the common agricultural policy and so on (I do not exclude the United Kingdom from that), would it be better if the Court of Auditors consisted of representatives of the donor countries? Would that not be much fairer? What would the Court of Auditors find if it consisted of some good, solid German, Danish and British accountants? Does the Minister believe there is any chance that it would find a figure as small as £5 billion missing every year? I doubt it.

As to the plea of the noble Lord, Lord Tomlinson, on the innocence of the whole system—that irregularities take place in member states—the well-known policy when dealing with fraud is to follow the money and, if necessary, to withhold the money. If such matters are taking place in member states, we simply should not give them the money in the first place. Can the Minister tell me whether I am being oversimplistic or unreasonable?

Lord McIntosh of Haringey

First, I shall deal with the issue raised by my noble friends Lord Bruce of Donington and Lord Tomlinson. I do not know why the report of the Court of Auditors was not in the Printed Paper Office or how my noble friend Lord Tomlinson acquired it when my noble friend Lord Bruce did not. Of course, that is a matter for the authorities of the House. I can assure noble Lords that they will have heard the criticism and the matter will have to be sorted out.

Perhaps I may reassure the noble Lord, Lord Biffen. The report of the Select Committee is not missing from the Printed Paper Office. That has always been available.

Lord Biffen

I never suggested that it was. I am quite aware that the report of the Select Committee has been available for some while. The fact that it has been available and has not yet been debated ahead of this debate appears to me to be quite deplorable. In that sense, I was echoing the remarks of the noble Lord, Lord Bruce.

Lord McIntosh of Haringey

There was either a slip of the tongue or, more likely, I misheard the noble Lord. When the report of the Select Committee is debated is a matter for the usual channels.

I was taken aback by what the noble Lord, Lord Howell, said. I have done what the noble Lord, Lord Pearson, has done and looked at paragraph 3 of Article 247. The noble Lord is right. The members of the Court of Auditors shall be appointed for a term of six years. That is in the existing text. The Council, acting by a qualified majority after consulting the European Parliament, shall adopt the list of Members drawn up in accordance with the proposals made by each Member State". That follows a provision in paragraph 1 that the Court of Auditors, shall consist of one national from each Member State". It sounds to me as though a very small difference is proposed and all that is provided by qualified majority voting is that someone from one member state cannot veto the nominee of another member state. It strikes me that that provision may be useful, but may not always be required. It certainly does not lead me to consider that there is any danger in it. On the other hand, in response to the noble Lord, Lord Biffen, it does not lead me to consider that the work of the Court of Auditors will be improved. I believe that the possible difficulty in the decision-making process for the appointment of the Court of Auditors will be removed.

Lord Pearson of Rannoch

Another change is that the term will be renewable. It used to be for just six years. Under the new wording it will be renewable.

Lord McIntosh of Haringey

And why not, if they are good?

Lord Pearson of Rannoch

In that case, will the Minister respond to my suggestion that perhaps the members of the Court of Auditors should consist of the donor countries only. Does he not believe that that would do much to stamp out fraud and so on? Does he believe that that is a good idea that Her Majesty's Government can put to their partners in Brussels?

Lord McIntosh of Haringey

I did not think that I was required to take that seriously. I am sorry. If there is one way to introduce disharmony between member states it is to say that the rich have the ability to override the wishes of the poor.

Lord Pearson of Rannoch

The rich would merely have the ability to follow their own money. Many of the problems that we face would not be there.

Lord Bruce of Donington

Can the Minister say how he regards the apparent distinction between fraud and irregularity? It would be useful to be informed of where the line is to be drawn between them. An irregularity is an irregularity. Therefore, the dividing line between that and fraud may be a question of intent. It may be a whole question which merits the decision of extremely skilled lawyers in the field. But it perhaps is a little dangerous—I put it no higher than that—to regard an irregularity as something that can be tolerated rather than checked and taken to its source and remedies for the "irregularity" instituted.

Lord McIntosh of Haringey

The rules of this House and the rules of this Committee do not provide for any sanctions against noble Lords asking questions or making points which are outside the area of the amendment that we are supposed to be considering. Self-denial says that I will answer questions about the amendment and not questions that clearly have nothing to do with it.

Lord Pearson of Rannoch

In that case, if we are to decide whether the Court of Auditors is to be appointed in future on a system of qualified majority voting, with all the disadvantages that I have enumerated, would the Minister care to answer the question that I put to him, and which is well within the amendment, as to how the Court of Auditors' report this year compares with its previous reports? We are talking about the performance of the Court of Auditors whose composition we are asked to change. Also, how is Mr Kinnock getting on with his reforms which concern the Court of Auditors?

Lord Howell of Guildford

We all applaud the spirit of self-denial in which the Minister speaks.

It is right and proper that we should focus on the amendments without excluding some of the reasoning—often the great edifice of reasoning—and events that lie behind the proposals in the Nice Treaty and the wish of the amendment that they might disapply in our own legislation.

What we have established from the short debate is that while our amendment is unlikely to change anything very much, neither will the provision. This therefore is change for change's sake. In addition, Article 248 states: The Court of Auditors shall draw up its Rules of Procedure. Those rules shall require the approval of the Council, acting by a qualified majority". That change is in heavy type. So there, too, is a tiny grandmother's footstep forward in directions as regards which we are right to be on our guard. Bearing in mind the need to make progress and that this is perhaps not a central provision either way, although there are questions left hanging in the air—Why bother? Why do it? Why sign up to it?—I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Howell of Guildford moved Amendment No. 25: Page 1, line 9, after "10," insert "other than Article 2, paragraph 41,

The noble Lord said: These are similar provisions concerning the addition of QMV to other interesting and important areas in the structure of the European institutions. Amendments Nos. 25 and 26 refer to the extension of QMV to choosing the membership of the 350 member-strong Economic and Social Committee. Its members are appointed for four years. Amendment No. 30 concerns the Committee of the Regions.

Both bodies are valuable institutions. I have heard them criticised. People have said that they are only talking shops and so on. Talk and the airing of opinions and views from certain interests in addition to those of the citizens of Europe through the, sadly inadequate, general democratic system—an envelope of democracy encasing the European institutions—should not be dismissed. The institutions form a part of the pattern of exchange and dialogue from the grass roots. They are rather like the buttresses of a cathedral that has not been built because the democratic deficit is so obvious at the centre of the system. But around the edge are institutions where hard work is done by people from the various member states who offer their expertise and views. Apparently, that is all to be governed by qualified majority voting. I wonder why. I beg to move.

6.15 p.m.

Lord Willoughby de Broke

I rise to support the amendment tabled by my noble friend Lord Howell. I would like to find out more about the Committee of the Regions. It was established in the Maastricht Treaty. It seems to have areas of compulsory consultation—economic and social cohesion. trans-European networks, public health, education, youth culture and so on. What has it achieved? My noble friend said that it was not a talking shop. If it is not a talking shop, what has it done? If it is a talking shop, why do we need it at all? If it is not, perhaps we could be told why it is so important that it needs to he dealt with by qualified majority voting and not by unanimity.

It may be that the Minister can tell me this in a letter rather than in a debate, but it would be interesting to find out its remit and what it has done. I have not seen a report on the Committee of the Regions. I do not know whether it has a budget, whether its members are paid or unpaid, whether it gets its expenses, and where and how often it meets. I know that there is a so-called "bureau" of 40 members including a president and a vice-president, and so on. It seems to have a great deal of work to do. But I wonder whether it is worthwhile. What has the Committee of the Regions done? Perhaps a member of it can tell me. My old friend the noble Lord, Lord Bowness, is here. He was a member of the Committee of the Regions. We may be further enlightened. I wait to hear if we get some information from a member of the very committee about which we are talking.

Lord Wallace of Saltaire

One could ask other members of this House who are members of the Committee of the Regions. These things are not secret. There seems to be a view that the entire European Union is a conspiracy against Britain which, to my great surprise, the noble Lord, Lord Howell, along with the noble Lords, Lord Tebbit and Lord Stoddart, and others, appears to share. There seems to be a view that somehow there is a great secret plot going The noble Lord, Lord Pearson of Rannoch, referred to all these secret groups which now meet under the common and foreign security policy.

I am happy to give—

Lord Pearson of Rannoch

I do not think that I used the word "secret". I just believe that they exist and I was asking who they report to, what they do and whether we take any foreign policy decision without their agreement.

Lord Wallace of Saltaire

I can refer the noble Lord to some extremely boring academic articles—the first one written in 1977 by a dreadful character called William Wallace—to show that this is not secret. It has been much studied. These things are all out in the public domain if one wishes to learn. Trying to use this Committee to suggest that we need to be told at great length by the Government things that have been in the public domain for a very long time seems to be a little excessive.

Lord Bowness

I was tempted by my noble friend to rise to speak about the Committee of the Regions. I shall resist the temptation to speak at length, but implicit in my noble friend's remarks was the suggestion that the committee was a waste of time.

I had the honour to be a member of the Committee of the Regions in its first mandate. I am no longer a member, but there are two Members of your Lordships' House who are still members of the Committee—the noble Lords, Lord Tope and my noble friend Lord Hanningfield. The committee is representative of local and regional government from the member states of the European Union. The number of its members is determined according to the size of the member state.

There is obligatory consultation by the Council and Commission on proposals put forward by the Committee of the Regions. I should have thought that noble Lords would be pleased to hear that members of the Committee of the Regions always hold a local mandate within their respective member states. Many of the initiatives of the European Union are implemented by local and regional government within the European Union. I know that this may bring shock and horror to some of my noble friends, but I was a member not only of the Committee of the Regions but also of the European People's Party group on that committee, and it seemed to me that it was entirely appropriate that local members who ultimately had to implement European legislation should have the opportunity of commenting at an early stage.

In order not to take up too much of the Committee's time, I shall say only that within the first mandate when I was a member, the results of the committee's work were carefully monitored. At least two reports were produced, showing the areas in which members of the Committee of the Regions, through the opinions that they produced in open plenary session before the public, influenced proposals put forward either by the Council or the Commission. I am sure that since I have ceased to be a member, and as the committee has gone from strength to strength, its influence has grown.

That committee is certainly not a talking shop. I can assure my noble friends that its members are not paid; they are given subsistence and a daily allowance. They meet principally in Brussels, although I believe that some members of the commissions and the bureau meet elsewhere from time to time. Certainly the bureau meets once in the country that holds the presidency.

I see no reason why members of the Committee of the Regions should not be appointed on a qualified majority vote. They go forward on a slate from the member states. Local government in this country does not decide who they should be. It may forward names to the Secretary of State, but it is the Council which makes the appointment.

I regret taking up the Committee's time, but it seemed that some of the work of the Committee of the Regions was being called into question and it was suggested that it was in some way secret. I thought it appropriate that somebody who served on that committee for four years, with other Members of your Lordships' House, should make it clear that that was not the case.

Lord Pearson of Rannoch

I do not know whether it is in order in these Committee proceedings to make a prophecy rather than to ask a question. My prophecy is that the Committee of the Regions, and the regions concerned, will eventually come forward, in a future amendment to the Treaty of Rome, as elected bodies that report directly to Brussels, and to a degree that is not yet clear to me, they will replace the parliaments of national governments. There is evidence for my remarks, not because of the inevitable drift of Euro-creep, to which I referred before, but Article 263 lays the ground for the change that I forecast. It refers to, representatives of regional and local bodies, who either hold a regional or local authority electoral mandate or are politically accountable to an elected assembly". Those are the new words. One has seen so much of this over the years—from Maastricht, through Amsterdam to Nice. Unfortunately I was not involved in these matters during the passage of the Single European Act, but that is the drift of what the Committee of the Regions and regional assemblies are expected to be.

Lord Bowness

I am grateful to my noble friend for giving way. I should explain that in the United Kingdom legislation that implemented Maastricht, we specified that members of the Committee of the Regions should hold a locally elected mandate. That was not the case for all member states. There were instances of people who had lost their local mandate but did not resign. To some extent that went to the heart of the Committee of the Regions which, far from being representative of Brussels, was representative of local and regional authorities from the different member states.

The latter part of the phraseology is to take account of the Dutch and Belgian position and allow their burgomasters, who are appointed by the Crown and the governors of provinces, to serve, because they are accountable to their local authorities—to use our phraseology—although they are not directly elected by them. It is a guarantee of local democracy and local accountability working in the Committee of the Regions

Lord Acton

I understood the noble Lord, Lord Bowness, to speak before the noble Lord, Lord Pearson, sat down. If I may also speak now, I would ask the noble Lord, Lord Pearson of Rannoch, if he is familiar with the golden words in the Companion that debate must be relevant to the Question that is before the House. I do not wish to be anything but polite to the noble Lord who knows that I hold him in the highest esteem. He is a friend of 30 years, but he constantly speaks off the point. Prophecies are not relevant.

Lord Pearson of Rannoch

In answer to my noble friend Lord Acton, if I may refer to him as such, it is pertinent if one is considering how the Committee of the Regions is to be altered by this treaty that we consider what its future may be. I could have a bet with the noble Lord, if he would like that.

Lord Acton

Will the noble Lord answer my question? Is he familiar with that rule?

Lord Pearson of Rannoch

Of course, and I believe that I am within it.

Lord Waddington

We used to talk at the Bar of pleas in aggravation. I think that we heard a plea in aggravation rather than mitigation a short time ago. The trouble with the Committee of the Regions is that it is there for a purpose. There is only one conceivable purpose, which is to further the project of a Europe of the regions. As that is the last thing on earth that we want and would be very damaging to our interests in this country, I certainly look with no favour whatsoever on the Committee of the Regions. Anything that can be done to diminish its influence is something well done.

Lord Stoddart of Swindon

First, I wish to ask the Minister a question. Does the treaty alter the method by which members of the Committee of the Regions from this country are appointed? Will the system be altered in any way?

My other point is that, whether we like it or not, there is a worry in the country that the Committee of the Regions is working towards the regionalisation of Europe on a cross-continental basis. I have received letters about it. I was at a well attended meeting in Exeter—there were about 300 people there—where concern was expressed about the activities in relation to regionalisation. There was also a meeting in Bristol, attended by the right reverend Prelate the Bishop of Bristol, to discuss the question of regionalisation. A member of the Commission attended that particular meeting. Naturally, people questioned why that individual should be at the meeting to discuss English regionalisation. That was a perfectly legitimate question to raise.

To support the remarks of the noble Lord, Lord Pearson, I understand that at a meeting of the European Movement at the University of Bristol, Dr Caroline Jackson, a Tory MEP, was asked whether regional assemblies would become regional governments and eventually cause Westminster to be abolished. She said yes. I did not hear the observation of the noble Lord, but I give way to him.

6.30 p.m.

Lord Tomlinson

So that the noble Lord can get it, if Caroline Jackson has said it, that is game, set and match, is it not? It is all over.

Lord Stoddart of Swindon

But game, set and match to whom—Caroline Jackson or Parliament at Westminster? The fact of the matter is that she is, presumably, a responsible person. She represents the South West. I know her reasonably well. She is a nice woman whom I like very much. I got on very well with her when I represented Swindon. She is presumably a responsible person—and that was the statement that she made. She may not have meant it. She may not have meant it in the way she said it. I do not understand why people would do that; nevertheless, although she may not have meant it, that was what she said. That is why people are worried, and it is legitimate to raise these concerns when we can in this Chamber since we are likely to be involved in future.

Lord McIntosh of Haringey

There are not very many rules in this House, but I shall invent one: do not take bets on line. If the noble Lord, Lord Pearson, wants to give you his money, do it outside the Chamber, please.

This is a debate on an amendment which would introduce qualified majority voting into the selection of members of the Economic and Social Committee and of the Committee of the Regions. The present situation is that both committees are consultative bodies on each of which the UK has 24 members. No change is proposed under the Treaty of Nice. The only change is the increase in the total number of members to accommodate the new member states. As I understand it, in practice in the past no member state has ever objected to another's nominations. The only reason that I can think of for the provision of qualified majority voting is the same as that which applies to the Court of Auditors; namely, it would prevent a member, unusually and without precedent, objecting to the nomination of another member state. Therefore, I believe that it is a useful but not very important measure—and certainly not worthy of the kind of debate that we have had this afternoon.

Lord Howell of Guildford

I moved the amendment in a very modest tone. I apologise if I have intruded into divisions on the Benches opposite about these very important bodies.

Lord McIntosh of Haringey

The divisions are entirely behind the noble Lord.

Lord Howell of Guildford

I said that in the knowledge that the noble Lord would rise to his feet to assert what is decreasingly true as the whole pattern of the debate on Europe shifts to a new direction. That will produce some surprising new divisions as Ministers will shortly learn.

The conclusion is that this is a matter of no great importance. I must not distort the words of the Minister, but he indicated that this was not a tremendously progressive and creative provision. He could not see any point in our objecting to it; nor could he see very much point in the provision in the document. We are left with the feeling that we are dealing with rather small matters, although interestingly these kinds of debate uncover deeper issues, which perhaps are not dealt with either in the other place or this Chamber, about the way that Europe and our own affairs in relation to the rest of the Union are developing. Perhaps that should be debated more thoroughly.

For the moment, we are concerned with two narrow amendments which are not vastly important, although the provisions are significant. We note yet again that they are small grandmother's footsteps in the direction of a qualified majority vote and away from unanimity. I suspect that in the end they will make some difference, but obviously we shall not get to the heart of the matter this evening. Therefore, in the same spirit that I moved the amendment, I beg leave to withdraw it.

Amendment, by leave, withdrawn.

[Amendments Nos. 26 to 33 not moved.]

Lord Howell of Guildford moved Amendment No. 34: Page 1, line 12, after "Protocols" insert "(other than Article 3 of the Protocol on the Enlargement of the European Union)

The noble Lord said: We come now to matters extremely central to the debate about the whole Treaty of Nice and the legislation that is passing through your Lordships' House in relation to it. It has been argued by Ministers and their supporters that the issue we are about to address adds up to the whole purpose of the treaty; namely, that it is the key to the process of enlargement, which we on this side support very strongly, and that if anyone tampers with it, somehow that process will be held up.

There are two clauses in this group. I shall speak to a probing amendment that is concerned with the redistribution of voting weights in the Council which is covered by the article that we are considering. My noble friend Lord Willoughby de Broke has tabled an amendment which takes a larger vista and considers the whole of the crucial protocol. With the leave of the Committee, I should like to make some comments in relation to that as well.

I start with the narrow point. We are dealing here with new procedures which will require 169 votes—a qualified majority—for a decision to be reached. There is a new weighted population factor—62 per cent of the total—in deciding whether such a decision by 169 votes, or at least two-thirds of the majority of the Council, is valid. This raises some interesting arithmetical questions. One of the propositions of Ministers all along, including at the time of their return from the exhausting process of the Treaty of Nice, which many found an unsatisfactory event, was that somehow in the battles for weightings of Council votes and so on, the United Kingdom had come out of the scrum somewhat better off than when it went in.

However, my noble friend Lord Tebbit observed the other day in this Chamber that, in fact, when one added up all the votes and looked forward to the enlarged Union—we read that the aim is that there should be a so-called "big bang" involving an extra 10 in 2004, so it is hoped, with Turkey, Romania and Bulgaria, coming along behind—the number of votes left to the United Kingdom appeared to be a considerably smaller proportion—a shrunken proportion—of the total. Therefore, there are two circles to be squared—or squares to be circled—and it will be interesting to hear the views of Ministers on how that is to be done.

I move to the larger issue. Those of us who want to see enlargement move ahead might have hoped that the protocol would be the core of a treaty which might have gone through considerably more quickly. The present treaty has come up against the buffers—we hope they are temporary—of the Irish referendum. The reasons that that took place in the Republic of Ireland are associated not with enlargement or the protocol but with a mass of other issues which were hung on the treaty like decorations on a Christmas tree. That made it a treaty which many people—in particular those who want to see enlargement carried forward as quickly as possible—find unconstructive and undesirable.

Contrary to the assertions of Ministers, we believe that the Treaty of Nice is not the vital key. There are important mechanical keys to the enlargement process although they are by no means the main obstacles or issues. In so far as the enlargement arrangements give to the new applicant countries fewer seats in the European Parliament on a population-merit basis it will make life more difficult.

The Nice Council produced a timetable for enlargement negotiations and raised a number of issues. If we are concerned about enlargement, it would be better to concentrate on those issues rather than claiming that this protocol and these mechanics are the vital, determining factor for enlargement. Of course, they are not. The major issues lie in other areas and require the attention of all those who want to see enlargement go forward. It is a great pity if attention is distracted by the claim that the Treaty of Nice is the unlocking key. It sets back the enlargement cause.

The Nice Council identified a list of issues: transport, taxation, justice and home affairs, energy and, above all, the need for the applicant countries to comply with the full body of the acquis communautaire—I understand that there are 80,000 pages—and the insistence not only on compliance and the signing up to it but also on implementation and enforcement over areas so vast that no human mind can get hold of them. These are matters which have to be handled by a set of computer programs. We are dealing with complexities of such detail in 1,001 different areas that those who seek to negotiate them and sign up to the acquis lose all track of the underlying purpose: to become members of the European Union, a totally understandable and desirable aim.

Last week, I attended a conference in Budapest involving a number of Ministers from the leading applicant countries. The Treaty of Nice was not mentioned once. Concerns about enlargement, whether the timetable would be adhered to, and the problems involved, concentrated on quite different issues: the movement of labour, immigration questions and the common agricultural policy. Polish Ministers spoke. We must remember that there are more farms in Poland than in the whole of Germany and France added together. Concerns concentrated on security and the need to maintain the Atlantic dimension. In the centre and east of Europe one finds more determination that we should not undermine NATO to which Hungary and the Czech Republic have recently adhered and less satisfaction with the idea of autonomy, separate forces and so on. There were concerns—I noted them on visits to capitals of other applicant countries—that the complexity of the acquis is creating colossal problems. Some countries are being asked to adhere to standards which are not asked of existing members of the Union. That is one of the great issues. But when we look at enlargement, the protocol and the Government's arguments that this is essential and that the whole treaty coating and envelope are essential for enlargement, the biggest issue is none of those things: the biggest issue is the budget and who pays. Ten per cent of the EU budget is said to be set aside for financing enlargement. I have heard suggestions from Brussels that it could be as much as 25 per cent. Mr Stoiber, the Prime Minister of Bavaria, said recently in Berlin that if one wanted to remove obstacles one would have, first, to increase regional aid from 30 billion euros to 67 billion euros— I cannot work that out in dollars or pounds but the amount is more than doubled—and that for the process to move forward the financing of the common agricultural policy would have to increase from 34 billion euros to over 50 billion euros. He added, as have others, that for the applicant countries that is a moving target. People are considering ways in which the common agricultural policy can be reformed, as it must be. The constant difficulty of the applicant countries is not with the Treaty of Nice but with having to comply with a moving target.

That is the reality of the enlargement debate. It is not a question of the Treaty of Nice being pushed through, without even a pause in relation to the Irish referendum. We are heading towards a Europe which could have 25 members and nearly half a billion people by 2004 with three more countries to come. Many of those countries face colossal awkwardnesses and difficulties.

6.45 p.m.

Lord Radice

I thank the noble Lord for giving way; I do not yet know the conventions of the House. I accept all that he said about the real concerns of the entrant countries. However, if the weightings for the countries had gone wrong, the noble Lord would have heard a lot about the Treaty of Nice. The Polish Government were very concerned that the weighting of their vote should be of the same order, for example, as Spain, which has a similar population. There was a moment when it seemed that that might be so. We would have heard a lot about the Treaty of Nice if it had gone wrong.

Lord Howell of Guildford

I am glad to accept the noble Lord's intervention. He carries enormous experience on these matters. I am sure that his intervention is in line with all the procedures and customs of this House, as I understand them. I am quite a new boy as well.

The provisions in the protocol—and this is why I am moving a probing amendment—are important for the enlargement process to go forward. However, the noble Lord used the phrase "if it [the Treaty of Nice] had gone wrong". I hope that the Treaty of Nice will go right, but at present it is an undisputable fact that one country has refused to ratify by a referendum. Until that can be unscrambled, the Treaty of Nice will not go forward. If we had had a smaller treaty—a plan B—with such provisions in the protocol it might by now be all over and done with. There would have been no objections in Dublin or anywhere else. Unfortunately, the decision, supported by Her Majesty's Government, was that the Nice Treaty should include other provisions which have nothing to do with enlargement and which have greatly weighed down the treaty-making process. Those issues to do with enlargement did not feature very much.

What will be the result? Those of us who want to see enlargement are entitled to raise these questions with some firmness. It is perhaps a cause of anger that far from helping enlargement, clumsy treaty making is getting in its way. What is happening? In Warsaw we see that hostile europhobe parties—they are not merely euro realists or sceptics—are gaining more influence and now have 15 per cent of the votes. There is enormous concern about the acquis provisions on borders and about Schengen. Poland has huge difficulties when considering how to transfer its border from the west, the old Schengen border, to the east, vis-à-vis Russia, which has always presented a porous and different kind of border. That will require vast upheavals and social changes.

In the Czech Republic we find growing disenchantment and worries expressed over whether Slovakia will be included. I hope that it will be, otherwise the Czechs will have to consider putting a Schengen border between the Czech Republic and Slovakia; namely, a border erected between two nations which, until only a few years ago, were one country. That border is particularly permeable.

I had an opportunity to put questions to the Prime Minister of Hungary, Mr Orban. We met on a public occasion and there is no harm in repeating his comments. He made it perfectly clear that he seeks a flexible Europe. He is uneasy about centralisation and the growth of qualified majority voting. The Hungarians also face nightmarish problems as regards the Schengen provisions vis-à-vis Romania if that country remains outside the EU. The above are immensely difficult problems which we shall address with all our energies.

I turn now to the brave Baltic states, which I have visited on many occasions and for which all have a soft spot. It is often forgotten that Estonia was founded, in effect, by British actions taken in the 1920s before that country entered the long dark night of absorption into the Soviet Union. Those states have been asked to put up tariffs. I understand that they are not worried about it, but that is what joining the European Union means. However, they are concerned that they may become second-class members of the common agricultural policy. That concern also applies to other countries.

The Cyprus problem is beginning to burn. No noble Lord is better qualified to comment on that than the noble Lord, Lord Hannay of Chiswick, who is not in his place. However, the problems with Turkey and Greece are extremely dangerous. There is a real threat that Greece may veto and obstruct the entire process if membership for Cyprus is delayed. Equally, Turkey may cause all the trouble it can if the situation turns the other way around; namely, if Cypriot membership is accelerated. Furthermore, smaller countries such as Latvia insist that they want to see a Europe of nations.

The cause of Europe has been damaged by the botched nature of the treaty proposals and evidence of the big boys ganging together over them. That is why the famous Euro-barometer records waning enthusiasm. At the beginning of this year it recorded that some 44 per cent of the EU was in favour, but I gather that the percentage is now much lower.

We agree with the Minister, who commented yesterday at the Dispatch Box that considerable benefits will be enjoyed in an enlarged market. Ironically, we seem to be moving to a situation in which the applicant states, whose position would be assisted by this protocol if only we could move it forward and it was not bogged down in the rest of the treaty, are set to grow faster than the near stagnant member states of western Europe; in particular they will grow faster than Germany. Luckily, however, for the moment the British economy seems to be doing well.

When we are told that unless we tick the boxes on the Nice Treaty enlargement will be held up, then we are entitled to be more than cynical and to say that, on the contrary, if we were to tick all the boxes in the Nice Treaty we shall find ourselves in deeper trouble. Indeed, that is the case already. If, as many advised at the time, we had concentrated on the simple mechanical changes needed to correct the weighting, distribute properly the seats in the European Parliament, get the structure of the Commission right and so forth, we would now be moving ahead on the process of enlargement.

It is deplorable that enlargement has taken so long. It should have taken place after the fall of the Berlin Wall and the liberation of Czechoslovakia soon after. Those of us who visited those regions at the time told our dear friends in Prague—it may have been misleading—that in only a matter of months, or perhaps a year or two, they would join the European Union. That was 12 years ago. So much for enthusiasm about enlargement.

Lord Lea of Crondall

I am grateful to the noble Lord for giving way. Is he seriously suggesting that all the problems he has adumbrated—the 10,000 pages or so of the acquis communautaire, the challenges of economic adjustment, abolition or reformation of the CAP, and questions about the budget—could have been dealt with far more quickly had we not put in place a treaty along these lines? That appears to be the burden of the noble Lord's argument.

Lord Howell of Guildford

I do not suggest that. If that is how my comments have been perceived by the noble Lord, then mea culpa, it must be the inadequacy of my presentation. I had thought that I made it clear that these are the obstacles and issues and thus the areas to which energies should be directed. I was going to go on to say that perhaps, when looking back over the past 12 years—and, I confess, here moving to the very edge of the amendment—if we had spent less time on manufacturing endless treaties and more time on addressing the issues I have outlined in my remarks—and perhaps building treaties around their resolution—we would be a little closer to the goal of enlargement than, humiliatingly, is now the case.

I hope that it takes place in 2004, which will mark 15 years since the fall of the Berlin Wall. That is far too long, but when enlargement is secured, it will reunite the Europe for which a previous generation fought and gave their lives. That is a fine objective. I should hate to see bureaucracy and the machinations of certain treaty arrangements get in its way. I beg to move.

Lord Watson of Richmond

The noble Lord described an eastern Central Europe which is barely recognisable. If it is truly the noble Lord's conviction that in the capitals of the applicant states governments hold their heads in their hands in despair when confronted by the complexities of the acquis communautaire—for which they must buy large computers to scan an unforeseeable future; although one noble Lord is strong on prophecy and it might be cheaper to hire him—that they perceive as an absolutely unalterable barrier, then that conviction is, frankly, quite unreal. The truth is that the acquis communautaire, although complicated, provides an important blueprint and plan for the modernisation of eastern Central Europe.

It is greatly to the good fortune of Europe at this historic moment that the treaties are in place, that the acquis communautaire is a single body and that, therefore, a proper negotiating agenda has been agreed; namely, a road map by which the enlargement of Europe can proceed. If all those achievements were wished away, which clearly is what many Members of the Committee desire, then to be frank, Europe would be in turmoil. We would certainly be dependent on prophecy and even the biggest computer would not be able to solve our problems.

The fact is that membership of the European Union is the great driving force for modernisation in the eastern Central European states. Far from enthusiasm waning for membership of the EU—I do not know which polls the noble Lord has consulted; they differ from the ones I have seen and from the evidence of my own visits to some of the capitals—it is clear that determination to proceed with enlargement is formidably strong. Are we to say that the populations who will that and their governments which express that are foolish, naïve and misled? Have they not listened to the prophecies, and thus do not believe in the conspiracy theories? Should we in some way educate them in a new clarity and realism? No, that is not the right approach.

The fact is that the Nice Treaty, although somewhat inelegant in parts, is essential to the enlargement process. It has clarified the important question of weighting of votes in the Council. It has introduced an element of legitimacy to the voting system, which is extremely important because it would be difficult to proceed if that had not been achieved. As Europe stands at present, it is vital that the three larger countries of the present Union hold their positions. That was not easy to negotiate at Nice, as we all know. However, it was achieved.

We must distinguish between the endless and multiplying problems foreseen by the noble Lord, Lord Howell. He has examined every aspect of the European Union for grandmother's footprints, or someone else's footprints; there are always more footprints in the snow. Every time one of them melts, it is replaced by dozens more. Indeed, it would be possible to become positively hectic, even neurotic, in the pursuit of those footprints. I sometimes wonder whether, on occasion, that might be the case.

But the truth is that the vast majority of opinion expressed by the applicant states is clear: enlargement should take place. The Treaty of Nice has been welcomed as a necessary step. The Government are absolutely determined to go ahead with it. I do not think that it is right, for this Committee or those elsewhere in the United Kingdom, to stand in the way of what is clearly the historic right of the applicant countries and an unarguable demand that we should move forward.

7 p.m.

Lord Willoughby de Broke

I rise to speak to my amendment, which is Amendment No. 34A. I believe that it goes to the heart of the enlargement process. The protocol on enlargement deals with institutional reform in some detail, including the re-weighting of votes, the number of members of the European Parliament and members of the Commission. To that limited extent it is about enlargement. Perhaps it is one of the few parts of the treaty that is actually about enlargement.

That is all very well. I accept what the noble Lord, Lord Watson, has said. I am sure that there is a groundswell of desire in the candidate countries to join the European Union. But the real barrier to enlargement in the end, apart from the reforms which are being carried out, is the common agricultural policy. It seems to me that without reform of that policy within the treaty there will be more barriers to enlargement. It will be harder for the candidate states to enter the European Union.

Of the five candidate countries at the moment, Poland and Hungary have two very significant and highly important agricultural sectors. Indeed, I believe that Poland has more farmers than the whole of the rest of the European Union together. I agree that most are small farmers, but farming represents about 20 to 25 per cent of Poland's GDP compared with about 3 per cent for this country. So for Poland it is a very serious problem.

Therefore, it seems somewhat irrational to make preparations to receive new members before we have decided what the ground rules are, how they are going to be accepted and how the CAP is to be reformed to allow the candidate countries to join the Union. In the way the CAP is currently constituted there does not appear to be any provision by which the candidate countries can be admitted, because there is no appetite for reform. Indeed, the President of the Commission has gone on record as saying that there will be no reform or even review of the CAP before 2006. He has been supported in that view by the French Prime Minister.

It is astonishing that, given their importance, the chapters on agriculture have not been opened for discussion with the candidate countries. But the agriculture Ministers of Poland and Hungary have made it perfectly clear that they expect that their farmers will enjoy all the benefits, if I can call them that, of the common agricultural policy.

So how is that circle to be squared? How can we meet the legitimate expectations of the agricultural sectors of the candidate countries without reforming the CAP? How is it to be reformed? How is it to be dealt with? As I have said, there is no prospect of real reform. It has been tinkered with at the edges in the past few years. It has been watered down and proposals have been made but nothing significant has happened. Certainly, nothing is going to be done to radically reform the CAP, which is necessary.

It appears to me that there are three possible scenarios. The first is that some of the current recipient countries—France is the largest—will volunteer to give away some of their receipts to the candidate countries. I do not know whether that has been proposed, but we have not been knocked over in the rush for that to happen.

Secondly, the other proposal, which is equally unlikely, is that the CAP budget of the European Union will be enlarged to accommodate the new entrants and their agricultural sectors so that they can receive the subsidies that the current members receive. The third scenario, which seems to be on the cards at the moment, is that the candidate countries are to be told that they will have to comply with all the rules and regulations of the CAP but that they will not receive subsidies because there is no money and they will have to make shift with that scenario. It is rather like being an off-peak member of a tennis club where one pays one's dues, obeys the rules without being able to change them but can use the hard courts only on weekday mornings.

I do not believe that that is acceptable to any of the aspirant countries with such large agricultural sectors. My noble friend Lord Howell was absolutely right that a smaller treaty, perhaps beginning with the title "Protocol on the Enlargement of the European Union", encompassing the reform of the common agricultural policy, would have made the enlargement process much more speedy. I did not realise that it had taken quite as long as my noble friend said, namely, about 15 years. That seems astonishing. I gather that the first countries to join will not do so for another three years, if then, and only if the CAP is reformed. I believe that application and reform of the CAP should be coterminous and therefore should be included in the treaty; hence the reasoning behind my amendment. If the treaty is to be about enlargement, surely it has to include agriculture and the CAP.

Lord Grenfell

I believe that it has been said that a misunderstanding repeated often enough may begin as an embarrassment but usually ends up as a matter for widespread mirth. I do not know how many times I have heard it repeated in this House as regards the Treaty of Nice that reform of the CAP does not require a change to the treaty; that reform of the CAP is going forward on a parallel track and will continue until it is completed. But to try to put the CAP into the Treaty of Nice does not make any sense whatsoever.

Lord Willoughby de Broke

That is the noble Lord's opinion, but I do not agree. I believe that putting the CAP into the treaty would hasten the process of enlargement.

Lord Waddington

I was slightly surprised by some of the remarks made by the noble Lord, Lord Watson of Richmond. It is difficult for us to speak with authority about attitudes in each of the applicant states. But it would be a very brave person who asserted that all these applicant states want to join a tightly-knit club subject to more and more rules dictating how they should approach essentially domestic problems rather than that they should wish to join a union of sovereign states. In so far as I have any knowledge of the matter, it would be a very brave person who asserted that it is not the latter which most of them would prefer.

I have always looked with great dismay at the Treaty of Nice, because it is ironical that we should be saying that it was a treaty to pave the way for an enlarged community and yet we are putting more and more difficulties in the path of the applicant countries. We are saying, for instance, that they could not join unless they accepted that they had to have rules in this or that direction, and as a result of a step taken last year, for instance, they had to have an involved system of works councils and bargaining in the workplace which have nothing whatsoever to do with the normal rules of any club. That was how I reacted to the way in which the noble Lord, Lord Watson, looked at the matter.

Lord Watson of Richmond

Would the noble Lord accept that, by definition, the applicant states have applied to join the European Union as defined by the existing acquis communautaire? That is a matter of historical fact. Whether the noble Lord likes the European Union as it exists within the present acquis communautaire is another matter: whether he believes that they would like a different kind of Europe is a matter for speculation. I have heard that the candidate countries are absolutely determined to join the European Union as it is at present defined by the acquis communautaire. A number of countries have made it quite clear, for example, that they would like to join the European monetary union and the euro when it becomes a reality.

Lord Waddington

It is certainly not what I would like, but that is not at issue at all. I am just saying that I doubt very much whether it was wise or proper, in advance of saying that these countries could join the Union, to impose more and more rules which had nothing whatsoever to do with completion of the single market.

We were discussing this earlier. I would not have risen had it not been asserted by the noble Lord that all the changes that have taken place are meat and drink to the countries which wish to join. I think that is complete and utter nonsense. If those countries had been consulted about some of the extensions of qualified majority voting provided for in the Nice Treaty, they would have asked, as I do, what on earth that has got to do with enlargement of the community. It quite clearly has nothing to do with it.

Lord Monson

It seems to be glibly imagined by enthusiasts of greater European integration that the electorate of the Republic of Ireland will tamely come to heel and reverse their recent decision before long, certainly within the next couple of years. But supposing the Irish electorate stick to their guns, as they show every sign of doing? What then?

The noble Lord, Lord Watson of Richmond, said that the ratification of the Nice Treaty by all member states is a necessary step towards enlargement. He is absolutely right. Is it seriously imagined that enlargement can take place with countries not knowing how many votes they will have in the Council of Ministers and how many seats they will have in the European Parliament?

It is also glibly imagined, I am afraid, that there will be no problem about admitting Cyprus while continuing to keep Turkey at arm's length. The Greeks certainly want that to happen—there is no secret about that—but others are rather more discreet. The Germans secretly aim towards that situation. If that were to happen, it would without any question be a breach of the Zurich agreements. Turkey would not take it lying down and it would have the most serious consequences. We should reflect upon this matter.

7.15 p.m.

Lord Stoddart of Swindon

When I spoke to the previous group of amendments, I referred to a meeting about regionalisation being held at Exeter, chaired by the right reverend Prelate the Bishop of Bristol. That of course was a slip of the tongue; it should have been the right reverend Prelate the Bishop of Exeter. I apologise to the right reverend Prelate and sincerely hope that I have caused him no difficulty with his right reverend friend.

As to the amendment, I am the odd man out—no, I am not quite the odd man out—because I do not believe that enlargement will be good for the Community or for this country. I say that I am not the odd man out because I understand that Sir Edward Heath—who, as noble Lords will know, is no political friend of mine—takes the same view; that is, that enlargement may well do a lot of damage to the Union rather than improve it.

There is some evidence that this will be so. After all, we started out as the Common Market; we became the European Economic Community; we then became the European Community; now we are the European Union. So virtually at each enlargement we have found that there has been not only a widening but a deepening.

A noble Lord

Hear, hear!

Lord Stoddart of Swindon

I am glad that a noble Lord said "Hear, hear". It confirms what I am saying. At each stage there has been a deepening, and with that deepening has come centralisation. That, I fear, is what will happen—and, indeed, is happening—through this treaty. There will be a greater accrual of powers to the centre and a greater bureaucratic control by the centre.

I do not believe that that is what the British people intended—although they were not consulted about it—when they joined the Common Market. They believed that they were joining a free market—not a single market; that did not come until 1985— where individual countries had free trade between them and co-operated on a wide range of issues. That has not turned out to be the case.

Whether we like it or not, it is becoming increasingly obvious from the messages coming from heads of state, from members of the Commission, from Members of the European Parliament and from Parliament itself, that that is not the intention. The intention is to build a state of union, and a good many of the necessary building blocks are there. I believe that that would be a disaster for Europe because, as we have found in the past, as various bits of the new state find themselves disadvantaged in relation to other bits of the state, they will rebel and the whole edifice will fall apart.

That will be so especially if we are not prepared—I am not sure that we are prepared at the moment, although we may be later on—to have a much bigger central budget. The United States has a central budget of 25 per cent of GDP. If you are going to redistribute and bring countries up to a standing which is acceptable throughout, you will need central taxation. Indeed, we have already seen signs of that. The Belgian presidency said that there would be a need for direct taxation levied by the European Parliament, and the European Parliament believes that there should be a central tax levy.

That is what is facing us. I do not know whether people in this country understand that. When the MacDougal Committee reported on expansion in, I think it was, the 1970s, it said that we would need at least 7.8 per cent of GDP to be raised as central taxation for redistribution in an expanded community. But 7.8 per cent of our GDP is about £78 billion. We have to grasp these kinds of issues if we are to go ahead with a successful expansion.

I do not believe that it is possible. I do not believe that people are prepared to accept what goes with real expansion, real enlargement. I believe that, because of that, the whole project will collapse—which would not bother me; I should be delighted—and endanger the existing community. The Committee should take that into account.

Lord Tugendhat

Perhaps I may delay the Committee for a minute and a half or so because I should not like the debate to end without a single Conservative voice being raised in favour of the Treaty of Nice. I say that because the Treaty of Nice is designed to bring about a result that has been the objective of successive Conservative governments over the years.

I realise that many noble Lords on these Benches, and many other of my friends and colleagues in the Conservative Party, have changed their positions somewhat in recent years, but the fact remains that the original objective of Conservative governments (that is, to bring about the enlargement of the Community) was a good objective in the interests of this country and of a wider Europe.

I agree with my noble friend Lord Howell that it is an absolute disgrace that enlargement was delayed so long after the fall of the Berlin Wall. He is absolutely right in that, as in many other things. If we were by any mischance to reject the Treaty of Nice after the Irish referendum that has already been referred to, that would make the task of enlarging the EU immeasurably greater. I cannot believe that either my noble friend or many others who have been in the Conservative Party a long time or have served in Conservative governments would want that to happen.

I hope that the Treaty of Nice will be passed as it stands. It is a curate's egg, by no means perfect in all respects and has some features that I would have preferred not to see, but it is designed to bring about a result that would be in the interests of Britain and Europe and one for which the Conservative Party has fought over many years.

Lord Pearson of Rannoch

Perhaps I may try to answer some of that from my noble friend. Like the noble Lord, Lord Stoddart of Swindon, and my noble friend Lord Willoughby de Broke—whose amendment I support—I fear that enlargement may be a serious mistake for the continent of Europe. I do not understand why the Conservative Party still thinks that enlargement is a good idea. I say to my noble friend Lord Tugendhat, if I could have his attention for a moment—

Lord McIntosh of Haringey

Would the noble Lord prefer it if we left, to allow the debate to continue in private? I feel intrusive.

Lord Pearson of Rannoch

The Minister is of course free to leave but I do not think that that would improve the quality of our debate.

I was saying that I do not understand why the Conservative Party—on whose Benches I still sit, just—goes on saying that enlargement is a good idea. I had the privilege of sitting on your Lordships' Select Committee from 1992 to 1996, which I am no longer allowed to do. In those days, the position of the then Conservative government was entirely clear. It supported enlargement because it thought that "widening" would lead to "weakening" of the centre— the powers of Brussels and so on.

If we did not know before, we know for certain now—with the Treaty of Nice before us—that "widening" definitely leads to "deepening". It cannot be widened without increasing the powers at the centre—of Brussels. I am at issue with my party. I understand why it adopted that position but suggest that it is no longer tenable.

I accept also that the political classes at least in most of the new democracies of eastern Europe want to join the European Union—although my noble friend Lord Howell revealed that many of the peoples of eastern Europe and some of their political leaders are beginning to wake up to what joining the EU may mean. Why is it in their interests to have struggled so valiantly to escape communism, only to submerge their hard-earned democracies into what seems to be an emerging undemocratic EU megastate? I acknowledge that countries enjoy the EU subsidies that they receive while they are queuing to join and that the prospect of joining the EU has on a few occasions made some applicant countries—I have Romania in mind—behave better than they might have done otherwise. Neither of those two qualifications condones the colossal mistake that enlargement would mean for their emerging democracies. It is clear that those emerging democracies and emerging economies cannot afford the 80,000 pages of mostly labour and social-related legislation or the latest raft of stuff from Brussels—which particularly hits small businesses, as we debated on the first day in Committee. All those countries really need is free trade, which is denied them by our good partners in the European Union. They need also defence through NATO.

In earlier debates, the noble Baroness, Lady Symons, has said that proper or sufficient enlargement of the kind that the Government would like to see is not possible without the Treaty of Nice, but it is. The EU has been enlarged on several occasions when new applicant countries have joined. Even with the Treaty of Nice, there will need to be a separate treaty of accession with each country that joins. If people want enlargement, they certainly do not need the protocol. Enlargement can be achieved country by country. Voting can be adjusted, as in the past, as each new country joins.

We Euro-realists love the Europe of nations—the continent of different cultures and glorious civilisations—but hate the Treaty of Rome, the European Union and everything that comes out of it. We believe that democracy is the guardian of peace in Europe and elsewhere. On the whole, democracies do not provoke conflicts but forced or premature conglomerations of disparate nations nearly always end in disaster. I could give the Committee many examples, including Northern Ireland, the Middle East, most of Africa, Yugoslavia and the Trans-Caucasus. The recipe for conflict and aggression is some form of undemocratic or even fascist leadership and a lack of true democracy.

If applicant nations from central and eastern Europe can keep their democracies and trade freely together and with their neighbours under NATO, we shall see peace and prosperity—and not run the risk of the European dream descending into the conflict that I fear lies ahead.

7.30 p.m.

Baroness Symons of Vernham Dean

I thank the noble Lord, Lord Howell, for the interesting way in which he moved Amendment No. 34 and spoke to Amendment No. 34A in the name of the noble Lord, Lord Willoughby de Broke. The protocol is important but that is not the only issue. I was seized with a huge sense of relief when the noble Lord remarked that the matters involved were so vast that no one mind could get hold of them.

The noble Lord gave an illuminating description of his visit to Budapest and elsewhere in central and eastern Europe last week and said that he had not been tackled about the Treaty of Nice. His experience cannot be so different from mine. When people are worried about an issue, they tend to raise it. I agree wholeheartedly with my noble friend Lord Radice. I am sure that if people had not wanted the noble Lord to support the treaty, they would have said so. Most of the people to whom the noble Lord spoke probably did want him to support the treaty today. No one is disputing that in a number of European countries there will be some people who disagree with their government. But it is a function of democracy that we deal with the elected governments of the day, and with the view that they put forward on behalf of the people whom they represent.

The noble Lord spoke again about his vision for Europe in the future. He set it out with the same eloquence when we debated the Bill at Second Reading. He steered a course between his European credentials—of which I am sure he is justifiably proud—and the position of his party. However, I felt that in raising the points that he did, he was properly addressing the issues that are to be raised at the IGC in 2004: for example, defining and de-limiting the European Union's competence; simplifying the treaties which the noble Lord, Lord Howell, criticised; making those treaties easier to understand to the ordinary citizens of Europe; improving accountability and transparency; and the role of national parliaments. When the noble Lord spoke about the "enormous complexity", he was quite right. That is why his view has—if I may draw this from his remarks—at least some points of commonality with that of the Prime Minister; namely, that these subjects should rightly be discussed at the next IGC in 2004.

The noble Lord went on to say that the simple mechanical processes are important. Indeed they are—and they are here in the protocol. The protocol sets out the changes to the institutions of the European Union, the European Parliament, the Council and the Commission, which are in the Government's view essential for the European Union to enlarge—I believe the word I used previously to the noble Lord, Lord Pearson of Rannoch, was "successfully". It is an important mechanical key, as the noble Lord, Lord Howell, said, and I use his phraseology. It is not the only key, but it is certainly an important one. First, to mention a relatively minor matter, we need to repeal the protocol on the institutions which was agreed at Amsterdam. It has obviously been overtaken by the Nice treaty.

Amendment No. 34 by the noble Lord, Lord Howell, would strike out only Article 3 of the protocol concerning vote re-weighting. Amendment No. 34A by the noble Lord, Lord Willoughby de Broke, would strike out the whole protocol. That is the difference between the two amendments. Either way, the Government believe that the Opposition is misguided in tabling these amendments. Perhaps I may attempt to explain why.

First, we are re-weighting the Council votes to give the United Kingdom and other big member states—that is, Germany, France and Italy—more power relative to the small or medium-sized member states. The effect is that the UK's relative voting power—I stress the word "relative" in relation to current members—goes up. Whereas under the present arrangements we have three times the voting power of Denmark, following the agreement at Nice we shall have four times its voting power. That is a fairer distribution in relation to our population size. There could be a blocking minority, consisting of Germany and two of the other three countries—that is, the United Kingdom, Italy and France.

Secondly, agreement was reached at Nice on a new level of seats in the European Parliament following enlargement. Its overall size will increase to 732 in an EU of 27 members. The number of UK MEPs will fall to 72 from the current 87 seats. We discussed this in some detail during the debate at Second Reading.

It is the Government's position that this is a good deal for the United Kingdom. In designing a system for almost double the current number of member states it was inevitable that the United Kingdom would have fewer seats—particularly if the size of the European Parliament was to remain manageable. But the reduction will be gradual.

Thirdly, it was agreed at Nice that, once the EU reaches 27 member states, there will be less than one commissioner per member state, chosen on a basis of equal rotation. Again, that is an important reform, which will help to keep down the size of the Commission—a point with which I am sure many Members of the Committee have a great deal of sympathy—so that is a manageable size after enlargement.

So we have in the protocol the arrangements that will enhance Britain's power in the Council, relative to the small and medium-sized countries; and which will reform the Commission and keep the Parliament to a manageable size, but with significant numbers of MEPs remaining. We believe that the changes are in the interests of the United Kingdom.

I turn briefly to the points made by the noble Lord, Lord Willoughby de Broke. My noble friend Lord Grenfell is right. Reform of the CAP does not require treaty change. The noble Lord may feel that treaty changes are desirable, but they are not mandatory. That was the point that my noble friend was making. We shall negotiate on the CAP, as I have had occasion to state previously, and as the noble Lord noted, the chapters with the applicant countries have not yet been opened, but they will be opened by the beginning of next year. One would, of course, expect all those who are going to negotiate on such issues to adopt a tough negotiating position. I would do so; so would any other sensible negotiator. The point is what is negotiated in the end, not the position that people adopt in prospect.

Lord Pearson of Rannoch

Perhaps I may put a question to the Minister. It is gracious of her to give way. When she says to my noble friend Lord Willoughby de Broke that treaty change is not necessary to reform the common agricultural policy, will she agree that enlargement is not possible without reform of the common agricultural policy? While we are on that point, will she agree also that the President of France has assured the world, in the strongest conceivable terms, in the past fortnight that France will not tolerate any change in the common agricultural policy from France's point of view—it is very advantageous to France—until 2006? Of course, it may be just a negotiating ploy, but if it is so, does it not put the process back a bit?

Baroness Symons of Vernham Dean

I am sure the noble Lord will accept it when I say that I have sat round negotiating tables in recent months and heard people declare one position with absolute certainty; and I have seen some very different outcomes—most notably in Doha only last week. If we were to insist on CAP reform before enlargement, we should make enlargement a hostage to those member states which are least keen on it. We must be careful about the way in which we approach this matter. We are approaching it very much in the interests of the United Kingdom.

Perhaps I may turn to the points raised by the noble Lord, Lord Monson, in relation to Ireland. The Irish Government have asked us to go ahead with our ratification process. That may not suit the position of some Members of the Committee. I understand that. But the Irish Government are the democratic leaders of their country. They have asked us and our European partners to proceed with our ratification process, and we are proceeding, on the unequivocal mandate that we have as a result of this year's general election. I admired very much the unequivocal stance taken by the noble Lord, Lord Stoddart. The noble Lord, Lord Pearson of Rannoch, rode to his rescue and said that he, too, was not too keen on enlargement. But whatever else the treaty is about, it has been very much in the public domain a treaty about successful enlargement. I believe that the Government have a mandate on which to proceed.

The noble Lord, Lord Tugendhat, gave balance to the debate. He agreed with his noble friend about the "disgrace" in terms of the length of time taken for enlargement. He was right to say that if we wreck the treaty we shall delay enlargement even further. The noble Lord knows his noble friend far better than I do, but I cannot help feeling that his noble friend on the Front Bench will understand the weight of his remarks on that point.

The Government are right to resist these amendments, for the reasons which I hope I have spelt out clearly.

Lord Howell of Guildford

I am grateful to the Minister for setting out her reply so clearly to the amendments, which, in the case of those in my name, are narrowly focused on the weighting issues. I listened carefully to the Minister's remarks, but I do not think that she explained how, in an enlarged Community, eventually the voting power of the United Kingdom will be rather less. I do not attach too much weight to the issue of less or more voting power. It is my personal view that the real problem lies in the over-centralisation of power in the European institutions. If there had been any beef behind subsidiarity, which turned out to be an empty vessel, or any determination at Nice or at other summit gatherings to return to nation states some of the powers that in today's conditions it is inappropriate to deal with centrally, even though it may have been appropriate to do so in the past, the problem of weighting and the feeling that powers were going to be taken and important decisions made at a high level against national interests would be much reduced.

The arithmetic suggests that, while with the current members—the words that the noble Baroness used—the share of British votes is up, eventually, when the enlargement takes place, our share will go down. I do not know when that "eventually" will be. The Commission has produced an upbeat report about enlargement, suggesting that the whole thing can be tied up for 10 countries by 2004, which is not at all far away. At that point we shall have a shrunken role.

I do not make a major issue of that, but we should get it right for the record. The noble Baroness is right about current numbers, but for the longer term Ministers are not correct in saying that Britain will have a larger share of the votes.

The noble Lord, Lord Watson, spoke with great authority and knows a great deal about the mood in the applicant states. We get different impressions from the different places that we visit. There is an opinion poll machine called the Euro-barometer—I find these things very inaccurate—that seems to indicate that popular support for the whole project is waning in a number of applicant countries. But if the noble Lord, Lord Watson, asks why we should believe such polls, he has a friend in me because I find that they can be extremely unreliable.

The generation who first took power after the velvet revolution, who hoped that enlargement would come soon, were driven by a very understandable essential impulse: they wanted to join the club of Western democracy, as expressed by the European Union, and to put as much political space as they could between themselves and the then Soviet Union. The older generation in many central European capitals remains of that view. Despite the new friendship and hand-clasping in Texas by the very skilled Mr Putin—whose Russian Government have been very helpful in the present global anti-terrorism campaign—there remains a deep feeling engraved in many minds by hideous memories that Russia is not the body to be politically associated with and the European Union will give some protection. Running alongside that is the equal wish that NATO should be enlarged still further.

We can see these debates unfolding. The Prime Minister recently made some interesting comments about whether Russia might become related to NATO in some form. This touches on that debate. The older generation wants to get away from Russia and join Western organisations, but the younger generation wants to wait and see whether the modern Russia is really as dedicated to dangers, expansion and territorial seizure as Communist and pre-Communist Russia was for hundreds of years or whether we have a new Russia. They are not sure that it is quite such a high priority to distance themselves from Russia. If they want to distance themselves, they want to ask a question that they did not ask at the beginning: what is the cost? They want to know how much they have to pay in the approval of the acquis to join the club. That mood is undoubtedly present. It leads to a lively debate. It is basically a pro-European—indeed, pro-European Union—debate, but it raises fundamental questions about the governance of Europe that were not addressed at Nice and towards which I do not believe that the Nice Treaty was helpful.

Of course I respect the extremely experienced views of my noble friend Lord Tugendhat. He speaks not only as an experienced business person but as an ex-Commissioner. His judgment is that the treaty is essential to enlargement. Other judgments are that the treaty may help if it works—as long as it works, as the noble Lord, Lord Radice, suggested. Some of my noble friends have argued all along that the treaty is heading for trouble and that before we are through we will have to think about recasting treaty arrangements to move the enlargement process forward.

We have probably quoted Mr Prodi too much and I know that the Minister is tired of my quotations from him, but he let the cat out of the bag when he said that if plan B is necessary and the Irish referendum does not turn Irish opinion round, we will have to come to other means of carrying forward these mechanical arrangements.

We feel that this is the wrong way to achieve the greater European unity and the re-unification of Europe that is now within our grasp. We are not convinced that giving a fair wind to the whole treaty, with all its warts and difficulties, is necessarily the best way to achieve that objective.

In the light of a number of comments, I shall not press Amendment No. 34, but I understand that my noble friend Lord Willoughby de Broke has another view on his Amendment No. 34A, which he will no doubt utter in a moment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Willoughby de Broke moved Amendment No. 34A: Page 1, line 12, after "Protocols" insert "(other than the Protocol on the Enlargement of the European Union)

The noble Lord said: I am grateful to the Minister for answering my questions, but I remind the Committee that the Nice Treaty is dead at the moment. We are debating a treaty that is null and void, so it is sensible to start again and see how it might be better drawn up. The Irish people may be asked to look at a very different treaty—as may we all. It may not contain all the centralising proposals that we have been discussing during the past two days of debate. It may be more tightly drawn. Agriculture is a central block on enlargement. If enlargement is what everybody wants, agriculture will have to be dealt with in the treaty. I have not had enough reassurance on that, so I shall test the opinion of the Committee on my amendment. I beg to move.

7.48 p.m.

On Question, Whether the said amendment (No. 34A) shall be agreed to?

Their Lordships divided: Contents, 74, Not-Contents, 140.

Division No. 3
Alton of Liverpool, L. Lindsay, E.
Astor, V. Luke, L.
Astor of Hever, L. Lyell, L.
Biffen, L. Mancroft, L.
Boardman, L. Mar, C.
Bridgeman, V. Marsh, L.
Brougham and Vaux, L. Miller of Hendon, B.
Burnham, L. Monson, L.
Buscombe, B. Montrose, D.
Byford, B. Noakes, B.
Caithness, E. Northbrook, L.
Campbell of Alloway, L. Northesk, E.
Clark of Kempston, L. Norton of Louth, L.
Colwyn, L. O'Cathain, B.
Cope of Berkeley, L. [Teller] Onslow, E
Craig of Radley, L. Park of Monmouth, B.
Craigavon, V. Patten, L.
Dean of Harptree, L. Pearson of Rannoch, L.
Elliott of Morpeth, L. Pilkington of Oxenford, L.
Fookes, B. Roberts of Conwy, L.
Glentoran, L. Rogan, L.
Goschen, V. Rotherwick, L.
Griffiths of Fforestfach, L. Seccombe, B. [Teller]
Hanham, B. Selsdon, L.
Hanningfield, L. Sharples, B.
Henley, L. Shaw of Northstead, L.
Hodgson of Astley Abbotts, L. Skelmersdale, L.
Howe, E. Stewartby, L.
Howell of Guildford, L. Stodart of Leaston, L.
Jenkin of Roding, L. Stoddart of Swindon, L.
Jopling, L. Strange, B.
Kilclooney, L. Tebbit, L.
Kimball, L. Vivian, L.
King of Bridgwater, L. Waddington, L.
Kingsland, L. Wilcox, B.
Knight of Collingtree, B. Willoughby de Broke, L.
Lamont of Lerwick, L. Windlesham, L.
Acton, L. Billingham, B.
Addington, L. Blackstone, B.
Ahmed, L. Bragg, L.
Alli, L. Brennan, L.
Amos, B. Brett, L.
Andrews, B. Brooke of Alverthorpe, L.
Bach, L. Brookman, L.
Barker, B. Brooks of Tremorfa, L.
Bassam of Brighton, L. Burlison, L.
Bernstein of Craigweil, L. Campbell-Savours, L.
Carter, L. [Teller] McNally, L.
Castle of Blackburn, B. Maddock, B.
Chandos, V. Mar and Kellie, E.
Clark of Windermere, L. Mason of Barnsley, L.
Clarke of Hampstead, L. Massey of Darwen, B.
Cohen of Pimlico, B. Merlyn-Rees, L.
Corbett of Castle Vale, L. Miller of Chilthorne Domer, B.
David, B. Milner of Leeds, L.
Davies of Coity, L. Mitchell, L.
Davies of Oldham, L. Morgan, L.
Dholakia, L. Morris of Aberavon, L.
Dixon, L. Murray of Epping Forest, L.
Dormand of Easington, L. Nicol, B.
Elder, L. Northover, B.
Ezra, L. Oakeshott of Seagrove Bay, L.
Falkland, V. Pendry, L.
Farrington of Ribbleton, B. Pitkeathley, B.
Faulkner of Worcester, L. Plant of Highfield, L.
Filkin, L. Radice, L.
Fyfe of Fairfield, L. Ramsay of Cartvale, B.
Gale, B. Rea, L.
Gibson of Market Rasen, B. Redesdale, L.
Gladwin of Clee, L. Rennard, L.
Golding, B. Richard, L.
Gordon of Strathblane, L. Rodgers of Quarry Bank, L.
Goudie, B. Rooker, L.
Gould of Potternewton, B. Roper, L.
Graham of Edmonton, L. Russell, E.
Greaves, L. Sainsbury of Turville, L.
Greengross, B. Scotland of Asthal, B.
Grenfell, L. Sharp of Guildford, B.
Grocott, L. Shutt of Greetland, L.
Hamwee, B. Simon, V.
Hannay of Chiswick, L. Smith of Clifton, L.
Hardy of Wath, L. Smith of Leigh, L.
Harris of Haringey, L. Symons of Vernham Dean, B.
Harris of Richmond, B. Taylor of Blackburn, L.
Harrison, L. Temple-Morris, L.
Hilton of Eggardon, B. Thomas of Gresford, L.
Hogg of Cumbernauld, L. Thomas of Walliswood, B.
Hollis of Heigham, B. Thomson of Monifieth, L.
Hoyle, L. Thornton, B.
Hughes of Woodside, L. Tomlinson, L.
Hunt of Kings Heath, L. Tugendhat, L.
Janner of Braunstone, L. Turnberg, L.
Jones, L. Turner of Camden, B.
Judd, L. Uddin, B.
King of West Bromwich, L. Varley, L.
Kirkhill, L. Wallace of Saltaire, L.
Laird, L. Walmsley, B.
Lea of Crondall, L. Walpole, L.
Lipsey, L. Warner, L.
Livsey of Talgarth, L. Warwick of Undercliffe, B.
Lofthouse of Pontefract, L. Watson of Richmond, L.
McCarthy, L. Whitaker, B.
McIntosh of Haringey, L. Wigoder, L.
[Teller] Williams of Crosby, B.
McIntosh of Hudnall, B. Williams of Mostyn, L. (Lord
MacKenzie of Culkein, L. Privy Seal)
Mackenzie of Framwellgate, L. Williamson of Horton, L.
Maclennan of Rogart, L. Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.

Lord Davies of Oldham

I beg to move that the House do now resume. In moving that Motion, I suggest that the Committee begins again not before nine.

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

House resumed.

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