HL Deb 18 March 2002 vol 632 cc1123-38

4.35 p.m.

Lord Williams of Mostyn

My Lords, with the leave of the House, I shall now repeat a Statement made earlier in another place by my right honourable friend the Prime Minister. The Statement is as follows:

"With permission, Mr Speaker, I should like to make a Statement about the European Council which took place in Barcelona on 15th and 16th March.

"Two years ago at Lisbon the European Union set out to become the world's most competitive and dynamic economy by 2010. Since that date the European Union has created five million new jobs. There are now nearly three million more women in work. Tax rates on low wage earners have been falling. We have agreed a new framework for competitive telecoms markets. Telecoms liberalisation has cut the price of calls across the EU by almost a half. As a result of the EU Action Plan, Internet access has doubled across the EU.

We have cut red tape for small firms so that a private limited company can now be set up in under two weeks in 10 EU member states. We have recently agreed proposals to deliver a single EU securities market and cheaper capital for small firms.

"The recent difficulties faced by the world economy mean we cannot rely on cyclical growth to deliver the employment Europe's citizens need. We must push ahead with the structural reforms to Europe's economies.

"At Stockholm a year ago, progress stalled. Barcelona had to recover momentum. There is no doubt that, after Barcelona, we are moving again, though there is still much ground to be made up by 2010. Such progress as there is is a tribute to the Commission and the leadership of the Spanish presidency, and I pay tribute to the excellent chairmanship of Prime Minister Aznar.

"Here is what was achieved. We set a timetable under majority voting to complete the single market in financial services, itself capable of boosting EU GDP by half a percentage point. No fewer than 25 different liberalising measures have already been agreed. Seven more key measures will be agreed by the end of the year. Most of all, we made a breakthrough in opening up the European energy market. All member states have now agreed fully to open up the non-domestic market by 2004 with free and fair competition. This represents over 60 per cent of the total market in gas and electricity. In addition, it is clear that the overriding majority of EU countries are now ready to open up their domestic markets as well. We agreed that a decision on the relevant directives will be taken by majority vote, at the latest by the end of 2002. This means that a single market in energy is now attainable.

"We agreed to deliver broadband technology across the European Union by 2005. That means Internet access at 10 times the present speed. We agreed to boost our commitment to research and development towards a target of 3 per cent of GDP by 2010. The new Research Framework programme will spend 17.5 billion euros to this end. New industries, like the growing biotech market, will benefit significantly.

"We have agreed to implement by the end of 2002 proposals to reduce regulation on business and a new system for consultation with business before new regulation is introduced.

"These steps go hand in hand with a social policy which seeks to encourage more and better jobs for all. The record of the British Government is strong. We have guaranteed fair rights at work. We have a national minimum wage. Our disability, gender and race equality legislation is among the most advanced in Europe. We have introduced a new system of tax credits to make work pay. Our New Deal has got over 300,000 young people into work.

"Since we came to power unemployment in Britain has fallen to its lowest level for 25 years. We have one of the highest employment rates in Europe overall, including for women and for older workers. Europe agreed that the enlargement agenda must focus on measures targeted at jobs, enterprise and moving people off benefit into work, rather than heavy-handed regulation—the British approach and increasingly the European one. As the Barcelona conclusions say, employment is the best guarantee against social exclusion". "The enlargement countries came to Barcelona and, for the first time, participated in policy debates. We also discussed how to make our decision-making more streamlined and efficient once we become a European Union of 25, 27, and more. I welcome the proposals of the Secretary General of the Council, Javier Solana, which will now be taken forward by the Spanish presidency. In many respects, these echo the ideas that Chancellor Schroeder of Germany and I put forward in a recent paper on Council reform.

"The Council also addressed a range of pressing international issues. The EU committed to increase its average development aid to 0.39 per cent of GDP by 2006. This achievement owes a lot to the lead given by my right honourable friends the Chancellor of the Exchequer and the Development Secretary. It is worth an extra 7 billion dollars a year. If delivered, it means another 80 million children in Africa and elsewhere in schooling—up for the first time.

"On the Middle East, we underlined the extreme gravity of the present situation and called on both sides to take action to stop the bloodshed. We welcomed the resolution adopted by the UN Security Council last week and the initiative taken by Crown Prince Abdullah of Saudi Arabia offering full normalisation of relations with Israel in return for full withdrawal from Occupied Territories. There must be an immediate ceasefire all round to give the peace process a chance to work again.

"On Zimbabwe, the European Council accepted our judgment that these elections were neither free nor fair. It agreed to take forward specific measures through Foreign Ministers.

"On the Balkans, the Council warmly welcomed the agreement brokered by the EU's High Representative Javier Solana between the authorities in Serbia and Montenegro for a new relationship within a single state. This agreement underlines just how far the countries of south east Europe have come in the past four years. A democratic government is in place in Belgrade. Milosevic is on trial in The Hague, and Kosovo has held successful elections for its provisional government. Moderates are in power in Croatia and Bosnia. The noose is tightening around Karadzic. In Macedonia, active diplomacy last year stopped what could have become another Balkan war.

"All this progress came about in large part through Britain acting in alliance with others. Prior to the summit, we took initiatives with no fewer than seven different countries—the Netherlands, Germany, Sweden, Denmark, Italy, Belgium and Poland. Five years ago, such alliances would have been unthinkable. Under the previous Conservative government, Britain was marginalised, without influence appropriate to our weight and size, in the isolation room. Now, from the economy to defence to institutional reform, Britain is in there shaping Europe's future, making Europe work in a way that is better for Britain and Europe. The policy of constructive engagement is right. Britain's proper role is as a leader and partner in Europe. We shall continue to get the best for Britain in Europe. Under this Government, the days of weakness and isolation will not return".

My Lords, that concludes the Statement.

4.43 p.m.

Lord Howell of Guildford

My Lords, I am most grateful to the noble and learned Lord the Leader of the House for repeating the Statement. As I believe the noble and learned Lord is aware, I have been asked to respond to the Statement due to the unavoidable absence of my noble friend Lord Strathclyde.

To begin with, putting aside the party political cadences in the final paragraph of the Statement, is it not the objective view of most observers that the Barcelona meeting has been a bit of a disappointment? I suppose that that is not really surprising because previous EU summits in recent times have also been disappointing. Indeed, no one could claim that it matched the hype and the rather extravagant claims that it would be a "make or break" affair, which would determine whether or not the momentum for modernising Europe was going forward.

We certainly support the rather modest liberalisation of energy trading that was achieved. It is very minor, but we support it. It still leaves Electricite de France in a complete monopoly position, both inside France and in its operations on this side of the Channel. However, it is better than nothing. We strongly support the Prime Minister and the Chancellor of the Exchequer in their firm rejection of the protestations of Mr John Monks, and others. Protecting workers' rights is very important, but when that is really a code for protecting the rights of those in jobs at the expense of those who are unemployed, and when it really means promoting unemployment, we believe that the Prime Minister and the Chancellor are right. Those who argue another line are totally wrong, unfeeling and selfish.

Having said that, it is the universal view—one that appears to be shared by the Prime Minister—that the Barcelona event was not very entertaining. In fact, the Prime Minister came very near to saying that it was a bit of a bore, and that he would rather have been elsewhere. One can see his point. The Government recently produced a vast White Paper on the subject of realising Europe's potential, which set out all sorts of high hopes; but these do not seem to have reached Barcelona. In practice, as we learnt from the Statement. the results that emerged are very thin. Indeed, if one is to judge by what was actually achieved, it looks as though the reform process is running into the ground throughout the euro zone.

Why do I make that comment? I do so because energy liberalisation in the larger sense has been blocked, although we have the small concession. We should remember that the Lisbon process was supposed to be a matter of catching up with the United States—admittedly, over a period of years—but we are two years into the system and all the statistics show that the US is still further ahead in per capita income, in technological advance, as well as in other areas. The Lisbon process was supposed to achieve a lighter and more targeted regulation on business. Coming from this Government, that would have been a shade more credible if they had not been the Government who, last year, imposed 4,642 new regulations on small business—which works out at one every 25 minutes of the working day.

Then there is enlargement, which many people believe to be the central ideal of the Union today. But that is bedevilled by disputes about second-class status for the central European applicant states, and there does not seem to be much about that in the communique. As for certain defence issues not mentioned in the Statement, but featured in newspaper reports, it seems that EU countries are still at sixes and sevens as to what relationship the rapid reaction force should have with NATO. In the end, I believe that reality will force it back into the NATO pattern as a strong European subsidiary of the organisation, and not as an autonomous force.

Newspaper reports have mentioned the same kind of disagreements over what Europe should do on the second phase of the war on terrorism. We know that there are disagreements rather nearer to home on what to do about Iraq, but none of that was covered in the Statement. Can the noble and learned Lord say whether anything was actually debated at Barcelona in that respect? Was there any discussion on common agricultural policy reform, which is very important? Was anything decided on the blocked take-over directives, or on pension reform, which is now becoming a critical issue for the Italians? Generally, we believe that Barcelona took place under a delusion—a delusion that governments create jobs. They do not.

On the foreign side, there is a hint of firmness as regards Zimbabwe. However, it would be helpful if the noble and learned Lord could tell the House what the Foreign Ministers will now consider, and what their next move might be. Menacing reports have appeared in newspapers about Gibraltar; but, again, nothing was mentioned in the Statement. We need the assurance that the Gibraltarians will not be put under intolerable pressure if they turn down the joint sovereignty deal—which, of course, they will. They must not be forced to renege on their own democratic wishes.

Noble Lords on this side of the House are constructive Europeans: we want new measures to defeat the euro malaise, and to restore democracy and accountability. We see very little constructive corning out of Barcelona. The Prime Minister said that the achievements were limited and solid. They are limited; indeed, they are so limited that one would almost need to use a microscope to see them. They are so solid that they appear to be on the verge of being immobile. In our view, it is high time for a fresh approach. Nothing that was done or said at Barcelona by this Government seems to reflect that urgent need.

4.50 p.m.

Baroness Williams of Crosby

My Lords, I. too, thank the noble and learned Lord the Leader of the House for repeating the Statement made in another place. I begin by saying that it is perhaps a little churlish not to pay considerable respect to the remarkable achievement of the turnover from national currencies into the euro. Whether or not we are part of that process at present, it has been a remarkable achievement and extraordinarily successfully carried out. Whether one is pro or anti membership of the European monetary union, one should recognise that that has been, and is recognised throughout the world as being, a remarkable achievement.

Perhaps I may mention, with approval from these Benches, two other achievements of the Barcelona summit. One is the impressive resolution to increase development aid and to bring about a more rapid move towards debt relief. In that context we on these Benches congratulate the Chancellor of the Exchequer and the Minister for International Development on what has been a steady and consistent attempt to address the huge inequities in our global economy, for which they deserve considerable praise. We are pleased to see further measures being taken on the environment and moves towards an energy tax, although the dating of that is somewhat distant.

Having said that, and having also said that it is encouraging that there is some move towards liberalisation of the electricity market, we have to agree to a limited extent with the noble Lord, Lord Howell of Guildford, that, even given the extraordinary ability of the Prime Minister to burnish almost anything to a very high glow, this was not a particularly impressive summit. First, as we all know. there was no substantial move towards completing the internal market. Frankly, a figure of 98 per cent for seven countries so long after the Single European Act was passed is not impressive by any standard. To say that it will be another four years before we get anywhere near 100 per cent is to say that we are moving at a tortoise-like pace.

Secondly, to speak of research and development expenditure increasing to 3 per cent by 2010 is slow progress. That is hardly what one might call a wildly ambitious target. We are disappointed by the fact that the financial services action plan, which is vitally important to the development of the European economy, is still mired in indecision, and equally that the attempt to create a European patent is still subject to long delays because no one can agree on the languages into which it should be interpreted.

On some of the key areas of creating exactly the kind of modern, information technology-conscious economy of which the Prime Minister and some of his colleagues have spoken on many occasions, we are not making what one might describe as rapid progress. That is a pity because there is no doubt that Europe's potential is much greater than its achievement. In that respect, I ask the Leader of the House three questions. First, can he tell the House more about the financial services action plan, the Lamfalussi proposals, and what prospects there are of that being implemented within the next four or five years in line with some of the reforms that are being made globally? Secondly, can he say something about the European charter for small and medium enterprises, which is again a vital part of modernising the economy of Europe and creating more job opportunities? Finally in this respect, can he say a word or two about the proposals with regard to patents?

I turn to the international annex attached to the Statement. Again, we congratulate the Prime Minister and the Government on the steps that have been taken to create a new federation between Serbia and Montenegro. It is hoped that that will be one which will provide for more autonomy for Montenegro than was the case in the old federation. It is obvious that Montenegro is tugging in the direction of having a greater say in its own future. I have suggested already that we are pleased by some of the steps towards environmental improvements, including at a global level.

However, again I must ask the Leader of the House a serious question. The summit Statement has much more to say about the Middle East than has the Prime Minister's Statement. It is clear from the visits being paid to the Arab states by Vice-President Cheney that the message has come through loud and clear from virtually every moderate Arab capital that it is the war and growing escalation of violence and tension in the Middle East that is perceived by all those governments—Egypt, Jordan, Bahrain, Qatar, and Saudi Arabia—as being the central threat they face. Against that threat they will not get engaged in giving help for an attack on Iraq because they do not believe that that is the first priority in saving the peace of the world. It is interesting that Mr Cheney has begun to change his tune somewhat and, in the past couple of days, speak as if he too thinks that perhaps the Middle East crisis should take priority.

In that context perhaps I may ask the Leader of the House specifically about two matters the Prime Minister did not mention, and welcome one which he did. We welcome the commitment of the Prime Minister and the European Council to call on Israel to withdraw from the occupied territories. However, there were two other things said by the Council which the Prime Minister did not say. The first was to call again on both sides to respect United Nations resolutions, including the most recent resolution 1397, calling upon both sides to respect the sovereignty of the other, the ultimate setting up of a Palestinian state and the withdrawal of both sides from violence in the other country.

But, secondly, and perhaps even more important, the European Council called for there to be monitors sent from the European Union to oversee and monitor any attempt to try to create a peace agreement between the two sides. Many of us in this House regard that as being perceived to be more neutral between the two sides than, with great respect, American monitors. It is vitally important that we know the view of our own Prime Minister on that European Union proposal. I therefore conclude my questions by asking the Leader of the House to tell us as precisely as possible whether the Prime Minister supports that conclusion and whether he would agree to co-operate by sending British monitors along with European monitors to supervise the peace process desperately needed in the Middle East.

4.57 p.m.

Lord Williams of Mostyn

My Lords, I am grateful for the contributions of the noble Lord, Lord Howell, and the noble Baroness, Lady Williams. I confirm that the noble Lord was courteous enough to indicate the reason why the noble Lord, Lord Strathclyde, could not be in his place.

I do not believe that it is right to say that Barcelona was a disappointment. It would be deeply disappointing if one thought that one was going to change the world on every such occasion. Such processes are bound to be incremental. We cannot have "big bang" solutions on every occasion, particularly in a community, a union, which is expanding quickly and introducing countries at different levels of economic, political, cultural and social development. In the view of the Government, that is the key to the future of the European Union.

It was said, for instance, that the Prime Minister and the Chancellor had repudiated Mr Monks on the rights of workers. I do not think they did. He is a thoughtful, careful and, if I might say without presumption or appearing to patronise, most intelligent trade union leader. He might well be putting forward the point of view, which I recognise as having legitimacy, that if one is a worker in a company one has certain rights in the same way that one has certain duties to one's employer. He might have had in mind what sometimes strikes some of us as the grossly disproportionate outcomes one has if one is a worker in a firm which fails as opposed, perhaps, to being a director in a firm which fails. That sometimes seems to some of us to be a necessary pre-condition to receiving a multi-million pound payout.

It is right that one cannot have an endlessly static labour market. It is also right in my experience and belief that we will never have a satisfactory labour and employment market unless people who work and thereby contribute to the profit of the company have their rights properly and decently regarded. I believe that the noble Lord, Lord Howell, said that the Prime Minister appeared to be bored in Barcelona. In my experience such a thing is not possible. One may go to bed very late but one is certainly not bored.

What have we brought about? It was said that Barcelona was supposed to be make or break. As regards the energy markets, for instance: 60 per cent, non-domestic, to be followed promptly by the remainder of the energy market being opened up, with every prospect that that will be done by this time next year; the progress in telecommunications and broadband by 2005; the research and development budget up to 3 per cent; the Secretary General's proposals for reform on institutional change; the desire to achieve 0.39 per cent of GDP in terms of international aid and development; the communiqué on the Middle East; and the progress on Zimbabwe. None of these could be said to be disappointing. They are not perfect outcomes because, as I said earlier, this is a continuing incremental procedure.

The noble Lord, Lord Howell, asked in particular about CAP and about Iraq, Gibraltar and Zimbabwe. The noble Baroness certainly asked about the Middle East and the war against terrorism. On Gibraltar perhaps I may repeat again—I know that your Lordships are perfectly reasonably concerned about Gibraltar—that the Government's position has not changed at all since a few days ago when my noble friend Lady Symons yet again unambiguously stated the Government's position, which is that there will be no constitutional change in the Gibraltarian context without the consent of the people of Gibraltar.

I shall make plain the Government's precise position yet again because I know that your Lordships are concerned about the matter. We will not enter into arrangements in which the people of Gibraltar would pass under the sovereignty of another state against their freely and democratically expressed wishes. I know that the noble Lord, Lord Waddington, has on a number of occasions pressed my colleague. I repeat that formulation which I hope is important to the people of Gibraltar.

Questions were asked about the Middle East. Perhaps I should deal with that matter at more length. I believe that on the Middle East there was significant progress made. We said in terms that we absolutely support the United Nations Security Council's Resolution 1397, to which the noble Baroness, Lady Williams, referred. Your Lordships will know that Resolution 1397 deals with the rights and legitimacies of Israel and the Palestinians.

The Arab summit will take place on 27th March. I entirely take the points which the noble Baroness made about the dangers of the Middle East situation at the moment. We have supported the proposals made by Crown Prince Abdullah. On behalf of the Government I entirely agree with the noble Baroness that there can be no resolution of wider matters without a determined attempt to resolve the Middle Eastern question.

I agree with the noble Baroness that it is necessary that all sides—whoever they are and whatever their historic grievances—should respect UN Security Council Resolution 1397.

The noble Baroness, Lady Williams, asked a number of questions about the financial services action plan. Its deadline for implementation is 2005. There are about 45 measures needed to complete it. Twenty-five of those have already been agreed. There is a continuing review of the progress of the financial services action plan available on the Internet. It is frequently updated. I have a large number of pieces of paper in my hand. I should be more than happy to circumvent the operation of the Internet, because, on this occasion, I think that the human hand will be quicker than the Internet. I am more than happy to provide the noble Baroness with a copy later today.

The noble Baroness also asked about the small firms charter. That has been agreed. Barcelona called for full implementation of the charter. I know that the conclusions contain quite an amount of material. The reference is paragraph 15 of the conclusions.

The noble Lord, Lord Howell, asked whether there had been any discussion of a takeover directive. In January of this year the high level group of experts on company law produced a report on how to take forward the idea of a takeover directive. The Government welcome that report and hope that the Commission will come forward with a new proposal as soon as possible. That is the up-to-date material that I have on the matter.

It cannot be said that Barcelona was a disappointing conference. I know that the noble Lord very gently chided me about reading out the more "partisan", as he described them, last two paragraphs. I cannot really disagree with that adjectival description. What seems to me absolutely critical is what was said earlier in the Prime Minister's Statement. Five years ago many of these steps would have been inconceivable. It is extremely sobering and humbling to go around Europe and see what hopes are placed on the progress of the United Kingdom in playing a full part in Europe. We are seeing countries now about to enter the European Union which have had a century of dismal history—no democracy, overborne by neighbouring countries, often totalitarian, and With the idea of human rights absent not simply from their constitutions but from their hopes, dreams and thoughts.

We are capable of exercising a substantial moral as well as political energy in the European Union. It will damage the European Union, as well as us, if we do not take our opportunities.

I hope that I have dealt with the specific points that were put to me. I repeat that this has not been a disappointing conference, except among those who believed that two days in Barcelona would change the world.

5.6 p.m.

Lord Tomlinson

My Lords, does my noble and learned friend agree that the Barcelona conclusions contain not only some welcome agreements but also some points of serious warning? Perhaps the most serious warning at a time when we are concentrating on how better to connect Europe to the citizen is not to start too many new initiatives until we have completed some of the existing ones. Therefore, should not the now more than 10-year old initiative of completing the single market be put as an absolute priority until we have got the single European securities market, the full completion of the telecommunications markets, a full single market in financial services and a single energy market? Should we not therefore be encouraging an attitude of mind that doing less and doing it better involves a self-denying ordinance on new initiatives until we have completed the agenda that we have already committed ourselves to?

Lord Williams of Mostyn

My Lords, I think that there is a good deal of virtue in what the noble Lord says. That is why I was seeking to say that these are incremental processes. We are making quite significant progress towards the conclusions of which the noble Lord speaks. I know that the noble Lord has referred to this matter in your Lordships' House on other occasions. In addition, if we are to make these changes we need to make sure that those who are involved—that is, the citizens of every state in the European Union—fully know what we are doing and the purposes we hope to obtain by bringing them about.

Lord Waddington

My Lords, the noble and learned Lord did not really answer the question put by my noble friend about Gibraltar. What was said at the Council meeting about Gibraltar? Are the press reports correct that money was offered to Gibraltar conditional on it accepting whatever is agreed between Britain and Spain? Surely, the development envisaged is either economically justified or not? If it is economically justified but cannot take place at present because of obstruction by Spain, the duty of the countries in Europe is to tell Spain to stop being obstructive rather than offering a bribe to the people of Gibraltar and telling them that they had better accept any arrangement arrived at between Spain and Britain—whether or not they think it right—because if they do not agree to it they will not get the money.

Lord Williams of Mostyn

My Lords, I am not sure what newspapers the noble Lord is referring to. I enjoy reading newspapers but I do not always accept their entire accuracy on every occasion. What happened at Barcelona was that the Council welcomed the United Kingdom and Spanish efforts under the Brussels process, which I remind the House—I hope not tediously—was a communiqué issued in November 1984 to overcome our differences over Gibraltar. I repeat: any proposals on sovereignty would be put to the people of Gibraltar in a referendum.

I am advised that no sum of money has been agreed. The Commission has been asked to make proposals and we look forward to reading them in due course. There is no question of a "bribe"—to use the noble Lord's word. If agreement can be achieved, it would not be inappropriate to provide some financial underpinning for it. That is not a bribe if—I repeat— we make it plain that we will not enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another state against their freely and democratically expressed wishes.

Lord Sheldon

My Lords, my noble and learned friend mentioned discussions on the Middle East. Was any comment made about the danger of our acting against Iraq in the absence of any settlement of the Israeli-Palestinian situation? That is a most dangerous matter. There must surely have been some discussion of that important matter in Barcelona.

Lord Williams of Mostyn

Indeed, my Lords, there was. First, I am happy to tell my noble friend that the Council issued a strong declaration warmly welcoming UN Security Council Resolution 1397, which, as I said—I know that I was paraphrasing it—is not limited to the rights of Israel alone; it also deals with the rights of the Palestinian people.

The Council made perfectly plain that the Palestinian Authority must have full responsibility for fighting terrorism, but that Israel must withdraw its forces from Palestinian-controlled areas, stop extra-judicial killings, lift restrictions and closures and freeze settlements. Both parties—I underline this—must respect international human rights standards. As my right honourable friend the Prime Minister said in the Commons this afternoon, if Israel is exercising a state's undoubted right in law, any response must be proportionate.

I repeat, as the Prime Minister has said on many occasions, no decisions in respect of Iraq have been made. Plainly, no one would seek even to contemplate any action in respect of Iraq without bearing in mind the possible consequences on an already deeply troubled area. On that I agree with my noble friend.

Lord Ezra

My Lords, I should like to ask about the liberalisation of the energy market. It is welcome that the liberalisation of the commercial part of the market has now been agreed. Can we also take it that when the appropriate directives are discussed at the end of the year, they will include extending liberalisation to domestic markets? Furthermore, as the other important issue facing the European Union is security of supply—because of its increasing dependence on imported sources—will that be urgently considered at a future conference?

Lord Williams of Mostyn

My Lords, I cannot give the noble Lord a cast-iron assurance on his second question, although I imagine that all governments will have the concerns that he mentioned well in mind. However, I can give him an assurance on his first question. As he rightly says, the breakthrough at Barcelona deals with more than 60 per cent of the gas and other energy markets, so they will be open to full and fair competition by 2004. The noble Lord's important supplementary question was: what will happen to the remaining part of the market? Within a year, a decision will be taken on full liberalisation, as the noble Lord spoke of it. It will be taken by qualified majority voting in the Council of Ministers. Barcelona showed that there was a clear majority in favour—14 to 1—so we should have agreement on the further step described by the noble Lord by about this time next year.

Lord Clinton-Davis

My Lords, does my noble and learned friend agree that there was a marked difference of tone between what the noble Lord, Lord Howell, had to say about the summit and what was said n the House of Commons by the Leader of the Opposition? What was the reaction of other members of the European Union at the Barcelona summit to those positive achievements of the British Government—the national minimum wage, fair rights at work and so on?

Turning to the Middle East, would it not be better if the Palestinian Authority, which controls television and radio, was far more positive about the existence of the state of Israel? Whatever one's views of Prime Minister Sharon, does my noble and learned friend agree that the state of Israel is there to stay?

Lord Williams of Mostyn

My Lords, there is no question in the Government's mind that the state of Israel is there to stay, for all sorts of moral, historical and legal reasons. There is no future for either the state of Israel or the Palestinian people unless they are able to live together. That is a truism, but it none the less needs to be recognised.

As for television coverage of the conflict in the Palestinian media, I imagine that criticism could be made of all sorts of media coverage. It is not for outside governments to seek to interfere with media coverage in other parts of the world, any more than they should seek to interfere with media coverage here, even though sometimes one may regard it as wrong.

The tone of the response of the noble Lord, Lord Howell, was indeed different. Of course, that comes as no surprise to your Lordships, as the quality of debate in this Chamber is normally higher than one finds elsewhere—I did not say in another place. Indeed, the noble Lord is free of mummy in a way that perhaps Mr Duncan Smith is not.

Lord Brooke of Sutton Mandeville

My Lords, why do the Government run the risk of confusing our European colleagues by claiming that the New Deal has generated 300,000 new jobs when the National Audit Office, which is a far from partial witness, states that only 20,000 are attributable to the New Deal?

Lord Williams of Mostyn

My Lords, I know that there are different views about that figure. I do not think that the fact of that extraordinary improvement is itself disputed. Personally, I prefer to accentuate the positive by pointing out that between 250,000 and 300,000 people now have good prospects of settled, long-term employment. That benefits not only them and their families but, critically, the operation of our society, not least in the incidence of youth crime.

Lord Pearson of Rannoch

My Lords, does the noble and learned Lord agree that in at least two important areas the Statement is factually incorrect? One is where the Statement claims that proposals are emerging to reduce regulation on business. Does that mean that some existing regulations will be withdrawn? The flood of such regulations continues unabated. One need only consider the vibration and end of life directives, the new regulations on nitrates for farming, the reversal of burden of proof in discrimination cases, the part-time workers directive, dietary requirements for sedentary workers and even the ladders directive, which will make it an offence to climb a ladder unless someone is holding the bottom of it. Surely it is simply untrue to say that we are winning the battle against European regulation.

Nor is it true to say—this is the second prong of my question—that the United Kingdom is winning the argument in Brussels. That is clearly untrue. Did not the European Parliament vote last week to give the European Union legal personality? If that is passed, does not the whole picture fall into place—with the charter of fundamental rights, the army, corpus juris for the legal system and even the ant hem and the flag? The flag is not legal at the moment—it is advertising—but it will be when the European Union gets legal personality.

To a Euro-realist such as myself, the Statement simply does not stand up. The Prime Minister himself said that Barcelona would be make or break. Clearly, it is break. So why do not we confess that, or, at least, talk about it at greater length than we can in a debate such as this?

Lord Williams of Mostyn

My Lords, my memory is quite short-term, but I do not think that one can find the phrase "the battle against European legislation" in any sentence of the Statement.

Lord Pearson of Rannoch

My Lords, at the end of the Statement, it says that all thanks are due to the Labour Government's wonderful new policy.

Lord Williams of Mostyn

It does not say that either.

Lord Pearson of Rannoch

My Lords, it says that Barcelona would not have been possible under the previous Conservative government, that then we were "without influence" and that we are no longer "in the isolation room". We jolly well are in the isolation room, unless we want to go along with the things I have just mentioned.

Lord Williams of Mostyn

My Lords, the noble Lord, Lord Pearson of Rannoch, sounds like a politician. He put forward his proposition, but, when I gently asked whether it was to be found anywhere in the text, he said, "No" and quickly side-stepped the question. In fact, he did not say, "No"; he just side-stepped it.

I shall repeat what was said towards the end of the Statement, because it is worth a guinea a word: Under the last Conservative Government, Britain was marginalised, without influence appropriate to our weight and size, in the isolation room". As a proposition of descriptive fact, that is correct. That is a continuing reproach to how feeble we were. We now have the opportunity to go forward under a Prime Minister who wants to do the best for Britain, knows where our future lies, wants to do the best for Europe and knows where its future lies.

There is, sometimes, too much legislation, but many of the regulations about which the noble Lord complains periodically are nothing to do with Brussels. They are, in fact, domestic statutory instruments. If the noble Lord wants to talk about people standing at the bottom of ladders, I respectfully invite him to examine the regulations made pursuant—as they say in my old trade—to the Factories Act 1961. He will find lots of regulations about people having to foot ladders. Why will he find such regulations? Because, if someone goes up a ladder that is not footed, they are liable to fall off, injure themselves and sue their employer.

Not all regulations are wrong, and I shall give one illustration. The sheep are baa-ing all over the world, not least in the United States Congress, about how Enron could have been allowed to be brought to the point of collapse. What reason is given? It is that there was not enough regulation.

Lord Harrison

My Lords, can my noble friend the Minister advise us whether there was any support at Barcelona for the views expressed by the noble Baroness, Lady Thatcher, as published today in The Times?

Lord Williams of Mostyn

My Lords, not only was there not much support for them in Barcelona, there is not much support for them in the sane tendency of the Conservative Party.

I am pleased to see the noble Lord, Lord Hurd of Westwell, in his place. In 2001, he usefully pointed out: Until six weeks ago, Mr Duncan Smith was known to students of politics as a one-issue man. He had built a reputation by undermining the last Conservative Government's policy on Europe and resisting all appeals to loyalty". It is a pity that the noble Lord, Lord Brittan of Spennithorne, is not in his place. He has encapsulated the views of the noble Baroness, Lady Thatcher, far better than I could ever attempt to do, saying that, her suggestions are unrealistic, undesirable and dangerous—the present leadership of the Conservative Party is so closely associated with her that unless they unequivocally and immediately repudiate those ideas, they will be assumed to have them as a hidden agenda". As the Prime Minister said in the House of Commons this afternoon, the present Conservative policy on Europe seems to be one of total silence.

Lord Wallace of Saltaire

My Lords, I am glad to see that this is a much less partisan House than the other place.

I press the Minister to answer the question asked by my noble friend Lady Williams of Crosby about EU observers in the Arab-Israeli dispute. I did not hear him respond.

I also want to know what plans the Government have to help the broader public—and, indeed, some of us in this House—to understand some of the deeply obscure and technical negotiations that go on under the name of the EU. There is the Lisbon process. I was not aware that the Gibraltar negotiations were called the Brussels process. I am familiar with the Tampere declaration, the Dublin convention and all the other things that one tries desperately to understand.

As we approach the next inter-governmental conference, we have a convention already under way on which the British Government have not attempted what, I gather, is now called in Whitehall domestic public diplomacy beyond the Schröder-Blair letter, which is itself written in fairly turgid, technical language. I must be one of the 155 people in Britain who have read it from start to finish. Do the Government intend to try to explain to a broader public—perhaps through a Green Paper—what the issues for the convention are, beyond the occasional multiple bilateral alliances to which the Statement refers? It is important to make sure that the British people have a deeper understanding of the issues.

Lord Williams of Mostyn

My Lords, the noble Lord has a valid point, but I cannot commit myself to a Green Paper. However, I can say, without an excess of self-congratulation, that it is something that we have discussed many times in your Lordships' House. I know that the noble Baroness, Lady Williams of Crosby, has raised the matter many times. It may well be that we ought to be able to have more defined structures and mechanisms in this House not only for debate but for the elucidation in our debates and Select Committees to which the noble Lord, Lord Wallace of Saltaire, referred. It is an extremely important point.

I confess that, until it was necessary to point the finger of scorn in the context of Gibraltar, I was unaware of the Brussels process. The only reason that I stressed 1984 was that I seemed to recollect dimly that there might have been a Conservative government in power at that time.

The noble Lord is right. I did not mean to be discourteous to the noble Baroness, Lady Williams of Crosby. She put a wide range of questions, and my note to myself did not pick up the answer to her question, for which I apologise. Our stance was that we urged both parties to consider the proposals for monitors and stressed that we were prepared ourselves to participate in such a mechanism.

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