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Baroness Seear: My Lords, we on these Benches also wish to thank the noble Viscount the Leader of the House for repeating the Statement. The report, of course, is about the preparations for the beginning of the IGC, but judging from the press and judging from much comment that has been made, it is somewhat overwhelmed by the subject of beef, which is a subject on which we have perhaps heard rather a little too much over the past fortnight.

The Prime Minister must be glad to realise that the beef issue is recognised as a European issue. Perhaps he and the Government also accept that it is a good thing that it is recognised as a European issue. If we were not--I would not say at the heart of Europe--at least inside the European Union, we should have a great deal more trouble in dealing with our beef problem than we have at the present time. It is certainly welcome that our partners in the European Union are prepared to help with the financial implications. Incidentally, has anyone

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ever discovered how much BSE there is among our European partners? I know nothing about agriculture but I find it extremely difficult to believe that this unpleasant germ or condition--who knows what it is?--is confined to these islands. The fact that we are not told of the numbers of cases in other countries does not necessarily mean that they do not exist. Did we extract any information about the extent of the beef problem, or rather the potential for a beef problem, in these other countries, if that information were more widely available? Perhaps the noble Viscount can enlighten us about that.

On the subject of beef, it is good that there were negotiations and discussions about it, but surely the most important thing is to achieve a settlement of some kind as fast as possible. There can be no doubt whatever that there are a great many people in this country at the moment who think that they are likely to be broke by the end of next week unless the Government make a clear decision. As we are operating in what I humbly suggest is almost Cloud-cuckoo-town in regard to beef--the whole matter is in a realm of unreality--can we not just cut through it all, regardless of what comes out from Europe, and get on with it? That is what is urgently needed as regards the rural areas of this country. We need a decision to be made quickly so that people know where they stand. I hope we can be told how much help we shall receive and how quickly it will be given, but we need to come to a decision, whatever else there is to be done about the beef issue in the future.

Listening to the noble Viscount repeating the Statement I tried again to ascertain what the meeting was supposed to be about. I understand from the first page of the document that it is supposed primarily to be about enlargement. However, I see remarkably little within the Statement that tells us what will happen in relation to enlargement, and yet a great many of the issues that are raised should be very much about enlargement. The Statement refers to the problem of unemployment in the Union. The reference to enlargement is on the first page of the document if the noble Viscount the Leader of the House has overlooked it. The question of enlargement is surely at the heart of what is going on in relation to the IGC.

Unemployment is an extremely important issue in the European Union, and we all recognise that. For the Government to harp on about the effect of the social chapter really is to be straining at gnats and swallowing camels. Surely the most important issue in connection with enlargement is what its effect will be on employment in the better off countries with high standards of living inside the European Union when enlargement will bring in countries whose labour costs are so much lower. Yet, if we do not accept their goods, that makes extreme nonsense of any talk about enlargement. I am astonished that nowhere in the document is there any reference to what we will do about the problems arising from enlargement both in relation to the CAP and in relation to unemployment. To talk about the unemployment question and not to discuss it in relation to those countries with low costs which are to come into the Union seems to me to be missing the point in a most spectacular way.

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The first two pages of the document are almost entirely devoted to stating that the Government are in fact Gaullists and that they believe in a union des patries, and not in any sense in a federal Europe. They use the word "federal"--as I would--in the sense in which it is understood in every country except Great Britain. Great Britain manages to create a bogey of federalism by misinterpreting the use of the word. Those of us who are strongly federal in the European sense are totally in support of subsidiarity. In fact in many ways we are more in support of subsidiarity than are Her Majesty's Government. However, that does not emerge.

The Government seem to think that they can go ahead with enlargement and yet maintain in every possible way national control over all the issues. Yet another inevitable consequence of enlargement is that we have to look at qualified majority voting. Again, in the Statement, the Government refer to qualified majority voting but they do not refer to the effect that enlargement will have on the whole question of voting. How can one possibly contemplate enlargement without saying how on earth one will make decisions when there are 17 or 25 countries who do not have the opportunity for qualified majority voting? It is "Hamlet" without the prince to have an IGC on the subject of enlargement and to leave those questions totally unanswered.

Viscount Cranborne: My Lords, I shall try to answer both the noble Lord and the noble Baroness as succinctly as I can. However, it will be a challenge in view of the number of questions that the noble Lord, Lord Richard, asked me. The noble Lord, Lord Richard, asked me two questions about beef. The first concerned when the Government package of measures would emerge. If I may, I shall link that to my response to the entirely justified urging of the noble Baroness that speed was of the essence in the restoration of confidence in the beef market. My right honourable friend the Minister of Agriculture is in Luxembourg today discussing this issue with the Commission with the absolute endorsement of Her Majesty's Government, aiming to agree a package of measures to help restore confidence in beef right across Europe as swiftly as possible. The Government are all too well aware--as the noble Baroness pointed out--of the large number of jobs which depend directly and indirectly on the beef industry. The number of beef products spreads almost throughout the economic endeavour in this country. So it is essential that this period of uncertainty should be brought to a close as swiftly as possible. I hope that the eradication of BSE and the market support measures which my right honourable friend has discussed, and is discussing today, will be a welcome step towards getting the EU ban lifted, which I think is a prerequisite to the restoration of confidence.

The noble Lord's second question concerned compensation and whether it would come out of the rebate. It is not clear as yet what level of compensation will be payable to various interested parties. It will depend entirely on what measures emerge. It is important that when the measures emerge we should make it perfectly clear as swiftly as possible how they are to be applied and how they will operate. A broad declaration will not in itself restore confidence. What

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will restore confidence is the clarity with which Her Majesty's Government set out their proposals; and I hope that that will be possible in a very few days.

The question of compensation will have to be addressed at that point. However, I remind the noble Lord that measures on calves and a number of market support measures have been announced by my right honourable friend. The question of intervention is one to which the rules apply. A broadening of the rules and categories of intervention may emerge from my right honourable friend's discussions.

I turn to matters of the IGC. The noble Lord, Lord Richard, as always--he drew our attention to this fact--looked at the communique. I make no complaint about that. However, he forgot one thing, if I may so suggest, in his clear indication that the Government had not taken any trouble to set out their own policy. I am sure that the noble Lord, Lord Richard, has not forgotten the recent White Paper which published the negotiating objectives of Her Majesty's Government in the IGC. I am sure that what was set out in the White Paper has been part of the noble Lord's daily reading. However, I remind him that among our objectives set out clearly in that document has been the further entrenchment of subsidiarity in the treaty and action to ensure that the treaty articles are not misused. Indeed, my right honourable friend made it clear in his Statement that we feel that Article 118a, on health and safety, has been misused by the Commission, an issue on which we hope to get action during the course of the IGC. We hope to achieve improvements in the quality of legislation through better consultation and the automatic withdrawal of proposals not adopted within a given period. We do not want any more powers for the European Parliament at the expense of national parliaments or governments. We believe that the foreign and defence policy must remain the responsibility of national governments and that NATO should remain the bedrock of western security.

That is all fairly well ploughed ground; I could go on. However, there are some signs that our European partners are beginning at least to move in the direction that we have set out. I draw the noble Lord's attention in particular to the French Prime Minister's recent speech in which he underlined the central role in the European Union of the nation state and the supremacy of the Council of Ministers over the Commission.

In his reference to the final document, the noble Lord asked a number of questions. I believe that an ever closer union among peoples is clearly an objective which the Government can sign up to. After all, as set out in the White Paper, we fully support a strengthened co-operation and friendship across the whole of Europe. I suggest to your Lordships that that is not the same as an ever closer federal union of states--"federal" in the sense that we understand it in this country rather than as it is understood abroad, as the noble Baroness said.

As regards the strengthening of human rights, I believe that our position is perfectly clear. The fundamental human rights are already protected by the European Convention on Human Rights. All member states and the European Union are bound to respect that

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convention. As your Lordships know, the ECHR is already enforceable through its commission and through the court. The Government see no need for duplication of the ECHR in the EU treaty. I believe that there has been an Advocate-General's opinion supporting that view in the past few days.

I also point out to the noble Lord, Lord Richard, that unemployment, the institutions, the widening of co-decision, simplifying procedures, the extension of QMV, rules to strengthen co-operation, and so on, are already well on the agenda so far as concerns European meetings. It seems perfectly sensible that those matters should be discussed. I am sure the noble Lord will realise that the fact they are discussed does not necessarily mean that Her Majesty's Government feel able to sign up to all of them. Indeed, they may not feel able to sign up to many of them--but that could be said also of a number of our European partners. However, if some of our partners wish to see those issues on the agenda, it is much better in the tradition of representative government to discuss whether they are to be accepted or rejected rather than that they should be swept under the carpet and not explored.

Rather than weary your Lordships with a long exposition on the common foreign and security policy, perhaps I may refer the noble Lord, Lord Richard, to the speech which my right honourable friend the Foreign Secretary delivered recently in Paris. It set out our views very clearly indeed. In particular, my right honourable friend made it perfectly clear that it would be sensible for us to develop a common policy; and that it would be very much better if that policy were developed by consensus rather than by majority voting in the sense that it is much easier to ensure that there are no divisive votes on anything which can be of critical importance to individual countries.

It must be fair to say to the noble Baroness, Lady Seear, that a number of those areas, in particular as regards qualified majority voting, are integral to the question of enlargement. For reasons greater than the question of internal government of the European Union, I think that all noble Lords will agree that we must pursue enlargement with the utmost vigour. I am sure that the noble Baroness would agree with that. Nevertheless, unless we are able to find practical mechanics to enable enlargement to occur, that very desirable objective will be kicked further into the distance with considerable malign consequences for the future stability not only of central and eastern Europe but, I suspect, of western Europe, too. Therefore it is important that we should examine the matters to which the noble Baroness drew attention.

Finally, I wish to draw your Lordships' attention to the social chapter, to which the noble Baroness referred. It was perfectly right, in my view, for so much of the time of those who prepared for this European Council, and the conversation during the course of the European Council to concentrate on unemployment. It has become perhaps the greatest scourge for the membership of the European Union. Her Majesty's Government are clear that the way to address the scourge is broadly through the economic policies we have been endeavouring to

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pursue in this country for some years. It is a matter of deregulation, of supply side reforms, rather than the more prescriptive and expensive methods which have increasingly come to dominate attempted solutions by our European partners.

With the greatest diffidence, I suggest to the noble Lord, Lord Richard, that the statistics are beginning to give a hint, at the least, that we may have had a point all along. Our unemployment statistics, from far too a high a peak, have fallen since 1992 by 0.75 million. In the past three years we have created over 0.5 million new jobs. Our European partners have not had the same experience: they have high non-wage employment costs which we have managed increasingly to shed. The inward investment record of this country compared with that of our partners in Europe seems to show that many investors from outside western Europe agree with us. Therefore, I hope that in the run-up to the next general election the noble Lord will consider whether he feels that it is sensible--I put the point to him in the spirit of delightful amity and partnership which I hope he will agree we have developed during the past two years--to continue to advocate adherence to the social chapter and other matters which seem to obsess his party. Perhaps he will consider whether there are any votes in it from his point of view.

4.31 p.m.

Lord Renton: My Lords, is my noble friend aware that the Rome Treaty was designed about 40 years ago for five nations of western Europe whose legal systems and constitutions had much in common? Even as amended, it is now quite unsuitable for an enlarged Community of 15 nations which may be further enlarged by several nations in the fairly near future. Is he aware that in the course of the IGC negotiations, attempts should therefore be made by Her Majesty's Government to persuade the other European countries to have a system based not on the Rome Treaty but on consolidation and amendment of the treaties which followed it in order to avoid the present confusion which arises in law making?

Is my noble friend aware that in the enlarged Community, with 11 different languages and a number of different constitutions, law making has become dilatory and cumbersome and the outcome is sometimes confusing? If the Community is to succeed in the years to come, as an enlarged Community of many different countries, we must get the constitutional position put right.

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