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Lord Bruce of Donington: My Lords, I congratulate the noble Baroness on going a little further than she was able to go on 12th March last. Then she indicated to the House that it would be unwise to report on matters still under negotiation. Particularly in view of the meeting of the General Council on 25th March, will any endeavour be made to keep the standard and detail of the information given to the Westminster Parliament to the level and extent to that which will automatically be given to Members of the European Parliament?

Baroness Chalker of Wallasey: My Lords, the noble Lord will realise that we have moved on since 12th March. That is why I am able to give the noble Lord a little more information. I can assure the noble Lord that at least all of the documents which are made available to other national parliaments and to the European Parliament will be made available to your Lordships and Members of another place. As for the standard and detail, if they are the same documents they will be of the same standard and detail. Therefore,

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anything else that the noble Lord manages to elicit from me or one of my noble friends will be a bonus as a result of his persistent and ever-interesting questioning.

Lord Clark of Kempston: My Lords, does my noble friend agree that one of the important matters in the periodic reports to this House by the European Union is how it spends its money? Does my noble friend place any credence on the reports of the Court of Auditors of the European Parliament, many of whose members have no accountancy and audit qualification? Would it not be a good idea for Her Majesty's Government to press their partners in Europe to follow the pattern of the National Audit Commission in this country where qualified people look after public expenditure?

Baroness Chalker of Wallasey: My Lords, I am well aware of my noble friend's great interest in how money is spent in the European Union, as in the United Kingdom. Certainly, to have qualified auditors is far better than to have unqualified auditors. Many accountants, including my noble friend, who is an illustrious proponent of that profession, know that if we can improve those standards so we will improve monitoring standards. Our own National Audit Office has been influential in helping the Court of Auditors to improve, as have a number of other national governments.

Lord Stoddart of Swindon: My Lords, does the Minister recall that page 7 of the communique issued after the Turin Conference of 29th March refers to the association of the European Parliament and its work on the IGC? It details the way in which that Parliament is to be consulted. One of the arrangements is that once a month, and whenever Ministers' representatives deem it necessary by common accord, the Presidency will hold a working meeting on the occasion of meetings of Ministers' representatives for the purpose of holding a detailed exchange of views with the representatives of the European Parliament. Does the Minister agree that the arrangements for detailed consultations with the European Parliament will be far better, and far more effective, than those proposed for consultation and discussion with our Parliament at Westminster?

Baroness Chalker of Wallasey: My Lords, I want to examine what the noble Lord said, because I believe that he has interpreted what was written as a result of Turin much more broadly than is being utilised. I want to look at it with great care, and I shall try to respond to the point in the debate which your Lordships' House will be having in a few minutes.

Lord Richard: My Lords, perhaps I may ask the Minister to reconsider the Answer that she gave to my noble friend Lord Bruce of Donington. This is a set of negotiations which, it is envisaged, will go on for a very long time. Indeed, I believe that there will be weekly meetings, and that some unfortunate will have to attend every week for about 18 months, as far as one can see. I believe that my noble friend has a strong point on this. Surely in those circumstances it would be right that from time to time, when appropriate, Parliament be informed officially by the Government of the state of play in the

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negotiations. Perhaps I may assure the Minister that no one is asking for disclosure of negotiating positions, but from time to time it would surely be better if Parliament were informed formally rather than that matters be winkled out by Parliamentary Question or individual Statement.

Baroness Chalker of Wallasey: My Lords, I believe that the noble Lord, Lord Richard, also misunderstood me. My answers today must be opaque. Perhaps I may assure him that Parliament will be informed of the state of play--as he called it--after Ministers have met. But the meetings which will take place weekly will not be meetings of Ministers. When there has been a meeting of Foreign Ministers--the IGC will be on the Foreign Affairs Council agenda each month--there will be a response to Parliament--probably through a Written Question or perhaps through some Oral Questions--of the whole of the Foreign Affairs Council, which will include consideration of the IGC. When I teased the noble Lord, Lord Bruce of Donington, in a friendly way, it was just to say that one will obviously give clear information. However, as the noble Lord, Lord Richard, may have noted, the noble Lord, Lord Bruce of Donington, is extremely good at eliciting other little bits of information through his persistent questioning.

Lord Pearson of Rannoch: My Lords, does my noble friend agree that at the IGC the Commission should be discouraged from continuing its disdain for national parliaments, which it demonstrates by increasingly depositing documents for proposed European legislation too late for scrutiny in those parliaments?

Baroness Chalker of Wallasey: My Lords, I am well aware of, and sympathetic to, your Lordships' dilemma, that when documents come late to this House or to another place it makes it difficult to discuss them properly and thoroughly. That is why the British Government have made a particular effort with the Commission and the Secretariat of the Council of Ministers, by which the documents are issued, to get them to national parliaments. It is not the Commission's responsibility; it is the responsibility of the Secretariat of the Council of Ministers. We have been working away at that with, I might say, some success, because it is a good deal better now than it was some three years ago.

Lord Bruce of Donington: My Lords, on the last point raised by the Minister, is she aware that it now takes seven months for an English transcript of the proceedings of the European Parliament to reach this country and Parliament? I have the latest edition on my desk, which goes up to 16th June 1995, since when there has been a rather unfortunate gap. Will the Minister ensure, through the Foreign Office or the Ambassador, that we receive copies within a reasonable time so that we ourselves know what is happening in the European Parliament?

Baroness Chalker of Wallasey: My Lords, I am aware that the noble Lord wants to read absolutely

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everything that is said in Strasbourg, but I am not sure that that is the major priority, although many MEPs will be horrified to hear me say so. Therefore, if there is an order of priorities for translation and for the spending of money on translation, it may be that all the words of wisdom, including the debate and 230 amendments in the European Parliament on 13th March last as to its view of what should go into the IGC, can wait a little longer than some of the other matters which are of much more importance to national parliaments, and, in particular, to governments.

Lord Monkswell: My Lords, the House will be grateful to the Minister for announcing that we shall receive periodic Written Answers to planted Questions, and her supplementary answer suggesting that we shall also obtain responses to Oral Questions. Will the Government give consideration to making regular ministerial Statements which can be responded to across the Floor of the House?

Baroness Chalker of Wallasey: My Lords, we are as open to making Statements, when it is wished in this House, as we have ever been, particularly on this issue. But just as with the priorities for the spending of money, one has to have priorities for legislation. Unless your Lordships are of one accord that we should sit very long and late on many occasions, it is important to make a Statement when there is something valuable and factual to say. It is not a good use of your Lordships' time to talk about things which are purely speculative. I fear that what the noble Lord has in mind is a number of matters which would have been entirely speculative.

Rating (Caravans and Boats) Bill

Report received.

Intergovernmental Conference: White Paper

3.8 p.m.

Baroness Chalker of Wallasey rose to move, That this House take note of the White Paper on the British approach to the 1996 Intergovernmental Conference (Cm. 3181).

The noble Baroness said: My Lords, I am pleased that we have this important opportunity to discuss the IGC in advance of the first substantial meeting of Foreign Ministers in seven days' time. We much look forward to hearing the maiden speeches of my noble friends Lady Wilcox and Lord Bowness.

The British Government approach to the negotiations is set out in the White Paper A Partnership of Nations placed in your Lordships' House on 12th March. That document is a clear and comprehensive statement of our position. Our vision of Europe's future is enshrined in the title. We want to see a Europe of nation states working together in partnership to advance their national interests and to manage their shared aims. This is the reality in Europe today. It must develop and improve as

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the European Union tackles the crucial tasks associated with enlargement. The Intergovernmental Conference is about the mechanics of this process. It is about ironing out the incongruities and inadequacies of the European Union, and thus creating a machine which is leaner, more efficient and more effective, capable of taking us successfully into the 21st century; in other words, doing less better.

Previous conferences have been built around grand visions of concrete steps forward: in 1985 the creation of the single market; in 1991 the project of a single European currency. This time it is different. The aim of the 1996 IGC is to examine how far changes may be necessary to ensure,

    "the effectiveness of the mechanisms and institutions of the Community",
just as the Maastricht Treaty stated. That involves a close look at the nuts and bolts but not a whole new engine.

So the aims of the conference are relatively modest. I can assure your Lordships that this is not a uniquely British perception: the study group set up to prepare the IGC expresses clearly in its report that the IGC is not designed--allow me to repeat "not designed"--to embark upon a complete revision of the treaty. This is the right approach. But the IGC is not the only item on the European agenda, so Europe must also face a whole series of important challenges which are related to, but largely outside, the remit of the IGC.

I have already referred to the crucial tasks associated with enlargement. The study group described this as the Union's most ambitious target for the next few years. We fully agreed. The opportunity to bring the new democracies of the East into the European fold is unique. We must seize it. It is our moral obligation to take this historic step because the central and eastern European countries need us; and because that integration into the Union is essential to secure the future prosperity and security of the whole of Europe, including Britain.

The prospect of enlargement brings with it the need to reform the agricultural and structural policies of the Union. The total present levels of CAP support and cohesion expenditure are already far too high and will be totally unsustainable in a union of 20 or more states. Business thrives when it pays continuous attention to competitiveness. In a very similar way, Europe will overcome her difficulties only by finding a productive way through this persistent lack of competitiveness. She will then successfully be able to compete with her transatlantic partners and with the Far East. That is the reality of the global economy in which we shall live in the 21st century.

Successful competition is equally important on a world-wide scale if we are to help to create jobs which Europe so desperately needs. In the UK we have seen how business-friendly measures of deregulation and reduction of non-wage costs have helped reduce unemployment steadily since 1992. Most of our European partners have not been so fortunate. We know that external competitiveness is an essential adjunct to flexible domestic measures.

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The Community's financing arrangements fixed in Edinburgh in 1992 have to be reviewed before the end of the century. That is another major and complex task. There are some large choices for Europe to make on the move to a single currency. They must not be left out. By the Government's own action, Britain's position remains fully protected by the opt-out secured by my right honourable friend the Prime Minister at Maastricht. But we must, and shall, be ever watchful of the effects of others' wishes as well as our own.

The Intergovernmental Conference has just begun. It is only one in a series of negotiations which the Union is facing. As I have indicated, it is not even the most significant. By saying that we are not seeking to belittle the IGC's importance but to set it in the wider context.

Before looking in detail at some of the specific issues which the conference will examine, perhaps your Lordships will allow me to outline some broad principles which underpin the British Government's approach to Europe. First, the Government are wholeheartedly committed to a successful Britain in a successful Europe. As the White Paper shows, we are actively engaged in all areas of the Union's work. We want Europe to work better, to be more efficient internally and to play a more effective role outside its borders. In order for Europe to succeed, we are convinced that the nation state must remain the primary focus of democratic legitimacy in the Union. The Council is and must remain the prime decision-making body. It is for those decisions that Ministers are held to account by their own national parliaments. It is through national democratic institutions that the peoples of Europe can most closely identify with the whole European project.

In recent months we have heard references from some continental European leaders to the dangers of nationalism; to the threats that any resurgence of nationalism would pose to the European project. Such a threat must never be allowed to take shape. But let us not confuse a legitimate defence of the sovereign nation state of the 1990s with the evils of the nationalism of the 1930s. They are very different. We are by no means alone in Europe in stressing the pivotal role that the nation state must continue to play. Last month the French Prime Minister, Alain Juppe, said,

    "the nation state remains more than ever the essential, central place where the democratic contract, the social and political link between citizens and their elected representatives, is fulfilled".
There are some who argue for extensive integration, for dilution of the role of the nation state, as being necessary for the enlargement of the Union. The British Government do not agree, nor does M. Juppe. Nor even, we suspect, do very many of the countries which are aspiring to join the Union. Certainly, Vaclav Klaus, Prime Minister of the Czech Republic, does not. Allow me to quote from a recent address that he made in Paris. He said:

    "We are convinced that even in the future the sovereign states will represent the original building stones of the European Union".

The second key principle is that the Union must respect diversity, not impose uniformity. There are, of course, areas where it is in our interest to integrate. The

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single market is an important example which has been a substantial benefit to all. But there are many more where the variety offered by the member states should be preserved; where the diversity that has evolved through differing traditions in different countries is a positive asset. The structures of the Union must develop in a way which can incorporate this diversity and allow it to flourish. Some people see uniformity, harmonisation and standardisation as necessary for Europe to work together. We reject that vision entirely, and many others across Europe agree with us.

I would ask the people who argue for greater conformity as a necessary precondition for enlargement to heed the words of those who wish to accede to the Union. Vaclav Klaus again spoke for many when he said:

    "We do not want our state to be disintegrated in multi-national structures which have neither deep historical roots nor genuine identity. The strength of Europe is in its diversity, not its uniformity".
How much we agree. The peoples of the new democracies which have so recently emerged from the shadow of totalitarian regimes to rediscover their identities would not fit comfortably into a union whose structures repress such variety. We should be doing those countries scant favour if we allowed the Union to go down that road.

That brings me to the third principle. The European Union cannot succeed without the whole-hearted support of public opinion. Those who want a rapid move to a federal Europe, such as the European Commission and the European Parliament if the opinions which they have submitted to the IGC reflect accurately their views, make the perilous mistake of ignoring that imperative. I say "perilous" because they have not learnt the lessons of Maastricht--the Danish "no", the cliffhanger of a referendum in France culminating in the "petit oui" and our own difficult ratification here in Britain. Those who do not heed the lessons of Maastricht and press for a federal agenda risk sabotaging Europe's sensible development based on a partnership of nations.

The treaty to emerge from this IGC is likely to be put to a referendum in a number of countries. A "no" vote in any one of them could put back European co-operation many years. That is why we must get the IGC right if we are to move forward.

The final guiding principle which I mention now is subsidiarity. That has become a widely accepted concept since its inclusion, largely as a result of British pressure, in the Maastricht Treaty. It was Jacques Santer who said that the Commission should do less but do it better. As I have already made clear, we welcome that aim which will be assisted by a further clarification and definition of the subsidiarity principle. The Government will be putting forward concrete proposals at the IGC which will further assist averting any over-intrusive regulation which does so much to damage public confidence in Europe by alienating the ordinary citizen.

I shall now move on to some more detailed issues which will be dealt with in the IGC. The Maastricht Treaty set up the new pillared structure of the Union. We are committed firmly to preserving that. It reflects the reality that Community procedures and institutions

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are not right for foreign and security and justice and home affairs policies. Those are areas of crucial importance, both internally and externally, for the Union.

The United Kingdom accepts fully the need for a co-ordinated, multi-national response to the threats from within Europe such as drug trafficking, terrorism and growing cross-border crime as well as the challenges from without, showing the advantages of a co-ordinated European approach on key foreign policy issues. Community institutions and procedures are really not appropriate in those cases.

Defence too is a vital issue for the security of the Union, although it is not one for the Commission. As the White Paper sets out, we believe that discussions on European defence issues must be carried forward in the clear realisation that NATO remains the bedrock of European security. The WEU has an important role to play. The UK has already put forward proposals for enhanced collaboration between the WEU and the EU, but we believe, for the reasons which the White Paper sets out, that the WEU must remain an autonomous organisation with its own treaty base.

The Maastricht structure recognises that those areas go to the heart of national sovereignty and therefore must continue to be handled intergovernmentally. We see no case for changing that. Many people argue that qualified majority voting must become the rule in order to avoid decision-making paralysis in an enlarged Union. The noble Baroness, Lady Seear, spoke along those lines in the House earlier this month. I cannot find that those arguments stand up to the scrutiny which they must receive for three reasons.

First, they ignore the fact that majority voting is already the rule on a wide range of subjects, including agriculture, the single market and trade policy. Secondly, they ignore a fact of history; namely, that many major decisions have been taken under unanimity--the financing package agreed at Edinburgh, for example, and the Maastricht Treaty itself. Unanimity can hardly be described as a block to progress on either of those occasions. But, thirdly, they ignore the fact that the majority of areas which still need unanimity are of major constitutional importance where QMV would be unacceptable not only to ourselves but also to the vast majority of our partners. Treaty changes, new accessions and the level of the Community budget are but three examples.

Major issues of constitutional importance aside, the areas which remain subject to unanimity are few: industrial policy, some limited areas of environmental policy, taxation, citizenship, culture, the overall research policy and structural funds' framework, some of the articles on EMU, some derogation from Community rules and some institutional issues such as the siting of institutions. Therefore, it is scarcely credible to claim that continued unanimity in those areas will paralyse all progress in an enlarged union.

An area where we see the need for reform before enlargement is the voting system. Currently, the smaller states have a disproportionate influence relative to the size of their population: one vote for every 200,000

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Luxembourgers; one for every 8 million Germans. Population is by no means the only factor which matters. We must acknowledge too the sovereign right of even the smallest nation to have a say. But there is a strong case for the IGC to look closely at the system and to seek a means to redress somewhat the existing imbalance.

One of Europe's key objectives is to cut unemployment. Some of our partners, as well as the Labour Party, are, I believe, very misguided when they call for a treaty chapter on employment. Frankly, we cannot see what possible contribution that will make to job creation, except within an expanding European Commission, and that is something which many of your Lordships have said that they most certainly do not wish to see. It is businesses, not governments and still less the European Union, that are the key to job creation. It is our task, as governments, to provide a regulatory framework which allows the investment decisions to be made for businesses to expand. It is not treaty language which will make the difference; it is our own activity. We have to provide the right framework for that activity to thrive and to create employment of a lasting nature.

This Government will be looking for concrete improvements in a large number of areas: to improve the quality of European legislation as well as the continued reduction in its quantity; more consultation with business before relevant legislation is passed; better committee procedures; improved monitoring and enforcement procedures; and an enhanced role for national parliaments in the decision-making process of the Union, which I know will please the noble Lord, Lord Bruce of Donington. I nearly called him my noble friend.

Those detailed commitments are further evidence of our positive and constructive approach to the IGC. We believe also that the IGC needs to look at the role of the European Court of Justice. I know that most of your Lordships share the serious concerns that have been expressed recently about the perceived threat of further centralisation through apparently integrationist court decisions.

We shall shortly be issuing a memorandum putting forward proposals to address those concerns. We must recognise, however, that Britain benefits from a strong, independent court and we must abide by our long tradition of respect for and adherence to the rule of law. For example, the single market would really risk being undermined if its rules were not enforced and enforceable by the European Court.

The root of those problems can often be found in the laws themselves rather than in the courts. Ambiguous or contradictory law plays an important part in contributing towards court judgments which we then find unpalatable. Therefore we shall look at ways for laws or their parent treaty articles to be revised if their effect is found to be inappropriate or disproportionate.

We believe in Europe as a partnership of nations, sharing and pooling experience and knowledge in the Community when there is a clear common interest in so doing and co-operating closely on an intergovernmental

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basis in areas where it is better to maintain unfettered national control. That is the way that we can help create a Europe which is comfortable with its structures and with itself, and in which its citizens can not only feel at ease but can also thrive and benefit from that partnership of nations and the aims that we all share for peace and prosperity.

Moved, That this House take note of the White Paper on the British approach to the 1996 Intergovernmental Conference (Cm. 3181).--(Baroness Chalker of Wallasey.)

3.30 p.m.

Lord Richard: My Lords, I believe it is appropriate for the House to have an opportunity today to discuss the Intergovernmental Conference and, in particular, that we should have the opportunity to discuss not only the Government's detailed approach to the conference but perhaps also their approach to the European Union as a whole. I am grateful to the Minister for her introduction, which was discursive and wide-ranging; and I am awaiting with great interest to hear the two maiden speeches in today's debate.

I am pleased that the Government have at least, and after much travail, arrived as a concerted, even if only temporary, position so far as concerns a referendum. As I understand the position, the option to join an economic and monetary union remains an option and is certainly not to be closed before the next general election. I note that the Minister is nodding her head in agreement. If the country were so unfortunate as to re-elect the Conservative Government and if that Government were to decide to exercise the option of joining the EMU, then that decision would at some stage be put to the country in a referendum. As I understand it, that is now the policy of Her Majesty's Government.

As the House will know, the Labour Party has consistently argued that there should be a test of public opinion on the issue of whether or not Britain becomes part of a common currency. We note with interest that the Government are now finally supporting that idea.

The Minister was quite right to draw attention to the importance of the IGC itself. She was also right to say that it is not a conference which is designed to be part of a re-drafting of the Treaty of Rome, nor is it to be a re-run of Maastricht. But, nevertheless, it is a conference of considerable significance. It is charged with the duty of looking at the treaties and seeing how they should be adapted between now and the end of the century. That is a particularly important role having regard to the possibility of enlargement of the Union within the relatively near future. I understand that it will be sitting for a year or more, and one can well understand why some of our partners in Europe are anxious that it should still be in session at the time of the next general election in the United Kingdom.

When the Prime Minister returned from Turin and made his Statement to the House of Commons, I asked the noble Viscount the Leader of the House a number of questions on the communique. I did not expect to get any answers, and I must say that my expectations were not in the least disappointed. But the whole tenor of the

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communique and the whole tone of that argument is in the direction of a more integrated Europe. If the IGC does what the Turin Summit requested it to do, it would be bound to involve a greater role for the European Parliament; a more co-ordinated foreign policy; greater majority voting in the Council of Ministers; a common immigration and asylum policy; and more vigorous action on unemployment. However one looks at it, this is bound to involve a further curtailment of Britain's right of independent action, and it is no good the Government pretending otherwise. To say one thing in London and agree to something else in Europe is effective at neither end. What they say here makes our position in Europe more difficult, and what they eventually have to accept in Europe makes their position here more untenable.

The truth, of course, is that government policy on Europe is determined not by a sober assessment of British interests but rather by a panic assessment of Conservative disunity. On Europe, they have elevated drift to a political art form and they should not be surprised that they have succeeded in convincing no one.

Let us take the question of majority voting. Despite what the Minister said, it is clearly impossible to envisage substantial enlargement of the Community without an increase in the use of qualified majority voting in the Council of Ministers. Indeed, I do not believe that anyone could pretend otherwise. To argue the contrary would leave the two countries which are on the verge, or at least the nearest in doing so, of joining the Union--namely, Malta and Cyprus--with a veto over the actions of the whole of the rest of the Union in certain key specific areas. I cannot believe that that is a position which anyone in this House would advocate.

It is impossible to envisage further reform of the common agriculture policy, which is particularly necessary in view of enlargement, because the countries in eastern Europe will, frankly, not be able to be accommodated within the Union unless and until the CAP is substantially amended. Again, it would be impossible to envisage further reform of the CAP without an extension of qualified majority voting. I do not believe that anyone would pretend otherwise.

Yet by setting their face against any extension of qualified majority voting, the Government are once again putting themselves out of court in seeking to influence the re-weighting of votes or of determining the further circumstances in which QMV should be used. Having said that, I was somewhat heartened to note the changes (at least in wording) in the Prime Minister's attitude towards qualified majority voting compared with his previous total rejection. From a flat denial it has now become somewhat more nuancee--if I dare use a Community expression in this House. I shall read out what the Prime Minister actually said in the House of Commons on Monday 1st April. Your Lordships will no doubt notice that it is not quite so comprehensive as some of the other statements being made by Ministers.

    "As for the intergovernmental conference, we are pursuing the question of reweighting the voting, and I anticipate that we shall have the support of a number of other states in achieving that. Britain is not likely to be isolated in this regard. It will be a matter of

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    some importance, especially as the Community enlarges. I anticipate success. I do not anticipate any significant extension of qualified majority voting, and it is possible that there will be no single extension at all. We are not seeking to accept any. What may turn up in negotiations lies ahead; at present, we do not intend to accept any extension of QMV whatever. I hope that that is clear enough for the right hon. Gentleman: no extension of qualified majority voting".--[Official Report, Commons, 1/4/96; col. 25.]
I am surprised that the Prime Minister did not say, "Read my lips", at the same time. We all know what happened to that particular prophecy.

However, perhaps the Minister has told us today what the Government's position really is. I could well understand a diplomatic retreat from the over-extended position that Mr. Major put himself in by the comprehensiveness of his denials to David Frost in February, and a little clarity has, perhaps, been helpful both here and in Europe. But, if the Minister will forgive me, I shall read exactly what she had to say on qualified majority voting with great care, with a red pencil and with other texts open at the same time. Therefore, we may somehow see the drift of the Government's policy.

The fact remains that we are still in a minority of one in being against any further extension. The only possible supporter for our position is a tentative "Don't know" from Sweden. That and other issues raise rather more fundamental points than the minutiae if what will be discussed in the IGC. What are the British interests, not prejudices but interests, which demand that the Government pursue that course? No one else in Europe seems to agree that it is in their interests to be quite so negative. What distinguishes us from France, Germany and Italy, let alone all the others? Wherein lies the distinctiveness of the British position? I have to confess that I do not know the answers. Indeed on any real analysis of our interests there is precious little to choose between the United Kingdom and other countries in the European Union. We all trade (increasingly with each other) and we all broadly want the same type of society with the same human and democratic rights guaranteed and protected. So where are these differences that make us quite so special? I do not detect them and I listened with great care to what the noble Baroness had to say today when she enunciated her principles. Like apple pie and motherhood I could agree with probably 99 per cent. of what she had to say. However, I am bound to say that I thought her apple pie had a few cloves in it which are not particularly to my taste, but apart from that it seemed to me to be perfectly all right.

Again, on the reform of the European Court, so far as I can tell, we are in a minority of one once again. As I understand it, no one in the Community is in favour of reducing the powers of the European Court of Justice save for the British, with a tentative "Don't know" from the French. I am not sure why our interests demand that we should take up this position; but, as I understand it, this is what we have done.

On economic and monetary union, after the Verona meeting this weekend, again, according to the Italian presidency, we find ourselves in a minority of one. Why? What leads the UK into a position of such isolation when the others are clearly moving in the opposite direction? What disturbs me particularly is the fact that the justification for our attitude--if we are not

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careful--will be to look for failure on the part of the others. This is not just a question of intellectual differences; these are pretty fundamental points and unless one can try to unearth the reasons why Britain is supposed to be so unique in these respects, our European colleagues are bound to approach us with suspicion.

One can argue about the minutiae of the IGC--I am sure they will be argued at great length for perhaps 18 months or so--but as a country in the end we shall have to decide whether we are on the side of events in Europe or whether we shall stand out against them. I am afraid that at the moment we seem to be justifying too much General de Gaulle's suspicion and resentment. That really is a shame. Rarely can a Government consistently, over some 17 years, have incurred so much odium to so little effect. When the history of our relations with Europe over that period come to be written, future historians will I think be amazed at the extent to which a reservoir of good will for Britain was so capriciously emptied. It is hardly surprising that our negotiating position has deteriorated as sharply as it has in that period of time.

3.42 p.m.

Lord Ezra: My Lords, this important debate on the IGC has been effectively introduced by the speech of the noble Baroness, Lady Chalker, setting out with her customary clarity the Government's position; and the speech of the noble Lord, Lord Richard, in which he has raised a number of vital issues which I am sure will be dealt with in the course of the debate.

Having studied carefully, and to some degree participated in the long running debate on Britain's European policy, I have been increasingly disturbed at the emphasis on political issues; the emphasis on sovereignty and losses either real or in some cases, in my opinion, imagined; and the relatively lesser importance that has been attached to the economic implications of the European Community. I am glad that the noble Baroness referred to those matters briefly in her speech.

The most important British initiative in recent times in European terms has been the launching of the single market. I am delighted that the noble Lord, Lord Cockfield, who played such an important part in that, will be speaking later. It is most important that we consider what could be the impact on the single market of the various wider issues which will be debated at the IGC. The single market represents the one means within the European Union in which we can deal with issues which are uppermost in the minds of the people; namely, jobs, investment and competitiveness. We can go on arguing in our specialised milieu about sovereignty and about various forms of political association or joint or several political effort, but that does not deal with the issues about which people are now concerned. I wish to talk on that issue.

I hope I may interject a personal note. I have in recent years been involved in enterprises in France, Belgium, Holland, Austria and Italy. The one common factor in that participation has been the extent to which the

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European concept, the European procedures and the challenge of the European market played a part in the debates, whether at board level or committee level. Europe is inevitably being created by the enterprises of Europe. There will be no going back. We either have to make a success of it to enable the enterprises to do their job properly or fail to the enormous disadvantage of all the people we represent.

It is sometimes said that of course the best thing to do is to leave it to the enterprises. The noble Baroness used that phrase and it also appears in the Government White Paper. But the enterprises cannot do it on their own. They depend on an effective framework, and indeed the noble Baroness referred to that. Therefore it is the framework which will emerge from these deliberations which is of vital importance. I hope that when she replies to the debate later the noble Baroness will say what steps are being taken within the limits of the single market to complete it effectively. There are still areas of weakness. For example, there is a lack of liberalisation in the two important markets of telecommunications and energy. The policy on competition needs tightening up. The problems of distortions, particularly arising from subsidies in certain countries, have still not been resolved. My first question is, what will be done about those matters? I hope that they will not be lost sight of in the wider deliberations in which we are becoming involved.

I now consider some of the broader issues which will be tackled in the negotiations which could have an impact on the single market and on its progressive development. One of the most serious and adverse could be the creation of a two-speed Europe--of a hard core on the one hand and the remainder on the other. It is difficult to envisage what impact that would have on the single market, but I cannot avoid the conclusion that it could be extremely adverse. The Government appear to be against this division but, on the other hand, they favour variable geometry, flexibility and a multi-track approach. All this I find difficult to understand. They do not like two-speed but they like multi-track. They do not like a hard core but they like variable geometry. We need to be a little clearer about what this amounts to. This is not the first time that Britain in its relations with Europe has sought to find a form of words which will enable us to be part of but not wholly within it.

I recall during the 1950s there was much debate about the Community in its early stages and about the European Free Trade Area and the Atlantic Alliance. I believe that it was Sir Anthony Eden, as he then was, who devised the term "Europe o tiroirs". He likened Europe to a chest of drawers: some would get into the European Community drawer; others into the European Free Trade Area drawer; others into the Atlantic Alliance drawer; and I believe that there were two or three other drawers.

I was reminded of that Europe o tiroirs when I read about flexible geometry. The inventiveness of the brilliant young men in the Foreign Office, or from wherever these terms emerge, seems to be without bounds. I have no doubt that in some years ahead we shall use some other phrase to discuss the one continuing issue which seems to afflict us: we cannot

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make up our minds about Europe. On the one hand we want to have an opportunity to get out or to limit its impact if we possibly can, but on the other we want to have a role in influencing its development.

That ambivalence is becoming very serious. In relation to the single market, we have to be very clear that we are totally against any division: that we are totally against differing speeds, differing tracks, flexible geometry, or whatever else; and we want to have a single grouping within Europe to concentrate on developing a single market which will be in the interests of and result in the well being of all members of the Union.

A second area of confusion--the noble Lord, Lord Richard, referred to it--relates to decision making: the question of qualified majority voting. The Government want to limit the further development of qualified majority voting. That is a perfectly proper line to take. What has struck me as odd is to take a totally adamant attitude against any further extension even before negotiations have begun. The noble Lord, Lord Richard, pointed out that careful analysis of the words of the Prime Minister in recent times may indicate a softening in that attitude. I hope that that is so because I do not see how one can enter into such negotiations when taking up unalterable positions in advance. The scope for negotiation seems thereby to be limited to almost nil.

That point is of great importance as regards the single market. If cases can be cited where qualified majority voting is appropriate, in particular in the context of enlargement, and decisions are not taken because it is not applied, then the operation of the single market could suffer. Again, I hope that we shall have clarification on where we stand in that area.

That leads to the question of enlargement, which will be one of the major issues debated during these long drawn-out deliberations. I do not know whether we have yet worked out fully the implications of enlargement. My noble friend Lady Seear advised us recently to ponder carefully on the effect of the entry of a large number of countries with a lower level of economic development into the single market as it exists. As she properly put it, on the one hand letting them join the Community means that they should participate freely in the single market. However, if they participate freely in the single market, will that be a threat to the jobs and livelihoods of those already in? That is a fair question to raise. It is very relevant to the operation of a single market; and I am not sure that we have yet found the answer. I do not know whether we have worked out that by some staging phases those countries should become members in order not to create too much disturbance in the single market while at the same time giving them opportunities for wider trading.

Finally, we come to the real bugbear, the ghost at the feast (because it will not be discussed)--namely, the single currency. From the point of view of the single market and of enterprises, the continued uncertainty about our position is damaging. The fact that we have retained an option is fair enough. Decide when you know all the facts. What is unclear--it has become

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particularly unclear as a result of the Verona meeting of Foreign Ministers--is what our position will be if we stay out. Where would our currency stand in relation to the single currency, if it were formed? The proponents of the single currency would like to have some defined band for the other currencies. It would be a fairly wide band, according to the statement today in the newspapers attributed to the Italian Prime Minister. But we apparently rejected that. The potential harm to the single market and its growth by having confusion in the currency situation would be serious. I do not see how one can have a grouping of three, four or five countries with a fixed currency, and with total currency uncertainty so far as concerns the others.

I have been involved in many deliberations on our industrial policy in Europe. One thing that enterprises would like to see, among others--such as low inflation which we have achieved--is a stable currency. It is in no one's interest to have a widely fluctuating currency. We should aim to have a stable currency. Whether one goes from that objective to a fixed currency is a matter for debate. But surely our aim should be, as well as keeping inflation low, to go for a stable currency.

Starting from what I regard as one of the big achievements of the European Union, namely the single market, I have sought to consider the impact on the further development of the single market as a result of wider issues which will be deliberated at the IGC. I hope that we shall bear that very much in mind when we negotiate, and that we adopt the attitude of negotiating from within rather than criticising from without, which has been the appearance, unfortunately, that Britain has too often presented in recent months.

3.57 p.m.

Viscount Tonypandy: My Lords, at the beginning and at the conclusion of his remarks, the noble Lord, Lord Ezra, reminded us of the importance of the debate today. I always listen to the noble Baroness with great--I almost said affection--respect, but I thought that she was rather sliding over major issues today. The noble Lord, Lord Richard, spoke for his party. The three previous speakers have had the authority to speak for their party. I lay no such claim. I speak for myself, and my speech will be different.

In my judgment, the best part of the Government's White Paper is the title A Partnership of Nations. Chancellor Kohl, and to a lesser extent President Chirac, seek not a partnership of nations but total political and economic union. European monetary union remains their goal.

I remind your Lordships that by sitting on these Cross Benches I follow the long established custom that former Speakers of another place never return to the party political arena. The total trust given in another place to its Speaker is based on the knowledge that when Speakers leave the Speaker's Chair they will always give their full support to protecting the independence, the rights and the privileges of our sovereign Parliament and refrain from active party political activity.

The Intergovernmental Conference gives us an opportunity to pause and take stock of the way in which the Treaty of Rome and the subsequent treaties are

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working. It is quite wrong to pretend that we do not have the right to consider how it is working, what we have gained and what we have lost by belonging to the European Union. We should have the right to consider whether the time has come when it is wise for us to change course in our economic and foreign policy. Only an objective study of the economic, social and political consequences of membership of the European Union can provide the answer to that question.

In preparing my contribution for this debate, I am deeply indebted to the in-depth and careful research into the subject undertaken by Mr. Bill Jamieson in his book Britain Beyond Europe; Bernard Connolly in The Rotten Heart of Europe; Andrew Marr in Ruling Britannia; and Norman Lamont in Sovereign Britain. Surely we may quote a former Chancellor of the Exchequer and believe that what he has to say is based on information. I am also indebted to the right honourable David Howell, Chairman of the Select Committee on Foreign Affairs in another place; Christopher Booker, an outstanding journalist crusader; the noble Lord, Lord Rees-Mogg; and noble Lords on both sides of the House. Those people are not lightweights; it is no good smiling about their research as though it can be disregarded. I believe that they are dealing with facts. In his book Sovereign Britain, Norman Lamont states:

    "I cannot pinpoint a single concrete advantage that unambiguously comes to this country because of our Membership of the European Union".

That we are in pursuit of continental integration is regularly denied in this House, but none the less the policy seems to be relentlessly pursued. Propaganda to convince us that we are incapable of survival as an independent nation has poured upon us. It is emphasised that we need European crutches to be mobile. The attraction of belonging to a home market of over 250 million people has been dangled before us for over 20 years. As Bill Jamieson points out, that is the myth at the heart of Europe.

Facts and figures are more impressive than propaganda. I look to the impeccable source of the Treasury red books for my evidence. The results of European membership are very different from what we are encouraged to believe. The first fact of significance is that Europe is the only continent where our terms of trade are consistently in deficit. We have a surplus in balance of trade with every other continent in the world. We buy from Europe much more than it buys from us. The trade advantage has been with it since 1974. Crisis and consternation would cover Germany in particular if she did not have the British market to purchase her finished industrial products. Unemployment in Germany, which is already equal to the total population of Norway, would rocket still higher without the British market.

Examine the following statistics from the Treasury red book. It appears that in the 10 years from 1985 to 1994 we had a cumulative deficit of a staggering £105 billion with the European Union, but we had a £13 billion surplus with the rest of the world. Outside the European Union, we run a surplus with all the major industrialised nations of the world. Fortunately

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for us, our deficits have been cleared in no small amount by our invisibles--interest on investments, insurance and the like--or we would have been sunk without trace. The City of London, with its foremost stature among the exchanges of the world, is estimated to attract to the UK at least £20 billion a year. Whatever sweet words are said in this House, it is common knowledge that both France and Germany resent the City of London's world influence. That is one of the major reasons why the European Union decided to establish the proposed Central European Bank in Frankfurt. Equally, it resents the rapid growth of English as the pre-eminent world commercial tongue. English is now the language of finance; it is the language of the air that makes communication easier for all the markets in the world.

The total financial cost to Britain of membership of the European Union--and mark my words; these are not my figures but the Treasury's--is now a colossal £108 billion. This results from our cumulative visible balance of payments deficit with the EU since 1973 amounting to £87 billion. In addition, our net contributions to the Community budget amounted to £21 billion. Those are mind-boggling figures. No wonder the Government have been so shy about bringing them to our attention. In addition, there has been a serious effect on the cost of living in the United Kingdom. When we entered the European Union, we ended the cheap food supply from Australia, New Zealand and the Americas in favour of the highly expensive food regime in Europe.

An OECD estimate in 1993 calculated that an average British family paid £1,040 per year (£20 a week) more for its food as a direct result of the nightmare common agricultural policy. Because the CAP now claims nearly two-thirds of the Community budget, that extra cost is even higher.

Membership of the European Union is ferocious for us. It has severely weakened our balance of payments. It has reduced our political and economic rights to a pale shadow of what they were. Another place has already been diminished beyond measure compared with what it was as recently as when I presided in the Speaker's Chair. When this Parliament passed an Act preventing Spanish fishermen from sailing under our flag and stealing the quota of fish allotted to us, the European Court of Justice in Luxembourg declared the Act illegal--an Act passed by the British Parliament!--and told us we had no business to do so. If any foreign court had tried to overrule the sovereign rights of our Parliament as late as the 1970s it would have been told to jump in the river. What has happened to our self-respect in the meantime? What has happened to us that we now submit to overruling by foreign courts with a docility that is a disgrace to the "bulldog breed"?

Through our brief but turbulent period as members of the ERM our interest rates were decided more by Germany than by our own domestic monetary conditions. We must never forget that costly folly. It is estimated to have cost British taxpayers £5 billion. That is real money from the taxpayers of this country. It forced thousands of small businesses

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into bankruptcy. It ruined families from John o'Groats to Land's End. These are grave and grim facts. They are not opinions; they are facts.

I now turn to the indisputable evidence that a new global economic and trading pattern is emerging. Future world trade growth will leap forward in the Middle and Far East and in those countries on the Pacific Rim, the so-called tiger economies. Fortunately for us, many of the Commonwealth countries are also among the emerging giants. Monumental opportunity beckons us to increase dealing with Singapore, Malaysia, South Africa, Australasia, India and other nations where exploding expansion is under way. What is more, those countries are well disposed towards us. They do not seek every opportunity to hurt us--in contrast with the lightning speed with which France and Germany plunged their dagger into our cattle trade. Not being content with spitting on us themselves, they invited the world to do the same.

We are tied to an uncompetitive, introvert regional economic bloc whose share of world trade is already withering on the vine. It is getting a smaller, not a greater, share of the world's trade.

We need have no fear, whatever decisions we take about belonging to Europe: our trade with Europe will continue whether we are members or not. Europe cannot do without us. Our market for European goods is essential. Like Norway, Japan and Switzerland (countries outside the European Union) we should be dealing with Europe free of its restrictive practices. We must set ourselves free from the manacles put on us by introvert Europe. Our central position as a global trader is the target we must always keep in mind.

Europe has almost destroyed our fishing industry; it has played havoc with our farmers; it has destroyed the living standards of thousands of our citizens; it has diminished the standing of our Parliament and the stature of our Law Lords. They used to be supreme. Now they must doff their caps to Spain, Italy and Germany, because they know they can be overruled. That ought to make us hide our heads in shame.

Our veto is our life-line. But timidity in using it has landed us with serious economic and social problems. Even if we are but one against 14, we must be prepared to stand firm. It will not be the first time that the United Kingdom has stood alone in Europe.

Some things in life are so precious that they are beyond price. Love in one's own family is one. Love of liberty, political, social and economic, is another. Our fathers paid a great price for the political independence of these Isles; we will betray our trust if we deny such liberty to our descendants.

This Intergovernmental Conference is our last chance to set ourselves free. I am not intimidated by the craven warnings as to what would happen if we withdrew from the European Union. It would be an act of liberation for which our people long. I have taken more time than I intended, and I am sorry; but I believe in my bones that there are masses of people in this country who are frustrated and resentful because they have never been

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given a chance to decide their own destiny. I pray that Her Majesty's Government will not just brush aside what I have said today.

4.17 p.m.

Baroness Wilcox: My Lords, I crave your Lordships' indulgence as I make my debut in this House speaking in one of the most controversial areas for debate in Britain today; namely, the future development of the European Union. I follow nervously such experienced and distinguished speakers on all sides of the House. I am emboldened to do so because this conference provides the perfect opportunity to work for changes that will benefit the future of the Union and the future of our nation within it--and because, when I read the White Paper, I saw some stars twinkling at me.

As a trader in Europe for some 26 years, and a representative of the National Consumer Council in Europe for six years, I am attracted by some points in the White Paper. Some of them have already been referred to, and I wish to commend them to the House.

To introduce a personal note, as is often the way with new ventures, my trading started by accident on a windswept Breton fish quay at 4 a.m. buying a few langoustines to take back to the United Kingdom--something which was then a bit different. My school French was not up to the local Breton dialect; in the howling wind I became totally confused by the metric system, and by 4.30 a.m. I was the proud possessor of a quarter of a tonne of live langoustines crawling around the back of my Mini! A frantic bit of marketing on the phone and guesswork as to the exchange rate eventually saw them delivered, still gaspingly alive, to Harrods, Fortnum and Mason and the Bunny Club. They sold fast, and at a profit. In no time I was a busy, happy European trader. I learnt, as I have learnt many years since, that traders will trade, and anywhere, given the right conditions.

At the National Consumer Council--the other side of the counter--I became keenly aware of how the United Kingdom's 58 million consumers are directly affected by legislation and policies agreed within the Union. So, for the British traders like me and for the British consumers like me, the first shining star on the paper--so far as I could see, the most difficult one to reach--is openness and transparency.

Decisions taken in Brussels can seem very remote from ordinary people. If we are ever to make British citizens feel that the Union exists for them, we have to encourage more openness, better scrutiny and some plain language. I am delighted therefore to see that the White Paper recognises the need to build people's confidence in the Union and attaches priority to encouraging greater openness. Consultation is very much part of that process. Therefore, I welcome the commitment to:

    "press for more systematic consultation by the Commission of business, parliaments and other interested parties, before introducing proposals for new legislation".

We have seen considerable advances in recent years: better public access to documents, open meetings of the Council, the publication of votes and minutes of

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meetings. So let us extend those achievements and bring the European Union closer to the people that it serves. Involving people in decision-making will inevitably help to foster greater understanding and greater trust. I am sure that as an ideal it commands your Lordships' widespread support.

We have already heard a lot about my second shining star. The Intergovernmental Conference is much concerned with preparing the Union for enlargement. But before we can welcome new partners, we need to make sure that our policies are in good order. As my noble friend Lady Chalker has already stated here today--and the noble Lord, Lord Richard, agreed--the common agricultural policy certainly needs to be looked at. We recognise that pressing need. But convincing our partners in Europe continues to require courage and perseverance. I take this opportunity to praise our efforts so far in pushing our European partners up that very steep hill toward reform. I am thankful at least that the prospect of enlargement will concentrate the minds of all member governments wonderfully well. The accession of central and eastern European countries in particular demands that we work for further reform now. Adapting their agriculture to current levels of CAP support would take spending to levels that no one can afford. As the noble Viscount, Lord Tonypandy, identified, it already costs every British family and every European family of four, I think, technically, over £20 a week in higher taxes and food prices. Not only has the CAP become a very regressive tax, it also encourages damage to the environment, disrupts international trade and hurts the fragile economies of many poorer nations.

I come to my last point--my third, flickering star. Coming from a West Country fishing family and with long experience and knowledge of that industry, I could not end my speech without reference to another key policy: the common fisheries policy. Support for our fishermen is very close to my heart, particularly the inshore fleets which are so vital to the families of Devon and Cornwall. I confess to an emotional involvement here. Fishing families are close, drawn together by the unpredictable element in which they must work: the life taking and life giving sea. No doubt in time, battling over a fast diminishing, unreliable, internationally fought-over resource will be replaced by the much more predictable and supermarket-friendly, reliable farmed fish. But for the present, our Government's new determination to see fairness and order in our industry is our only hope. Quota hopping and our precious licences must be scrutinised anew.

As I stand here today, I ponder--I pondered as I sat up at 4 a.m. trying to re-write this speech--what my fishing forebear, Great-Granny Johns, would have made of the discussion that we are having here today. To her, foreignness and foreigners started with landsmen and went from there to the people in the next village. That is about as far as my Great-Granny Johns was prepared to go. To her, currency was hard--very hard. She put her money in the bank once and the bank folded. She never forgave it. From that moment on she bought and sold all her boats in sovereigns. I have to tell noble

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Lords that when she died, her sovereigns were found sewn into her mattress. But she traded; and she traded her fish where she had to in the conditions of her day. I recall being taken at the age of seven by my own formidable mother to see what I had to live up to. At 5 a.m., in the cold and wind, at over 90, my Great-Granny Johns was down on the quays at Plymouth. She was there to see off her men and ships; to wish them Godspeed; to encourage them to be brave and cheery; to return with a good catch; and to return "safe home".

More important and relevant here, she gave to her captains her trust and the freedom to negotiate at the helm in foreign waters. In that same spirit, I urge your Lordships today, when the debate is done, to send our British Ministers and our civil servants to this long conference with our trust, our encouragement and freedom at the helm to negotiate a peaceful partnership for the benefit of us all.

4.26 p.m.

Lord Bruce of Donington: My Lords, your Lordships, I venture to suggest, have listened to one of the most remarkable and agreeable maiden speeches that the House has heard for some time. I should like respectfully to congratulate the noble Baroness upon it.

The noble Baroness brings many talents to this House, talents of which she has not informed the House wholly and in extenso. Perhaps I may inform your Lordships that in addition to being president of the National Consumer Council and her business experience, first in her own family business and later in the food industry generally both in the United Kingdom and France, she is also a non-executive director of the Board of Inland Revenue. That should reassure many noble Lords, particularly as we are still very close indeed to 5th April.

That is not the limit of the noble Baroness's interests. She has been keenly concerned with the development of the national curriculum, thus showing an educational interest which I am quite sure will be most welcome in your Lordships' House, and has been associated with technical and educational training. I see also that she is a member of the Institute of Directors, which brings additional authority to large numbers of members of the Institute of Directors who are in your Lordships' House, excluding me, of course. Among her listed recreations is calligraphy. That is indeed a remarkable recreation. I hope that she will never find herself exercising that skill by receiving a missive from me in my own handwriting. It will present very considerable trouble to her. I am sure that the whole House will look forward to hearing from the noble Baroness at frequent intervals in the days that lie ahead and in the very wide field of subjects of which, quite clearly, she has considerable experience.

I listened with pleasure to the remarks that fell from the lips of the noble Viscount, Lord Tonypandy, with the object of detecting some reaction from Members of the House, particularly those not only on my own side but also on the government side. It is only a few months ago since the noble Lord, Lord Henley, told this House that the benefits of membership of the European Union

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were so self-evident that it was unnecessary to provide particulars. Perhaps the noble Lord should be reminded that we had a most authoritative speech from the noble Viscount, Lord Tonypandy, very much on the same lines as a memorandum published by the Treasury in 1988, when it thought it was worthwhile to draw up a balance sheet and profit and loss account of the whole position. If the Government disagree with what the noble Viscount said this afternoon, perhaps they would be kind enough to publish their own figures and let the House and the country make their own judgments as to who is right.

My interest, since 1963, has been in relation to the constitutional position of the United Kingdom within any further association with, as it was at that time, the continent of Europe. I am well aware that all governments operate within certain international constraints imposed by trade, treaty or by sheer financial power. I have always believed in the maintenance of the power of Westminster to deal with those affairs that are intrinsically part of the governance of the United Kingdom; that people from outside should not be entitled to tell us what we are to do, whether by majority vote or otherwise. I suggest, not only to Members of this House but also to Members of another place, that the principal concern in regard to our membership of the European Union should be the integrity of the United Kingdom Parliament. I shall therefore pursue the narrow path of how the Government White Paper deals with the whole question of the powers of the United Kingdom Parliament as against those of the Commission and the European Parliament, and what has happened since. Your Lordships will recall that in the Government's White Paper which dealt with this position, at paragraph 35, they said:

    "The Government does not feel, however, that the European Parliament needs new powers. Nor do we accept, in a Union of nation states, that the European Parliament can displace the primary role of national Parliaments".
It goes on to say,

    "The European Parliament has sometimes used its powers under this procedure irresponsibly, to try to force the Council to accept institutional changes not directly related to the legislation under discussion".

With the greatest respect, and I hope without undue embarrassment to the Government or my own side, that is a judgment that I accept. It is clear from the Government's standpoint, as set out in the White Paper, that they intend to maintain the power of the national Parliament in so far as it lies within their abilities to do so. In that connection, the White Paper of 12th March last was followed by a General Affairs Council meeting in Brussels on 25th March which was attended by a Foreign Office Minister. In the communique published in Hansard on 29th March, no mention was made of any discussion having taken place in regard to the powers of the national Parliament. However, it said this:

    "The Council also reached agreement in principle on the mechanism for keeping the European Parliament informed about the progress of the intergovernmental conference".--[Official Report, Commons, 29/3/96; col. WA 797.]

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It makes no mention of any progress made to keep the British Parliament informed. We then pass to the Prime Minister's Statement of 1st April on the result of the European Council in Turin. The only commitment he made in regard to national parliaments was,

    "For example, I underlined ... the value of a greater role for national parliaments".
That was the limit of the Prime Minister's commitment to the matter.

In the presidency conclusions, the support for the Government's position about the importance of national parliaments was dealt with briefly. They stated that,

    "The IGC should equally examine how and to what extent national parliaments could, also collectively, better contribute to the Union's tasks".
That is as far as it went. It is not exactly a ringing declaration in favour of strengthening the powers of national parliaments. But worse is to come. In the presidency communique published almost immediately afterwards, there was an annex. The conclusions said,

    "The Heads of State or Government have confirmed the agreement reached between the Ministers of Foreign Affairs on 26th March 1996 regarding the association of the European Parliament with the work of the IGC".
That was not mentioned in the Answer to the Written Question submitted in another place to which I referred. It would appear that on that occasion the Minister for Foreign Affairs agreed to explicit new powers for the European Parliament and I shall read them to your Lordships. They are,

    "To ensure that association in compliance with the provisions applicable to the revision of the Treaties the Ministers for Foreign Affairs have agreed on the following arrangements:

    1. The meetings of the European Council dealing with the IGC will begin, as usual, with an exchange of views with the President of the European Parliament on the subjects on the agenda.

    2. Ministerial meetings of the IGC will also be preceded by an exchange of views with the President of the European Parliament, assisted by the representatives of the European Parliament, on the items on the agenda.

    3. Once a month and whenever the Ministers' representatives deem it necessary by common accord, the Presidency will hold a working meeting, on the occasion of meetings of the Ministers' representatives, for the purpose of holding a detailed exchange of views with the representatives of the European Parliament.

    4. The Presidency will regularly provide oral or written information to the European Parliament. It will also, as agreed, provide information to the national Parliaments through the Conference of bodies concerned with Community affairs (COSAC).

    5. The European Parliament's association will begin with an invitation to the President of the European Parliament and two representatives of the European Parliament to the opening of the IGC in Turin on 29 March 1996".

Anybody trying to equate that statement with the Government's desire that no further powers should be advanced to the European Parliament would be straining all credulity. But it is worse than that. We have a statement from the European Parliament itself--it arrived this morning--which claims that at the Intergovernmental Conference in Turin it did in fact have many new powers that it was determined to use.

The reason that I have gone into this detail is simple. I have given one illustration--and I can give many--of where the Government say one thing and do another.

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In public and in your Lordships' House, they can growl with righteous independence, but the moment that we come to the real arena within the European Union itself, in either the European Council or the Council of Ministers, or even in COREPER, they achieve very little at all.

It is very difficult to talk about these issues at the present time. One appreciates the Government's difficulties in these matters; but there is a world of difference between disagreeing on a matter of principle and going along with something for the sake of a quiet life or of "being at the centre of Europe" as it is called. Surely, "being at the centre of Europe" in ordinary parlance does not mean that we are thereby debarred from disagreeing from time to time. Why should we not disagree when it is right for us to do so?

In part the difficulty arises from a disinclination to go into too much detail. I believe that we are a very law-abiding country. We have a record which is second to none in Europe in obeying and enforcing the regulations that are imposed on us, whether or not we agree with them. Our main trouble is that our political leaders do not read. Indeed, as the Chancellor of the Exchequer said a little while back as regards Maastricht,

    "Nobody has read it. I have never read it. You should not waste your time unless you are particularly interested in the diplomatic minutiae".
What an admission from the head of Her Majesty's Exchequer; from a Minister whose responsibility it is within the United Kingdom meticulously to supervise the complications of the annual Finance Act! Why should foreign legislation, foreign communiques and treaties be exempt from detailed study? It is the supreme laziness which sooner or later we shall pay for.

Following Turin and the conference which has recently concluded in Verona, what impression does one get? If we are completely honest, and unless we are purblind and completely deafened by the mob, surely the picture is this: that France and Germany have combined together, and have been together by treaty since 1963, with the explicit objective of arriving at an agreement before every Council meeting, every meeting of Foreign Ministers and of the IGC. They are committed to meet together in order to determine the line to be taken.

Your Lordships will recall that it was Herr Kohl himself who, without any prompting, raised the possibility of war. Nobody prompted him to do that. But your Lordships may well conclude that at the moment, because we will not face the facts which have been faced by the noble Viscount, we are already living under Pax Germanica. We shall continue in that direction unless something is done. Let us hope that in the life of this Government or, possibly even that of the next one, something will be done in the interests of the United Kingdom as a whole.

4.45 p.m.

Lord Lester of Herne Hill: My Lords, it is a very great pleasure to have been present to hear the witty, thoughtful, modest and delightfully personal maiden

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speech made a few moments ago by the noble Baroness, Lady Wilcox. It was made with characteristic humour, vividness and the down-to-earth common sense that I have always associated with her, counting her as an old friend as well as a respected champion of consumer interests. I much look forward to her contributions to the wisdom of this House.

I intervene only to draw attention to the Government's attitude towards the European Court of Justice. I believe that it is an attitude designed to appease the large Europhobic rump of the Conservative Party. It is a regrettable attitude because it gives the impression that the Government wish to curb the Court's supposedly excessive powers because they injure the reputation long enjoyed by this country as a nation which cherishes the independence of the judiciary, the rule of law and the protection of human rights; and because it tends to undermine the vital authority of the independent judiciary in protecting our basic rights as citizens of this country and of Europe.

The Government say in their White Paper that they are:

    "committed to a strong, independent Court without which it would be impossible to ensure even application of Community law, and to prevent abuse of power by the Community institutions".
The White Paper goes on to point out that it was the threat of court action by the UK and others in 1994 that led to Italy paying the biggest fine in EC history for breaching milk quota rules. The White Paper observes that in 1995 the European Court found that the European Parliament had abused its powers in relation to the EC budget. The Government also rightly note that the Court:

    "safeguards all Member States by ensuring that partners meet their Community obligations".
So far so good.

But in paragraph 37 of the White Paper the Government express their concern about judgments in recent years that they claim have imposed disproportionate costs on governments or business. They claim that the Court's interpretations of laws:

    "sometimes seems to go beyond what the participating Governments intended in framing these laws".
They say, with a certain menace, that the Government are:

    "working up a number of proposals to enable the Court to address these concerns better".

When I read that I asked the Government to give chapter and verse of the cases that they had in mind where the court had gone too far. The Written Answer given by the noble Baroness, Lady Chalker of Wallasey, on 21st March is instructive and I am grateful for it. The examples given include two cases in which the European Court held that the European Parliament could challenge the legality of the acts of the Commission and of the Council and in which the legality of the European Parliament's acts could also be challenged.

How, I ask myself, can the Government sensibly complain, while purporting to believe in the rule of law, that the European Court has gone too far by requiring that all institutions of the European Union must act within the powers conferred by the treaties, especially

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when the Treaty of European Union expressly affirmed the effect of these judgments in the new version of Article 173, approved by our own Government at Maastricht, and especially when, as I have already said, the White Paper singles out for favourable mention the Court's finding that the European Parliament had abused its powers in relation to the EC budget?

Other examples given of decisions unwelcome to the Government are four British cases involving breaches of the EC principles of equal pay and equal treatment without sex discrimination, the cases of Garland, Barber, Marshall and Richardson. It is astonishing that the Government should give those as instances where the Court supposedly went beyond what was intended by the framers of the EC treaty and the equality directives. It shows that the Government's real objection is to the equality principles in the Treaty of Rome and in the directives signed by previous governments rather than to the Court's interpretations of those principles.

Perhaps I may explain briefly that in the Garland case the conclusion of the European Court of Justice was so obvious and so predictable that the Law Lords, led by Lord Diplock, criticised counsel for not having relied upon Community law at an earlier stage in the English proceedings. The Barber and Marshall decisions were long foreseen by British judges and British lawyers; namely, that occupational pensions benefits were part of the concept of pay, and that the Equal Treatment Directive forbids sex discrimination in compulsory retirement ages. Very eminent and distinguished British judges contributed to those European judgments, including the noble and learned Lord, Lord Mackenzie-Stuart, and the noble and learned Lord, Lord Slynn of Hadley, whom I am delighted to see in his place.

The decision in the Richardson case that men and women alike are entitled to receive free prescriptions at the same age followed a similar approach towards the relevant directive adopted by the English Court of Appeal in the Thomas case. It is especially inappropriate for the Government to cavil at the result in Richardson as being excessively burdensome--if that is the complaint--for it is the Government, rather than the European Court, who chose to implement that judgment in the most expensive way by providing free prescriptions for men and women at 60 rather than at, say, 63 or 65 years.

I cannot believe that the Government were advised by their own excellent lawyers that the result was likely to be different from what it turned out to be in any of those cases. The Government's implied criticism of the Court as unduly "activist" is unjustified and was firmly rejected by the sub-committee chaired by the noble Lord, Lord Tordoff, of which I was privileged to be a member, on the basis of a careful review of the evidence.

I asked the Government whether any of the proposals in the White Paper would involve reducing the Court's powers. In a Written Answer given on 26th March the noble Lord, Lord Chesham, explained that the Government's proposals concerning damages, national time limits and limitation of retrospective effect are

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designed to reduce the likelihood of the Court delivering judgments which impose disproportionate costs on business and member states.

I am sorry to say that that is a somewhat disingenuous response. What the Government describe as their proposals go no further than the case law developed by the European Court of Justice. It is the European Court which has made quite clear that damages will be awarded against a member state only for a manifest and serious breach of its obligations; it is the Court which has ruled that national time limits must be applied in all cases based on EC law except where the member state's failure to implement a directive is a serious and manifest breach of its obligations; and it is the Court which has held that it will limit the retrospective temporal application of its judgments in appropriate cases to achieve legal certainty.

The Government's muddled and unprincipled approach to this issue is typified by the fact that they actually want to give the European Court controversial powers to decide what are essentially political rather than legal questions. The White Paper proposes a treaty provision,

    "clarifying the application of subsidiarity in the interpretation of EC law",
to ensure that the principle is fully taken into account by the Court when deciding cases. Deciding where to draw the line between matters to be legislated upon at a European or at a national level is surely a political rather than a judicial question. The sub-committee concluded that it is not a question which could properly be decided by the European Court. It is curious to find the Government favouring increasing the Court's powers in this political area.

I am sorry to say that it is also deeply dispiriting to me that the Government are now lobbying in Strasbourg to weaken the jurisprudence of the other European Court, the Court of Human Rights, seeking to persuade other governments to join in passing a resolution to put pressure on that Court to give governments a wide margin of appreciation or discretion when they interfere with fundamental human rights. It breaches the vital principle of the separation of powers for Ministers to seek to persuade their colleagues to join them in exerting pressure on the European Court of Human Rights in that way and it sends an untimely message of support for the so-called "variable geometry" of human rights to the fledging democracies of central and eastern Europe. "Variable geometry" is music to the ears of those who yearn to exercise arbitrary power in any part of the world.

The implications of enlargement for the two European Courts require urgently to be addressed by a group of independent experts of the kind recommended by the sub-committee. That would provide a proper foundation for the important and difficult decisions that must be taken if we are to preserve and strengthen the rule of law and human rights protection across Europe; one which will not be provided by the specious debating points made in the White Paper, nor by the misguided attempts at intergovernmental level to reduce the influence of the two European Courts.

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4.56 p.m.

Lord Chalfont: My Lords, although the noble Baroness, Lady Chalker, cautioned us against exaggerating the importance of the Intergovernmental Conference, I venture to suggest that the White Paper is one of unparalleled political and constitutional significance and one which we should take very seriously indeed. I speak not as, on the one hand, a Euro-fanatic, nor, on the other hand, a Euro-sceptic, so I shall not address today questions of federalism, confederalism, referenda or even qualified majority voting.

I am sorry that the noble Lord, Lord Richard, is temporarily not in his place because I was somewhat puzzled by his analysis of the Government's attitude towards qualified majority voting. He seemed to suggest that there was something wrong with the position in which the Government were in a minority of one and where some of their major partners in Europe were in disagreement. I see nothing wrong with that position. There is nothing wrong in being in a minority of one if you believe that the policies that you are advocating are right. Perhaps I might suggest an answer to the noble Lord's question of why some of our partners in Europe are so keen on changing qualified majority voting. It may be that they are keener on strengthening the institutions of Europe and bringing Europe closer to political integration than are Her Majesty's Government. The noble Lord was perhaps a little off target when he attacked the Government on that basis.

I should like to concentrate on only one aspect of the White Paper, defence and security. I know that the legislative, economic and monetary aspects are important, but I concentrate on defence because it goes right to the heart of national sovereignty. The most important role that any democratically elected government can have is to ensure the safety and security of their people, without which none of the other policies means very much at all.

In that context, perhaps I may say that when I first saw the terms of the Maastricht Treaty one article in it immediately rang loud alarm bells in my mind. I refer to Article J.4 which I read in its entirety:

    "The common foreign and security policy shall include all questions related to the security of the Union, including the eventual framing of a common defence policy"--
here the alarm bells really begin to ring--

    "which might in time lead to a common defence".
To anyone who had passed through the travails of multilateral forces, multilateral nuclear deterrents and all the other fallacies of some kind of European-based common defence policy, this was extremely alarming. On the other hand, from reading the White Paper, especially those paragraphs dealing with defence and Annex D (the memorandum placed in the Libraries of both Houses in the spring of last year) I believe that the Government have taken a robust and clearly thought-out line which deserves the support of everyone committed to the effective defence and security of the United Kingdom. They have made one basic and, in my view, unassailable assumption from which intelligent

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defence policies must surely flow. I refer to paragraph 44 on page 20 of the White Paper, the relevant sentence of which reads:

    "Decisions to send service men and women to risk their lives are for national Governments, accountable to national Parliaments. They are not matters for decision in the European Union".

From that unexceptionable premise the Government have been led to a number of conclusions which are reflected in the White Paper. They include recognition of the overriding importance of the Atlantic Alliance and NATO as a keystone to our security and an effective but limited role for the Western European Union as the European pillar of the Western Alliance. They have recognised that it is wasteful to develop separate European military structures, and they have underlined and underpinned all that with a declaration that the nation state should be the basic building block of the international community.

I believe that that approach does much to defuse the alarm experienced by some of us as a result of the strangely imprecise and somewhat sinister Article J.4, with its reference to a common European defence policy, possibly leading to a common defence. If that means, as I know a number of colleagues in Europe believe, a Community-wide defence involving complete European Union control of procurement, deployment and decision-making--which is what a common defence means--it should be resisted with all the strength and determination at our command.

The White Paper suggests that the Government substantially agree with that view. In any review of the Maastricht Treaty, which is the main object of the IGC, I hope that they will not resile from the clear proposition that they advance at the end of paragraph 45 on page 21 of the White Paper. Referring to the Western European Union (about which a number of hairbrained suggestions have been made), the White Paper states:

    "Its separate, intergovernmental treaty base ensures that decisions on defence policy are taken by consensus and remain where they belong--with sovereign nation states".
That seems to me to be a healthy, clear-sighted and pragmatically sensible view of defence within the European Union.

My concerns go a little wider than simply the arrangements within the Union. I hope that the somewhat inward-looking culture of the European Union will not allow attention to be distracted from the Atlantic dimension of this. I declare an interest here, although not of a financial nature. I am on the international advisory board of the New Atlantic Initiative which is to hold a conference in Prague later this year and is designed inter alia to draw attention to the Atlantic dimension of the security of Europe and the West.

In that context, in recent post-cold war years the record of co-operation between the United States, as one pillar of the alliance, and the European pillar of the alliance does not inspire great confidence. There has been inadequate support for the sometimes unstable political and economic systems of central Europe. There has also been some disgraceful--I hope that that is not too strong a word--foot-dragging over enlargement of the North Atlantic Treaty Organisation. There has been

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some serious bungling and sheer incompetence in former Yugoslavia which has led to serious divisions within the alliance. Much more important and alarming in the long run, there has been an apparent inability in the Atlantic Alliance as a whole to form a clear and unified response to alarming political developments in post-cold war Russia. We just do not seem to know what is going on there; and even when we do know we do not seem to know what to do about it.

In conclusion, I believe that we need to understand and reaffirm the indivisibility of the defence and security interests of Europe and North America. At the moment there is far too much talk, especially in Europe, about those matters that Europe might be doing on its own. I believe that not only should we welcome and strengthen the links between Europe and North America but be prepared to welcome strong global American leadership, without which the long-term security of Europe cannot be adequately guaranteed. I believe that we should not follow the modern trendy habit of engaging in small-minded whingeing about the strength of the United States and regarding it as some kind of juggernaut. When listening to the utterances of anti-American people in this country, sometimes one thinks that they are the pronouncements of the Ayatollah Khomeini from Teheran.

It may be argued that what we need--I believe that the Government have accepted this in their White Paper in preparation for the IGC--are new Atlantic institutions far more than new European institutions. In that context, I return to the memorandum reproduced as Annex D to the White Paper which was placed in the Libraries of both Houses last spring. The noble Baroness, Lady Chalker, has already made reference to it. I refer to paragraph 8 on page 34 of the White Paper where we see the following important policy statement:

    "the Government believes that defence of the territory of NATO Member States should remain a matter for NATO, in accordance with Article 5 of the Washington Treaty. NATO is the bedrock of our common defence against threats to our territorial integrity and that of our Allies".
I hope that the Minister can assure the House when she comes to reply that that will be the firm philosophical basis upon which Her Majesty's Government will discuss matters of defence and security at the IGC.

5.10 p.m.

Lord Bowness: My Lords, it is a privilege to be able to address your Lordships' House this afternoon. I trust that I shall be able to do so within the accepted customs and practices of a maiden speech, although I fear that it will be difficult to follow and compete with the contribution made by the first maiden speaker, my noble friend Lady Wilcox.

The matters about which I wish to speak are, against the background of the total agenda of the IGC, perhaps small, although of considerable interest to local and regional government across the EU, including that in the UK. I refer to the future arrangements for the Committee of the Regions of the EU. At this stage I should perhaps declare my interest as a member of the UK delegation to that committee and as a member of an English local authority--Croydon Borough Council.

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The Committee of the Regions is not referred to in the Government's White Paper, although, as I understand it, part of the IGC's role is to review the institutions, organisations, and procedures of the Union. The committee is not an institution like the European Parliament but, as your Lordships will know, is an advisory body comprising representatives from local and regional government across the Union, set up by the Treaty of Maastricht to give those local and regional representatives the opportunity to comment upon policies and proposed legislation.

The treaty specifies the matters which the Council of Ministers and the Commission must refer to the committee for an opinion. The committee has a right to issue opinions on matters referred also to the Economic and Social Committee, and, perhaps most important, by virtue of the treaty, to issue opinions on its own initiative.

The committee is still very new, and in the opinion of some people has still to justify its experience, but there is evidence that in its short life it is proving to be effective. During the first two years of its existence, 65 main opinions have been given--35 in response to referrals and a further 30 on its own initiative. The committee and the Commission have set up a monitoring system to try to judge the effect of those opinions.

Of the 65 main opinions, 16 related to regional and local economic development, economic and social cohesion, or the structural funds. On at least 12 occasions, those opinions have had an effect upon the final text adopted by the Council or the Commission. In other areas, there is evidence of successful influence.

Your Lordships may wonder why the Government or the House should concern themselves with these matters. I believe, and I hope that other Members of your Lordships' House who with me are members of the Committee of the Regions--my noble friend Lord Kenyon, the noble Lord, Lord Tope, and the noble Baroness, Lady Farrington of Ribbleton, who is not present this afternoon--will confirm that, quite apart from the interests of local government in the UK, it will be of concern to local and regional government in other member states.

The diverse systems of local and regional government throughout the Union mean that some members of the Committee of the Regions enjoy a degree of political importance within their own countries. So, while a former leader of a borough council, and still less a former opposition leader, does not bear comparison with a Minister President of a German Land, or a member of such distinction as to be elected to the presidency of Portugal, your Lordships will understand that within that body such powerful figures carry weight in their own countries and share a commitment to the Committee of the Regions. Its future arrangements are very much on their agenda.

The committee's representations to the reflection group preparing for the IGC have included the raising of the committee's status to that of an institution, and the right of reference to the Court of Justice if it feels

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that its rights or the rights of its members with legislative powers are infringed. At one stage, co-decision with the European Parliament was mooted.

UK members, almost unanimously, supported a more modest, and, in our view, realistic approach, and one which will build upon the committee's success rather than one which is over-ambitious. We have sought the separation of the administration of the committee from joint working with the Economic and Social Committee--something which caused considerable difficulties in the first two years; a requirement that in the future members hold a locally elected mandate or are directly answerable to a directly elected local authority or regional authority during the whole of their term of office; and for the European Parliament to have the right to consult the committee in the same way as the Council of Ministers. That is something which we believe would improve relations between those two bodies.

I should like to emphasise that, while comprising elected members, the members of the COR should not in any way seek to detract from the role or to usurp the position or power of the European Parliament.

Lastly, the Government's commitment to subsidiarity in the White Paper is welcomed. Local government would like it to go a little further than consultation with business and other interested parties, and included a specific reference to local government as a partner in the development of appropriate areas of public policy.

Subsidiarity is not a matter just between the Union and member states but between governments and lower tiers of government administration within those states. I realise that not everyone will be supportive: some may consider that the EU does not need such an institution or organisation, and some may say that it is a trap for the Government to support the concept of regional authorities within the UK. I do not believe that to be necessary. In that, I may not be in agreement with colleagues from the Benches opposite on the Committee of the Regions. I do not believe that support for the Committee of the Regions means support for such authorities in the UK.

Certainly, UK local authorities are learning to work together so that they may benefit from certain European initiatives. They are doing that without the creation of another tier of government. Whatever one's view of the EU--provided that one is not advocating withdrawal--however much or however little is done at European level, Europe needs its institutions, its rules and its laws, and it cannot function in some ad hoc fashion. It is, as the White Paper makes out, more than a giant trade pact, and so it should be if the main objects of peace and stability are to be achieved. Proposals may be disagreed with, but we should not disparage the proposers or their visions of a European future.

The Committee of the Regions is--to use the phrase of my noble friend the Minister--a little nut or bolt in the EU which enables local and regional government to have an advisory role in the affairs of Europe. It represents a tier of government which is close to the people of Europe. It can help make the EU relevant to

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the people. The very stuff of local government is often at the heart of people's daily concerns. It has therefore, in my respectful submission, a place in the political activity of the Union. As someone who has the privilege of playing, albeit a small part, in three levels of political activity--local, here in your Lordships' House, and in a European body--I hope that each of those levels will come to appreciate that it has nothing to fear from the others. For all those reasons, I request my noble friend the Minister to remember the modest but important wishes of UK local government in these matters.

5.17 p.m.

Lord Bridges: My Lords, it is my pleasant duty to thank the noble Lord, Lord Bowness, for his most interesting maiden speech. From what we have heard him say, it is clear that he can contribute much to the business of the House. His long and distinguished career as a solicitor and his membership of the Committee of the Regions enables him to bring to our deliberations some first hand knowledge which many of us do not possess. I have long wondered what happens in the Committee of the Regions. I am delighted to hear of the work that it does, which is designed to improve European legislation--something which is taken seriously in this House, in the Select Committee and elsewhere.

I must begin by thanking the Minister for meeting the request made in the report of the Select Committee on the IGC, that the Government publish a White Paper in advance of the conference, and that there should be a debate. In making that recommendation, I do not believe the Select Committee realised how difficult it might be for the Government to comply, since that, it seems, would mean exposing their policy to further criticism from among their own ranks in another place. That was not my intention. I believe that the Government have taken the right decision by setting out their views in the White Paper. That is valuable for Parliament, the nation and the other member states of the EU, as the attitude and approach of all governments need to be taken into account if a satisfactory agreement is to be reached at the conference.

I do not propose to contrast the White Paper with the opinion of the Select Committee. That would be a lengthy task and perhaps others may wish to do so. However, I noted with surprise that the Minister said little about the committee's report. I do not myself detect a wide divergence between the two documents. Both seek to concentrate on improvements to the way of operating Community institutions in the light of experience and on anticipating the changes which will be required as a result of the next enlargement.

I should like to venture one general comment on the Government's approach. As one would expect, their document is a carefully expressed, matter-of-fact kind of paper based on our experience as a member state during the past 23 years. But to my mind there is a missing element. The Union is not just an administrative arrangement between the European states concerned. It also involves an idea and the ideals which accompany it; namely, the creation of a new form of political society--neither single nation

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state, nor federation, nor confederation. The success or failure of the venture will ultimately depend upon the success of the idea, which is strongly supported in France, Germany, Italy and in the Benelux union. One reason for our political difficulties in Europe is that the European idea, which seemed so promising in 1973, has not prospered in this country as it has among our neighbours. Of course, basic concepts of that kind will not flourish as a result of artificial puffs by government departments. But the Government can help powerfully by showing their own serious purpose and determination to succeed. It is that sense of wholehearted commitment which is lacking from the White Paper.

There are, of course, some genteel bows in that direction but they are qualified by phrases such as that in paragraph 6, which states:

    "Above all, we shall be guided by a cool assessment of the British interest".
To that one might reply, citing the poet Wordsworth,

    "Give all thou canst,

    High Heaven rejects the lore

    of nicely calculated less or more".

Or, if one does not care for that wordy poet, one may follow the injunction of the psalmist to,

    "lift up thine eyes unto the hills, from whence cometh our help".
Some might say that that is the most appropriate quarter for the Government to turn to at present, but I would not go as far as that. One must remember that some of the farmers in the hills keep cattle. However, I suggest that if our European affairs are to prosper some more overt enthusiasm for and interest in the European idea would not come amiss.

Here I must anticipate a riposte from the noble Lord, Lord Beloff, who contributed an interesting review article to the Financial Times 10 days ago when reviewing a book about the history of the British Empire. He ended with the words:

    "In the end, history is about what happened, not feelings".
Of course, that is right but I suggest to the noble Lord that feelings may strongly influence what happens.

As an example of that I quote General de Gaulle, who told us in his memoirs that he was inspired in early manhood by what he called une certaine idee de la France. It was that burning light of idealism about the renovation of his own country which sustained him over many years and led him to achieve so much for his nation.

Another interesting reflection was made by the French historian Albert Sorel when writing about Britain before the First World War. He wrote the following rather penetrating paragraph:

    "The British only undertake war for commercial reasons. War interrupts commerce and compromises it. They only decide to fight when their interests seem to them to be under grave threat. But then they throw themselves into the fight because they judge themselves compelled to do so and they bring to war a serious and concentrated passion with an animosity all the more tenacious because the motive is in proportion to their interest. Their history is full of these alternations, from an indifference which makes one believe in their decadence, to a passionate commitment which disconcerts their enemies. We see them by turns abandoning Europe and dominating it, or neglecting the largest issues on the Continent and seeking to direct the most trivial affairs, moving from complete peace to all-out war".

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We all recognise in those sentences that spirit which was last evoked for us by the noble Baroness, Lady Thatcher, at the time of the Falklands War. I quote the passage in order to cite Sorel's belief, which I believe to be correct, in seeing our motives as a nation as largely empirical, derived from circumstances rather than from ideals.

A different and more flattering version of our behaviour appeared last year in Dr. Kissinger's blockbuster volume entitled Diplomacy. It is, in fact, a history of foreign policy, which is a rather different subject. Dr. Kissinger is most interesting. He admires the diplomatic method of Palmerston and Disraeli, describing it as,

    "a disciplined aloofness from disputes and a ruthless commitment to the equilibrium in the face of threats".
He continues:

    "America would find it quite difficult to marshal either the aloofness or the ruthlessness, not to mention the willingness to interpret international affairs strictly in terms of power".
Dr. Kissinger's book is, in fact, a critique of American foreign policy above all for its failure to operate a balance of power system and for its too frequent recourse to moral principles in the conduct of international relations.

It is my belief that the balance of power system as practised by Britain in centuries past is now over. What we have today is a collective security system which has essentially worked since 1945. We also live in a world of intense economic competition which has encouraged the growth of trading blocs of which the European Union is perhaps the most successful to date. We should all recognise the great change in our traditional attitudes which this requires. One senses that as one walks over Westminster Bridge. If one stops in front of the statue of Queen Boudicca one can read the lines by William Cowper engraved on the plinth:

    "Regions Caesar never knew

    Thy posterity shall sway".

It is hard to read these lines without a twinge of melancholy, history having moved in the opposite direction. We confirmed that move when we signed and ratified the Treaty of Accession in 1973.

We need to recognise that fact and to support the European Union with more interest and enthusiasm if we are to make the new system work to our full advantage. If we ourselves examine every Commission proposal on the basis of cost-benefit analysis in the national interest we can hardly be surprised if others do the same when we ask for Community solidarity and help in special circumstances, as over beef. A fuller sense of interest and enthusiasm would help and I do not see as much of that in the White Paper as I would like.

There are three other matters on which I wish to touch more briefly. The first is the question of the two-tier Community. That was mentioned by the noble Lord, Lord Ezra, and I agree with his line of argument. The Government seem confident in their view that the opt-out from the Social Chapter is an essential safeguard. They have now broadened this attitude to embrace the need for all member states to have the freedom to choose whether to participate in particular

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policies. That amounts to Europe o la carte, an approach strongly criticised by most member states. It does not look as though the Government's position on this matter will be negotiable at the Intergovernmental Conference. I am not sure that our present formulation is wise, since it amounts to acceptance under another label of the long-standing French notion of a "two-speed Europe", or variable geometry.

The problem about such concepts is that one will end up with a core Europe, based on Germany, France and some of their close neighbours, and an outer group including Britain. It does not take much imagination to foresee that the inner group will determine the broad policy outline and that the outer group will be obliged to accept or reject what is on offer. That appears to be the kind of situation reached by the Finance Ministers at their meeting in Verona in the past few days when discussing the future of the new exchange rate mechanism. Surely the only safe way to proceed is by being a member of the inner group which determines policy in the first place.

I turn next to parliamentary scrutiny of draft legislation by national parliaments. The White Paper is right to draw attention to that subject, which receives increasing attention from our colleagues in other European legislatures. It would be helpful if the Intergovernmental Conference could reach a decision which emphasises the need for the Commission and other EC bodies to do all that they can to facilitate proper scrutiny by national parliaments. The greatest difficulty that we have at present is in receiving the texts of draft legislation in national languages in good time. Unless that is done, effective scrutiny is not possible. That has been explained to the Government by our own Select Committee on several occasions in the past year and I believe that the Government understand the nature of the problem.

Finally, I emphasise my personal opinion that one of our most urgent tasks is to overcome what I may call the security vacuum in Eastern Europe. The collapse of the Communist system and the Warsaw Pact means that there is no effective security guarantor on the Western frontier of the former USSR, where there are some difficult and unresolved territorial issues which could readily give rise to dangerous disturbances. Those range from, at the northern Baltic end, Klaipeda, formerly Memel, and Kaliningrad, formerly Konigsberg, to Moldova, formerly Bessarabia, at the Black Sea end. To prevent those flashpoints from becoming something more serious, we need a security understanding, perhaps a new body or one based on the OCSE, to which all could turn in the event of difficulty.

I heard what my noble friend Lord Chalfont said about the international dimension of those security organisations. I have no wish to detract from the valuable role which NATO plays. But it can be argued that we need a body which works in conjunction with NATO or, to some degree, on behalf of it, which could provide the kind of mechanism we need in order to prevent disturbance in that very tense area. That will be an urgent task for the second pillar and I should hope to

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see the various measures mentioned in the White Paper put in hand as soon as possible so that we can install a body charged with those responsibilities.

I do not believe personally that it would be wise to extend the membership of NATO itself so that it touches the western Russian frontier. That could all too easily provide a target for some of the new Russian nationalists whom we read of as candidates in the forthcoming Russian elections.

5.32 p.m.

Lord Howe of Aberavon: My Lords, I commence with some words of thanks. First, I have a double-barrelled message of thanks and congratulations to my two noble friends Lady Wilcox and Lord Bowness on their outstanding and diverse maiden speeches. They illustrate a range of personality and experience and I hope that we shall hear from them often, with great pleasure.

Secondly, I thank my noble friend Lady Chalker for her calm and lucid presentation of the Government's case, including a reminder of the ever-crucial objectives which lie ahead; for example, enlargement, reform of the CAP, competitiveness and so on.

Finally, I thank Her Majesty's Government for the White Paper with its important emphasis on the British approach to the IGC because that description implies, even if it does not acknowledge, the need in this field above every other for the Government to identify and pursue a policy which commands the widest possible cross-party coalition support in both Houses of Parliament.

Experience under successive governments has shown how difficult it is to rely on what might often, if not always, be an inadequate majority of any single party in the other place. It really has always been thus. There has been no doubt about the core of policy to which our country wished to commit itself from the days of Macmillan to the days of my right honourable friend Edward Heath, as we took the legislation through Parliament together, to my noble friend Lady Thatcher and, indeed, to the present Prime Minister. My noble friend Lady Thatcher spoke of our destiny as being in Europe, as part of the Community, in her Bruges speech. My right honourable friend the Prime Minister spoke of being:

    "at the very heart of Europe, working with our partners in building the future".
That means that it is with regret that I part company with my noble friend, if I may so describe a fellow freeman of the Borough of Port Talbot, Lord Tonypandy. He wishes to challenge that common ground. I am not impressed in favour of his case by the identity of the expert witnesses whom he cited. Nor am I overcome with terror by his reliance on the evidence of my personal friend, Norman Lamont. There is a good deal less solidarity among ex-Chancellors than there is among ex-Speakers of the House of Commons.

Seriously, my anxiety is the risk that Britain's approach to the IGC may be perceived as being hedged about by unduly absolutist, negative commitments so

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that we appear to be resisting any enhancement of the role of Brussels in any field and resisting any increase in qualified majority voting in the Council of Ministers. My anxiety is that that approach, seen in that way, risks reinforcing the view in European capitals that Britain is far from being--I coin a phrase--"a man with whom I can do business".

But almost more important is that that apparent absolutism risks weakening the legitimacy of many important points which we should be and are making; for example, along the lines of the committee chaired by the noble Lord, Lord Tordoff, as well as in the White Paper, that there is a need for the European Parliament to begin to use its new powers effectively before it can expect to be given a substantially larger legislative role, a need to give a growing role to national parliaments and a further entrenchment of subsidiarity. To my pleasurable surprise, I found myself agreeing with the noble Lord, Lord Bruce of Donington, on both those points. But sometimes, his very rhetoric risks the points being perceived as less important than they really are.

The serious consequence of that is that the continental agenda may be moving on to find ways in which to outmanoeuvre this country. For example, in Bonn, there is an increasing tendency to think in terms of creating the two-speed Europe to which several noble Lords have already referred, with those either unwilling or unable to go further and faster being excluded from the top table. That was a point made by the noble Lords, Lord Ezra and Lord Bridges. Indeed, Bonn has already secured the agreement of Paris to the possibility of that approach, which was unveiled first after the meeting between Chancellor Kohl and President Chirac at Baden-Baden before Christmas.

All that risks producing an ironic result because the IGC is now perhaps unlikely to focus on the conversion of the European Union into a federal European state, as Bonn may have originally wanted. To that extent, that would be a success for this country. But the corresponding risk is that it might be likely to focus instead on the development of a made-to-measure core Europe for a smaller number of ambitious states which are moving forward on their own terms. That risks converting our success in advocating reluctance to accept a federal Europe into a reverse, in the opposite direction. A multi-speed, multi-track, multi-layered Europe was, in the first instance, a vision offered by this country. The problem is that we can hardly object if others pick up that idea and run with it to their advantage. We cannot insist realistically that the use of any such further and faster co-operation clause should require a safety-catch of unanimity every time that it is used.

That is why we need to steer clear of the risk of being perceived as adopting an attitude of defensive absolutism. We must recognise the way in which Britain has, ever since 1972, played a significant role in shaping the policies and design of the European Union. How have we succeeded as far as we have in that way? On previous occasions we have taken care to avoid boxing ourselves into a non-negotiable position. That is the real

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danger of apparent absolutism on our part which can spring from a too easy adoption of the language and tone of Europhobia.

For example, my noble friend Lady Thatcher and I avoided, I think, that hazard in our approach to the Luxembourg IGC which produced the Single European Act of 1985. We left no doubt about our enthusiasm for the positive achievement of a single market. Even while we argued against Treaty amendment, we expressed a willingness to see real changes in decision-making procedures towards a common objective. It should even now be possible for the Government to re-establish the same kind of positive and pragmatic approach without conceding any ground that should not be conceded. Of course that requires an explicit acceptance that membership of the European Union involves sharing sovereignty in defined areas. It requires the acknowledgment of the unique reality of the European Union as it is rather than the contention that it is no more than a set of independent states operating exclusively on intergovernmental lines.

It must be said that, by those standards, the White Paper is written in language which looks unobjectionable but which appears inadequate on closer examination. At no point, for example, does it provide a clear description of what European integration is. It uses metaphorical terms when it says that,

    "the bed-rock of the European Union is the independent, democratic nation state".
That does not help the analysis. However, we are certainly entitled to say, as my noble friend did, that the nation state is the principal focus of democratic legitimacy; and, indeed, as M. Juppe also said. But it is surely misleading and inadequate to describe the nation state as the,

    "bed-rock of the European Union".

If one tried to identify the bed-rock, one would probably identify:

    "A common system of law governing those aspects of economic and political life which are European rather than national".
That is the unique feature of the system and that is why I welcome the Government's clear recognition au fond--despite the comments understandably made by the noble Lord, Lord Lester of Herne Hill--of the importance of the role of the European Court. The risk is that we might encourage people to revert to the old argument--the false Manichaeanism of choosing, on the one hand, between,

    "a federal European super state",

    "a Europe of independent sovereign nations".
It is not as simple as that. We must have the courage and the candour to recognise and to assert that the European Union is a completely novel form of political entity. It is essential to demonstrate in that novel form our willingness to negotiate constructively--a willingness to make at least some concessions, on the right issues, even if we stand firm on other issues with equal certainty. One of those issues is indeed that of qualified majority voting. The noble Lord, Lord Richard, drew attention to the hazard of a single state standing in the way of progress, as

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Malta did in the CSCE negotiations over many years. He also spoke about the need for us to make headway on the CAP.

My anxiety is that the White Paper may do less than justice to the Government's own position by not defining it as confidently or as clearly as it could or should. Instead of appearing to reiterate an ostensibly immobile stance of "no extension" as a matter of principle, I believe that the White Paper would have done better to quote my right honourable friend the Foreign Secretary who testified to the European Legislation Committee in another place on 13th February and there asserted a different and much more positive position. He said:

    "If you say that in future there were other strategic British interests which could only be achieved by qualified majority voting, yes, then there might be an argument for going in that direction; I would not exclude that".
That insight into the mind of the Foreign Secretary has been reinforced--or so it appears--by the Prime Minister's apparently more open position in his last statements on the matter. A reluctance to formulate policy in such more positive terms indicates, possibly, the extent to which Eurosceptic intimidation risks limiting the Government's ability to retain and, indeed, assert the room for manoeuvre which is crucial.

Her Majesty's Government could do themselves a good service by pointing out that the emerging area of dispute on QMV is now actually much narrower than might appear from the White Paper. We are moving on to common ground and there are serious dangers in not acknowledging that fact. It risks turning into question principle issues upon which negotiation is and should be possible; and thus actually risks devaluing our ability to defend those other positions which really matter, simply because the number of non-negotiable points has apparently become indigestibly long.

As my noble friend Lady Thatcher and I discovered in Luxembourg and as my right honourable friend the Prime Minister confirmed at Maastricht, the real world of negotiation does not work like that. Along the more candid, more courageous lines of the real world it should certainly be possible to find a common way forward that is entirely consistent with British interests (as those would be defined by a substantial majority in both Houses of Parliament). France is not the only country that could be ready to back compromise solutions of that kind--we could, if we have the courage to reach out for them.

The "multi-speed Europe" was intended, sensibly enough, to lead to a variegated pattern of intergovernmental co-operation, involving different states in different ways. The risk always was that it might offer a route map towards a closer union of a small group of states from which we should be excluded. The risk is that that kind of isolation, which we have avoided for so long, could become the general pattern of European relations--and that notwithstanding the fact that such an outcome (our exclusion from Europe) would be out of line with the view of a substantial majority in both Houses of Parliament and indeed, I am convinced, out of line with the view of our people at large. Some people, although only a few,

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might be tempted to herald that as a triumph for British diplomacy. In fact, it would be a defeat of significant proportions.

However, I am totally confident that Her Majesty's present Government would not wish to bring about a result of that kind. The negotiations now under way still offer a real chance of averting the risk of such a disaster. Those who govern this country during the next two years or so--beginning, and I hope continuing, with Her Majesty's present Government--must be sure to recognise, to seize and to exploit the continuing opportunity that lies before us.

5.46 p.m.

Lord Stoddart of Swindon: My Lords, the House was rightly interested in the speech we have just heard. In fact, I thought that we were making progress when the noble and learned Lord agreed with my noble friend Lord Bruce of Donington on even one point. However, when the noble and learned Lord talks about sharing sovereignty, I should tell him that I really do not believe that that can happen. I believe that we either have or do not have sovereignty; it is not something which can be shared.

However, like other noble Lords, I welcome the White Paper for itself. Indeed, I believe that we are probably lucky to have one at all. Had it not been for the pressure of what I like to term the "Euro-realists"--that is, the Back-Bench Euro-realists--we probably would not have had a White Paper. I certainly believe that the Government, or many of its members, were opposed to producing a White Paper on the IGC. But the importance of the subject is underlined by the large number of noble Lords who have spoken so far in today's debate. We have heard many notable speeches both from the two maiden speakers and from the noble Viscount, Lord Tonypandy, with whose remarks I entirely agree.

Many references have been made to our European partners. Anyone who continues to believe that they are our partners rather than our competitors after their extraordinary, brutal and self-interested behaviour over the beef crisis must now surely revise his views. That is especially so after the weekend revelation by the European Union Agriculture Commissioner that the world ban on British beef was not imposed on grounds that it was dangerous to health, but on the basis that not to do so might be injurious to the interests of continental beef producers. So the British Beef industry, and its associated industries, were to be sacrificed to protect the commercial interests of EU farmers and industrialists outside the UK--not to protect the health of the people, because there was no health risk. Some partners these! In my view, which I have held for a very long period of time, the sooner we get rid of them the better.

The noble Lord, Lord Lester, who is temporarily absent from the Chamber, made criticism of the so-called "Europhobes" on the Back Benches opposite. I do not think they are Europhobes. As I have just said, I think they are Euro-realists. However, we need not be too worried about them. The "phobes" we need to worry

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about are the Anglophobes across the Channel. As I said, we have seen what can happen as regards the beef crisis. That has been educative in many ways.

For example, how many noble Lords and others realised that such awesome power has been handed over to the European Union as regards our trade and great industries, a power which ranges over a much wider field than the beef industry or farming as a whole? But of course the White Paper does not deal with power, wilfully and in dereliction of their duty to maintain Parliament's sovereignty, which has been handed over in the past by Members of both Houses of Parliament. The White Paper refers to further powers being demanded by those whose ambition it is to create "a country called Europe". That is a phrase we are increasingly hearing not only in Europe but on British television in Britain. It is these people up to now, and the people who have this ambition, who have been in the ascendant. They have been gradually getting their way. Indeed, I must tell the noble Baroness that by signing the Turin communique the Government have already accepted the federalist agenda and conceded the principle that the European Parliament will be closely associated with the work of the IGC, and will have its views considered. The Government have quickly caved in to early pressure.

There are certainly some parts of the White Paper with which I can agree, or at least I can tolerate. Some reflect the recommendations of the intergovernmental sub-committee of the European Communities Committee of your Lordships' House upon which I had the honour to serve. Indeed, if the British approach set out in paragraph 6 on page 4 of the White Paper means that the Government believe in a Europe of freely co-operating states unencumbered by creeping federal ambition or a centralised power-hungry bureaucracy and a return to Parliament of its sovereign status, I could even welcome that statement. Perhaps when the noble Baroness replies to the debate she can tell me whether my interpretation of the White Paper in that regard is correct. What is quite certain, however, is that it is not the view of the Germans and the other European countries, including France.

Herr Kohl and his henchmen have made it abundantly clear that they believe the day of the nation state is past and they want to kill it off. They make no secret of their ambition for "a country called Europe"--a new state complete with flag, anthem, a central government, its own currency, a uniform economic and monetary policy, a foreign policy and, of course, its own army. Naturally all this would be under German suzerainty. These are the same people who rail against the nation state. Indeed, they seem to want us to forget that it was not the nation state that caused the problems in Europe in the 1930s and the war of 1939 to 1945; it was German imperialism which caused that war and caused the difficulties. Let us not forget that point of history and let us not run down the nation state which has worked pretty well over a long period of time.

Can the noble Baroness assure me and the House that this Germano/Continental vision of Europe will be firmly rejected and that the Germans and the French in particular will be told quite bluntly that if they persist in

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pursuing this nightmare scenario they will do so without Britain? In the last analysis the Government will find that the threat of secession will do much to cure their ambitions. Even the Chancellor of the Exchequer after his ungentlemanly drubbing at Verona may now have his eyes opened to the real intentions of the Europeanists, although, as my noble friend pointed out earlier, if he had bothered to read the Maastricht Treaty he would have known their intentions right from the start. The Chancellor should have consulted the noble Lord, Lord Cockfield, who is good at interpreting treaties, before he made the statement that he had never read the treaty.

Noble Lords need not be worried about Britain going it alone. We heard that from the noble Viscount, Lord Tonypandy. We are often told that 60 per cent. of our trade is with Europe. That simply is not true. Only 44 per cent. of our total trade is with Europe, if visibles and invisibles are taken together. Inward investment comes to Britain not because of Europe but in spite of Europe because the attractions are in many other directions rather than our membership of a European Union. Our English language and our good, trained, loyal workforce are all matters which foreign companies know of and come here to take advantage of. If we got rid of the huge trade deficit with the EU and if we did not have to pay the £3.5 billion net every year, we could enjoy cheaper food prices and be rid of the bureaucratic stifling Euro-legislation. We could blossom and flower in the world where the real opportunities lie, especially if we did so in concert with the Commonwealth.

The Norwegians were told the same story when they held their referendum. The Norwegians were told that if they did not enter the European Union the country would collapse. But what has happened since Norway rejected the idea of going into Europe? Instead of being ruined Norway is thriving. Inflation is 2 per cent., growth is 4.5 per cent. and unemployment is only 3.5 per cent. Norway is booming and those opposed to EU membership now constitute 66 per cent. of the population. Let us contrast that with what is happening in stagnating Europe where unemployment is now endemic and rising.

In the White Paper the Government are clearly of the opinion that there should be no extension of qualified majority voting to any further areas, especially those involving foreign and security policy and home affairs. They will be under pressure to compromise on this issue. The threat of no further enlargement will be used by the federalists to get their way. I hope that under no circumstances will the Government compromise one iota. It will be better to have no enlargement in Europe than to compromise our sovereignty even further. In any event, once the people of the applicant countries realise the price of entry, they may not want to join.

Many people are concerned about the European Court of Justice. That has been mentioned by a number of speakers this afternoon. They are concerned about the judgments and the costs they impose. Indeed, the Government themselves are worried and are seeking changes in the way the court works and the retrospective nature of some of its judgments. The Government are

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shortly to issue a memorandum setting out their proposals in detail. We await that with interest. But will those proposals contain ideas to deal with the entirely unacceptable situation where the ECJ has the right to overturn an Act of Parliament? That is clearly a position which cannot be allowed to continue. I hope that the noble Baroness will give an assurance that that will be one of the matters the Government will wish to achieve.

I also find the Government's policy to resist giving further powers to the European Parliament somewhat encouraging, especially bearing in mind that many of its members want a European state, a European Government and the European Parliament as the major legislative arm. I always knew that a directly elected European Parliament would become precocious, avid for power and ambitious to replace national parliaments as the seat of democratic legitimacy. That was why I would not support it in the House of Commons; and, indeed, how right I was.

I have a copy of a document outlining a speech made by the European President at the beginning of the IGC. Perhaps I may quote a couple of paragraphs. The document states:

    "The European Parliament's involvement will go far beyond the contribution we were permitted to make during negotiation on the Treaty of Maastricht five years ago; equally the outcome of this Intergovernmental Conference must go far beyond mere adjustments to the Maastricht Treaty".
The document continues:

    "Today I do not want to set out in general or in detail the European Parliament's demands".
It refers to "demands", not suggestions. Therefore everything that the European Parliament wants is in contradiction to what the Government say they want. They should be very careful indeed before allowing the European Parliament to have any further powers. Indeed, in my view it would be much better if we reverted to the previous situation with a European Assembly nominated by and properly responsible to national parliaments.

Finally, the prime aim for the Government at the IGC should be to stop the rot, to prevent the seepage of further powers from the nation states, in particular from our Parliament, and to make a start on returning many powers already ceded to where they properly belong--back here in our Parliament.

6.2 p.m.

Lord Cockfield: My Lords, one of the problems in participating in the debate is that my noble friend Lady Chalker of Wallasey is much more realistic and constructive on European matters than can be said for the Government as a whole. It follows, therefore, that however much I embarrass her by saying so, I shall need to direct my remarks more to the White Paper which is nominally the subject of this debate than to anything that my noble friend said.

However, before I come to the White Paper, I wish to deal with two issues which have tended to attract a lot of attention in the debate. One is our trade deficit with the European Union. Trade is not bilateral; it is

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multilateral. Trade is not solely trade in goods; it is also trade in services, and in particular financial services. In the days when my noble and learned friend Lord Howe of Aberavon and I were members of the Government, we had a trade surplus. I can, therefore, talk about these matters without any tinge of guilt. I hope that the position remains today much as it was then. However, the trade deficit that this country had with Japan was enormous. But what happened to the money that Japan earned by exporting goods to the United Kingdom? It spent it in buying oil from the Middle East, because the Japanese have many things but "they ain't got no oil". What did the Middle East do with the money that was paid to it by Japan to buy the oil? It spent it in the United Kingdom; and the United Kingdom, therefore, had a large balance of payments surplus with the Middle East. That is the way trade operates.

We have a deficit overall on our trade in merchandise, but we have a large surplus on our trade in invisibles, both in dividend income and in financial services, as we have in many of the professional services too. One has to consider the picture as a whole. If one is looking at our relations with Europe, what matters is the enormous amount of trade we do with Europe. If we were not able to export about 60 per cent. of our total exports to Europe, where on earth would we export those goods and services? The truth of the matter is that if one goes back to the 1960s and 1970s our trade with the Commonwealth was fading away. Barriers were being put up in the Commonwealth countries to trade with the United Kingdom; and we were almost forced to go to the European Community to make good that enormous gap in our trade. That is one point. One has to look at it as an overall issue, not as a simple Europe versus Britain issue.

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