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The Lord Bishop of Carlisle: My Lords, it is an honour to associate the Bench of Bishops with these tributes to Lady Seear. We did indeed have an unrivalled view of her across the Chamber on the Front Bench opposite. She was a model Member because she spoke authoritatively, fluently and with great wisdom. She had that particular skill, not unknown in this House, of perhaps appearing not wholly to concentrate fully all the time and yet being immediately up with the debate when she made any remark, openly or sotto voce. She was obviously fully alert and with it.

I should like to say one brief word on behalf of the general public. She was also that rare being, a model political television panellist--quick to spot cant and to challenge evasion, and full of robust common sense. Lady Seear was a supportive member of the Church, but I mean it as a tribute when I say that she was not in the least churchy. She expressed her beliefs and her values in the way that she lived, in her public and political life and in the many causes which she espoused.

I can only claim one brief personal encounter with Lady Seear, at a meeting of the Ecclesiastical Committee, before I became a Member of your Lordships' House. The subject under discussion was that delicate matter of the removal of a clergyman from office in certain circumstances. Such matters are difficult to deal with; indeed, some of the questioning became rather obscure and the replies, as a consequence,

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somewhat Delphic. I was asked a certain question and was gathering my thoughts together in order to reply when Lady Seear intervened to say, "What the Bishop is trying to say is that clergymen occasionally go batty and we need to find a way of removing them without actually saying that they have gone batty". My Lords, I rest my case.


Lord Carter: My Lords, it may be for the convenience of your Lordships to know that the House will sit at 11 a.m. on Thursday 22nd May. At its rising on that day, the House will adjourn until Tuesday 3rd June, when the House will sit at the usual time of 2.30 p.m.

National Health Service (Private Finance) Bill [H.L.]

3.51 p.m.

The Minister of State, Department of Health (Baroness Jay of Paddington): My Lords, I beg to introduce a Bill to make provision about the powers of National Health Service trusts to enter into agreements. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.--(Baroness Jay of Paddington.)

On Question, Bill read a first time, and to be printed.

Coordinated Universal Time Bill [H.L.]

Lord Tanlaw: My Lords, I beg to introduce a Bill to amend the Interpretation Act 1978 to make provision for the use of coordinated universal time. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.--(Lord Tanlaw.)

On Question, Bill read a first time, and to be printed.

Address in Reply to Her Majesty's Most Gracious Speech

Debate resumed on the Motion moved yesterday by the Lord Merlyn-Rees--namely, That an humble Address be presented to Her Majesty as follows:

"Most Gracious Sovereign--We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament".

3.53 p.m.

Lord Richard: My Lords, it is a great honour to open your Lordships' debate on the gracious Speech this afternoon. Perhaps I may say at the outset that I very much look forward to hearing the maiden speech

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today of the noble Lord, Lord Moynihan, and later in the debate, those of the noble Earls, Lord Derby and Lord Cork and Orrery.

When the debate opened last year, my noble friend Lady Blackstone observed that, for the fourth year in succession, she was opening the foreign affairs and defence debate on the Queen's Speech for the Opposition. She expressed the hope that it would be the last time for some years that she did so for the Opposition and that we on that side of the House would be introducing the debate the next year from this side of the House--and so it has come to pass. It is therefore a particular privilege to be opening the debate this year.

The electorate has just voted for change in a most dramatic and almost unprecedented fashion. This new Government are humbly aware of the hopes and expectations which the electorate has placed in them. Not everything can be achieved at once, impatient though many will be. But the gracious Speech outlines a comprehensive programme for the forthcoming Session which marks at the outset the range of our ambitions as a reforming government.

The mandate given to us by the British people is indeed awesome. It is the biggest majority ever for the Labour Party and, I think, the smallest number of Conservative seats in the House of Commons since 1832. I believe that two things follow from that result: the first is a responsibility for the Government; and, secondly, if I may say so, a responsibility has also been placed on the Opposition.

As a government with such a massive majority in another place, we are, I believe, under a duty to use that power sensibly and wisely in the execution of our mandate. As an Opposition, I think that it behoves the party opposite to recognise the strength of public feeling that was shown for the changes outlined in our manifesto. Of course, one does not want to press the mandate argument too far, and I hope that I do not, but there is no doubt that certain issues, particularly perhaps the constitutional ones, were put fairly and squarely to the people and were resoundingly approved, even to the extent of there now being no Conservative representation in either Scotland or Wales. Whatever else we have, we do have the clear and unmistakable consent of the British people for our proposals for devolution and, dare I say it, for reform of your Lordships' House.

Among those proposals was that we hold referendums in Scotland and Wales, a subject to which I should like to return a little later. However, perhaps I may first say a few words about what is not in this gracious Speech. On careful reading of the gracious Speech, your Lordships may have observed that reform of the composition of this House does not figure among the measures presaged in the gracious Speech. I hasten to reassure the House that that is not omission by inadvertence. The proposal, of course, remains part of the Labour Party's programme for this Parliament. Quite when it will be introduced remains to be seen, but that it is there, there should be no doubt.

Today's debate focuses on foreign affairs, international development and defence and will be wound up by my noble friend Lady Symons of Vernham Dean. On Monday

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the debate will concentrate on constitutional affairs, home affairs, health and social affairs. The Referendums (Scotland and Wales) Bill will provide for referendums on whether there should be a Scottish Parliament, and whether this should have tax raising powers; it will also provide for a referendum on whether there should be a Welsh Assembly. In the event of a positive outcome of those referenda, a Bill to establish a Scottish Parliament and a Bill to establish a Welsh Assembly will then come before Parliament.

Home affairs legislation set out in the gracious Speech includes a Bill to incorporate the main provisions of the European Convention on Human Rights into United Kingdom law. That will enable people to enforce their rights under the convention before our courts. I know that this Bill will be of particular interest in your Lordships' House. There will be a Bill to introduce measures to combat crime, including streamlining the youth justice system. There will also be a Firearms (Amendment) Bill which will allow a free vote on prohibiting the private possession of handguns.

There will be two Bills relating to Northern Ireland. One of these will renew the provisions of the Northern Ireland (Emergency Provisions) Act to help combat terrorism. The other, the Northern Ireland (Parades and Marches) Bill, is introduced in response to the North Report and will implement many of its recommendations, thus helping to reduce tension over parades, in particular through the establishment of a parades commission. Monday's debate will also encompass health matters, including the National Health (Private Finance) Bill which will clarify the powers of NHS trusts to enter into partnerships with the private sector. The National Lottery (Amendment) Bill will enable funds from the National Lottery to be used in particular for education and health projects.

Tuesday's debate will concentrate on education and employment, the environment, transport, agriculture and local government. The legislation to be covered in that day's debate includes an education Bill to implement the Government's manifesto commitments on standards in schools, school structure and further education and higher education. It will be a wide-ranging and important Bill, about which more discussion will no doubt take place on Tuesday. The Government will also soon introduce an Education (Assisted Places) Bill which will abolish the assisted places schemes so that money saved can be used to cut class sizes for five to seven year-olds. Again, that was a commitment in our party's manifesto.

Among the measures that Tuesday's debate will also cover are the National Minimum Wage Bill; the Greater London Authority (Referendum) Bill which will enable a referendum to be held on the introduction of a directly-elected strategic authority and mayor for London; the Local Authority (Capital Receipts) Bill which will enable capital receipts from the sale of council houses to be invested in house building and renovation; and a Bill to establish regional development agencies for England, outside London, to promote economic development in the regions.

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The final day of debate on Wednesday will concentrate on industry and economic affairs. A competition Bill will be introduced to reform and strengthen competition law; a data protection Bill to strengthen data protection controls and simplify the existing registration scheme; and a Bill which will provide a statutory right to interest on late payment of debts, as part of the approach to backing small business. A Bill will also be introduced to give the Bank of England operational responsibility for setting interest rates. We believe that that will help to deliver price stability and to support the Government's overall economic policy within a framework of enhanced accountability. Whatever else one can say, we shall be busy. This is a formidable and wide-ranging legislative programme, about which your Lordships will hear more in the next four days of debate, and of course during the passage of each Bill.

I turn now to today's area of interest, foreign affairs, international development and defence. I am a little surprised, but I understand that there will not be a debate on foreign affairs and defence on the gracious Speech in another place. Although I do not intend this to be a speech covering the whole range of foreign affairs, in those circumstances there are perhaps one or two matters which the House might wish me to deal with. I think it might be helpful if I were now to state the Government's approach to the problems and opportunities raised by our membership of the European Union and of NATO. These are, after all, probably the most important areas in which far-reaching decisions affecting our prosperity and well-being will have to be made.

The first priority of this Government is to restore to Britain the role that she deserves, helping to lead the way in the creation of a European Union of independent nation states. The Government are already taking, and will continue to take, a positive approach in discussion and negotiation with our European partners. I am confident that this positive approach will bring us success. It is certainly refreshing.

One of our first priorities therefore is to complete the single market, so that British companies can exploit their competitiveness to the full. We shall seek the early and successful enlargement of the European Union to include countries of central and eastern Europe and Cyprus. We look forward to welcoming new members to the European family, spreading the benefits of the European Union--prosperity, security and solidarity--more widely. I think it is common ground in this House that the common agricultural policy is costly, vulnerable to fraud and not geared to environmental protection. We shall vigorously seek its reform.

The intergovernmental conference will take key decisions on preparing the Union's institutions for enlargement. We share the goal of completing the intergovernmental conference at Amsterdam. Within the IGC, we shall firmly but politely defend our vital national interest. We shall, for example, insist that Britain retains control of its own frontiers. We shall work in the IGC to help improve the European Union's ability to protect the European environment, to fight

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fraud, to protect the rights of European citizens and to improve co-operation between member states in the European Union's common foreign and security policy.

The European Union must find ways to increase understanding among the peoples of Europe of how the Union works, and how it works on their behalf and for their benefit. We shall work to make the Union more transparent in its workings, more democratic and more accountable. We believe, however, that the Union must do more to tackle unemployment and promote flexible labour markets. We support an employment chapter in the new treaty under negotiation at the IGC. But the true test of whether the Union can promote employment for its citizens will not lie in treaty declarations but in real jobs. We have already announced our intention to join the social chapter. We shall use our membership to boost jobs and to make Europe's companies more competitive.

I wish now to say a few words about defence. I fear I shall be brief but--I say this with respect--I do not wish this to be a Foreign Office speech, which is a catalogue of different parts of the world comprising two sentences on each. This Government are committed to a strong defence for these islands. We are determined that our Armed Forces will remain strong to defend Britain and that they will be given solid political support, leadership and direction. Our Armed Forces are a unique asset to the nation. Their courage, professionalism and commitment are rightly admired around the world. Our Armed Forces personnel in Northern Ireland, for example, provide invaluable support to the RUC in countering terrorism. As I speak, over 40,000 servicemen and women are deployed overseas on a range of missions and tasks. They are serving in Bosnia, Cyprus, Africa, the Gulf, the Falkland Islands and in the Pacific. In the Asia-Pacific region, we have the OCEAN WAVE 97 Task Group which is the largest Royal Navy deployment since the Gulf War.

Since the end of the Cold War, the security risks to the United Kingdom and our allies have changed fundamentally. New security challenges confront us: proliferation of weapons of mass destruction, aggressive nationalisms and international terrorism. We must ensure that our forces are matched not only to today's but also to tomorrow's challenges and have a clear sense of purpose. Therefore, this Government have decided to hold a strategic defence and security review. Again, that was something that was presaged when we were in Opposition. Our country's security needs and foreign policy objectives must be fully reflected in the roles, missions and tasks of our Armed Forces. I assure the House that that review will be foreign policy-led, identifying our interests and commitments and deciding how our Armed Forces should be structured, equipped and deployed to meet them. All this will enable us to provide the clearest direction for strong defence into the next century.

In Europe our security has been provided and guaranteed by our membership of NATO which will remain the key framework for our common defence. NATO is undergoing a great process of change to reflect the changed strategic environment. We intend to play a full and active part in NATO's future development. It is

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taking on new tasks; it is adapting its internal structures; it is building new relationships with former enemies; and it is preparing for enlargement. At the Madrid Summit we expect the first candidates for membership to be invited to begin negotiations for accession. The enlargement of NATO and enhanced co-operation with countries which are not invited, or do not wish to join, will in our view increase security across the whole of Europe. It will extend across the Continent the peace, stability and habits of close co-operation that NATO embodies. We must at the same time reach a satisfactory agreement with Russia so that she too can play her full part in ensuring Europe's security in partnership with NATO. We welcome greatly the agreement reached yesterday between the Secretary-General of NATO, Mr. Solana, and the Foreign Minister of Russia, Mr. Primakov, on the text of a joint NATO/Russia document. We hope that it will now be endorsed by NATO members and Russia for signature at a summit in Paris on 27th May.

Enlargement of NATO must not and will not create new dividing lines in Europe. The Government strongly support building the European security and defence identity within the Alliance. This will allow European countries to do more for their own defence and security, including through the Western European Union. The Government are committed to achieving that aim and to increasing the practical co-operation between the WEU and the European Union. However, we do not agree with those who advocate merging the two organisations.

It is true that the threats to peace in Europe have receded, although they have not vanished. However, conflict still continues in many other parts of the world. In too many regions, international relationships are soured by enmity and mistrust. Great challenges remain in working for peace and security around the world. Working with the United Nations, with other international organisations and with our partners and allies we shall be firm in seeking to secure lasting peace and reconciliation.

I said at the beginning of my speech that it was an honour to be opening the debate. I have felt it so. It is indeed an honour for my party to find itself, after 18 years in Opposition, now back again in Government. We shall enjoy it. We shall do our best to serve the British nation; and I hope that the British nation will feel that peace and security are safe in our hands.

4.11 p.m.

Viscount Cranborne: My Lords, perhaps I may say at the outset how much I look forward to hearing the maiden speech of my noble friend Lord Moynihan later today. The House has listened with, I think, considerable interest to the noble Lord the Leader of the House. Understandably in the circumstances some of his speech was not concerned primarily with the main subjects for debate today--defence and foreign policy. I hope that I did not misunderstand the noble Lord. I thought I detected a mild threat--what I might call the sword of Damocles argument hanging over your Lordships' House--in some of what he said. I am delighted to see

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the noble Lord shake his head. In that case I withdraw what was clearly an over-sensitive interpretation on my part.

However, let me reiterate what I intimated yesterday. The Official Opposition in your Lordships' House will not in any way be deflected from what they see to be their duty: to exercise their judgment, to improve, to amend and to scrutinise legislation. They will attempt to be a constructive and vigorous Opposition. They will treat each Bill on its merits with no thought for their own future or indeed the future of your Lordships' House. I hope that your Lordships will feel that that pledge is honoured in the light of experience.

I can readily understand why the noble Lord the Leader of the House chose to open the Queen's Speech debate today both for the reasons which he charmingly laid out and in view of his considerable experience in foreign affairs. As a European Commissioner and a former permanent representative at the United Nations, he is eminently qualified by experience to speak on foreign policy including our relationship with the European Union. Perhaps I may also warmly welcome the noble Baroness, Lady Symons, to her new position. We much look forward to hearing her when she embarks later on her maiden voyage at the Dispatch Box. For myself, with the House's permission, I shall concentrate on foreign affairs, including European affairs, and rely on my noble friend Lord Howe to speak on the subject of defence.

I think I said yesterday that there are some familiar phrases in the gracious Speech. Some of them, in particular the aspirations expressed, do not conflict in any way with the objectives of my party. We certainly applaud the Government's aspirations on NATO enlargement and on United Nations reform. Equally, the Government do not seem to differ from us in their desire to place high on their agenda peace in former Yugoslavia, a settlement in Cyprus, and peace in the Middle East. And we share the same aspirations for Hong Kong's future and the desire to promote open markets around the world. As in everything else, we shall watch the Government's efforts in all these areas with close attention and we shall do our best to support them if their plans to transform aspirations into reality seem well founded and practical.

However, to the outside observer there seems an interesting contrast in style between the foreign policy sections of the gracious Speech and the mission paper launched with so much glitz this week by the Foreign Secretary. The first is sober--dare I say, almost dull--in style; the second is directed by one of the leading Labour "luvvies", Sir David Putnam. I have always entertained the greatest respect for the right honourable gentleman the Foreign Secretary, in particular for his formidable debating skills in another place. However, I have never seen him as the Cecil B. de Mille of British foreign policy. Indeed, I am surprised that the Foreign Secretary should have succumbed to the temptation of adopting the Hollywood approach. The record of success of glitzy foreign policy initiatives, if my memory serves me right, has not been inspiring from the Field of the Cloth of Gold onwards. They tend to

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raise expectations. When the protagonists fail to meet them, the disappointment is all the greater. The Foreign Secretary's glitz masks what I think amounts to remarkably little that is either new or original despite the grandiloquent language with which the document begins and ends. I shall come to the Foreign Secretary's aspirations, and those of Mr. Henderson for the European Union, later in my remarks.

Reform of the United Nations was high on the last Government's agenda. I wonder whether rejoining UNESCO at this time gives quite the right signal. I am far from convinced that UNESCO has sufficiently mended its ways to warrant such a step. Perhaps, when the noble Baroness replies, she can confirm that rejoining would cost about £11 million in subscription. Can she tell the House how many more small posts in developing countries could be run for the cost of that subscription? And while she is at it, can the Minister also say what future she sees for our permanent seat on the Security Council in view of European aspirations to take it over or see it merged with the French seat?

Equally, there is nothing new in making export promotion a Foreign and Commonwealth Office budget priority. I hope that I do not burden the Minister too much. But am I right in thinking that commercial work is already the largest activity of the Foreign and Commonwealth Office, accounting, I understand, for about 25 per cent. of its spending? If so, how much more of the existing budget does the noble Baroness expect to spend under this head? Or does she expect to increase the budget for this purpose? And, if so, by how much? How does she square that with the promise by the Chancellor of the Exchequer to keep within the last Government's spending plans overall? I could ask the same questions about virtually every other aspiration in the Foreign Secretary's position paper.

The last Government spent large sums on improving the audibility of the BBC World Service on the understandable ground that there is little sense in pumping out large quantities of broadcast material if not many people can receive it clearly. I yield to no one in my admiration for the World Service. I have listened to it, if I may venture to say so with great boldness and without too much presumption, probably in least as many distant countries as anyone in this House. I know what a lifeline of truth and sanity it is to millions of people all over the world. Can the noble Baroness give any indication of how much more money she and her colleagues intend to spend on the World Service? If she cannot increase its budget, how does she intend to squeeze more out of the existing one?

I shall not weary the House with more examples. I have perhaps said enough to suggest that this parcel has more wrapping than content. Nevertheless, there is a "but", and it is substantial. One element, one sentence, of the position paper almost took my breath away. I hope that neither the noble Lord the Leader of the House nor the noble Baroness, Lady Symons, will take this personally because I except them from the accusation. But for sheer sanctimonious humbug it beats even the high standards set in less than two short weeks by what is already too clearly--despite what the noble Lord said--an embarrassingly arrogant Government.

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The Foreign Secretary concludes by saying that he is launching a,

    "project to make Britain once again a force for good in the world".
Pray note the phrase, "once again". Does the Foreign Secretary mean to imply that over the past 18 years the people of this country elected Conservative governments that were not a force for good? Perhaps noble Lords opposite who so readily assent to that proposition will tell me whether they believe that the foreign policy of this country over the past 18 years has been a force for evil. I wholly accept that the result on 1st May made very clear, as the noble Lord the Leader of the House said, that the electorate thought it high time for a change of government. However, it is extraordinarily difficult to argue that they voted for the present Government with any great sense of enthusiasm. After all, fewer voted for Mr. Blair in 1997 than voted for Mr. Major in 1992. I certainly do not remember any popular clamour for a change of government because of the "evil" that Conservative government policy was wreaking world wide. Indeed, as we see from the rather more sober tone of the gracious Speech, this Government and the last share a number of foreign and defence policy objectives of a strategic nature--for example, dependence on NATO; NATO and European Union enlargement; and keeping separate (I was very pleased to hear the remarks of the noble Lord the Leader of the House on this matter) the Western European Union and the European Union. I am delighted to hear that the Government, like us, also wish to promote open markets world wide, a point to which I shall return.

The implication of that last sentence, to which obviously in the view of noble Lords opposite I took such unwarranted exception, must be rather narrower. Perhaps, although in view of the fact that it was no doubt drafted by the Foreign Office it is unlikely, the drafting is sloppy. The implication is that this Labour Government's foreign policy will be morally superior to that of the last Government. They have clearly forgotten the efforts of the last Chancellor of the Exchequer to encourage swapping loans for equity in developing countries and how we increased, contrary to popular view, our aid budget, if we add together multilateral and bilateral elements, at a time of great financial stringency. They have clearly forgotten the success of my noble friend Lady Chalker in concentrating our bilateral aid budget on the poorest nations; our success in arms control; and, not least, the great contributions of my right honourable friend Mr. Gummer to improvements to the environment internationally. We really need no lessons in ethics from the Foreign Secretary, and we will watch with some interest the Government's efforts to translate their moral strictures into foreign policy decisions. To take a topical example, how will the Foreign Secretary's stance stand up in reacting to the developing crisis in Zaire? Does he envisage sending troops if asked to do so? Sending troops will cost money. Would he be prepared to spend it? Indeed, would the Chancellor of the Exchequer let him do so?

Noble Lords may deduce that I find Mr. Cook's position paper less than convincing. That would be entirely right. I would have been more impressed had the Foreign Secretary addressed far more fundamental

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questions. Perhaps I may give just two rather outlandish examples. He might, for instance, have shared with us his analysis of where, overall, Britain's interests lie. What, for instance, is his view of the future relationship between the European Union and the United States? Does he think that if Europe becomes more protectionist the consequent tensions between the two blocs, which between them account for 50 per cent. of world trade and 75 per cent. of all overseas investment, could drive them apart? What are the risks of that happening? Does he think that Mr. Rifkind's idea of a transatlantic free trade area could reduce those inherent tensions? What views does he have on the political stability of the Far East and in particular the ambitions of China to exert influence on the region? What influence does he feel the mineral riches of the Russian Far East will have on the geo-politics of the same region? The last Government felt that those questions were important to this country. That is one of the reasons I am glad that the noble Lord the Leader of the House referred to our deployment of over 20 ships in Ocean Wave '97 to the Far East this year. Also, in reference to that part of the world, will the noble Baroness give some idea of her ethical position on the present situation of the people of Tibet and what representations the Government will make to the Chinese Government in that regard?

In short, Mr. Cook is big on self-righteousness but is a little short on geo-politics. Nowhere is that more apparent than in the Government's attitude to the European Union. The last Government were often accused by their critics, of whom the noble Lord, Lord Jenkins of Hillhead, may have been one, of being Little Englanders. I find that charge an extraordinarily interesting one and I should like briefly to examine it.

Let me try to explain my interest. I have no doubt that the European Union could, and should, prove to be of the most enormous benefit to this country. It could and should create among member states new jobs and an unparalleled level of prosperity and do so in a framework of peace and stability. Those objectives are an enormous prize. It is well worth our while striving to attain them. However, as the Foreign Secretary says in his paper,

    "The global economy is stimulating growth in trade between nations at double the rate of growth in output within their economies. The information revolution has produced satellites and fibre-optic cables that enable us to communicate with other continents as rapidly as with the next room".
I entirely agree. So perhaps we should ask ourselves one fundamental question. How do we create jobs and prosperity in this fast-moving world that the Foreign Secretary so neatly describes?

The Labour Party's answer is a remarkable one. It is to rush to sign up to those very aspects of European policy that have proved over the past few years to have destroyed jobs rather than create them. Ask any German industrialist or French businessman why unemployment is so high and rising in their countries. Almost to a man and woman they will answer that over-regulation of labour markets and high non-wage labour costs act as a barrier to employment and investment. They envy us the reforms that successive Tory governments have introduced since 1979, which this month again reduced

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our unemployment by an enormous number, which enabled us to meet our inflation target of 2.5 per cent. by the end of the last Parliament, and which have indeed begun to deliver 3 per cent. growth rates allied to low inflation. Yet the Government promise with glee to sign us up to the very measures that will kill jobs and investment just when our policies are beginning to work.

To digress for a moment, I understood the present Prime Minister to say before the election that he proposed to implement only those provisions of the social chapter that suited him. Will the noble Baroness confirm that he can pick and choose in that way only by preserving the opt-out we negotiated at Maastricht and introducing those provisions that suit him in parallel in the British Parliament? If that proposition is true, and if memory serves me right that was the received advice, will the noble Baroness further explain why the Government propose to surrender our opt-out on the social chapter at all? I admit that that is a digression and I shall return to the interesting question of Little Englanders. The effect of those European policies is clearly to make the European Union uncompetitive with the growing economies of America and Asia. In the world of swift communication described by the Foreign Secretary, old-fashioned protectionism is difficult to enforce and is in any case self-defeating, if only because of the extreme mobility of capital in today's world.

The last Government had a vision for the European Union designed to make Europe competitive so that it would create jobs and attract capital. Many of our European partners disagreed with our analysis or, if they agreed, found it expedient not to say so. However, we at least had the courage to fight for our view and to fight for our interests, especially our capacity to create jobs. We felt then, and still feel, that the only way to control the ambitions of those who wish to impose reactionary ideas upon us is to maintain the power and cohesion of the nation state. In spite of what the noble Lord the Leader of the House said about his desire to establish a Europe of nation states--a desire which I entirely applaud--that is something to which Mr. Blair clearly does not wholly subscribe as he proposes to deliver the constituent parts of the United Kingdom, bound and gagged, into the hands of super-federalists as mere regions in a united states of Europe.

The Government take a diametrically opposite view from us. All their instincts are to agree with the corporatist views of the Rhineland model economies. Some of my colleagues call their proposed actions surrender. And, from the point of view of this country, that is what it is. But to the Government it is not surrender at all; it is a fusion of ideas with which they feel entirely at home and they are happy to concede without asking for anything in exchange.

What are they signing up to? It is a Europe of Little Europeans, an inward-looking Europe afraid to take the measures necessary to compete in the Foreign Secretary's new world of communication. To cover their own position, they are all too prone to call the rest of us who have perhaps a slightly broader view Little Englanders. It is not the world of free trade that we have to fear, the world of flexible labour markets: it is the

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Little Europeans whose instincts are to close the frontiers of the European Union to foreign trade and to try to reduce the unemployment created with the solutions of big government that failed us 20-odd years ago. That will help to drive the world economy into protectionist regional groupings. That will be bad for jobs, bad for prosperity and above all bad for stability, particularly for stable relations between Europe and the United States of America.

Of course I wish the Government well. After all, the electorate has entrusted the welfare of all of us to their care. I can only hope that where there is glitz they will eventually put substance and where their policies of substance are mistaken they will eventually see the error of their ways.

4.32 p.m.

Lord Jenkins of Hillhead: My Lords, I greatly dislike troubling your Lordships' House with my third speech within the first 25 hours of the Sitting of this House in the new Parliament, but I can assure noble Lords both that I shall on that account be brief and that thereafter, to recall Lord Attlee's famous rebuke of Professor Laski, not only will a period of silence from me be most welcome, it will actually occur.

In the few brief remarks I wish to make, I shall apply myself almost as a text to the remarks of the noble Lord the Lord Privy Seal to the effect that the primary object of the Government's foreign policy is to restore to Britain the role which it deserves in the development of the European Union. That should mean--and probably that is what the Government have at the back of their minds--trying to achieve a position, which has signally disappeared recently, for Britain of joint leadership with France and Germany in the European Union. There has been recently an almost exclusively Franco-German axis of leadership. It is about the only thing which has moved the European Union forward. Nobody with any sense of history--or any sense at all--could possibly believe that that partnership is not a vast improvement upon the enmity between those two countries which so disfigured Europe and the world for nearly a century before. Therefore no sane British government could wish to break up that partnership and to drive it asunder.

Nonetheless it would, in the interests of this country, certainly be more desirable if we could achieve not an exclusive leadership role--that would be extremely foolish and Utopian--but a position as the third point in a triangle of leadership. In many ways that could be a better and more fructuous arrangement for the other countries of the Union because a triangle is a rather more friendly geometrical concept within which to cluster than a straight line or an axis.

What are the chances of achieving that? The Government have, in my view, made a very good start. They have made very good noises towards Europe, and that has been greatly welcomed. I welcome--though I do not think it is of vast importance except symbolically--the acceptance of the social chapter. If I may say so with the greatest respect, and even affection, I have never heard more of a farrago of nonsense than what the noble Viscount put to the House

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this afternoon. He said that, if you ask any French or German industrialist what he thinks is damaging his country, he will reply that it is the social chapter. I would say to him that, if he asks the head of any multinational company operating in Britain and in Europe what he thinks about the social chapter, he will say that it is of very little importance one way or the other. That is absolutely the fact.

As a matter of fact, the social chapter has been a greatly exaggerated King Charles's head: it does not do all that much for welfare, but nor does it do all that much damage to enterprise. The social chapter performed a totally exaggerated role in the stale election propaganda of the Conservative Party. One can see when one looks at the shape of the House of Commons today exactly how effective that stale election propaganda was. My advice to the noble Viscount would be: forget it; move a little forward from those stale electoral platitudes which so signally failed.

There have been other good moves. However, there are hard issues that the Government have to face. If a triangle of leadership is to be achieved, it means full British participation in all the main initiatives and institutions of the Community. It does not just mean expressions of good will, though those are desirable and have in a sense already reaped a certain reward. Consider the reception which Mr. Gordon Brown received in Brussels when he said he wanted to reduce VAT on fuel. I am not all that enthusiastic about reducing VAT on fuel; I think there are environmental disadvantages. Nonetheless it was in the Government's manifesto and, if they want to do it, I am in favour of their being allowed by Europe to do it. With a little good will, Mr. Brown received a good reception. Contrast that with the way the previous Government handled the BSE issue, first of all their battling view and then the complete collapse of their position. A little good will works a good deal of benefit on peripheral issues but not in itself on establishing a triangle of leadership.

While I welcome what has happened so far, I remember at least three disappointments in the past. First, I remember how, after the 1975 referendum, there was great hope that the British Government, having a two-to-one mandate behind it, would play a really constructive role in Europe. That was followed by considerable disappointment, which was epitomised by Britain being the only country of the nine which stood out from the effective part of the European monetary system in 1978-79.

Then, when the new Conservative Government came in, the noble Lord, Lord Carrington, made a great effort in his early days--I observed it from my position as president--in the Council of Ministers and elsewhere to establish a new atmosphere of good will for Britain's European policy. That was swept aside by the swings of Mrs. Thatcher's handbag over the budgetary question when, though she was right on the substance of the issue, she created a vast amount of ill will for a marginal amount of money at the end of that bitter dispute.

Then in 1990 Mr. Major began by saying that it was his aim to put Britain at the heart of Europe and there were the disappointments which followed from that.

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The fundamental contradiction was that, in so far as Mr. Major's European policy achieved any triumphs, they were the triumphs of opt-outs. Leadership cannot be built on opt-outs. I hope that the present Government will learn that lesson.

I do not know for certain whether the single European currency will come into being on the accepted date. I believe that it is still highly probable that it will do so. But in any event, the British record under governments of different parties has been consistently that of being over-sceptical about what would happen in Europe. Right from the beginning they have been saying that it will not work and will never happen--and they have always been wrong--and then joining late. In my view we should be extremely well advised to assume the reverse: to assume that it will happen--even if there is still a possibility that it does not happen--and to adjust to that.

It is simply not possible--this really should be taken into account--to exercise a role as one of a triangle of leadership if one is outside a European development as major as that of the single currency. That hard fact must be faced. It is possible to decide for other reasons that one would prefer perhaps to have a peripheral role in Europe or even to come out of Europe altogether. That might be the logical consequence. But it is not possible to believe that one can exercise a role outside the major development of the next few years, which is absolutely crucial to the future development of the whole European community. If, at this stage, a single currency were to fail or be postponed--to founder--it would be exactly like being in an aeroplane in which at the very last moment the captain decided to reverse his engines and abort take-off, bringing the plane to a stop before going into the sea or whatever. The passengers might survive but they would be very shaken and would not be very keen on new ventures for a long time to come.

If that foundering were to occur, I do not believe that substantial enlargement would take place. There would then be a very inward-looking perspective. If that happened I think that the French would veto major enlargement. So let us have some realism about what are the possibilities. The Government have made a good start but I hope very much that they will understand the hard choices in Europe, learn from the many lessons of the past and proceed accordingly.

In my view, it is also absolutely vital that the Government, if they wish to pursue a sensible and constructive European policy, should begin some firm persuasion and education of public opinion. Of course, I do not believe that one can go beyond a certain distance against public opinion and certainly the superficial, surface currents of public opinion are Euro-sceptic and hostile to Europe at the present time. Sometimes it amazes me that people are not more hostile than they are, when one remembers that for years past there has never been a word of positive enthusiasm or positive Euro-propaganda from the late Government. As a great part of the press is now trans-oceanically owned by proprietors who are very hostile to the concept of Europe, it is surprising that there is as much pro-European opinion as there is.

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I believe that the surface current is superficial. I remember that there was a very hostile position to Europe in the polls six months before the 1975 referendum. Opinion can be turned round. There is a great duty on the Government to do it. If they wish to operate in a decisively better climate. They have to a substantial extent to make the weather of public opinion for themselves. It has been let go for too many years. This is the time to start. I have great hopes of the Government. I hope that they will not be disappointed.

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