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Lord Williams of Elvel: My Lords, can my noble friend tell the House what costs would be involved if Romania were to be invited and accepted an invitation to join NATO? We have heard many figures, but none about Romania.

Baroness Symons of Vernham Dean: My Lords, I do not believe that costings on specific countries are available, but I shall check. If they are available I shall write to my noble friend. I do not believe that they have been worked out. As my noble friend the Lord Privy Seal pointed out to the House yesterday, on the broader question of costs, that is something which is still being sorted out in relation to the three countries which have been invited to join NATO.

Lord Jenkins of Putney: My Lords, is my noble friend aware that there are many ways in which countries like Romania can become more closely associated with western countries without necessarily going into the rather more controversial area of the enlargement of NATO?

Baroness Symons of Vernham Dean: My Lords, indeed there are. As we know, Romania has now become a member of the World Health Organisation,

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the International Labour Organisation and various other organisations, which brings that country closer integration into western institutions.

Lord Moynihan: My Lords, while welcoming the Minister's reply, is it the Government's policy to develop further integration with Romania in the light of the human rights abuses which have been reported within the country, particularly towards members of the Roma population? How will the Government reconcile the inherent tension between a policy of integration with its human rights-led foreign policy approach?

Baroness Symons of Vernham Dean: My Lords, the noble Lord is quite right. There have been concerns about respect for human rights in Romania, but there has been significant progress over recent years. The new Government, which took office last November, have committed themselves to further political reform in that respect. The noble Lord raised in particular the treatment of the Roma people. Sadly, they are often at the bottom of the social justice and economic ladder in many parts of Europe. They can face discrimination and prejudice. The problem is not unique to Romania. The new Government of Romania have committed themselves to improving the treatment of such minorities.

Lord Judd: My Lords, does my noble friend agree that one of the difficulties in the expansion of NATO is that inevitably, in the foreseeable future, more will be denied membership than offered it? Does she therefore agree that it is absolutely essential that we throw all the weight that we can possibly muster into the success of OSCE and organisations of that kind, so that we encourage positive policies towards those who do not join NATO rather than justify why they have not been admitted at this juncture?

Baroness Symons of Vernham Dean: My Lords, as I believe I have made clear to the House on previous occasions in relation to those who have not been invited to join NATO, the Government are determined that the admission of new members must not in any way discriminate against those who have not been invited to join at this stage. That would risk creating new dividing lines in Europe which would make a very unhappy position for all of us. The noble Lord's point is well taken. There are many ways in which countries such as Romania can be integrated into western institutions. Such ways may be offered through the World Health Organisation, UNESCO, the ILO, and other organisations.

Lord Wallace of Saltaire: My Lords, does the Minister accept that one of the dangerous dividing lines that one could recreate would be precisely between Hungary, which joined NATO and the European Union, and Romania, which was left outside, given the extreme delicacy of relations over Transylvania? Can the Minister assure us that the British Government will take

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into account the importance of maintaining open relations between those two countries when we negotiate on immigration and asylum limitations?

Baroness Symons of Vernham Dean: My Lords, I believe that Her Majesty's Government are aware of the difficulties that the noble Lord points out. That is why we have been at such pains to show that we do not want to see these kinds of dividing lines appearing. The United Kingdom has been active in NATO's work to devise enhanced arrangements for co-operation with non-members. The Euro-Atlantic Partnership Council and the new, strengthened arrangements for Partnership for Peace are a significant pointer in that direction. They will enable those countries not invited to join to develop deeper co-operation with NATO.

The Earl of Lauderdale: My Lords, can the Minister tell the House whether the accession of Hungary commits us all to helping that country resist Romanian claims to keep Transylvania, which is claimed by Hungary?

Baroness Symons of Vernham Dean: My Lords, the position between Romania and Hungary has a difficult history. The Romanian Government are committed to creating a genuine partnership with Hungary. The relationship between the two countries is on a much warmer and more open footing than was the case before the new government took over.

The Economy

3.17 p.m.

Lord Peyton of Yeovil asked Her Majesty's Government:

    What opinions on the current state of the British economy the Prime Minister expressed during the European Union meeting in Amsterdam and the G8 meeting in the United States.

Lord McIntosh of Haringey: My Lords, the Prime Minister put jobs at the top of the agenda at both the European Council meeting in Amsterdam and the G8 Summit in Denver, along with British ideas on competitiveness, flexible labour markets and employability. The Government intend to make the creation of real and lasting jobs a key theme of Britain's own presidency of the G8 and the European Union next year.

Lord Peyton of Yeovil: My Lords, I had rather expected--or hoped for--an Answer overflowing with useful and new information. There is some disappointment. Is the Minister aware that there had been a vague hope that his right honourable friend might feel able (in private conversation, of course) to express to his G8 colleagues his confidence in the economy which is so robust as to be able to withstand the adverse blows of a disappointing and rather damaging Budget?

Lord McIntosh of Haringey: My Lords, the noble Lord asked a very specific Question about the opinions

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the Prime Minister expressed. I am not aware that he made any specific comments on the record about the UK economy at either of the gatherings. Therefore, my Answer went well beyond his extremely limited Question. As the noble Lord suggests, the Government's policy is to have an economy which is stable and which provides low inflation and high growth, but it is by no means certain that we inherited an economy which was moving in that direction. Under the previous government we had the two longest and deepest recessions since the war. Britain had a growth rate below that of every other major industrial country. We had high unemployment, admittedly declining, but it was still above 2 million on the internationally accepted level. We had low productivity, lower than other major industrial countries, and weak public finances with a history of large public debt deficits with a steeply rising burden of public debt.

Lord Jenkins of Hillhead: My Lords, is the Minister aware that although it is possible that the present Government have inherited a rather better position than perhaps any incoming government since 1970, the position is a little more mixed than the noble Lord, Lord Peyton of Yeovil, indicated because the inflationary position is not quite as good as it looked; the public expenditure position is quite difficult; the balance of payments position is not bad and growth is quite strong, but is verging on overheating? It is not a bad position to be in; but it is not a great one, either.

Lord McIntosh of Haringey: My Lords, I readily accept the force of the noble Lord's comments about the year 1970. As far as 1997 is concerned--which I suspect is what most noble Lords are interested in--comment seems to have concentrated on the undoubtedly successful management of the economy in the last months of Mr. Clarke's Chancellorship. What I hope to show by my answers is that that by no means represents a rosy picture for the British economy.

Lord Barnett: My Lords, we all know that the noble Lord, Lord Peyton, is a stickler for maximum information and correctness--indeed, he was almost the same when he was a Minister. But perhaps I may help the noble Lord and the House (and perhaps myself) by asking my noble friend whether, when the Prime Minister was addressing his colleagues, he referred to the question of interest rates and the forecasts made by the previous six economic advisers to the former Chancellor who had forecast that interest rates would be in a range between 5.8 per cent. and 7.8 per cent. by the end of this year. Can my noble friend also tell us which of those forecasts my right honourable friend the Chancellor used in his forecasts?

Lord McIntosh of Haringey: My Lords, I do not think that I shall rise to the last question, but my noble friend's claims are right. The point that should be made about interest rates is that the policies of this Government have in a very short period caused a decline in long-term interest rates. Indeed, long-term interest rates are now nearly half a per cent. lower than they

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were. That cuts the government debt service, improves long-term investment and proves that the reforms that this Government have introduced have improved the credibility of government finances.

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