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3.41 p.m.

Lord Thomson of Monifieth: My Lords, I join the noble Viscount the Leader of the Opposition in thanking the Lord Privy Seal for arranging this debate. A month has passed since the Amsterdam Conference and the report to the House upon it. It has been a useful month in that it has allowed the dust to settle and put the Treaty of Amsterdam in a fairer perspective. I thank the noble Lord, Lord Richard, for the very clear way in which he described the provisions of the new Treaty of Amsterdam.

Following the trauma of the Treaty of Maastricht, I believe that in this country the Intergovernmental Conference that led to Amsterdam was always in danger of being hyped up by the fears and hysteria of the Euro-sceptics in more than one quarter of the House but particularly in the governing party. Much of the debate during that period ignored the fact that the IGC dealt neither with reform of the CAP nor with the arrangements for a single currency, which are the great issues that face the European Union. The Amsterdam Conference, as against the rather feverish background that led up to it, was in one sense something of an anticlimax. As the noble Lord, Lord Richard, has said, the Amsterdam Treaty is not a radical document. Nevertheless, it has brought about some useful changes (to use the language of the noble Lord, Lord Richard). These changes have been described very helpfully by your Lordships' Select Committee on Europe in a document that it produced which analysed the treaty against the recommendations of that committee at an earlier stage. For example, among those useful changes--I believe that on this I would carry even the noble Lord, Lord Bruce of Donington--is the introduction of qualified majority voting in the special case of fraud in the Union. I believe that that is a very helpful step forward in dealing with a problem about which we are all concerned.

However, the treaty fails to deal with the urgent issues of streamlining the structures of the European Union in its approach to enlargement. I refer to the changes

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required inside the European Commission and the changes required to the voting procedures. None of these aspects of the treaty with its modest changes has prevented the new leader of the Conservative Party from making the absurd proposal that there should be a referendum on this non-radical and modest treaty. It was significant that the noble Viscount the Leader of the Opposition made no mention of that particular commitment of the new leader of the Conservative Party.

If Amsterdam was a bit of a damp squib it was undoubtedly a considerable success for the new British Government. We on these Benches freely concede that. Among other things, the general election was a decisive repudiation of those who want to see Britain out of the European Union. I notice that the other day the Foreign Secretary in another place remarked that during the election one of our great newspapers had published a list of 308 Conservative candidates in its role of honour in the battle of Britain against Europe. Of those, 254 were rejected next day by the British people.


Lord Richard: My Lords, I am sorry to interrupt the noble Lord, Lord Thomson. I beg to move that the House do adjourn during pleasure for a quarter of an hour.

Moved accordingly, and, on Question, Motion agreed to.

[The sitting was suspended from 3.46 to 4 p.m.]

Lord Thomson of Monifieth: My Lords, as I was saying before I was interrupted, the Government had considerable success at the Amsterdam conference. The Prime Minister had a particular responsibility for that, and he is entitled to credit for it. He has in many ways transformed the tone of our relations with our partners in the EU. He is an able pupil of my former noble friend Lord Callaghan whom I recall telling me on one occasion that one of his early lessons as a trades union leader and a young Minister was, as he put it, "You catch a lot more flies with honey than with vinegar".

That new positive approach has restored Britain's influence in the Community and the Government's capacity to safeguard British interests. I followed with great interest what the noble Viscount said about the social chapter. I am glad that one of the Government's achievements at the Amsterdam conference was to end the humbug that there has been: that improving competitiveness, engaging in labour market flexibility, and training people for all the changes that are taking place in the global economy, are somehow in total contradiction and cannot be achieved alongside the social chapter.

I always thought that one of the previous government's achievements was to give a lead in promoting the notion of the importance of British competitiveness, but I always found difficult to understand why they put it alongside total opposition to the social chapter. Of course there will be difficulties in the negotiations--a point the noble Viscount laboured a little too much. The social chapter, properly dealt

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with within the EU, will assist in bringing about the economic changes necessary to maintain the competitiveness of the EU in the global economy. So far, so good from the point of view of these Benches, on the Government's record at the Amsterdam conference.

However, we believe that the Government could have afforded to be a good deal less timid on a number of matters. Now that it is possible to take a train from the heart of London to the heart of Paris, and then go on by overland train to Rome or Amsterdam, for example, I find it odd that the Government should still feel determined to decline to join a European passport-free zone. I am old fashioned. I still believe in Ernest Bevin's favourite version of British foreign policy, of being able to go down to Victoria station and, without a passport, buy a ticket to where the hell one likes. I am sorry that the Government's timidity has undermined what should be their vision in these matters.

Again, on NATO and the WEU, I regret that the Government's position is indistinguishable from that of the Conservatives. The noble Viscount might have been a little more generous to the Government when he dealt with that part of his speech. Fortunately, on the ground within the EU, a great deal of European defence co-operation is going on. Fortunately, Britain has been playing its part in that. I console myself that, in due course by organic growth the sensible outcome will be that the WEU and the EU will be able to come together so that Europe can play a more effective part in global peacekeeping.

We on these Benches should like to see the Government take a much more positive line than their predecessors on the civil liberties aspect of the pillar which deals with police and intelligence co-operation. I disagreed greatly with what the noble Viscount said about the Opposition's attitude on that, reflecting the policies they had when they were in government. I find it profoundly depressing that a Labour Government should say with such insular satisfaction that the ECJ should have no authority to deal with such matters across the field.

I conclude by drawing the Government's attention to the fact that there is now growing up a new and important opportunity for boldness by the British Government. There was some discussion during Question Time today about the problems for us caused by the wild fluctuations that have been taking place in sterling from Black Wednesday until today, with the pound steadily growing in strength. That brings forward powerful arguments for the creation of a single European currency, if the conditions can be made appropriate. On these Benches we agree with what Samuel Brittan was saying in the Financial Times the other day that prospects in this country would be transformed:

    "If the British Government surprised everyone by, at the last moment, agreeing to be a founder member".

Brittan argues as we have from these Benches, that it is of course important to get the conditions right. It is vital that there should be a referendum of the British people on such an important step, but if the British economy is in the right shape to be among the founder

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members of a single currency, we should be taking steps to ensure that that is still a possibility. The Chancellor of the Exchequer has surprised us in a number of ways since he took high office. He surprised us with the step he took on the independence of the Bank of England. From these Benches we urge him to surprise us still further over Britain becoming a founder member of the single European currency.

4.7 p.m.

Lord Bridges: My Lords, I, too, welcome the opportunity to debate the Amsterdam Summit before we rise for the Recess. The meeting of the European Council in mid-June was significant for all member states of the EU, but particularly so for this country, occurring as it did so soon after our elections. The Council approved the outlines of the new European treaty which covers many areas of central importance to us. My remarks are directed mainly towards the treaty.

We do not yet have the definitive text. I have the impression that the text which is available has not yet been fully absorbed. That is not surprising, as one finds out when attempting to grapple with its complexities. Having made some effort to do that, I offer the following observations which are by no means comprehensive, your Lordships will be glad to hear.

First, the most positive result for Britain of that meeting was our re-entry into a more active and positive role in European affairs. Here, I agree most heartily with what the noble Lord, Lord Thomson of Monifieth, said. We have resumed a negotiating role. For the previous year or more we had effectively excluded ourselves from European diplomacy, because of the imminence of an election campaign here and the division in the ranks of the then governing party and the growing influence of anti-European feeling within it.

The result of our elections was greeted with an audible sigh of relief throughout Europe. The attitude of our Prime Minister and his colleagues at Amsterdam did not disappoint our partners. We are now back in business in Europe. I heartily welcome that change.

However, when we come to look at the issues discussed at Amsterdam, although some progress was made on the most essential dossier, final agreement on many of the most important still eludes us. For example, let us take the reform of the Community institutions. Many had hoped that the Amsterdam European Council could settle some divisive matters before the enlargement negotiations begin. That hope has been disappointed. Some progress has been made; for example, the protocol on institutions gives broad agreement on the reduction of the number of Commissioners to 20 as a maximum. But many of us would say that 20 is still too many and that the changes will not take place until after enlargement and are in any case linked to another controversial subject, which is the reweighting of votes in the Council in the QMV procedure. There is much work still to be done and the fact that these issues remain open will make the enlargement negotiations more difficult. A full agreement on the key institutional matters would have made the role of the presidency and the Commission in conducting the negotiations much more straightforward.

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Nevertheless, some worthwhile agreements on institutional matters have been reached; for example, that relating to the appointment of members of the Commission by a common accord with the incoming president, who must in future be approved by the European Parliament. Those agreements seem to me to be improvements and should result in a more harmonious relationship between the member states, the President of the Commission and the European Parliament.

There are also extensions to the subjects covered by QMV in the Council and by the co-decision procedure of the parliament. Those changes will not be welcome to some sections of public opinion here, but the majority in Amsterdam and other capitals evidently thought otherwise, partly on grounds of democratic legitimacy and also because the changes were judged to be necessary as part of the preparation for enlargement.

I turn to agriculture. There had been hope that major changes could be made to the CAP before the enlargement negotiations began, as existing policies in the agricultural field--expressing it as politely as I can--are not appropriate to the agricultural profiles of the applicants. It would be far too expensive to continue with the policies that we have.

As far as I can judge, the Council did not have the full range of those issues on its agenda in Amsterdam and we cannot blame the heads of government for that. Nevertheless, we should take note that the issue has not been handled in an optimal and timely manner by the Community's institutions. In the meantime, Commissioner Fischler has put forward his agricultural proposals for the medium term in his Agriculture 2000 document. I understand that those proposals are likely to be examined by a Select Committee in another place and we await its appraisal with keen interest.

The proposals appear to be welcome in one respect; that is by placing greater emphasis on market-clearing prices for farm produce. However, I am disappointed by the continuing emphasis on income support for small and relatively inefficient producers. That policy has dogged us for far too long in the Community's agricultural policy. Of course, agricultural policy must embrace social considerations, but it should not be dominated by them. We must remember the interests of the consumer, too.

Another lacuna at the meeting was that the opportunity was not taken to redress the imbalance in expenditure caused by the outflow of resources from the structural and cohesion funds. I was interested to hear what the noble Lord the Lord Privy Seal said on that subject. I recognise that existing commitments remain in place in respect of those funds, but if we are to finance the changes necessary to prepare for enlargement it seems inevitable that a contribution must be found by economies in this area.

One significant change that has taken place is the insertion of a new title on employment into the Treaty of Rome. That reflects the social and political pressures on governments throughout Europe to promote a higher level of employment, a topic of more than usual importance and sensitivity because of its relevance to

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the financial criteria for EMU. One article in the title, No. 5, permits the adoption of measures in relation to employment which would be determined by using the QMV procedure in the Council and co-decision with the parliament.

That could involve funding from the Community budget, so the change is of particular importance to countries which are net contributors to the Community budget. However, it appears that there will not be sufficient headroom under heading No. 3 in the budget, which is specified in the text, for any large-scale spending at present. Nevertheless, the future use made of the new title in the treaty will require our close attention in future.

There is another interesting issue in the protocol on national parliaments. That document contains some important passages on the scrutiny of European legislation, a task carried out here by your Lordships' Select Committee on the European Communities, of which I have the honour to be a member. The new protocol has its origin in an initiative taken some time ago by the Select Committee and by the Select Committee on European legislation in another place. It led to a proposal for an amendment to the treaties. It was suggested that that should be done at the time of the Dublin European summit. That amendment would have provided for a period of four weeks from the receipt of a legislative proposal before its passage to enable scrutiny to take place in national parliaments. The latest text would extend that period to six weeks. If that text can be maintained in the final document it will represent a substantial improvement to existing procedures and will greatly facilitate the task of scrutiny at Westminster.

As I read it, the language used would also cover proposals emanating from the second and third pillars. It is at least clear that the proposal relating to the protocol on national parliaments would give COSAC (the Conference of European Affairs Committees of the national parliaments) a formal status under the treaties. Furthermore, there would be a particular responsibility for the scrutiny of legislative texts bearing on freedom, security and justice affecting the rights of individuals. I believe that that is certainly a step forward.

The juncture now reached raises some interesting questions about the political timetable. In 1998 governments of member states will have to take important decisions about EMU and the single currency, matters which were not on the agenda at Amsterdam. They will have to consider the procedure to be followed for ratification of the Amsterdam Treaty, too. Some countries--and I would expect Denmark to be one--may feel obliged to submit the new treaty to a popular vote because of the subject matter it contains. If so, the Danish Government might see some advantage in having the consultation on both issues--that is, EMU and the Amsterdam Summit--at the same time. Our position is different. Although we have heard the noble Viscount express the contrary view, I see no reason why we should not proceed to scrutiny and parliamentary debate of the new treaty and its subsequent ratification in the normal way.

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In Germany, decisions on this matter will be particularly important, given the extreme political sensitivity of the single currency/EMU issue there. I believe that a further vote will have to be taken in the Bundestag on that matter in any event, since the procedure was specifically required by a resolution in the Bundestag when it ratified the Maastricht Treaty.

I suggest that the sequence of decisions by parliaments and referenda on these European questions in 1998 will be of some importance. I hope that they can be arranged so as to avoid unnecessary tension and drama. In my opinion, there is nothing in the treaty that is so grave and menacing as to require submission to a popular referendum in this country. Perhaps I may hazard the thought that we in this country already have sufficient referenda on our political agenda for next year as to make a further one undesirable. Anything that the Minister can say to reassure us on that point will be most welcome.

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