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Lord Moynihan: I regret to say that that is not the only issue. It goes much further than that. It is not the Commission that would be the final arbiter in these circumstances. It is indeed the European Court of Justice that could be in the position of determining what are the important reasons for national policy. That is the issue on which I sought clarification. I appreciate that the noble Lord's point is an important one, but it is the next

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step beyond that point that requires clarification this evening. So I can fully appreciate the Government's position on the text of the treaty.

Lord Whitty: The debate has been wide-ranging, and I am sorely tempted to challenge some of the interpretations of history that were set out. However, I shall concentrate on the effect of the amendment and the whole question of flexibility in this treaty. In so far as I can answer the various specific points raised, I shall attempt to do so.

On the general context of the debate, first, I thoroughly endorse the comments of the noble Baroness, Lady Williams, about the general atmospherics within fellow member states. There is no vast enthusiasm for a great integrationist project. I disagree with the interpretation put on it by my noble friend Lord Shore and others. There was a time when the political elites in Germany, France and the Benelux countries were very much down the road towards an integrationist policy. That time has gone.

Noble Lords may have seen the television programme last night on BBC 2 presenting a discussion on enlargement. A German Social Democrat Member, indeed Vice-President, of the European Parliament, Madeleine Hoff--in the demonology of most noble Lords, she would be an arch-integrationist--said absolutely clearly that there is no chance of moving towards a federal, integrated superstate. She said that perhaps there would be some confederal features, but it is a free association of independent nation states bound by treaty and pooling their sovereignty in certain agreed areas. That is the project not only for the United Kingdom, but also for the other member states.

The view of the noble Lord, Lord Pearson, of the attitude of the governments of those countries that seek membership of the European Union is completely at odds with anything I have experienced. Last night I met members of most of the delegations who were here for a very important European conference which took place today. They made absolutely clear their desire to join the European Union. In that, I believe they reflect the views of their peoples.

Lord Pearson of Rannoch: The noble Lord will, however, accept that my view is based on personal discussion.

Lord Whitty: I accept that is based on personal discussion. However, both the formal position and recorded public opinion in those countries indicates a rather different conclusion.

In a sense, flexibility was to have been the big issue of the Amsterdam Treaty and it turned out not to be. These provisions on flexibility are relatively limited, and they do not change the total nature of the treaty that we inherited from Maastricht. Before Amsterdam, there was a big push and a lot of talk about new configurations of Europe, concentric circles, hard-core, soft-core, onions, variable geometry of various descriptions. In fact, this has provided a little elbow-room for a bit of welcome flexibility. But some of those grandiose projects for flexibility, and therefore

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a multi-tier Europe, were also reciprocated to some extent by the previous administration, as the noble Baroness, Lady Williams, said.

There was a dangerous situation where there appeared to be some coincidence between those central powers of Europe which wished to proceed to a flexibility which excluded in large part member states, including the United Kingdom--and the previous government of the United Kingdom, who wished to exclude themselves. To the Labour Party in opposition, and to the Government who came in in May, that seemed a very dangerous course. We were therefore not in favour of widespread flexibility within the treaty, and in particular not within Pillar I of the treaty, where the laws of the Community should, as far as possible, with a little bit of flexibility at the edges, apply more generally.

With flexibility in this treaty, it is not the first time we have seen flexibility in the European Union. From the Treaty of Rome onwards there have been derogations and transition periods and the single currency is one big bit of flexibility, the new provisions on border controls are another big one. The opt-outs are bits of flexibility.

What is new in the treaty is that we have made general provisions on flexibility which are spelt out in Article K.15 and which are subject to very serious safeguards. There has been some confusion during the course of the debate on how some of the provisions operate. In K.15, K.16 and to some extent K.17 we are talking about the overarching provisions which relate to all parts of the treaty. The specific clauses relating to Pillar I of the treaty, the Community part of the treaty, are in Article 5a.

Members of the Committee have referred to a great extent to Article K.12 which relates only to the justice and home affairs area and is limited to intergovernmental arrangements in any case. It relates to instruments such as conventions rather than Community law. Article K.12 is not therefore the key clause; it is Article 5a.

I wish to answer the noble Lord, Lord Shore, who interestingly welcomed some of the provisions. The noble Lord, Lord Moynihan, who was in favour of slightly more flexibility than I am, objected to them because they did not provide so clear a veto in the first instance. It is undoubtedly true that these provisions are a bit of a compromise--as are all treaty provisions--between those who wanted flexibility to go ahead, and to do so without any agreement with the others, and those who wanted to block any possibility of going ahead. What we were looking for and always said we were looking for was flexibility but only flexibility by the consent of the rest. The consent can be passive or active, but in the situation where the consent is not forthcoming a member state should be able to use its veto by appealing to the European Council as a whole.

There is not a veto within the first stage simply because, if one country was opposed to going forward but was nevertheless prepared to allow the others to go forward, that should not constitute a veto. But if there was a strong national objection, it would be reflected in

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the reference to the European Council where it could be blocked. Therefore, we are safeguarding a situation where people go forward to the detriment of the national interest of those who do not go forward.

In a range of questions, my noble friend Lord Bruce asked me who determined the situation when states can go forward. Surprisingly to all of us, he identified the Commission as the bogeyman in these arrangements. That is not the case. It is true that under Article 5a the Commission has to give an opinion, but the people who take the decision are the Council. The Council takes the view in the first instance by QMV, but that is capable of being overridden by the process I have just described. In no sense does the Commission make the final judgment. Only in limited cases where there is an issue of dispute would the Court of Justice have a role. That can be spelt out in detail in response to the noble Lord, Lord Moynihan, should he so wish.

In relation to the other question raised by my noble friend Lord Bruce and repeated again in more extreme form by others, including the noble Lord, Lord Swinfen, my noble friend Lord Bruce referred to Article K.7(6). But that does not have much to do with the flexibility clause; it relates to the JHA area. But, nevertheless, it does not give the European Court of Justice any jurisdiction over action by member states. It only allows the Court of Justice jurisdiction over decisions of the Council, not of member states. So it can have no effect on the sovereignty of Parliament. It does not therefore give the Court the ability to override or strike down legislation passed by Westminster.

That means that in the extreme case outlined by the noble Lord, Lord Swinfen, it does not prevent a member state from determining that it will withdraw from the European Union. Clearly, in order to withdraw, it would involve an incredibly complex degree of negotiation. Neither this Government nor any future government, I hope, would wish to contemplate withdrawal. Nevertheless, this article does not prevent us from withdrawing. The conditions under which we would accept flexibility and have accepted it in the Amsterdam Treaty, and would wish this Parliament to accept it in passing this Bill, are strict and limited.

Lord Swinfen: Perhaps the noble Lord will forgive me for intervening when he is in full flow, but I was not referring only to this article; I was referring to the Amsterdam Treaty as a whole. I was asking whether that will lock us into the EC and whether, once that is ratified, we will be able to withdraw. If we cannot withdraw, this Government are seeking to bind a future government, and that would be unconstitutional.

Lord Whitty: These are treaties. This is not a constitution of a federal state; these are treaties and we can negotiate our way out of a treaty. But it would require negotiation to get out. This treaty does not alter the status of the United Kingdom in relation to the European Union. Nothing that is newly introduced in

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this treaty alters the situation as regards ultimate withdrawal--remote and hypothetical as I trust that consideration may be.

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