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The Cardiff Summit

4.12 p.m.

The Lord Privy Seal (Lord Richard): My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister on the meeting of the European Council which he chaired in Cardiff on 15th and 16th June. My right honourable friends the Foreign Secretary and the Chancellor of the Exchequer, and my honourable friends the Minister of State at the Foreign Office and the Economic Secretary, were also present. Copies of the conclusions have been placed in the Libraries of both Houses. The Statement is as follows:

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    "A crucial part of the negotiations will concern the EU's future financing. There has been a good deal of press speculation about the position of the German and other governments over their net contributions to the budget. No doubt member states will continue to make their case for change in one direction or another. For our part, I made it clear that I will maintain the UK budget rebate, which cannot be changed without the agreement of the Government and this House.

    "As part of our enlargement debate, we discussed Turkey. The UK presidency has worked hard to restore positive EU/Turkey relations following the down-turn at the end of 1997. The Cardiff conclusions re-emphasised that Turkey's candidature to join the EU must be treated on the same basis as those of other candidate countries and endorsed a new strategy towards Turkey. The Commission has now said it will come forward with proposals for financing to overcome the existing impasse in this area. It is too soon to say definitively, but I believe this will help put this important relationship back on the rails and provide a basis for future progress.

    "On the foreign policy side, we issued a strong declaration on Kosovo, condemning the use of indiscriminate violence by the Federal Republic of Yugoslavia and Serbian security forces. If President Milosevic does not take steps to comply with our demands on dialogue, refugees, international monitoring and an end to violence, he should be in no doubt about our united resolve. We wait to see whether his discussions with President Yeltsin yesterday lead to the necessary changes on the ground. Meanwhile NATO planning and UN Security Council consultation continue.

    "We also discussed our serious concern about the Middle East peace process, where the EU remains supportive of US efforts. We called on India and Pakistan to take early steps to adhere to the international non-proliferation regime. We expressed support for Indonesia, provided a credible economic reform programme is followed, and underlined the need for an acceptable solution to the problems of East Timor, including the early release of political prisoners.

    "The European Council gave its support to the Northern Ireland Peace Agreement, and agreed that the EU should continue its active role in promoting peace and prosperity there.

    "We also discussed the environment and crime and drugs. We agreed on the need to implement the Amsterdam Treaty provisions on integrating environmental protection into EU policies. My right honourable friend the Deputy Prime Minister has begun this process during the UK presidency by bringing the work of the Transport and Environment Councils together, and ensuring that the next three presidencies are committed to an agreed programme. I am also delighted that one hour ago the Environment Council in Luxembourg concluded the EU's burden-sharing arrangements to implement

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    the legal obligation agreed at Kyoto for greenhouse gas emissions. This is an important step towards a cleaner world.

    "In Cardiff we welcomed the excellent progress made in implementing the action plan on organised crime. We endorsed the key elements of the EU drugs strategy for the period 2000 to 2004 and asked the Council and Commission to develop a comprehensive plan for action.

    "Heads of Government also had a wide-ranging discussion of the future development of the EU. We face big challenges: the introduction of the euro; enlargement; tackling unemployment and social exclusion; combating organised crime; giving the Union an effective voice in the world. There was agreement among EU leaders that, if the Union is to meet these challenges in a way that has the confidence of our citizens, it must ensure that people feel less remote from the political processes and institutions of the EU; that they can support European solutions to shared problems without fear of losing their national identity. This means increasing the democratic legitimacy of the European political process and making a reality of subsidiarity--being ready to co-operate where that is the right way of solving common problems, while reassuring our peoples that Europe will not encroach on national or regional freedom of action in areas where the state or indeed local authorities can best take responsibility.

    "There was widespread acceptance that the solutions do not simply lie in more centralised decision-making and that we need to find a more effective relationship between Europe's institutions and our national governments and parliaments. We now have to take those principles and make them the centrepiece of future European reform. The informal Heads of Government meeting in Austria in October will begin that process.

    "We also agreed that, once the Amsterdam Treaty is ratified, we will move on to the institutional issues not resolved at Amsterdam--notably the size of the Commission and vote re-weighting. Finally, we asked the Commission and Council to pursue work on improving their efficiency and organisation and to report on progress in the next presidency.

    "I was also delighted to welcome Nelson Mandela to Cardiff, to join my European colleagues in paying tribute to his extraordinary leadership in South Africa, and to take the opportunity to discuss with him the prospects for completion of an EU/South Africa co-operation agreement. We are agreed now to complete the negotiations by the early autumn. I understand that only 1 per cent. of the issues still remain to be resolved.

    "I believe the Cardiff European Council marked a solid step forward towards a more effective and better accepted European Union. We agreed, without rows or drama, on a series of substantive points to equip our countries and peoples better for the future.

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    "At the start of the UK presidency I outlined five objectives: building support for a third way in Europe--economic reform, combining economic dynamism with social justice; launching EMU; getting enlargement off to a good start; taking forward common action on crime, drugs and the environment; demonstrating that Europe could be a force for good in its relations with the outside world. These objectives have been met. As important as anything else for Britain, after years of negative and destructive posturing that isolated Britain in Europe but did not advance our interests, we have re-established strong, positive relations with our EU partners. Those relations, not before time, are transformed and for the better.

    "That is good for Britain, for Europe and for Britain in Europe. Cardiff was the proof of that."

My Lords, that concludes the Statement.

4.24 p.m.

Viscount Cranborne: My Lords, the whole House will, as usual, be grateful to the Leader of the House for repeating the Statement. It is in many ways a Statement of which I suspect many of us hoped for great things. After all, it marks the end of the British presidency.

Perhaps I may ask the Leader of the House whether he regards the last six months as a success. In answering that question he may want to bear in mind a number of matters. For example, first, a growing number of commentators are worried that the economic events in the east will spread westwards and that we may shortly have to face economic difficulties, both in Europe and America. Secondly, he will bear in mind that the number of trouble spots around the globe is proliferating and those trouble spots are both potential and actual. They include, self-evidently, parts of central, southern and eastern Europe, right on the borders of the European Union. Thirdly, he should bear in mind that proliferation of nuclear weapons is now a serious reality and that civil nuclear power stations in eastern and central Europe are an increasing cause for concern; and, finally, that the European Union faces the problem of endemic unemployment and the need, in the interests of political as well as economic stability, to ensure that that endemic problem is attacked.

Will the Leader of the House also accept, in answering that question, that we on this side of the House are pleased to see that the communique acknowledges the importance of those matters and, indeed, in 97 paragraphs and two appendices, catalogues a good few of them? Will he also accept that in particular we welcome the continued commitment to enlargement, to fighting organised crime, to budgetary discipline, to the completion of the single market, to job creation, to the environment, to small business, to reform of the CAP, to market access for Third World economies, to subsidiarity and to the expressions of good will for the resolution of virtually every regional crisis we can think of?

But what has the British presidency actually brought to a conclusion? As I so often follow the advice of the Leader of the House, I looked beyond the Statement to

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the communique. All we have in the communique is expressions of good will and assurances that progress is being made. The Prime Minister said the:


    "people's agenda was jobs, the economy, crime and the environment".

What has happened on those fronts? On jobs, in this country the Government seem to have adopted the former European Union agenda: the social chapter, the minimum wage, more public spending and more union power. Is it surprising that today, with what I can only describe as delicious irony, the Government have announced the first rise in unemployment for 26 months? Can the Leader of the House advise us as to why the European Union proposes to reverse the problem of unemployment by the adoption of what are after all rather old-fashioned methods? All the communique talks about is action plans which will "require further evaluation". Can the noble Lord tell us of one decision, as opposed to merely a report on progress, which will create one more job as a result of the Government's six months of hard work?

On the economy, of course we welcome the assurance on the Budget rebate and look forward to supporting the Government in their battles which will no doubt come to pass on that front. Does the Leader of the House think that the fudged criteria which enabled the 11 joiners to sign up to EMU is a sound basis for stability? That is, after all, a quality much hoped for in the communique. Does the noble Lord really think that in, say four years, the economies of the 15 will have converged, or will they have diverged?

Should we take it from the Prime Minister's remarks in Cardiff that he is now in favour of joining EMU as soon as he thinks that he can get away with it, by getting a yes vote in a referendum? May we have an assurance that the Treasury will not try to shadow currency movements in Europe meanwhile?

Can the Leader of the House say what are the Government's plans for tax harmonisation with our European partners? Is it the Government's aim to work for and achieve that? If so, on what basis?

On crime, we welcome the commitment in the communique, but I see that the European Union is again waiting for reports--this time from the United Nations. I hope that the urgency of the language will be mirrored in action.

On the environment we welcome the announcement that is in the Prime Minister's Statement, but clearly not in the communique, of what is happening in Luxembourg in adhering to the Kyoto agreement. The language of the communique covers a remarkable paucity of achievement with fine sentiments. Friends of the Earth called the summit's work


    "not much greener than a multi-storey car park."

Does the Leader of the House agree?

We see nothing of substance on enlargement. Does the noble Viscount agree with the Finnish Prime Minister that enlargement has become more problematical in the past six months, not less? However, I agree with the Leader of the House that the communique's language on Turkey is a great deal more reassuring.

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As the European Union is clearly against independence for Kosovo, what will the Government do if there happens to be an overwhelming majority vote from Kosovos for independence? Perhaps that is the great question that we should never raise, but it is one that ought to be envisaged and addressed.

I could find no mention of NATO in the communique although the Prime Minister rightly mentioned it in his Statement. I hope that the Leader of the House will be able to reassure us that the entire European Union, whether or not members of NATO, supports the actions that NATO is taking.

The communique covers a pretty poor performance over the past six months. Is it any wonder that the European Parliament voted down a Motion praising the British presidency? That seems a remarkable event, coming from an assembly dominated by the Prime Minister's ideological allies.

I wonder whether your Lordships recognise the following words:


    "We are on the brink of the new millennium, where radical, modernising programmes of reform are the only way to achieve decent modern societies for all our people."

Here we recognise the authentic voice of the Prime Minister. They are fine sentiments with which none of us could disagree, using words chosen by focus groups, serving as a substitute for action and a mask for increasing failure. Does it remind the Leader of the House just a little of the style of the communique?

4.33 p.m.

Lord Rodgers of Quarry Bank: My Lords, I too thank the Lord Privy Seal for making a Statement to the House. I know that he will understand that I say with no disrespect that the Statement could have been written in advance of the Cardiff meeting. Most of the events over the past two days, if events there have been, have already been well reported overnight. I confess that those who participated in the conference will remember it most for the surprise and pleasure of being in the great city of Cardiff and for the fringe event of the visit by Nelson Mandela--each of which provides the top or tail of the Statement.

The meeting was marked more by aspirations than decisions. I share in that respect many of the views of the noble Viscount, Lord Cranborne. I looked carefully under the heading of economic reform and employment but could identify nothing that represented a real decision with measurable consequences. I was particularly struck by this sentence in the statement:


    "We established a process to exchange best practice and monitor progress to ensure that these commitments are lived up to."

That phrase could have been repeated at almost every stage in the statement. The Lord Privy Seal shakes his head but I believe that he would be very hard pressed to point to any clear decision, the consequences of which will be plain. On the other hand, although that is typical of the Statement as a whole, it is an honest Statement, in so far as it refers to the two days in Cardiff as being a solid step forward. Those of us with experience of Westminster and Whitehall know that is

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Whitehall-speak for marking time. This was a marking time European Council at the end of a rather lacklustre presidency. While we welcome a number of aspects of the Statement and its more open and positive tone--very different from under the previous Government time and time again--the Government were mistaken to raise expectations that they could not wholly fulfil.

Certain elements or points in the Statement appear to have been agreed at Cardiff, although with uncertain consequences. We can applaud, for example, the references to democratic legitimacy and subsidiarity. We can take some comfort from those passages. The truth is--and I hope that the Lord Privy Seal will comment upon this--that there will be a diminishing role for Britain within the European Union as long as we are sidelined by our inability to decide when and in what circumstances to join the EMU. It is a strange matter that in the past six months of Britain's presidency a major historic decision was made to launch the euro, yet we were standing aside when we should have been participating and playing our part.

Does not the Lord Privy Seal agree that on the difficult but central question of the development of the European Union, were the Government to make a firm decision to set a clear timetable for joining EMU, we would find--as we did on other occasions in the past--that public opinion would swing to believing that that is the right way for Britain to go and that Britain should go in that direction as soon as possible?

4.37 p.m.

Lord Richard: My Lords, I am grateful to the noble Viscount, Lord Cranborne, and to the noble Lord, Lord Rodgers of Quarry Bank. When I listen to the noble Viscount on these occasions, I feel sometimes that there is a slightly farcical air to our proceedings. As I repeated the Statement made by the Prime Minister half an hour after he had made it, the noble Viscount had the opportunity to witness the Statement being made either in the Chamber or on television, and then to repeat his leader's response in the other place. All the quotations from the Prime Minister of Finland that the noble Viscount threw at me were those that Mr Hague saw fit to use in the other place.

For every quotation about the British presidency the noble Viscount can throw at me, I can provide a thicker file of foreign opinion that the British presidency has gone rather well. The noble Viscount asked whether we had had a good six months. In all candour I believe that we did, for three major reasons. We have re-established decent working relations with our European partners. After the history of the past decade that is a major achievement, to put it mildly. We have seen the successful launch of European monetary union. To get that off the ground successfully in the past six months is, again, a major achievement. Thirdly, we have seen enlargemet off to a flying start. Again, I have to say that that is a major achievement. So, if the noble Viscount asks what are the major achievements of the past six months, those are.

The noble Viscount asked a number of detailed questions. The main one of substance seemed to be: what has the summit achieved except for words? That

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was repeated to a certain extent by the noble Lord, Lord Rodgers. In relation to jobs, for the first time in the history of the European Union--at one time I had some modest responsibility for trying to look after employment throughout the affairs of the then European Economic Community--national plans to deal with unemployment were brought forward by each member state.

In relation to the decisions at Cardiff, the agreement on reinforcing the development of a skilled and adaptable workforce and so forth was agreed unanimously. It was said,


    "Orientations which guide our future work on employment shall include: reinforcing the development of a skilled and adaptable workforce, including through lifelong learning; particular attention should be paid to older workers; strengthening action on equal opportunities by ensuring that equality between men and women is mainstreamed in all employment policies ... tackling discrimination against the disabled ... promoting new ways of organising work, where necessary by reviewing the existing regulatory framework at all levels, to combine flexibility and security; reviewing tax and benefit systems to make it easier for employers to create new jobs and more attractive for employees to fill them; developing a culture of entrepreneurship and encouraging the growth of smaller businesses".

That is what all the members states signed up to. In addition, the Council agreed that the Commission should monitor progress in those directions. That is new. In my experience it has not happened before that specific commitments have been made in that way, endorsed unanimously by the European Council and to be monitored by the Commission.

The noble Viscount had a certain amount of fun with the Government saying that everything had been put off. But he misunderstands the nature of the European Council. The object of the Council, at the end of the presidency, is to review the progress being made on a number of ongoing issues. In our view, as I set out at the beginning of the Statement, the important ones are the economic reform policy, to which everybody signed up; the centrality of unemployment in national and economic policies; progress on enlargement; and progress towards EMU.

At a European Council meeting of this nature, though I was not there and do not know exactly what happened, they seem to try to review past progress and give those measures an encouraging push in the right direction. I do not accept for an instant that our presidency has been the sort of failure characterised by the noble Viscount, nor has it been as padded as the noble Lord, Lord Rodgers, seemed to characterise it. We have achieved the aims that we set for ourselves at the beginning of the presidency and the Government deserve credit for that.

4.43 p.m.

Lord Barnett: My Lords, I can assure my noble friend that I am not disappointed with the six months presidency--primarily because I was not expecting too much. My noble friend referred to improvements in the single market. Does he accept that the greatest improvement was for 11 member states to recognise that a single currency would provide the greatest improvement to a single market. My right honourable

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friend the Prime Minister is quoted in the press as having made one or two significant statements in Cardiff which implied some improvement in our position. Can my noble friend tell us whether there has been any significant change in what the Prime Minister said and in our position on the single currency?


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