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Baroness Jay of Paddington: My Lords, I am grateful for my noble friend's questions. As to the timetable on specific questions regarding taxation on savings and interest, although, as he rightly said, there is continuing discussion on them, it is only discussion. There has been no agreement to reach a decision at a particular point. There is all still to play for. As I said in reply to the noble Lord, Lord Strathclyde, the United Kingdom will not support action that will damage business competitiveness or jobs.

On our representation in the international organisations, the UK retains its seat on the IMF and at the G7 and other important bodies which discuss issues in the international forum. We have been successful in obtaining, and we always intended that there should be, an important distinction between those issues which would be considered as relating to the 11 euro members and the wider concerns of the 15. I hope that that reassures my noble friend.

Lord Waddington: My Lords, can the Leader of the House assist me? I gather that on tax harmonisation the

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Council said that the object of the exercise was not to bring about uniform tax rates but to stop, among other things, excessive loss of tax revenue by a country. Did anyone explain when a loss of tax revenue is acceptable and when it becomes excessive? Did the Council say who is to judge whether any loss of tax revenue is excessive and when it is acceptable?

Baroness Jay of Paddington: My Lords, I may be leading the noble Lord astray, but all I can do is to repeat to him the words in the communique:


    "Co-operation in the tax policy area is not aiming at uniform tax rates and is not inconsistent with fair tax competition but is called for to reduce the continuing distortions in the single market, to prevent excessive losses of tax revenue or to get tax structures to develop in a more employment-friendly way".
I read that because I thought it was the most sensible way to be explicit about the points raised by the noble Lord.

Lord Wallace of Saltaire: My Lords, referring to what was left out of the report, there was a quite substantial Austrian presidency paper on further development in justice and home affairs, particularly on immigration and asylum. If I understand it correctly, so far there are four European councils calendared for 1999. One of them, in Tampere in October, is to be devoted almost entirely to justice and home affairs. Was that not a subject on which the European Council spent time? If it is to be one of the major issues--and it is already one of the major activities of the European Union--could it be a subject for a government Statement on the British attitude, and perhaps a debate in this House?

Baroness Jay of Paddington: My Lords, a debate in this House would obviously be a matter for the usual channels. However, it has a resonance to which many noble Lords would agree.

The position on the action plan on justice and home affairs which was originally proposed by the Austrian presidency did not find agreement. Therefore, it was not discussed in the summit. But there has been a little confusion. I understand that there was also in circulation--and it was widely reported in the British media--a paper called Corpus Juris intended to take forward some of those matters. As I am sure the noble Lord knows, it was simply an academic institution paper and was not designed to reflect any of the positions to be taken either by the UK Government or by the Council of Ministers.

Lord Barnett: My Lords, I wish to take up two points with my noble friend. The first is on taxation. Does she accept that any rational Member of your Lordships' House would welcome and support the points made in the Statement? I refer to the aim to reduce harmful distortions, prevent excessive losses of such revenue and encourage employment-friendly tax measures. I hope that the noble Baroness will ignore those who laugh at these matters and accept that there would be no point in arguing with anyone who irrationally disagrees because they are no longer sensible.

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On enlargement, will the Minister state that, despite the welcome of the negotiations which have started, there is likely to be a long delay due to the lack of agreement--in particular, on those areas on taxation under CAP--and that those who plead for greater enlargement know that it will not occur at least for a very long time?

Finally, I recognise that there has been no real progress in Vienna. I doubt whether many people expected it. However, do I take the more euro-friendly tone of the Prime Minister to mean that it is now a matter of when we join rather than if we join?

Baroness Jay of Paddington: My Lords, my noble friend invites me to tread difficult waters as regards his latter point and his invitation to question the rationality of some Members of your Lordships' House in raising points--as I am sure they have always done--perfectly legitimately.

Although I know that there has been some speculation that the enlargement process has run out of steam and was not given an enormous push at Vienna, there are clear understandings behind the Statement and the communique that fast progress is expected under the German presidency to maintain the momentum, and that there should be new dynamism in and with those countries which are not yet in the formal negotiating process. Therefore, I do not necessarily agree with his understanding that there has been no progress in that field. I am sure my noble friend would not expect me to respond immediately.

Lord Pearson of Rannoch: My Lords, I wonder whether I can ask the noble Baroness the Leader of the House about two highly dubious claims in the Statement. The first is the claim that the EU's employment strategy is beginning to bear fruit, especially through new internal market measures in financial services which are supposed inter alia to increase the availability of risk capital. How do the Government square those claims with the loss of jobs and the damage to our economy which we are starting to suffer in, for example, our international art market and in our mergers and acquisitions industry in the City of London from harmonising EU legislation? If I am wrong about that, and the Statement is honourable in that area, can the Minister assure the House that we are indeed to escape from the effects of the VAT directives, droit de suite, and the takeover directive?

The second claim is at the end of the Statement and is even more absurd, I should have thought. It is to the effect that it would be profoundly damaging for this country to leave Europe. I suppose that it depends what the Government mean by the word "Europe". What do the Government mean by that word? Do they mean the common market, the single market, the Treaty of Rome, or the Europe of nation states? Presumably it is common ground that we do not want to leave the common market. But we would not damage the 15 per cent. of our economy which takes place with the EU if we left the Treaty of Rome. That would be profoundly beneficial to the remaining 85 per cent. of our economy which takes place in the United Kingdom and with the rest of the world.

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In short, why would it be disastrous to leave the treaty but to stay in the common market?

Baroness Jay of Paddington: My Lords, I am grateful to the noble Lord for his comments. The art market is a specialised area. I hope that he will forgive me if I do not respond immediately. I shall discover the answer to the points he made on that specialised area and will write to him about the VAT matter.

I simply say that it is in the Statement. Although I realise that there are difficulties in various economic and employment sectors throughout the UK, and in other parts of the EU, nonetheless over 1 million new jobs were created in the EU in the past year and over 250,000 of those were in the UK. The overall rate of EU unemployment has fallen below 10 per cent. for the first time since 1992.

As regards which part of Europe we are discussing, and how we define it, I think that when the Prime Minister, and indeed any Member of the Government, refer to leaving Europe they refer to the European Union.

Lord Bridges: My Lords, the Statement referred to the forthcoming entry into force of the Treaty of Amsterdam. Can the Minister say when she expects that to be? Have we deposited our instrument of ratification of the treaty? Perhaps I may remind the Government Front Bench that in the course of our debate a few weeks ago on the report of the Select Committee on the Treaty of Schengen I suggested that the Government should make a further communication to Parliament before deposit of our instrument of ratification. I still await a reply to the question that I put twice in that debate, I think to the noble Lord, Lord Whitty.

Baroness Jay of Paddington: My Lords, as the noble Lord will be aware, not all countries have yet ratified the Treaty of Amsterdam. Therefore, it is not possible to assess an exact date for its overall implementation. I shall follow up the noble Lord's inquiries to my noble friend Lord Whitty. I am sure that he will respond very shortly.

Lord Bridges: My Lords, the Minister did not reply to my specific question as to whether we had deposited our instrument of ratification of the treaty.

Baroness Jay of Paddington: My Lords, I am advised by my noble friend from the Foreign Office, and as regards my briefing from the Foreign Office, that that has not yet happened.


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