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Baroness Amos: My Lords, before the next speaker, perhaps I may remind your Lordships that we have two further debates this afternoon. The Companion suggests that your Lordships might wish to keep within a 15-minute limit for your speeches.

Lord Pearson of Rannoch: My Lords, I apologise to the House if I went three minutes over that time. I think it was occasioned by my diversion into the detail of the directive, for which I was asked.

1.25 p.m.

Lord Stoddart of Swindon: My Lords, I congratulate the noble Lord, Lord Willoughby de Broke, on bringing the Bill forward. It deserves support and I sincerely hope it will get a Second Reading today. I should also like to thank the noble Lord, Lord Pearson of Rannoch, for his explanation of the condoms directive, which shows quite clearly how officials, and indeed presumably Ministers, are engaged extensively with such ridiculously small items. As far as I know, condoms have been produced satisfactorily and safely in this country and throughout Europe over a very long period of time, long before the Treaty of Rome was signed in 1957. So, a great deal of money is wasted.

I should also like to support the noble Lord, Lord Pearson, in believing that we would be far better out of the European Union than we are in it. As one who opposed our entry into the Common Market, as chairman of the Campaign for Independent Britain and as one who still believes we should come out--and the sooner the better--I can tell the noble Lord, Lord Pearson, that he and I are in unison.

I appreciate the comments about the Bill made by the noble Lord, Lord Bruce of Donington. We really should have the assessments before things happen. However, that is not the way of the world at present. I believe that the provisions of the Bill will help to concentrate the

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minds of Ministers and civil servants, who will have to produce this information before they start making regulations and directives, especially as they will be required to report to Parliament and the various devolved assemblies. One flaw in the Bill is that it does not require the Government to find time to debate the reports in Parliament. Of course, they can just report but they never provide government time for those reports to be debated. So, we shall have to consider that in Committee.

The Government may say that there is adequate scrutiny at present. Clearly there is not because so many absurdities--some of which we have heard this afternoon--which often destroy businesses and cost jobs get through the net. A flood of regulations goes through Parliament, as has been mentioned, without any debate, and many important directives receive only a cursory glance by Parliament, both in the House of Commons and in this place.

Community legislation tends to have a greater and more serious impact on smaller businesses. They are not properly consulted about Euro-measures even though they are the ones the hardest hit by such measures. A recent publication entitled Inspector at the Door, issued by the Federation of Small Businesses, is well worth reading. It was published this year. I hope that my noble friend will obtain a copy. He will then perhaps realise just exactly how the system impinges so badly on the work of small businesses. They are plagued by a big raft of inspectorates, including some from the European Community. That distracts them from the real job of running those businesses and adds to their cost. I believe that that is recommended reading not only for Ministers but for civil servants.

It is not only small businesses that are worried. Even the New Labour-friendly CBI is worried by the seemingly unstoppable flow of regulations and legislation from the European Union. On pages 18 to 20 of the June issue of CBI News, an article warns firms to watch out for the "next wave" referring to a new raft of labour law in prospect. So even big business, as well as small businesses, is now becoming worried about what is happening in the European Union.

The horror story of European legislation and intrusion is told in stark detail by Christopher Booker and Richard North in their excellent book, The Castle of Lies. It was first published in 1996 but it is still relevant today. That, too, should be compulsory reading for Ministers. It shows how the bureaucrats have undermined democracy by bamboozling Ministers and sidelining Parliament.

Only yesterday an article appeared in the Daily Telegraph, written by Anthony Jay, whom we all know as the creator of "Yes Minister", which blew the gaffe on how government is carried on in this country. I cannot go into detail and quote from his article at length, but I believe that it should be read in full by Ministers, MPs and Members of your Lordships' House.

Mr. Jay said that all bureaucracies are bad, but the EC is a federal behemoth--I like that phrase. He also said,

    "If Brussels bureaucrats succeed in getting every country to join a single currency, they will be unstoppable".

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How I agree with that. How I have noted over the years that power after power has been ratcheted away from Parliament and from our own elected government to the unelected bureaucrats sitting in Brussels. So, good for Mr. Jay. Let him write more about that because I am sure his views will be welcomed.

The Maastricht Treaty was supposed to stop the flow of measures from Brussels through subsidiarity. But what happened? As many in this House predicted when we fought the Maastricht Treaty and the official Opposition refused to fight the Maastricht Treaty, the Commission treats subsidiarity as a joke. It continues to interfere in the nooks and crannies of our national life, which the noble Lord, Lord Hurd, when he was Foreign Secretary, deplored in such trenchant tones.

Just to illustrate how the tide of such legislation is still flowing in, Christopher Booker's column in last week's Sunday Telegraph tells how the rebirth of some of our great steam railway engines, like the Flying Scotsman, which have been lovingly rebuilt at great cost, could be at risk. They may not be able to operate in the future due to the imposition of expensive testing regimes for vital components built on a one-off basis. So even our steam engines, so loved by the British people and used by them when they are on holiday, are now at risk.

Christopher Booker referred also to some of the foreign vets working in our abattoirs, but I do not have time to go into that. Indeed, one could spend the rest of the day quoting cases of bureaucratic interference and misbehaviour, including the fraud about which we heard this year.

I will not detain the House any longer, except to reiterate my support for the Bill, which I hope will receive a Second Reading today and indeed be passed in its entirety by this House and another place.

1.33 p.m.

Viscount Trenchard: My Lords, I congratulate my noble friend Lord Willoughby de Broke on introducing this Bill, which should command support from all sides of the House.

The flood of legislation from Brussels continues to increase and, as your Lordships are well aware, much of it receives at best inadequate scrutiny here at Westminster. Members of your Lordships' Select Committee on the European Communities and of the European Legislation Committee in another place have repeatedly complained about this. Even directives are rarely debated and are often introduced as statutory instruments. It is often unclear how many Orders in Council will be required to put a Bill fully into effect, as your Lordships may well have noted in the case of the Pollution Prevention and Control Bill and the Employment Relations Bill.

It is clear that small and medium-sized businesses are particularly ill-equipped to understand, let alone implement, much of the vast myriad of detailed regulations emanating from the Commission. As a director of a company operating a small country house hotel in Devon, I am well aware of the enormous

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unwarranted costs we were required to incur in the refurbishment of the kitchens, re-siting the ovens, replacing the fine old wooden cupboards and shelves with stainless steel ones, and so forth. I understand that many small hotels have had to close because they are unable to bear the costs of implementing regulations of this kind.

The Working Time Directive is another case in point. As the Institute of Directors stated in its European manifesto,

    "Rogue employers will continue to thrive in the informal economy whilst their law-abiding counterparts struggle with the voluminous (but not quite 'definitive') guidance from the DTI on, for example, the Working Time Directive".

This measure will, according to the DTI, cost British business some £1.9 million. It seems that we in this country are much more conscientious in implementing EU regulations than are our continental neighbours. I would certainly not advocate that we should compromise our standards of observation of the law; indeed, rather the reverse. We should exhort the other European countries to raise their standards to ours. If they did, their governments would surely be more likely to join us in calling on Brussels for much more restraint in the introduction of new legislation. A law that is unenforceable is a bad law. A law which imposes obligations or restrictions on businesses or citizens which are disproportionate to the benefits it provides is a bad law.

In spite of the excellent work undertaken by noble Lords serving on the European Select Committee and its sub-committees, the achievements of which are rightly recognised in the country at large and which do much to enhance the reputation of your Lordships' House, the problem seems to be getting worse. It is of course frustrating that neither this House nor another place has any power to amend European legislation. The effect of my noble friend's Bill would be to increase the accountability of Ministers to Parliament in their representation of British interests in the Council of Ministers.

The power of member states to veto proposals has diminished and there has been a significant move towards a system of qualified majority voting as a result of the ratification of the Maastricht Treaty. There are unfortunately moves afoot to extend this system to other areas, such as tax policy. In that connection I also warmly welcome the introduction of the Bill of my noble friend Lord Waddington to restrict Ministers' powers to agree to tax harmonisation measures which at present seriously threaten employment in and the prosperity of the City of London.

I cannot understand why the Government are still seeking a compromise solution to the Commission's withholding tax proposals which will still cause this country much more relative damage than it will to other member states. The Government should, without further delay, declare their firm intention to veto this measure, the threat of which has already affected confidence in the City.

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In these circumstances it is absolutely necessary to increase the role of the British Parliament in the framing of Community legislation. Requiring the Secretary of State to consult with representatives of business, the trade unions, the professions and other interested parties, and then compile an annual report to Parliament is an excellent suggestion and should increase the obligation on Ministers to negotiate effectively on our behalf with their counterparts. The very sensible provision in the Bill to require Ministers to make an impact statement on British legislation required to give effect to European legislation will also serve the same purpose. I suggest that such impact statements should be required to be included on the face of a Bill in the same way as statements of compliance with the European Convention on Human Rights are now included.

Paradoxically, as power moves from the Council of Ministers to the European Parliament, the power of member states' parliaments will diminish. It is not encouraging that in spite of the wishes of your Lordships' House we have instituted a system of choosing our representatives in the European Parliament which provides for the least degree of democratic accountability and it seems that people have given their verdict on that system. For that reason also the Bill would serve the useful purpose of increasing public awareness of what is going on in Europe, both here at Westminster and in the country at large.

There are several industries and activities where we are world leaders but where we face particular threats. As regards the art market in this country, my noble friend Lord Hindlip has told the House on other occasions about the loss of jobs and damage to the market resulting from the Government's failure to prevent the droit de suite from being applied in this country.

I strongly welcome the Conservative Party's seven-point plan to cut red tape from Europe announced by my right honourable friend Mr John Redwood on 25th May. Among the seven points, I think that the point requiring the costs to affected countries of every piece of legislation introduced to be considered by the Commission and that requiring an assessment of the extent of compliance with existing legislation before the introduction of new proposals are especially important.

What I think the Government do not realise is the fact that we have a world market today, not a European market. Ring-fencing the European market by European red tape inhibits the competitive advantages of European players on the world stage. The opportunities available to British industry and commerce as a whole outside the EU are obviously greater than those inside the EU, especially given the respective expected future economic growth rates. For Europe and its member states to be strong and achieve their full potential and prosperity for their peoples, we need to restrict the continuing increase in bureaucratic regulations emanating from the Continent.

The noble Lord, Lord Bruce of Donington, said that the Bill only had effect after the event, after the European legislation had been introduced. I agree with

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him that it would be highly desirable for all European legislation to be subjected to an impact assessment by the Government before it is introduced. However, the effect of my noble friend's Bill would indeed be that Ministers would actually have to carry out an impact assessment prior to the introduction of legislation, because they will be uncomfortably aware of the need to report to Parliament afterwards.

I am grateful for having had the opportunity to speak in this debate and look forward to hearing the Minister's reply. I have also enjoyed listening to the contributions of other noble Lords.

1.41 p.m.

Lord Nunburnholme: My Lords, perhaps I may congratulate the noble Lord, Lord Willoughby de Broke, on bringing this very necessary Bill before us. I should also like to congratulate the noble Lord, Lord Pearson, on his insight and foresight. He covered his subjects totally and completely comprehensively. I thought that he made a magnificent speech. As for the noble Lord, Lord Bruce of Donington, I should point out to him that a man who is a little bit wiser than I am, whose name, I believe, is Solzhenitsyn--although I stand to be corrected--said:

    "A man who looks backward, looks forward with one eye closed; a man who never looks backward, looks forward with both eyes firmly shut".

I have many points to speak of the coming debate. The noble Viscount, Lord Trenchard, touched upon tax harmonisation and I have some hard guns to fire on that matter. However, if the noble Viscount does not mind, I will leave that for the next debate. Nevertheless, he got the point and was smack on. I thank him very much for that.

1.43 p.m.

Lord Taverne: My Lords, during the last debate I thought that I saw the noble Lord, Lord Willoughby de Broke, nodding his head with approval at some of my remarks. If that was a correct interpretation, I must apologise to him because I cannot quite reciprocate on the occasion of this Bill. I cannot return the compliment because I cannot support his Bill, although I could perhaps support Clause 3 with its idea of an impact statement on legislation.

Why? It is true that there is a substantial body of legislation coming out of Brussels which places burdens on companies. To my mind, that is an inevitable consequence of our membership of the single market. As our political and economic integration with Europe proceeds, as our exports are more and more oriented and our trade is more and more intertwined with that of Europe, of course we are affected by a host of European pieces of legislation. It is also true to say that in the past much of this has been oppressive, but there has been an improvement. For example, there is less concern now from Brussels with the harmonisation of, say, bottle-tops than there used to be.

However, even if this legislation places considerable burdens on companies, that does not justify the Bill. Indeed, it is a non sequitur. I find myself in the unusual

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position of agreeing with the noble Lord, Lord Bruce of Donington--at least as regards part of his remarks. I am not sure whether he welcomes my support, but on this occasion we do agree on one point; namely, that the effect of the Bill would not necessarily be helpful in any event because it would be retrospective and it would also be extremely onerous. It would not only be Ministers' time that would be consumed in trying to find out what the direct and indirect effects would be; there would also have to be a great army of civil servants. Is the noble Lord really suggesting that we should have a vast increase in the number of civil servants engaged in collecting statistics on something as vague as the direct and indirect impact on business of the various pieces of legislation? It would be a very difficult task to identify exactly what the impact was. What good would it do? At this point I differ from the noble Lord, Lord Bruce of Donington, because I think that it would be even more difficult if it related to future legislation when the impact would be even more uncertain.

There is another question that arises. If this is necessary in the case of legislation from Brussels, why should it not be necessary for legislation from the UK? There is no reason why we should not have the same sort of impact statement because that, too, can be extremely burdensome to industry. Let us imagine, for example, the Bill on which the noble Viscount, Lord Trenchard, and I were engaged earlier in the pre-legislation committee on the financial markets and services. It would be very difficult to assess what the exact impact, whether direct or indirect, is going to be. How could we ask a Minister to make a full statement on the subject? With great respect, I am afraid that the Bill is not practicable.

The latter raises the question as to why it has been brought forward. I do not think that it is necessarily the intention of the noble Lord, Lord Willoughby de Broke, but certainly there are others who welcome this as offering an opportunity to try to create more trouble in our relations with Brussels. It seems to be part of a sort of guerrilla campaign in which more and more impossible demands are made whereby power is sought to be restored to the UK Parliament. That is something which is perfectly logical from the point of view of the noble Lords, Lord Pearson of Rannoch, Lord Bruce of Donington and Lord Stoddart. They want us out of the European Community. But what is interesting is that that seems to be more and more the direction in which the Conservative leadership is travelling. This business about "in Europe but not run by Europe" is slowly beginning to edge us into moving out of Europe altogether. I give way to the noble Lord.

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