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Baroness Jay of Paddington: My Lords, it was made quite clear that the basic agenda items would be those originally agreed at Cologne. I am sure that I do not need to remind the noble Lord of the size and composition of the Commission, the weighting of the votes in the Council and the possible extension of qualified majority voting.

As I understand it, the noble Lord refers to the fact that a few additional items may be added later. They would be in the context of enlargement and reform, not extending the scope of the IGC. It is clear that the new conference is not a big policy opening. It will be about practical matters: to make more effective and efficient the institutions that were thought this time last year to be rather less than accountable.

Lord Boardman: My Lords, does the noble Baroness accept that the main reason for member states requiring the withholding tax is their failure to collect taxation from their own members? If they would remove the secrecy imposed on banking accounts, their problem would be made much easier. Does the noble Baroness accept that the Government's practice of suggesting compromises and further conferences on that question merely delays the day when they will be forced to make some concession? Would it not be more sensible to say to those pressing for some withholding tax to be imposed, "Get lost. Put your own house in order; do not leave us to be your tax collector"?

Baroness Jay of Paddington: My Lords, that is probably exactly what the Chancellor of the Exchequer said, in diplomatic language, at the ECOFIN discussions at the end of last week. The group will look at the whole package of tax arrangements proposed and discussed at Helsinki. The UK Government have made it absolutely clear that there is no question of any change that would prevent use of the City eurobond market, which we are determined to protect.

Lord Stoddart of Swindon: My Lords, is my noble friend aware that there are many more important issues in relation to the European standing force than whether or not English will be the working language? Annexe 4 announces that there will be a new standing political and military committee of the European Council that could or would act as the command authority for the standing force. How will that new body be accountable to heads of government and national parliaments?

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What would constitute a European army? The communique says that the new force will not constitute a European army. We need further explanation. Also, my noble friend referred to a union of nations. Is she aware that many of our continental partners take the view that the nation state is an anachronism and is just about dead? Can she say how the Government will make it absolutely clear to other countries and leaders that Britain continues to believe in the nation state and will progress that belief within the European Union?

Baroness Jay of Paddington: My Lords, I cannot authoritatively explain the position because I have not asked the specific question that my noble friend asked of me. I imagine that the new political and security standing committee would report through precisely the same mechanism as previous committees with that status. If I am mistaken, I will write to my noble friend.

The idea behind the common defence arrangements is to provide a more flexible rapid response force in certain situations, particularly where there are humanitarian crises or difficulties of the type that Kosovo might produce--although in that example, NATO was involved. As I told the noble Lord, Lord Strathclyde, it is explicit in the conclusions of the summit that it cannot in any language or understanding be remotely regarded as an army.

My noble friend Lord Stoddart invites me to into an area that is almost one of political philosophy. I am sure that the Government will at every opportunity make perfectly clear that the concept of the nation state is one that we in this country completely understand, will continue completely to support, and wish to see embraced within the context of the wider European Union.

Lord Biffen: My Lords, perhaps I may reinforce as best I can the points made by my noble friend Lord Boardman concerning the withholding tax. Does not the whole protracted debate on it and its complexity underline the value of the veto as part of the negotiating process? In that context, what does the noble Baroness believe to be the prospects at Helsinki of an enlarged European Union of 28 nation states comprising 540 million people? In that situation is there not a danger of our legislative identity being swamped, and what proposals do the Government have to deal with it?

Baroness Jay of Paddington: My Lords, as to progress on discussions relating to the withholding tax, in reply to the noble Lord, Lord Boardman, I did not make explicit that the conclusion of the ECOFIN Council in December 1997 was that the discussions should not apply to eurobonds and similar instruments. In a sense, although this debate may have been going on for two years, we have always made clear our bottom-line position which we are determined to protect.

As to the wider point raised by the noble Lord, Lord Biffen, about whether these issues will become more complex with the increase in the number of member states, some of which perhaps have an understanding

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of government arrangements and democratic institutions which is different from that in western Europe, without repeating what my noble friend Lady Scotland said in the debate last week, that is why it is important to have a flexible transition period. That is also why, as I said in reply to the noble Lord, Lord Tordoff, these issues are absolutely crucial to the arrangements which are built up during progress of the IGC.

Lord Bruce of Donington: My Lords, in view of the fact that some little time will elapse before the next intergovernmental conference, will my noble friend ensure that the public generally are made aware of the precise attitude of Her Majesty's Government towards the findings and recommendations of the so-called "three wise men"? Will she ensure that the substance of those proposals, which are likely to have an enormous effect on Europe's institutions, is thoroughly debated? Will my noble friend also ensure that steps are taken to acquaint the public and Parliament with any independent proposals of the Government before the IGC, bearing in mind that there should be a constructive contribution originating with ourselves?

Baroness Jay of Paddington: My Lords, as to my noble friend's final point, the Government will publish a White Paper early next year on their approach to the principle of the IGC and the issues that it raises, which may well cover some of the points raised this afternoon. I am not in a position to give my noble friend precise information on whether that will also embrace the specific response to the committee of three wise men. If I become aware of it, I shall let him know. From previous experience, I am aware that my noble friend probably has better and more exact channels of information on these matters than I do. As to broader public debate on the issues, it was made explicit in the conclusions at Helsinki that this matter should be more widely discussed. I am aware that my noble friend is always assiduous in pursuing these matters in your Lordships' House, and I doubt that we shall be in ignorance for long.

Lord Avebury: My Lords, what does the definition of Turkey as a candidate for membership of the European Union add to what was said at the Luxembourg Summit? Are not the conditions then laid down--that Turkey should align herself with human rights and the treatment of minorities that are common in the rest of Europe--to be upheld, plus the condition relating to Cyprus which, as far as I know, does not affect any other candidate? Does the role of Turkey as a candidate member make any difference to the conditions that that country must fulfil?

Baroness Jay of Paddington: My Lords, it probably makes the noble Lord's concerns more precise; that is, the criteria against which Turkey's performance with regard to human rights and democracy are to be judged are easier to benchmark (if I may use that expression) than without formal candidate status. I am sure that the noble Lord welcomes, as I do, the

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extremely important lever which the European Union has on what happens in Turkey in a wider context. Clearly, Turkey does not yet meet the criteria on human rights, on the political status of minorities or on the general development of some of the democratic institutions. As to the relationship with Cyprus, although the membership criteria are the same for Turkey as for every other candidate, Greek and Turkish relations in this context are clearly of specific interest. Those will be covered in the political dialogue with Turkey about the procedures that are to be undertaken. If there were a settlement within Cyprus, that would facilitate its accession and might ease the whole situation.

Lord Pearson of Rannoch: My Lords, I notice that the noble Baroness did not answer the question put by my noble friend Lord Strathclyde about the takeover directive. I wonder whether she can do so. The noble Baroness will be aware that this directive subjects the speedy findings of the Takeover Panel to the interminable delays of the Luxembourg Court and thus completely destroys hostile take-overs in the British economy. While she is at it, will the noble Baroness be so good as to say whether we are able to save the art market upon which we have also been outvoted on the question of droit de suite? Finally, I do not believe that she noticed the vitally important matter of corpus juris in the context of the European legal system which your Lordships debated on 25th November at which time the Government were unable to assure me that we had a veto. They merely said that we would have to pass primary legislation. Therefore, was any progress made at Helsinki on the takeover directive, the art market and the legal system?

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