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Lord Williams of Elvel: My Lords, I am grateful to the noble Baroness. Does the Liberal Democrat Party still stick to the idea that there should be a specific rise in income tax in order to finance education?

Baroness Sharp of Guildford: My Lords, we are of the opinion that there is a case for raising income tax by one penny in order to provide an extra 3 billion for the education budget.

Nor would we have allowed the flawed Ofsted regime of constant carping and blame to undermine the morale of the teaching profession in the way that it has. The chickens from the long years of under-investment in education are now coming home to roost. Yes, at long last we are seeing resources put into repairs and maintenance. But still too many schools, when visited in this new monsoon climate we seem to be enjoying, have buckets in classrooms to catch the drips coming from the ceiling.

We face an increasing crisis of teacher shortages. The age profile of the teaching profession, like that of nursing, means that many will be retiring in the course of the next 10 years. Others are leaving because they are just finding the pressures too great; and we have not been recruiting enough to fill the places that are vacant. Yes, the Minister has told us that we have more teachers in place than ever before; but if we going for smaller classes in primary schools and in secondary schools, we need more teachers. We cannot do without more teachers. The recently released figures on teacher recruitment show that, in spite of all the blandishments being offered, graduates are just not opting for the teaching profession.

Why? It is actually not a question of pay. Ask any teacher and you will find that their main complaint now is about the bureaucracy imposed on them; plans to be written, targets to be set, and then reports to be prepared on how you have achieved those tasks; and in between you have to get on with teaching. If you are a primary school teacher, you are lucky if you have one free period from teaching each week. As with the medical profession, many teachers have traditionally come from families where one or both parents are teachers. It is there that we are now losing out. These children observe the lives their parents lead, and vote with their feet. I am delighted to see the advertising campaigns that are being run to attract teachers. I am

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glad that Chris Woodhead has left Ofsted so that we can at last see a regime that is more supportive of teachers and their efforts. I hope to goodness that between them these measures will bring in more teachers because we have a real crisis on our hands.

Years of under-investment in education also shows through at the national level. It is now well known that in 1997 we were spending less of our GDP on education--4.5 per cent--than in 1979. What is less well known is that, thanks to following Tory spending limits, the figure fell in the years 1998 and 1999 and only now, with the Comprehensive Spending Review money beginning to come through, is it starting to rise. Education, education, education; yet the Government allow the percentage of GDP spent on education to fall.

It is not as if we were high up in the league tables anyhow; and it shows through in other ways. Last week a new league table came across my desk--the OECD International Literacy Survey--in which Britain is ranked 11th; with Sweden, Denmark, the Czech Republic, Norway, Germany, the Netherlands, Finland, Canada, the US and Hungary, in that order, ranked above us. Perhaps most shaming was the fact that over 20 per cent--more than one in five adults in this country--have literacy and numeracy skills insufficient, in the words of the survey,

    "to cope with modern life".

In other words, their skills are insufficient to read the label on a medicine bottle and understand what it means. That is an indictment of our education system. We perceive it as a legacy not of poor teaching but of many long years of under-investment in education.

To do them justice, this Government have begun to turn things around. They are now belatedly putting more resources into education, although whether they are putting in enough remains a moot point. The emphasis on smaller class sizes and numeracy and literacy in primary schools is welcome, although we are sad that class sizes in secondary schools have risen over the same period.

We are glad to see the emphasis on early years education and, at long last, the recognition that we need to pay more attention to the further education sector and the development of vocational skills. But this, too, requires adequate funding. Funding both in this area and in higher education is still seriously short.

I conclude with a few words on the issue of vocational skills. One in five adults in this country-- 7 million people--are what is termed functionally illiterate. This helps to explain why we have a "yob" culture. Members on the Conservative Benches in this House yearn for the return of grammar schools, but they should remember that this was an education system which gave a splendid education to the top 20 per cent of the age range--indeed, I was one of those who benefited from it. However, the system wrote off the other 80 per cent. It put academic education on a pedestal and afforded only a low status to vocational education and allowed what at one time had been a vision of technical schools to wither on the vine. To too great an extent, I believe, this remains the case today.

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In its final report, the National Skills Task Force made it clear that Britain faces a chronic shortage of people with what are called level 3--the equivalent of A-level--vocational training and skills. If we look at Britain's educational profile today, we are currently encouraging more and more young people to pursue academic A-level courses and go on to universities, but we still have too many leaving school at the age of 16 and not enough undertaking vocational courses and going on to further education and training. There is a great gap between those achieving only at level 1--bare numeracy and literacy--and the increasing numbers going through to academic degree level qualifications at level 4. If we compare ourselves with those higher up the literacy league tables, we see that we, in contrast to other countries, have far too few students achieving qualifications at level 2 and level 3.

The great challenge to education for the coming decade is to fill that gap, to get the yobs off the streets, into training and thus trained for proper jobs. It is no good laying down curfews or even, if I may say so, providing Connexions mentors to chase them up and counsel them at the ages of 16 and 17. That is treating the symptoms, not the causes. We lose these children from the school system at the age of 10, 11 and 12 rather than at 16 and 17. The access issue in Oxford arises mainly because there are too few pupils from homes in social class 5 who even achieve the required qualifications.

As with the issue of disability, reversing these trends requires a revolution, one in both resources and attitudes. But if we are to reverse those trends in illiteracy, which underlie Britain's yob culture, and to build, as the Minister said in her speech,

    "a modern, inclusive and competitive society",

it is a revolution that we shall have to make happen.


Lord Davies of Oldham: My Lords, before we move on to the Statement on the meeting of the European Council in Nice, I should like to take this opportunity to remind the House that the Companion indicates that discussion on a Statement should be confined to brief comments and questions for clarification. Peers who speak at length do so at the expense of other noble Lords.

European Council, Nice

4.4 p.m.

The Lord Privy Seal (Baroness Jay of Paddington): My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Prime Minister. The Statement is as follows:

    "With permission, I shall make a Statement on the European Council which took place from 7th to 10th December. A copy of the conclusions has been

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    placed in the Library of the House and a copy of the Nice treaty will also be deposited as soon as a final version is available from the Council Secretariat.

    "This summit was the culmination of a year-long conference called to deal with issues on which agreement could not be reached at Amsterdam three years ago. Agreement was essential to open the door to the enlargement of the European Union--the goal of successive British governments.

    "An agreement was reached in the early hours of this morning which removes all remaining institutional obstacles to enlargement. It is extraordinary to think that a few years ago those countries in central and eastern Europe were still under the communist yoke of the old Soviet bloc. Today, there is the real prospect of uniting western and eastern Europe for the first time in generations.

    "The primary objective in the negotiation has therefore been successfully accomplished. But there were also key British interests. Our first priority was to get more voting strength for the United Kingdom.

    "The agreement reached increases the weight of Britain's vote. It raises the threshold for QMV up, when the EU will be 27, to over 74 per cent of votes. It adds two further tests: any proposal must have at least a majority of states on side, as well as crossing the 74 per cent threshold; and a new population threshold at 62 per cent of the EU is introduced. So the three biggest countries will continue, even as the EU enlarges, to be able to block together. This now can be placed alongside the changes in Britain's financial contributions.

    "Ever since we joined the EU, Britain has made a far greater proportionate contribution to Europe's finances than France or Italy, despite, until recently, being a slightly smaller economy. By 2006, on the assumption of only six new member states, we shall be making a net contribution roughly equivalent to France and Italy for the first time in our membership.

    "Secondly, on defence, the European Council agreed the arrangements for European security that we have negotiated over the past two years. It was made plain, first, that European defence would operate only when NATO chooses not to be engaged; secondly, that it be limited to peacekeeping, humanitarian and crisis management tasks; and, thirdly, that, as the text puts it, the commitment of national assets to any EU-led operation will be based on 'sovereign national decisions'. Collective defence will remain the responsibility of NATO. The next step is for the two organisations, the EU and NATO, to agree on the necessary arrangements. Any significant operation will require NATO assets and any such operation will be planned at NATO by the planning staff at SHAPE. This underlines the EU's aim to develop a strategic partnership with NATO. So here, too, Britain's essential national interest has been protected.

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    "Thirdly, we have retained unanimity where necessary and extended qualified majority voting where necessary.

    "Of the articles that move to QMV, 11 are appointments or changes in rules of procedure. One of these is important--the nomination of the Commission president, where it is essential that, in an EU of 27 or 30, one small state cannot block the right appointment. Nine of the changes deal with freedom of movement, where we have an absolute right to decide whether to take part, thanks to the protocol we secured at Amsterdam. The remainder are primarily about the efficiency of economic management and the single market, where majority voting is in the national interest: financial management of the EU budget, industrial policy and trade in services. That means new markets for British financial services and the jobs and prosperity that go with it. And within these articles we have kept unanimity where we need it: unanimity for harmonisation in anti-discrimination measures, unanimity for passports, unanimity for anything to do with taxation and social security.

    "However, there were areas where it would not have been in our interests to agree to qualified majority voting, in particular for taxation and social security. As we undertook to the House, these matters will remain subject to unanimity. In the field of justice and home affairs, the special protocol we agreed at Amsterdam continues to mean that we decide where to join in co-operation in our national interest; for example, in dealing with problems of asylum. On all these issues we said that we would protect the national interest and, contrary to the dire warnings of the party opposite, that is exactly what we did. The House will note with some amusement their claims now that these issues were never under threat.

    "In an enlarged European Union there will inevitably be issues where some member states can move ahead faster than others. It is in Britain's interests, as one of the leading partners of the European Union, for that to be possible. We have secured conditions for this co-operation which fully safeguard the single market, prevent discrimination in trade between member states, cannot conflict with existing agreements and are open to all. In the field of foreign policy, the common strategies of the Union will continue to be set by unanimity. Any co-operation between groups of member states has to be consistent with a prior agreement reached by all and is subject to national veto if necessary. These enhanced co-operation agreements will not apply to defence--another key British objective secured.

    "On numbers of Commissioners, up to 2005 unchanged, except for one for any applicant country. Then from 2006, one Commissioner per country up to a maximum of 27, from its present 20, with agreement to reduce numbers in 2010, following a review.

    "Since the Amsterdam Summit of three-and-a-half years ago, we have tried to rebuild British policy in Europe, to get the best out of Europe for Britain

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    while shaping Europe's future. On each occasion we were told that it was impossible; that Britain versus Europe was the only game in town. At Amsterdam, we were told we could not protect our borders. We did. Two years ago, in Berlin, we were told we could not protect the British rebate. We did better. We put Britain's contributions on a more equitable footing for the first time. Then, at Lisbon, we were told Europe could not accept the agenda for economic reforms. It did.

    "Earlier this year, in June's summit, we were told we could not win the argument on the withholding tax. It is won. The rest of Europe is now going to adopt exchange of information, not a new tax, as the way forward.

    "Finally, here on defence, we were told we could not improve Europe's defence capability--a vital NATO as well as EU interest--without undermining NATO and that we would be isolated on tax and social security. We secured all our objectives without it even being suggested that we were an obstacle in the way of enlargement.

    "It is possible to fight Britain's corner, to get the best out of Europe for Britain and exercise real authority and influence in Europe. That is as it should be. Britain is a world power. To stand aside from the key alliance--the EU--right on our doorstep is not advancing Britain's interests. It is betraying them.

    "Enlargement will now happen. British interests were advanced. But we cannot continue to take decisions as important as this in this way. This is not a criticism of the French presidency, which did well in immensely difficult circumstances. But the ideas for future reform in the EU which Britain put forward a few weeks ago are now essential so that a more rational way of decision-making is achieved. This too is a debate in which we should be thoroughly and constructively engaged. And we will be.

    "The Europe that this Government are striving for is one of nation states with their own traditions, cultures and special interests, working together in their own interests and in those of Europe as a whole. That means, on the one hand, making common decisions at a European level where that makes sense and, on the other hand, making decisions at a national or regional level where that makes sense. It means embracing all the countries of Europe, east and west, in a way that would have been unimaginable throughout most of the troubled history of our continent. It is a goal which moved forward in Nice. I commend it to the House".

My Lords, that concludes the Statement.

4.13 p.m.

Lord Howell of Guildford: My Lords, in the unavoidable absence of my noble friend Lord Strathclyde, I have been asked to reply from these Benches. Straightaway, I thank the noble Baroness most warmly for the usual clarity and eloquence with which she has repeated the Statement. Perhaps I may

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also add a word of thanks, through her, to the officials, who must have ended the summit at some godless hour this morning. They must have worked extremely hard after a very uncomfortable weekend--both physically and intellectually--to cobble something together. They usually get forgotten and I should like to add a word of thanks to them.

Before I come to my questions, does the noble Baroness accept that we on this side are totally committed to enlargement and to the bringing together of a Europe of free and independent states, for which so many British citizens, including the relatives of many people in the House, fought and died? I hope that that is not in question--although, unfortunately, I have seen it questioned in some quarters.

Was the Nice Summit really about enlargement? Was it really and truly the only trigger required for the enlargement process to go forward? Will the Nice agreements, such as they are, speed up enlargement by a single day in practice? If the aim was enlargement at Nice, why on earth was there not discussion about the common agricultural policy, which everyone knows is by far the biggest block for the applicant states in joining the European Union? It is a problem, particularly for the Poles. Why was there not discussion about easing the acquis communautaire burden, which is causing enormous difficulties for Hungary, the Czech Republic and other applicant states? Why was there not any suggestion that the applicant states should become members now, as has been suggested in some quarters, in order that they may share in the future shaping of the Europe of which they will be part? None of these matters was brought forward, which raises the question of whether enlargement was the primary aim.

We on this side have no difficulties with the proposal for a single Commissioner or, indeed, for Commission reform. It is badly needed. The Commission has an expansionist tendency which is long overdue for curbing. In my personal view, the Commission reform should have been much more radical. But we are happy with that.

We have no particular difficulties with the weighting of votes, although clearly it caused a lot of problems at Nice. I must confess to personal unease--and it is personal--that we should perhaps be not speaking up as strongly as Britain used to for the smaller nations of Europe. There seems to be a danger that we could now get a line up between the small nations and the big ones and that this quarrel could upset the whole equilibrium of the whole European Union.

Nor are we worried about flexibility, provided that it is kept under restraint and that there is a veto ultimately on that flexibility or enhanced co-operation. I am not clear from the Statement whether that veto is still in place. Perhaps the noble Baroness will tell us in a moment.

As to QMV extensions, we are constantly told that 80 per cent of all EU issues are covered already by QMV. I think it is reasonable to ask why we want

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more. I know that the answer will be that Britain has to get its way and we will have to push through more decisions once the Community is enlarged. But the truth is that the CAP has been under QMV for years, and that has got us nowhere in terms of opening up the markets that we want or obtaining the reforms of the CAP that we want.

There is a deeper question. Why is it so unquestionably good that the flood of controls and regulations from the centre should always be made easier to manage and smoother? Some people of a democratic turn of mind might question whether it is sensible always to be aiming for a bigger and better sausage machine to turn out more laws and controls. Is streamlining really the best way to democracy? The American founding fathers, for example, took the opposite view. They thought it was more important to block executive power in an overweening form. Perhaps we should think about that occasionally.

We are, of course, glad that taxation is protected by unanimity--that is, indeed, if it was ever threatened in the first place. I understood that the whole issue was non-negotiable. I cannot quite see why, if it was non-negotiable, it is a great victory that it has not been negotiated.

But surely 80 per cent is enough. Indeed, many people would say today, in an age which is against centralisation, that 80 per cent is too much. What about taking things the other way, away from the centre? What happened, for instance, to subsidiarity? What happened to the dream of returning powers to nation states and ending the relentless centralism, of which, so the Foreign Secretary keeps telling us, Maastricht was supposed to be the high water mark? Is it not the truth that Nice has not been primarily about enlargement but about the passion for further integration, which many of us doubt is the best way to the kind of stable and democratic Europe that we want to see?

The charter of fundamental human rights seems to have evaporated from the Statement. I should like to know what has happened to it. We have many worries about it becoming mandatory, but it seems to have received no mention in the Statement.

As to the plan for a new IGC in 2004, is that not the next step in the integration process? It is difficult to understand why the Government seem to be in denial about all these glaringly obvious developments.

In regard to defence, I note what is said in the Statement, but it does not seem to answer the fears expressed by Secretary Cohen in his speech the other day. Is there or is there not to be a separate command structure? Is there or is there not to be a separate operational planning system and separate headquarters for the new European force? If so, are the Americans right that, if there is separation, it could be a catastrophe for NATO? Are the claims of Ministers that the USA is not worried still true? If Mr Cohen's speech is anything to go by, they appear to be flatly and disgracefully inaccurate. I know that the House will debate this matter later in the week, but there are a lot of obscurities to clear up.

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We do not like the trends towards more central power, on the bogus excuse that they are needed for enlargement, of which too much of the acrid Nice discussions seem to be part. We do not believe that these trends are in the interests of either Britain or the wider, more open and democratic Europe that we want to see and work for. Quite honestly, we do not know whether we are being told the full truth by the Government and its "spin" experts about NATO or anything else. We believe that the British people are entitled to many more answers than they have yet been offered about what is really going on in the EU and the direction in which it is being taken.

The Government keep saying that the summit has been a "victory" and a "success". To misquote King Pyrrhus, if we have any more such victories, the EU will be in very deep trouble indeed. This treaty takes our Europe in the wrong direction. If that is not obvious now, it soon will be.

4.21 p.m.

Lord Rodgers of Quarry Bank: My Lords, I thank the Minister for repeating the Statement. We have heard an interesting response from the noble Lord, Lord Howell--one very different from that given by his leader, Mr William Hague, in another place. Only half an hour ago, I heard Mr Hague twice use the expression, "three more major steps towards a European superstate". I was glad that the noble Lord used no words of that kind. Indeed, only once did he refer to "integration"; and the phrase used by his leader in another place, "the ratchet of integration", was repeated. The noble Lord made a thoughtful contribution. I can agree with some of his remarks: for example, his reference to the UK championship of smaller states, which was not very apparent in the communique or in the events of last weekend.

There is no ducking the plain fact that--clumsily, even imperfectly--Nice has delivered on the main issue before it; namely, enlargement. "Enlargement will now happen" is the phrase used by the Prime Minister in the Statement. Indeed, it will; and Nice put the seal on that. My heart does not sing, but I welcome the achievement nevertheless.

On the question of the size of the Commission, I think all of us would have preferred it to be the present size or possibly smaller. There is a great deal to be said for a Commission of 12 or 15 members. I believe it was my noble friend Lord Thomson of Monifieth who said in an earlier debate in this House that, realistically, the number of members is likely to be 27. If that is the case, so be it; we need not argue too much about it.

On the question of votes and qualified majority voting, it is very difficult to find a balance between the large nations and the small ones. As I have implied, I am not quite so enthusiastic as the Prime Minister about the three largest nations effectively continuing to have a veto; but so be it. A balance has to be found, and I do not quarrel too much with the solution reached at Nice.

As the Statement makes plain, Nice has also delivered on the matter of the rapid reaction force. In looking at some back papers the other day, I reminded

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myself that it was in 1950, at Strasbourg, that Winston Churchill called for a European army--and that led to a four-year debate on the European defence community. The idea was abandoned; however, all of us who have been involved in either European affairs or defence affairs over this half century know that there has been a continuing debate on how to keep the United States engaged in Europe through NATO and at the same time the need for Europe to make its own contribution to its defence. If there were not so much partisanship on this issue at the present time, the outcome would be judged by many to be a fair one. For that reason, there would be some satisfaction with what has happened at Nice.

One part of the debate which underlies the tone of the Prime Minister's remarks today is the question of Britain's interests. It sometimes seems to be implied that Britain joined what was then the European Economic Community for the sake of the rest of Europe rather than because it was in Britain's best interests. But the important question--which should have been confronted at Nice--is not what might be the short-term interest of any country but what is in the long-term interest of us all. The formation of the European Community was an historic development. Britain's decision to join was an historic change of direction. We should recognise that, even if some battles are lost in terms of our immediate self-interest, the benefit historically can be a great deal more and will compensate for any short-term concessions. I get a little tired--although I understand why--of heads of government coming back to their countries claiming that there has been a great victory for their country and for themselves. I wish that they would sometimes come back and say, "It's been a great victory for European union and for our working together on political as well as economic affairs".

Referring to the weekend at Nice, the Prime Minister said that we cannot continue to make decisions this way. All of us must have some sympathy given the time that he spent there and the ups and downs of the discussion. But this may well be the new diplomacy. This is, after all, open "covenance", openly arrived at--which some were talking about almost a century ago. Three or four days of hard work, with all the uncertainty that was involved, is a small price to pay for the outcome, if the outcome is of the kind that we have seen on this occasion.

Perhaps I may ask the noble Baroness a number of related questions. First, there is a reference in the Statement to the period before the Nice Summit when there were discussions with the applicant states. What has been the reaction of the applicant states to the outcome of Nice; and do they feel that there is now a suitable platform for further entries? Secondly, much to the surprise of many of us, there is no reference in the Statement to a further IGC in 2004. Where has that proposal gone? I understood that it was referred to by the Prime Minister in a statement that he made shortly before his departure. Thirdly, on the question of enhanced co-operation, the anxiety of many of us has been that it will lead to a two-tier European Union. The Statement refers to conditions that have been

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agreed, which, as I understand it, will impede the possibility of that developing. Will the Minister say a little more about what the conditions are that will prevent that undesirable development?

4.28 p.m.

Baroness Jay of Paddington: My Lords, I am grateful to both noble Lords for their reaction to the Statement. I join the noble Lord, Lord Howell, in congratulating those people--among them the officials on planes, in the Foreign Office and in Downing Street--who have worked so hard to produce the information that we have before us and which I have attempted to convey. However, I say in advance that the final text of the treaty, for example, is not yet fully available. Immediately it is, a copy will be placed in the Library. I shall try, as I hope I always do, to be as helpful as possible to noble Lords; however, this may be an occasion when I may have to say that I shall write to them rather more often than I customarily care to do. That is not because of lack of information prepared for me by officials but simply because everything has been, as the noble Lord, Lord Howell, said, rather scrambled together on the basis of events that took place at four or five o'clock this morning.

I welcome the statement of the noble Lord, Lord Howell, that he and Members on the Benches behind him are totally committed to the principles of enlargement. The Nice treaty, like the negotiations, is entirely directed to that end in order to achieve greater security, political stability and prosperity for this country and indeed the whole of Europe. I agree with the noble Lord, Lord Rodgers, that there was a slight difference in tone between what the noble Lord, Lord Howell, said and what Mr Hague said in another place. I entirely welcome the tone adopted by the noble Lord.

On the specific questions raised by the noble Lord, I very much welcome his constructive approach to the reform and size of the Commission and to the number of Commissioners from each individual member country.

He asked about the reweighting of votes and whether by 2004 any of the applicant countries would be present to take place in a subsequent IGC. I can confirm that that has been agreed and will take place in 2004. The noble Lord will also know from the statements made by the Prime Minister in Nice this morning that it is hoped and expected that the applicant countries that are able to do so will be at the table in 2004 to take part in that IGC. Therefore, I hope that that question has been answered.

It is right, of course, as the noble Lord, Lord Howell, said, that some of these matters should be more widely referred to the national parliaments. That was part of the burden of my right honourable friend the Prime Minister's address to the Warsaw Stock Exchange earlier in the autumn, when he mentioned what he hoped would be an increasing role for national

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parliaments in arriving at these decisions and in at least being more actively involved in the discussions leading to them.

The noble Lord raised the question of qualified majority voting. I am sure he will be aware that this country is pleased that QMV has been adopted in some areas--for example, in the greater extension of trade and particularly in the area of financial services. Another specific example is the professional movement across the European continent of people with particular skills in that area.

The noble Lord also asked about the charter. That was not mentioned in the Statement because the Government's position, which was that this was a political declaration, was adopted easily and early in Nice and, therefore, was not regarded as of headline value for the Statement that was made in another place.

The noble Lord, Lord Rodgers, raised the question of whether anybody from the applicant countries had commented on what had happened at Nice and seen that as opening the way for enlargement. By way of example, I quote the Polish Prime Minister, who this morning said that it is exceptionally favourable to Poland, and that enlargement by 2004 at the latest is very good news. A significant quotation that I have from a particularly important candidate country is that the Union, in his view, is not putting off enlargement.

The noble Lord also raised the question of the IGC, which I have mentioned. The point that he made about the question of smaller countries has been acknowledged by the UK. In the context of our national position, it was important to achieve the first enhancement of our own voting rights within the EU since we joined. That, of course, puts us in a comparatively stronger position. It also meets some of the arguments about the way in which other changes to the Commission might have diminished the authority of this country, without necessarily causing any of the problems referred to by the noble Lord, Lord Rodgers.

On the general overview of what happened, I draw to the attention of noble Lords, and specifically to the attention of the noble Lord, Lord Howell, the points made by my right honourable friend in his speech to the Warsaw Stock Exchange, in which he referred to a different way of doing business within the European Union, which would, for example, perhaps require an agenda for European activity to be tabled by the individual countries--and indeed by the Commission--to be reviewed annually. That would perhaps reduce some of the necessity for the rather extended, frenetic, and under-the-spotlight negotiation and consideration that has taken place in the past few days. I am sure that the noble Lord, as a parliamentarian, welcomes the point that I made a few moments ago about the enhanced role for European parliaments in a different type of working. I believe that those are the significant points, involving a more considered way of doing business, on which my right honourable friend sought to insist.

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The noble Lord, Lord Rodgers, questioned whether this matter was regarded as a game to be won. My right honourable friend made it clear in the Statement that he did not want Britain's engagement with Europe always to be regarded as Britain versus Europe. He would prefer it to be seen as part of a more generally enhanced arrangement.

On the European defence union, the simple answers to the questions of the noble Lord, Lord Howell, are, "No, no, no". I quote what was said by the Prime Minister in Nice this morning. He said:

    "The conclusions make absolutely clear that NATO is the cornerstone of our collective defence, that European defence in the circumstances where NATO as a whole decides not to be engaged, is limited to the peacekeeping and humanitarian tasks, and it is only where the sovereign decisions of each individual country is taken in respect of each individual mission. That is now absolutely clear".

I hope that the noble Lord will agree.

With regard to the potential for contrasting aims as between this country and the European Union as a whole, I should point out to the noble Lord, Lord Rodgers, that the summit has demonstrated that, if we continue to take the leadership that we have taken, we can protect our vital national interests and advance those national interests in the European Union. The emphasis is as much on the second part as the first.

4.35 p.m.

Lord Tordoff: My Lords, I shall not detain the House too long. The Select Committee will meet tomorrow and will no doubt ask many more questions of Mr Vaz than time permits today. However, it is probably fair to say that when we take the report from your Lordships' Select Committee on the IGC, it will emerge that the committee will feel pleased about the progress that has been made in respect of a number of points. Particularly in relation to enlargement, the road blocks that stood in the way following Amsterdam seem to have been cleared.

Perhaps I may ask the Leader of the House about the number of Commissioners. We recommended that, if possible, the number of Commissioners should be reduced to below 20. However, that was said with little hope of achievement at this stage. I note from the Statement that, once the figure reaches 27, there is an agreement to reduce the number in 2010. Will the noble Baroness indicate what mechanisms are envisaged to ensure the rotation of Commissioners? The rotation of Commissioners will mean, of course, that countries from time to time will have no Commissioner at all. Is there a general agreement that that should be the situation?

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