WEDNESDAY 24 APRIL 2002
Mr Jimmy Hood, in the Chair
RT HON PETER HAIN, a Member of the House, Minister of State for Europe and MR KIM DARROCH, Director, European Union, Foreign and Commonwealth Office, examined.
(Peter Hain) Thank you, Chairman. I see Council reform as absolutely central to the future reform of the European Union. The Prime Minister has made this our priority in terms of redesigning the institutional political architecture of Europe, which we are going to do in part at the Seville Council in June but in a longer time frame during the discussions for the Future of Europe Convention where I sit as the Government representative. Essentially, and I will come directly to your question about the General Affairs Council, we want to see the Council playing a much more politically-strategic role, giving the leadership which Europe needs, which it is not doing at the moment - and this has been widely acknowledged, including by the high representative, Javier Solana, who produced a paper for the Barcelona Council and in a joint letter which our Prime Minister and Chancellor Schröder wrote. We want to see the European Council itself, the heads of government, giving decisive strategic leadership, not getting bogged down in some of the detailed issues that they have done, and as part of this, looking at a reformed presidency system, so that we do not have the instability and discontinuity inherent in the six-monthly rotation. As far as the General Affairs Council is concerned, we support the idea of a reorganisation of the GAC which, and I have sat on it myself, is a rather uncomfortable mix between a foreign ministers council and a council which is attempting to manage the general affairs of the European Union. So we favour the separation of the GAC into a genuinely foreign ministers council on the one hand, given the way Europe is now much more prominently engaged in foreign policy issues than ever before, and on the other a body which could be called a general affairs council still, I would imagine, which would prepare for European Council meetings, take many of the detailed decisions which are now dumped on the agenda of the European Council, and therefore allow the European Council itself to focus on the really big issues and provide the political leadership necessary for driving Europe forward. In respect of defence, there is already a decision, as you will be aware, Chairman, that defence ministers can meet in the GAC defence formation, which is a different issue from this particular matter. I would just make one other point, I would not rule out there being a separate defence ministers council of ministers formation in any reorganisation of the Council, and I would be happy to go into that area if you wish to press me on it, since with European Security and Defence Policy now pushing forward there may well be a case for a separate council of ministers formation specifically to consider defence matters.
(Peter Hain) We start from the principle that, first of all, the presidency of the European Council should really be driving the political agenda of Europe in a way it is not at the moment, so what we would like to see is the European Council electing its president for a longer time frame than six months. It might be as long as five years to coincide with the full length of the Commission, but that is a matter for discussion and I would be interested in the Committee's views on that. Then a reduced number of council minister formations underneath, from the present number to perhaps ten or 12. Then different countries on a rotating basis allocated taking the chairs of perhaps one or two at a time for a longer period than six months, enabling the president of the council, a sort of team presidency approach, and enabling also countries to have more of a stake in the presidency system than, with an enlarged European Union of 25, you would have under the six-monthly rotation system, when you come round once every 121/2 years or eight times a century. So the idea is to get a team presidency which has more continuity, more strategic direction and more political clout, frankly. As against that, there is an attachment by a number of countries, especially the newer ones - and of course we have the prospect of ten new countries coming in by early 2004 with the decisions due at the Copenhagen Council in the middle of December - to their place in the sun, they like the idea of having a stake at the top table of Europe. Well, they will get a stake more regularly than if the six-monthly system continued. We suggested the idea of a host country where the six-monthly rotation would remain so that perhaps the informal council for heads of government, and maybe one or two other council of minister formations, could meet in the host country but there would not be the presidency, the presidency might be organised according to the description which I gave you earlier. That would then give each country and their people a stake, it would mean in the case of the newer countries Europe would come to Slovenia or Latvia or Malta or wherever it might be, which I think helps binds the institutions closer to the people of those countries, and of course we would be in the queue as well as would every other Member State.
(Peter Hain) Yes, that is our position. We do not distinguish in respect of rights to chair Council of Ministers meetings or indeed in terms of the team presidency approach which I suggested. If we went for the model I suggest and, say, you had around five countries in a team presidency underneath the elected president of the Council, then smaller countries would be as entitled to assume the position chairing council of ministers meetings and therefore being in the team presidency as would larger countries. Indeed I think it is really important with nine smaller countries coming in, Poland being the large one, if the enlargement negotiations remain on track and they all qualify, their rights are respected.
(Peter Hain) Chairman, I was described as candid by my friend, Bill, and I hope I am always candid with the Committee, and I hope the Committee values that. What is important is the model first of all that we have in mind for the future development of Europe, and our model as a government is our vision of a Europe of independent nation states rather than some kind of federal superstate.
(Peter Hain) Subject to majority voting is widely at the moment conceded by all governments in the great majority of cases following the Single Market Act ---
(Peter Hain) Well, the single market matters as part of the governance of Europe and indeed a very, very important part of what the European Union is all about. There are a number of red lines on qualified majority voting - foreign policy for example, defence policy in the sense of committing our soldiers to war. I do not think a British Government, or for that matter any other European Government, would take a decision to volunteer its men and conceivably women to fight or assume a defensive role, in the Balkans or wherever it might be, on the basis of Community decision making. Foreign policy, defence policy, treaty changes, taxation, social security, borders, these are matters of vital national interest where I think we should not proceed by qualified majority voting. But, as I think I explained to the Committee last time, if you look at the anti-terrorist measures which have been adopted since 11 September, a number of third pillar items on justice and home affairs have been moved into Community competence and can proceed with qualified majority voting because it is in our interests to do that, to stop asylum shopping, to stop the situation where people can come in across the borders, as they do, and camp out on the other side of the Channel Tunnel at Sangatte. As I explained to the Committee last time, that is an example where there would be a British self-interest in getting exactly the same procedures, exactly the same systems, exactly the same regulations, right across Europe so people could not asylum-shop to end up in Britain, if that is where they wanted to go. If I just conclude, it is an important point, you are implying integrationism is some sort of pejorative term. We are not interested in integrationism for its own sake. There are people in Europe who are but we are not. I think we are now flowing with the great tide of opinion in Europe which is against the idea of a federal superstate, wants the nation state to be the foundation and building block of Europe. I think the force is with us, if I may put it that way, and talking to representatives in the European Convention chaired by Giscard d'Estaing, it is very apparent that is the majority view.
(Peter Hain) I would be happy to.
(Peter Hain) This is something that we are quite keen on. If we take the example of the sites, we had at Laeken the unedifying spectacle of a squabble amongst the leaders of Europe as to which agency would be sited in their own country, and it broke down in the end for a number of reasons, including the fact Italy wanted the Food Standards Agency based in Parma because Prime Minister Berlosconi reckoned they had the best ham in the world and therefore that, ipso facto, defined where this Food Standards Agency should be. Finland took a different view. That is an example of an issue and a handling of it which did Europe no good at all, in fact it was very damaging for the image of Europe in the public's mind. It should have been handled by qualified majority voting and if it had been, without everybody holding a veto as to which particular part of the action they could claim, then we could have made sensible decisions. I guess decisions like that should be prepared for in the General Affairs Council. That is a concrete example.
(Peter Hain) Sir Stephen Wall, the Prime Minister's European adviser and a very distinguished Foreign Office official, has been entrusted with negotiating with the Spanish Presidency to try and get as much movement here as we can by the time of the Seville Council, and obviously we would want to report on that. There are, of course, a number of views on it and if the Committee is able to consider this matter and let me have its views before Seville, which is in the third week in June, I would happily feed that in. There are then a number of other matters requiring treaty change, such as the election of the president of the European Council for a longer term appointment, the election of chairs of the Council of Ministers for a longer term, the team presidency of the kind I have described. Those would require treaty change so could not actually be implemented until the next Intergovernmental Conference, which is scheduled for 2004, so there is a bit of time for scrutiny before then.
(Peter Hain) We are against it.
(Peter Hain) As you will be aware, the Lisbon economic reform agenda, which was essentially a British agenda adopted unanimously but, frankly, with varying degrees of enthusiasm in some areas, especially energy which I will return to, was absolutely crucial to making Europe more competitive. Europe is around 40 per cent less competitive in productivity terms than the USA for example, and with the competitive threat from the Far East, China in particular, Europe needs to be more competitive. That is why this ten year programme aimed at creating 20 million more jobs, to create in Europe the world's most advanced information technology society, was established. We have already created over the last few years 5 million of those jobs, although there has been an economic slow-down happening more recently. There has been progress. For instance, in telecommunications liberalisation, the price of long distance phone calls has fallen by half across the European Union over the last couple of years. So there is progress. We did make important progress on energy, on financial services, and on other matters which I am happy to go into, but it was absolutely crucial at Barcelona, after the process appeared to stall at Stockholm the year before under the Swedish Presidency, that the impetus was regained, and indeed that was the case.
(Peter Hain) First of all, taxation, for example, is a matter of national economic policy, and as far as we are concerned it will remain that way. That is not exactly a unanimous view across Europe but it is certainly a big majority view. On economic policy co-ordination, it is important for example we pursue the Lisbon Agenda, and we made progress on this at Barcelona, following many of the policies we have adopted in the last five years as a Labour Government, investing more in skills, up-grading our educational base and so on. So there is co-ordination of policy to that extent, though there is no Community competence in educational skills so it is a matter of co-ordination of policy. Of course, the countries in the euro-zone effectively do co-ordinate their policy because they have a common interest rate, and the decisions on that level obviously affect wider macro-economic policy. So in terms of modernising the infrastructure, whether in financial services, whether in research and development, whether in reducing the burden of regulation on small businesses, whether in labour market reform, all these areas are areas where we can co-ordinate economic policy, some of them at micro-level rather than necessarily at macro-level. I would like to see the commitment to full employment which we have made our standard under this Government in Britain being adopted right across Europe as well.
(Peter Hain) For example, through energy liberalisation, where we got ----
(Peter Hain) In that case I will hold my fire until that point. I think you have made a very fair point about goldplating. We have an honourable tradition in British Governments of implementing things as the text says we should do, and that is not always done elsewhere, to be frank. But looking at things in the round, bearing that in mind and I have been very open in my answer to you about it, Britain has not done too badly, in fact we have done rather well since we have been in Europe, and we have done rather well, especially if I may say so, in the last five years, whatever hindrances that problem might have produced. If you look at the opportunities, for example, for the financial services industry, where Barcelona saw an important step towards the completion of the single market by 2005, that will give our savers better returns and our businesses access to cheaper capital and an ability for Britain's financial institutions, which are pre-eminent in the world, to find extra business and make extra returns right across the European single market. The seven key directives which were agreed will be adopted by the end of the year and it is estimated that completing the single market in financial services will boost European GDP by 0.5 per cent, including in Britain. So that is a concrete example of how we actually gain out of it. The energy decision was another one. On the single skies initiative, a quarter of European flights were delayed by 15 minutes or more in 2000, and even a 25 per cent reduction in these delays would save the air transport industry and the public £1.5 billion a year. So these measures are all to our advantage and that is why we agree them.
(Peter Hain) I think so. I know there was a lot of debate around Barcelona, to which you may be referring, saying that a neo-liberal agenda had been adopted and we had become as a government a party to that. I think that is wrong and is far too simplistic. The most important right in this area is the right to work, and the whole cornerstone of the labour market reform agenda adopted in Barcelona and the economic programme in which it was situated, is to create full employment, as we have pretty well moved towards achieving here in Britain, to make it easier to get work, to create greater job flexibility but at the same time to underpin that with vital labour market social standards, provided by the Social Chapter, provided under a number of EU Directives and indeed our own legislation. So I think the balance is about right. We are not adopting an American hire-and-fire neo-liberal economic policy, and certainly not labour market policy, but we are wanting to make it easier for people to get work and easier for companies to gain the greatest productivity from their staff underpinned by high social standards.
(Peter Hain) I think the two go hand in hand. I do not accept that you have to dump social standards and employee rights and standards in the quest for greater economic efficiency. I think you have to reduce rigidities and inflexibilities in the system because it enables businesses to do better and the economy to do better and, as we have seen in the last five years, more than a million more jobs have been created in Britain as we have followed this agenda, but there are more trade unionists in Britain than there were in 1997. What strikes me, comparing our record across Europe, is that we have things to learn in respect of investment, we are still lagging on investment, in productivity terms we are still behind Germany and France, in our skills base and in our research and development levels. However, in terms of employability and employment compare us with France, for instance, which is very much in the news this week, French unemployment is 9 per cent where ours is 5 per cent, although France's rate has been coming down. So it is possible, and indeed that is our objective as a Labour Government, to have high social standards and a foundation of minimum employment standards with the right to work being paramount and people being given the opportunity to work.
(Peter Hain) Simply that we would want to keep under review Europe's ability to reach a target of full employment at a time when unemployment across Europe and outside Europe has been rising. It is not a universal picture in every country and the problems in East Germany have weighed very heavily on this picture, but it is the case that the world slow-down since 11 September has meant that Europe has been going through a difficult time in employment terms and therefore we wanted to keep under review the extent to which we were achieving the full employment objective and whether the policies necessary to secure that were being implemented.
(Peter Hain) By adopting this range of measures from energy liberalisation to cut energy costs, although I do not want to dwell on that too much, to financial services liberalisation, labour market reform, all of these matters, underpinned by sound macro-economic policies, I think that will position Europe much better for the future.
(Peter Hain) This is something which is continuously being addressed by colleagues in Government, especially by the Secretary of State for Trade & Industry and the Minister of State responsible. It is something that I personally am very strongly in favour of. I think you get a more productive, healthier economy especially in a modern context where skills, employee commitment and high levels of education and participation in business are so crucial to their success. The old caricature of, as it were, authoritarian management on the one hand and a remote workforce which does what it is told on the other, cannot work in the modern world, and therefore the principle of social partnership is very important.
(Peter Hain) We have implemented a whole series of directives in this area, most recently on inflation and consultation last year, but we have to constantly balance progress there with the need for creating a flexible economy capable of coping with the competitive pressures which are changing more often than year by year in some respects. If we do not do that, if we create a rigid model, then we will not succeed. I think there are some lessons which others in Europe are drawing from our own success, though I would not want to be too immodest about it. We still, as I indicated earlier, have a lot to learn from our European partners. For all the criticism, for example, of Germany being a failing economy, Britain I do not think, not even under this Labour Government, could have borne the burden of re-unification, so there are lessons to be learnt but I think we have a pretty good record to take forward.
(Peter Hain) I find what you are saying very interesting as well.
(Peter Hain) I do not think we should be too complacent about the British record. We have a good record over the last five years but in France, for example, their growth and economic record over recent years has been pretty comparable to Britain's. The European average is dragged down mainly by the legacy of East Germany, and, yes, we do very well against the European average, but if you disentangle some of the Member States from the average, against other countries (and I give France as an example and there will be others) we are not that far ahead, we have a lot of catching up to do, not least the legacy left by the Government which you supported last time. We are catching up. I would make this point, co-ordinating and co-operating over economic policy is a voluntary matter not a treaty competence in that sense.
(Peter Hain) I do not know if we want to spend too much time travelling down this road, though I am happy to do so.
(Peter Hain) The point is this, I think we should just take a deep breath occasionally, if I may say so, Bill, on these sorts of questions and just look at the facts rather than the dogma. The constraints being followed by the euro-zone countries are the sort of constraints which, as the Chancellor announced in his Budget speech last week, the British economy is meeting. So we have not done too badly meeting the Maastricht criteria, have we?
(Peter Hain) I do not think it is that, though pensions is a whole other issue and there are difficulties across Europe. I think it is an issue which has been widely discussed here in Britain, including under our Government, that a lot of skilled people leave the labour market earlier than perhaps they should, and they should be given the right to stay on, not as it were dragooned into staying on but given the right to stay on and contribute their skills to the economy and the prosperity that that generates both for them and for the rest of us. There is an additional problem that we have a whole trend of ageing populations across Europe, leading to labour shortages. I am sure we could all think of friends and friends of friends who leave the labour market when they are well able to, and indeed want to, contribute but because the retirement age is too low are not able to do so. I can think of people who leave the Civil Service whose expertise is greatly missed when they reach 60, for instance, though we are talking about the private sector in the main here.
(Peter Hain) Again, this is not a matter for me, it is a matter for other Government colleagues. To be perfectly frank, I do not have a table in front of me giving me an exact comparison. I do not know whether Kim, my colleague, does, but I am happy to write to the Committee about that if that would be help with your deliberations.
(Peter Hain) And these lights, I suspect.
(Peter Hain) No. I think a major advance was made in Barcelona. We secured, as you say, that all non-household customers would be free to choose their supplier by 2004, which means over 60 per cent of the European Union energy market is on track to be liberalised. We have never got that before, it was an important achievement. Equally important was that the decision will be taken by qualified majority voting before spring next year to open up the remainder of these markets. I stress qualified majority voting even though it will cause Bill Cash's hackles to rise because France will not be able to veto it, and it is important we establish full reciprocity. As you say, British companies, Centric, TXU and others have not been able to get into the French market or the German market, whereas EDF, the French publicly-controlled energy company, is able to buy up pretty well whoever it likes here in Britain. This lack of reciprocity has not been acceptable, so we have achieved that break through. On household markets that will come a little later down the road, but there has been a big advance there too. It is on its way. We have never achieved that before. Can I just say why it is important? Sometimes people do not follow, in the sort of "anorak" nature of the technicalities, that gas prices in Britain are 36 per cent lower than in France and 43 per cent lower than in Germany. So we are talking about not just big opportunities for British companies but big opportunities for European industrial and domestic consumers to get cheaper gas prices and therefore make Europe more competitive, which is what this agenda is all about.
(Peter Hain) I was Energy Minister, so you can take me down that road if you want to.
(Peter Hain) Uncomfortable sometimes.
(Peter Hain) I am very confident, because Germany supported the Barcelona outcome. If it came to an actual vote in 2003 on household energy liberalisation, it would be 14:1, if France camps on the position it has traditionally done, but it has already moved significantly. I think that once the current electoral cycle is out of the way, there will be more movement. It is in French consumers' interests that this should take place as much as it is in British companies' interests and in the interests of the whole of Europe to get much more competitive energy markets. If I may add one other point to your question, I think the way you deal with energy costs is not by artificially raising them but by developing forms of environmentally-friendly energy, increasing insulation and so on, which discourages wasteful energy use.
(Peter Hain) I acknowledge your interest and expertise in this matter and it is really important that that is the case, because I was one of those back in the early 1980s who thought that when Kenneth Baker wired Britain, or tried to somewhat disastrously, he should have gone for broadband then, which would have put us in pole position. At any rate, that did not happen. Europe does not have a bad record, there are more Europeans connected to the internet than there are Americans, but we have to catch up, you are absolutely right, and that is why the Lisbon Agenda and the current EU strategy was intended and is intended to deliver Europe as a higher quality information society, the best in the world. What we want to see is a follow-up strategy from Barcelona focused on agreeing a new broadband technology strategy. I think other Member States are agreed on this. In terms of our own specific targets that is probably a question that should be addressed to colleagues in Government. We did agree to deliver broadband technology across the European Union by 2005 and that, as you know, means Internet access at ten times the present speed. We agreed to boost our commitment to research and development towards a target of three per cent of GDP which is a significant increase by 2010. These moves will encourage us to get to where you want to get to, an objective which I share and which we should be pursuing right across Europe, including in Britain, with great urgency.
(Peter Hain) If I am allowed to speak for the Secretary of State for Education, and I will choose my words carefully in doing that, I think that is a misrepresentation of what the policy is. If you look at the language learning pamphlet which was published at the same time as the Green Paper, 14-19 Extending Opportunities, Raising Standards, which is a consultative document and the consultation ends at the end of May, it basically was wrestling with the problem of trying to teach languages to disgruntled 14 year olds as compared with shifting, as I understand it, interest in language and catching the enthusiasm of the younger school students so that primary school foreign language training and development would be given a much greater priority, thereby helping to catch school pupils at a much earlier age when they pick up languages enormously easily and take them through into secondary school. I think that is the strategy but I agree with you that our foreign languages standards in Britain are dreadful. Just because English is becoming the language of Europe, as it is, and the language of the world, but certainly the language of Europe with the candidate countries all speaking English, that should not absolve us from our own responsibilities to take modern foreign languages forward, which I think the Government strategy is doing. I noticed this very rapidly in the European Convention, they do not speak other languages, they do not speak French, for example, as much as English, so I think the English are coming in that sense across Europe.
(Peter Hain) That is why the Government's Green Paper has been brought out, because we are seized of this problem. The truth is that although we have a tendency to become lazy because English has become the language of IT and the language of modern international business, it is increasingly spoken across the world, the fact is more foreign language expertise would give our own businesses a much greater head start in winning contracts across Europe, for instance, and our own citizens much better opportunities.
(Peter Hain) I must say I am very taken with the point that you make and very interested in the policy implications and I will ensure that it is drawn to the attention of the Secretary of State, the relevant Secretaries of State, together with the relevant text of the transcript of this Committee. I think you are right. Forty million Britons will visit the rest of Europe this year on business or cultural or tourist trips and, even if you take account of multiple trips, around half the population is going to go to Western Europe and a language expertise facility would be a great advantage.
(Peter Hain) I have just returned from Valencia where we had an important meeting with the Euro-Med countries at a Euro-Med Conference and we play a very active role as the European Union with our High Representative, Javier Solana, being a very respected interlocutor, in seeking to promote negotiations between both the Palestinians and the Israelis, I cannot claim with much more success than anybody else has had. We need only look at the visit paid recently by Secretary of State Colin Powell from the USA. It is a constant source of discussion at the European Union level and high level missions are constantly engaging with the Israelis and the Palestinians. Europe, of course, provides virtually all of the Palestinian Authority's development assistance - these have been very largely destroyed by the Israeli defence forces - to enable them to develop an infrastructure in Palestine. Europe has actually got a proud record on that but not a successful one in terms of promoting negotiations, which are the only way forward.
(Peter Hain) It was not backed, you are quite right, nor was it backed by a majority of other Member States at that meeting. Until we have achieved a situation where suicide bombings end and Jenin-type incursions by the Israeli Defence Force end as well, we are not going to get circumstances in which we can promote the negotiations which in the end will be the only guarantee for Israel's security on the one hand and Palestinian rights and justice for Palestinians on the other.
(Peter Hain) It is enormously depressing but I do not think it is fair to say that we are making excuses for it. For example, the Foreign Secretary was one of the first to call for an inquiry into what happened at Jenin and those awful events. That has been secured, although it has now run into some difficulties. We have been trying, not with fantastic success, in fact with very little success, but none of these have been successful, this is the bleak reality, we have been trying to do everything that we can to create circumstances in which negotiations can take place of the kind that I have described, but it has not been an heroic story and it has not been a successful story, but I do not think gestures, including ending the association agreement or imposing sanctions, as others have asked for, at this stage would achieve anything with the Israeli Government on the one hand in its present cast of mind, and on the other with suicide bombings happening. It is not easy to know what to do and there is no point in me pretending otherwise, but I agree with you that it is desperately, desperately depressing as somebody who has supported the rights of the Palestinians over many decades.
(Peter Hain) We are trying to do this and it has been part of our consistent policy, Britain's and the European Union's, to demand that Israel withdraws from the Occupied Territories but also to insist that the Palestinian Authority does all that it can, and it has not been doing all that it can although its capacity to do so has been virtually destroyed, to stop the suicide bombings. Notwithstanding the horror that I share about the events in Jenin, I do think that suicide bombings create a siege atmosphere in any community which means that you get the kind of over-reaction that you have got. That is not to justify it in any way at all, it is simply to describe reality. The Palestinians are gaining nothing by suicide bombings except greater destruction and greater horror for their own people. Israel is not achieving its objective of security for its own state and its own people by its policies. These policies are all failing. American policy has failed, European policy has failed, Israeli Government policy has failed, the policy of the Arab States has failed, the policy of the Palestinian leadership has failed. This is an abject and depressing saga of failure on all sides. We have got to get through it.
(Peter Hain) I do not think it is as clear-cut as that. No decisions have been made on rebuilding the Palestinian Authority's infrastructure, as we want to do, because it is simply not practical at the moment. Inserting development projects in the middle of war zones is not practical. We have strongly condemned, as Commissioner Patten especially has in very strong terms, the destruction or the waste of tens of millions of European funds, that is in sterling, European funds just blasted to smithereens by the conflict there.
(Peter Hain) I did.
(Peter Hain) I will happily do so. First of all, I think from my recollection of the newspapers the words "humiliation" and others were used about Secretary of State Powell's visit, so if that was used, and I did not see those reports, about Javier Solana's visit, he was not alone, was he? If I may say so, I think in your embittered stance on Europe you should be a little more rounded about these matters. This is a desperately difficult situation. If you are saying to me that Europe should simply turn its back on the situation as the richest part of the world with strong historic ties to the region and have nothing to do with this because it would fit your agenda of saying that Europe should have nothing to do with pretty well everything, I do not think that is a responsible position to take.
(Peter Hain) I am just responding to your question. I think Europe should continue to do all that we can. Europe is evolving, the development of Europe in global affairs is in its infancy but in my view it should increase. I think the world is evolving into a multi-polar world with America the dominant super power but China is going to be much more important later this century and Russia wants a partnership with Europe. Why does Russia want a partnership with Europe? Because Europe is seen as an increasingly important global force.
(Peter Hain) It is my view and the Government's view, happily they coincide, that Europe should have a more powerful Common Foreign and Security Policy. Yes, I think we should shoulder our burden of responsibility in areas like the Balkans for peacekeeping purposes and the trouble spots in our own backyard.
(Peter Hain) It depends what you mean by a legal personality. If you are suggesting that this becomes a Community competence, that is not our policy. That should not be meant to imply, as I think you are doing and have conflated into an argument, that High Representative Solana should not be trying his best to put Europe's weight behind a solution to the Middle East peace process. I think we have a duty to do what we can and I think his role is very important. It is respected in Washington and it may not for the moment be particularly respected by the Sharon Government, but then who is, but I thought what was very important at the Sharm el-Sheikh discussions under Prime Minister Barak, the then Prime Minister of Israel, was Solana was part of those negotiations in 2000, was respected by the Israeli Government and that is the way I think Europe should be moving.
(Peter Hain) I would agree with you, Chairman, but I would just say one other thing. As a member of a Government that is strongly committed to an independent Palestinian state co-existing in peace and in co-operation with the State of Israel, I really do think that those Palestinians, whatever their frustrations, and goodness me they must be monumental, those Palestinian leaders who are encouraging suicide bombings are actually blocking the development of that independent state that I know you have supported, Chairman, Mike Connarty, and probably many other Members of the Committee, as I have over the years. We need a better strategy from the Israeli Government but we need a better strategy from the Palestinian leadership, however difficult it is for them, and the Arab world as well or this situation is just going to go from a nightmare into something worse, if that is possible.
(Peter Hain) There is a General Affairs Council due to take place in a couple of weeks which will review policy. I do not have an easy answer to that. As a Minister it would be wrong for me to pretend otherwise. The truth is the Israeli Government is not open to influence and the actions of the suicide bombers are discouraging it from adopting a more constructive policy in its own interests. I am sorry, it sounds very weak but it is desperately difficult.
Chairman: Minister, we fully appreciate your point. I would like to thank you for your usual candour and for your contribution during this evidence session, in particular on the last point which we are all very, very concerned about. Minister, thank you very much.