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As I said, the process has already begun. It is evident not only at a European level, but at other levels of administration and governance. There is also a parallel with events inside the United Kingdom, such as devolution to Scotland and to Wales. It is significant that in my own country of Wales, for example, with the advent of devolution, a Welsh Labour party and a Welsh Conservative party have developed. Although not many people vote for the latter party, it is there. That is a recognition that there is a tier of governance in Wales. The same type of development is occurring at European level, and that development is perfectly natural and sensible.

Amended article 191 will not simply reduce the democratic deficit and recognise the new political reality: it will achieve greater transparency and greater financial probity. I say that as one who was a Member of the European Parliament for 10 years. In that time, I saw—this is not a party political point—that the pan-European parties were being indirectly funded by the seepage of European Parliament resources. The Court of Auditors pointed out that reality, and the Labour party has strongly supported the Court's observations and recommendations. Article 191 has been amended because we want to ensure that everything is done properly, above board and with the utmost transparency and probity.

In view of the rhetoric of Conservative Members, who always tell us that they want to reduce any suggestion of maladministration or lack of probity in the European Union, I should have thought that they would support the Bill. It is a step forward in ensuring greater accountability and transparency, which is a very sound argument for supporting it. The democratic argument and arguments for greater probity support the Nice treaty.

We have heard much today about Edmund Burke and his definitions of democracy. I remind Conservative Members that we should not forget other great political thinkers, such as Thomas Paine, who said very clearly in the 1790s that we should never forget that, ultimately, democracy rests with the people.

Mr. Cash: We are well versed in Tom Paine. All I can say is, was he not extremely lucky to get away without being guillotined? Was he not a lucky man?

Mr. David: Yes indeed, he was very lucky. It is lucky for us, too, that he was not guillotined, because we can

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all learn a great deal not only from his thesis on democracy but from his internationalism. However, I do not want to stray from the point.

Mr. Francois: It is interesting that the hon. Gentleman, a Labour Member, has chosen to quote a republican political philosopher.

Mr. David: As the hon. Gentleman well knows, the Labour party is a broad church.

We should recognise that ultimately, in any civilised civil society, sovereignty rests with the people. Ultimately, it is a matter of choice whether people wish to associate across national boundaries in political entities and political parties. In a mature democracy, sufficient resources should be found for that other sort of democracy to flourish. We want a European Union that will once again express the genuine aspirations of the people of Europe.

Angus Robertson: I shall not take up much of the Committee's time, but I want to touch on two very specific points: the funding of transnational political parties, and the level of democracy at which scrutiny should be exercised over such an enterprise.

It is rather curious that most of the time taken up by the official Opposition at Westminster in considering the Bill has focused on the Conservative party's funding arrangements and its interrelationship with, or semi- detachment from, its colleagues on the centre right. Every political party has to make choices about who its friends are at a European level. My party, the Scottish National party, had to make that choice and is part of the fourth largest group in the European Parliament, the Greens/European Free Alliance. However, although we all have to make choices about who our friends are, it is absolutely mind-boggling that it is beyond the wit of the Conservative party to find like-minded colleagues.

It is regrettable that that should be the most substantive and time-consuming matter for Conservative Members in considering the Bill. I listened very closely to the speeches by the hon. Members for Stone (Mr. Cash) and for West Suffolk (Mr. Spring), and they seemed to spend most of their time on it. However, their argument did not hold water. Although the hon. Member for Stone raised more serious issues that should perhaps be addressed, the problem of finding colleagues at a European level does not constitute a substantial objection to the proposals.

The hon. Member for Galloway and Upper Nithsdale (Mr. Duncan) seemed to be opposed to the funding of political parties by taxpayers, but I suspect that that was probably because he prefers the support of big business. Again, I do not think that that is a substantive argument.

It is unfortunate that the right hon. and learned Member for North-East Fife (Mr. Campbell) has left the Chamber. I should have thought that he—as a man of note in the Scottish legal profession—and the Liberal Democrat party would support the notion that, at least in Scotland's case, the people, not Parliament, are sovereign. That is a very established tradition. It is strange that the Liberal Democrats chose not to support the idea that scrutiny—if indeed we need more scrutiny—should be exercised in the Scottish Parliament, not in this House.

The hon. Member for Buckingham (Mr. Bercow) often talks about subsidiarity and proportionality. I believe that democracy should be scrutinised at the level closest to the

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people, which is why I shall not support new clause 4. The devolved level is the right place for such matters to be decided.

Peter Hain: I assure the hon. Member for Stone (Mr. Cash) that his persistent arguments do indeed lead to a great deal of scribbling by Foreign Office officials. The legendary "JB"—the Foreign Office official who was outed yesterday morning on the "Today" programme—is doing nothing but scribble, because of the formidable points made by the hon. Gentleman. I am told that JB may even have to cancel his annual holiday to respond to the detailed submissions, which we await with enthusiasm, that the hon. Gentleman promised me last week.

The right hon. and learned Member for North-East Fife (Mr. Campbell) very courteously told us that he would have to leave the Chamber briefly, but I can tell him that I am very sorry that we lost his general support for the Government's position on the treaty and the Bill. He has advanced some extremely compelling arguments.

The right hon. and learned Gentleman asked me what the compelling arguments against new clause 4 were. The first argument, in reply to one of his points, is that the statute for Members of the European Parliament is different from the statute on the European political parties. For two and a half years we have been negotiating a statute for MEPs' terms and conditions under article 190(5) of the treaty, but we cannot reach agreement with the European Parliament. There is also no chance of ending the division between the European Parliament's sites. Sometimes, the Parliament meets for plenary sessions in Strasbourg and for committees in Brussels, whereas the secretariat meets in Luxembourg. The French will not agree to a sensible resolution of the sites issue. That whole question depends on achieving the very unanimity that Conservative Members always invite us to endorse, and sometimes that stops sensible progress of this kind.

New clause 4 is not necessary. Parliament has a highly effective scrutiny system—as my hon. Friend the Member for Wimbledon (Roger Casale) pointed out—in the European Scrutiny Committee, of which the hon. Member for Stone is a distinguished member. I wrote to the scrutiny Committees yesterday with details of the proposals from the Belgian presidency on the dossier, which were discussed in the presidency working group last Friday.

The letter covered presidency proposals—not final regulations, as I must explain to counter some of the hot air from the hon. Member for Stone and his colleagues—covering registration, verification, legal personality, expenses, financing and control. The last will be of interest to the Committee. Money must be accounted for in accordance with the rules applicable to the general budget of the EU and the financial regulation on the basis of an annual certificate by an external and independent auditor to be transmitted to the European Parliament and the European Court of Auditors. In other words, the proposals contain rigorous procedures for accountability and transparency.

Mr. Cash: I have been familiar with these procedures for some time. On what date is it intended that this matter will be put through? Is it a matter of urgency?

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Peter Hain: It is a presidency proposal, which will be put to the forthcoming General Affairs Council.

Mr. Cash: When?

Peter Hain: In October, I think. We will continue to keep the Committees and the House informed on the issue.

In response to the points made by the right hon. and learned Member for North-East Fife, it is worth remembering that the arrangements to be negotiated for EC funding will require a public statement of accounts by each European political party. All the necessary information will be available publicly, and that is why the new clause is not necessary.

New clause 5 requires Parliament to approve the EC regulation before it comes into effect. This is not acceptable; the statute, once agreed, will have immediate legal effect in the UK, under the terms of the European Communities Act 1972. But Parliament has a highly effective system for scrutinising European Community documents, and scrutiny Committees can request a debate on the draft statute before its adoption.

I enjoy sparring with the hon. Member for West Suffolk (Mr. Spring). For a Conservative, he is a pretty straight and decent guy. But his speech was full of puffed-up and contrived anger on a series of specious points that were not relevant to the issue. I am not sure whether the kind of speech that he made will be good for his career if the right hon. and learned Member for Rushcliffe (Mr. Clarke) becomes leader of the Conservative party. As someone who is concerned about his career and wants to see him do well, I urge him to show caution and prudence on this point.

Nice provides a new legal basis for a measure to regulate European political parties, and in particular, their funding arrangements. It is important to dwell on the facts for a moment. Parties such as the PES and the EPP are not new; indeed, they were first recognised by the Maastricht treaty, which was signed by the right hon. Member for Horsham (Mr. Maude), who is the boss of the hon. Member for West Suffolk. His boss signed the treaty that set up the system, and the hon. Gentleman is now having a go at it; that is very ill-disciplined.

It is right that people should be able to form parties at European as well as national level, if they want to. Several British national parties are affiliated to European political parties, as my hon. Friends the Members for Preston (Mr. Hendrick), for Caerphilly (Mr. David) and for Wimbledon pointed out. Those parties are not inherently evil, as some Conservative Members seem to suggest. It is revealing that when my hon. Friend the Member for Preston said that if the political groups within the European Parliament did not have funding provided as it is here, it would gum up the workings of the European Parliament, the hon. Member for Buckingham (Mr. Bercow) and some of his colleagues said, "Good," as if their objective was to create chaos in the European Parliament. That was a revealing reaction.

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