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4.26 p.m.

Lord Cledwyn of Penrhos: My Lords, I am grateful to the noble Baroness and to my noble friend Lady Blackstone for their wide-ranging speeches, which have set the scene for this debate. As they said, we are looking at vast areas afflicted by complex problems. When I read about the appalling poverty and the dreadful consequences of unnecessary wars in so many countries I ask myself what we in Britain can do.

When I was at school in Anglesey there was a big map on the wall on which the British Empire was coloured red. We were taught that Britain ruled the waves. Some find it difficult today to accept the reality that all that is gone, swept into the history books side by side with the history of Rome and other defunct empires. I believe that the British Empire did far more good than harm, but it no longer exists. Some people take the view that we can now sit back and let events take their course. But that is totally unacceptable. Britain must do its utmost to help resolve the difficulties which are now a blight on humanity.

When the Cold War ended we breathed a huge sigh of relief. It certainly gave the world new opportunities and provided a new framework for international security. For example, it became possible to define strategic interests within limited spheres of influence. It was inevitably a fairly fragile arrangement. The United States concentrates on the Caribbean and Central America while Europe is concerned with the European CIS, the Balkans and the North Africa buffer. In his important speech the noble and learned Lord, Lord Howe of Aberavon, made clear that there are acute problems in Georgia and the Balkans which have to be resolved. However, there are other areas in central and south Asia and parts of Africa which are not on anyone's map. That is serious.

Thus far the security framework is failing to meet the challenges presented by the spread of national and regional conflicts. It does not begin to respond effectively to what is called "the phenomenon of the failed states". Those are the 12 to 15 countries which are unable to provide for internal peace and security and which are divided by different warring groups. They are plunged into what seems unending violence. Let me name some of those countries: Armenia, Bosnia, Somalia, Rwanda, Liberia, Angola, Zaire, Sudan, Burundi, Cambodia, Afghanistan and some CIS states. I note with interest what the noble Baroness said about the need for more effective action in Rwanda. I thoroughly agree with her. Since the Berlin Wall came down, conflicts in the world have escalated to about 152. Across the globe there are over 40 million refugees, most of whom have fled war and civil unrest in their own countries.

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As the House will know, other countries are on the borderline of "failed states". Their communities are tense and unstable. They contain poverty-stricken areas and are beset with ethnic and religious strife. States which spend their limited resources on armaments when their people are starving is one of the greater evils of our time. I shall return to that in a moment.

It is a grim situation that has led to a new domino effect --the further expansion of insecurity encouraged by armaments, poverty, religious and ethnic tensions, and the failure of an international will to intervene in conflicts which do not affect the availability of oil. That is sad, but I regret to say that it is true.

The question that I must put to the Government in this important debate is: what will the international community do about the countries which have failed to govern effectively? I have to confess that I have no ready answer to the question. We can talk about reducing the level of our armaments. We can talk about organising consistent peacekeeping and assisting in the alleviation of the dreadful poverty in all such countries. It is easy to say those things, but achieving the objective is another matter. The sad reality is that some other countries are on the road to disaster. Detecting the countries at risk and working to prevent their ultimate failure is obviously an urgent responsibility which should rest primarily with the United Nations.

The simple point is this. Worldwide tension and instability are increasing dramatically, and very little constructive attention on a world scale is being given to that at present. Perhaps I may put some urgent questions to the Government. First, what will the world community do about this developing calamity? What well-thought-out plans, if any, have the Government to put to the Security Council and to the United Nations about the crisis? Secondly, what organisations in the world arena are in a position to respond effectively to the challenge? Thirdly, how effective are other strong nations in wishing, and working, to resolve the international conflicts which many see as being beyond their immediate strategic interests? Finally, what prospects other than silent and human suffering is the world to offer to the poor, the displaced and the destitute at this time?

Against that background, I find myself distressed and frustrated when I see people who call themselves Christians, Moslems and members of other religions arguing fighting and killing each other over issues which pale into insignificance when compared with the problems that I have sought to address in the debate. The leaders of those countries should pray for forgiveness.

I pay a tribute to the noble Baroness, Lady Chalker. She works hard and conscientiously and has a genuine commitment to overseas aid. We admire her for that. However, the objectives of her department have not been helped by some of the Government's policies. Those have already been referred to. I do not wish to go into the Pergau dam affair in any detail, but it is a classic example of how foreign affairs should not be conducted. Where, for example, did the money donated by Britain to build that dam--a project which has been condemned as unsound--come from? It came from the overseas

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development budget. That was in plain contravention of the Overseas Development and Co-operation Act 1980. Such unscrupulous manipulation of the aid budget was, in my opinion, a disgrace. The Government must now reimburse the aid budget. We hope that the noble Lord, Lord Henley, will confirm that that has been done and that there are no obstacles from the direction of the Treasury. When we think of the suffering of the people in the countries to which I have referred, the story is almost unbelievable.

I read an important leader in The Times of 11th November. It gives a reasonably independent, detached view. I shall read one paragraph.

    "The Government is now legally obliged to reimburse the aid budget for the money already disbursed, and to draw on it no further for Pergau. This means that in order to meet its contractual obligations to Malaysia, as it rightly insists that it must, it will have to fund the balance from reserves. Mr. Hurd's lawyers told the court that it did not follow that the overseas aid budget would benefit. That would depend, he said, on 'the well-publicised constraints on public spending'. To penalise ODA to compensate for the expenditure the contingency funds incur would be a shabby ending to an already sordid affair. It would exploit the fungibility of all public spending to the detriment of the budget wrongly raided in the first place. Enough damage has already been done. The aid budget should not be a casualty of ministerial casuistry".
I believe that the Government should consider the implications of that leader carefully.

Finally, perhaps I may draw the House's attention to a meeting of the very first importance to be held in January next year. It is a meeting of the United Nations Security Council at summit level--the second time that this has happened in the history of the United Nations. It is being called to discuss the very matters with which we are concerned in today's debate. A heavy burden of responsibility rests on the Government and with the other countries which will be represented there. I hope that when the noble Lord, Lord Henley, replies, he will say that the Government have positive, constructive proposals to put to the Council. It must be more than a talking shop. There is an opportunity to change the course of history for the better. The meeting must launch a policy to analyse potential conflicts and recommend policies to the Security Council to prevent violence. It must propose the setting up of small monitoring groups which will automatically debate a crisis. Conflicts should be avoided by mediation, fact-finding missions, confidence-building measures and the application of political and economic measures.

I know, of course, that Britain alone cannot resolve these problems. But we can at least be a driving force in the right direction with those qualities and background described by the noble and gallant Lord, Lord Craig, in his excellent speech.

I am glad to hear that the Church of England has produced a report which deals in some detail with the problems and makes important recommendations. I understand that the Synod is to consider the report within a matter of a few days. I hope that the Government, and especially the Prime Minister and the Foreign Secretary, will study the report carefully. The time has come for Britain's foreign policy to be

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analysed carefully again so that it may include and reflect the principles in which the people of this country believe.

4.39 p.m.

Lord Hooson: My Lords, unlike previous speakers, I wish to concentrate solely on that part of the gracious Speech which deals with the Government's European policy. In particular I wish to say something about the words in the speech that:

    "They will seek to ensure that the principle of subsidiarity is applied to European legislation. They will promote budgetary discipline in the Union and combat fraud".
Essentially, it seems to me that subsidiarity is at its worst a hope and at its best a guidance. If we remember the words that the noble Baroness used in introducing the debate today, she referred to the need to entrench the principle of subsidiarity. She is then saying that we must go further than having guidance; we must have that principle entrenched. That means that she is really advocating the principle of federalism, with which I happen entirely to agree. It seems to me that the two are, from a different direction, approaching the problem in a way that will converge at a certain point.

Many of the problems of the European Community, such as the widespread fraud, arise surely from the neo-functionalism of the Community's development, with heavy reliance on bureaucratic methods and corporate structures, which are a poor and inadequate alternative to a development based clearly on federal principles. When I say "federal principles", I believe that a federal Europe is a long way away, but eventually it is the direction in which we will go.

Although I very much disagree with the view of Euro-sceptics who continue to fight the battles of 25 and 30 years ago, I have considerable understanding for and sympathy with their exasperation at the way the Government have presented such things, for example, as the outcome of the Maastricht Treaty in so obviously misleading ways, to try to assuage anti-European views. Is it too much to hope that in this Session of Parliament the Government's public attitude towards the development of a united Europe will be positive and not of the dissembling nature which has characterised it in the past?

I have always believed in the goal of a united Europe, but I also believed that the most likely route to it was through the pressure of a threat to our security from a hostile USSR and the communist bloc. The advent of Mr. Gorbachev in his epoch-ending changes within that bloc altered all that. Now that the immediate threat from the Soviet bloc has disappeared, the progress towards European integration has slowed down. It would speed up again immediately if the threat, or something similar to it, reappeared. As my noble friend Lord Mayhew indicated, that could easily happen. However, its disappearance has advantages: we can proceed with a more measured sense of purpose because it is clearly important to take the people of Europe with us and to ensure a sense of allegiance to a European union.

It was the very distinguished American human geographer, Professor Meinig, who said of the United States federation that it was,

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    "an expedient developed under duress".
That constitution has been amazingly successful, but nevertheless it has its shortcomings, many born of the circumstances in which it came into existence.

Such shortcomings are more avoidable in Europe and our continent is in itself a much more complicated scenario for integration than was the infant United States of America. Essentially, we have faced, and are still facing now, the sacrifice that has faced people over many centuries as our civilisation evolved, from the time when tribe fought tribe in England, Wales, Scotland and elsewhere in Europe. At one stage or another every tribe, every region, was faced with the loss of a certain amount of sovereignty in a greater interest and we face exactly the same problem today. In this century, after two terrible European wars in which tens of millions were killed and so much misery was caused, I believe that people in the post-war period 20, 30 and 40 years ago came to the conclusion that one must make a sacrifice of some measure of sovereignty, of local independence, in order to guarantee a realistic chance of survival, well-being and progress in the modern world.

For the Government to pretend, as they have over the years, that we have not surrendered a measure of sovereignty at Maastricht, and other places, in the Single European Act in actually joining the EEC is clearly nonsense. Of course we have. The integration of Europe is going on all around us, but with inadequate control and direction. Anyone in business knows that that is taking place. Anyone in the law knows that it is taking place. It is taking place all around us and it seems to me that only the Government deny it.

Take the situation revealed by your Lordships' European Communities Committee with its very fine report on Financial Control and Fraud in the Community (HL Paper 75). That paper was discussed in a fascinating debate in your Lordships' House on 31st October this year, in which I did not take part. The following conclusion was expressed by the noble Lord, Lord Hunt of Tanworth, its chairman:

    "Inadequate ... control is at the heart of the problem".--[Official Report, 31/10/94; col. 698.]
Despite all the functional expedients suggested by others, and by that committee, to improve the situation problems will remain until there is totally clear legal responsibility, established by law, between the European Community and its member states. The only way of achieving that is to proceed along federal principles.

On 3rd November this year--the last day for Questions in your Lordships' House in the last Session--one Question requested the Government to give a definition of "federalism". It was the noble Baroness who replied and, uncharacteristically, her replies were, to put it mildly, obscure. There have been many definitions of "federalism", some formulated in the United Kingdom. With our history of presenting Canada, Australia, South Africa and other Commonwealth countries with federal constitutions, we have long realised the value of federalism. But, of course, in our history we were presenting federalism

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from the top down. In Europe, we are faced with the problem of federalism from the bottom up. However, federalism is a means of binding together a number of entities while preserving the basic integrity of those entities. In other words, it is a device for being united without necessarily becoming unitary. By its very nature, it must allow for the co-existence of dual allegiances and we are slowly getting used to that idea.

In Europe, one of the problems is the Brussels directives which have an obscure legal position. In some countries they are enforced dramatically by embodying them in law or by administrative action. In other countries, they are regarded as mere guidance. It seems to me that only the United Kingdom, and possibly Germany, treat them always as though they were actually laws as opposed to guidance. Through them, the European Commission in Brussels behaves as though Europe is a unitary authority, which it clearly is not. Furthermore, our officials receive the directives as though accepting that we are part of a unitary authority.

Eventually, if a federal constitution is to be achieved in Europe, then, given its history, it will only be achieved by the existing so-called sovereign states--I call them "so-called" because truly none are so now--giving up some of their authority formally to Brussels while retaining the maximum relevant amount of power possible in their own hands. But we are in the midst of a process which we must recognise of partially controlled and partially uncontrolled integration in Europe. None of the antics of the so-called "Euro-sceptics" will prevent it. It is far too late for that, even if it were desirable. I say that as I was the only Liberal in another place who voted against our entry into Europe. I have often reflected on that, but I thought at the time that I was right. I was in favour of going into Europe at the very outset. I felt that we should have waited until an optimum time for this country before we entered.

What do people now think would happen to the UK if it left the Common Market--a stupid suggestion made by an ex-Chancellor of the Exchequer--when over 60 per cent. of our trade is now with Europe? The rest of Europe would simply not allow us to have the benefits of a free trade area while taking on none of the responsibilities that are implicit in a developing and united Europe. What do they think would happen with huge inward investment from such countries as the United States, Japan and so on, simply because Britain is regarded as the most congenial base for their European activities? A research paper from the House of Commons dated 25th October 1994, which is in your Lordships' Library, gives details of that inward investment. One can see what a high proportion of it goes to this country simply because Britain is regarded as a good base for development of foreign investment into Europe.

It therefore seems to me that subsidiarity is in essence another word for describing the guiding principle in the share-out of responsibilities that are inherent in federalism. There has to be a reduction in the authority of the overall centre, Brussels, to its bare minimum. Other decisions must be taken democratically, at the level nearest to people that is sensibly and humanly

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possible. That therefore surely means that there has to be subsidiarity not only to the former sovereign states within Europe, but within the sovereign states themselves. For the UK it means real devolution to Scotland, Wales and Northern Ireland, and indeed probably to the regions of England. That whole process is essential for our survival and well-being if we are to have the overall umbrella of the Continent of Europe, which is daily becoming less remote and increasingly economically integrated.

The basic problem is therefore the question of the allocation of power between the European government, or centre, and its constituent units, whatever those will eventually be. I can well imagine that in the longer term, following the example of the German constitution in the post-war period and the developments that we see, for example, in Spain, we shall eventually end up with a Europe of the regions. But that is a long process and it is far off at the moment.

For the purposes of this decade, the only powers that are needed at the centre are surely those to ensure: (a) the workings of a common economic market with delegation of all grants to member states to administer, so that we do not have a great clash of interests in administration; (b) the achievement of a single European currency; (c) the creation of a common security policy by building firmly the long overdue European pillar of the Atlantic alliance--and I entirely agree with the remarks made, I believe yesterday, on this problem by Mr. Rifkind and with what was said today by my noble friend Lord Mayhew about the importance of developing the European side of the alliance; (d) a common foreign policy together with, let us face it, the gradual development of a common foreign diplomatic representation for Europe; and (e) to ensure progress towards a commonly accepted European code of law.

There is a huge mutual interest throughout Western Europe, and indeed well beyond, in achieving what will in reality be a form of state which has probably never existed in the world as it is today. We have moved on a long way from the 19th century. We have moved on from the German Federation of which we were very largely the architects in the post-war period. We face different problems today, and different forms of government can emerge. At the same time, the political units, the races of Europe, with their diverse cultures, social habits and so on, are so rooted in time and place that it would be not only just but also sensible and far-seeing to retain the maximum amount of decision-making as close to the people as possible.

How close to the people do this Government think that decisions affecting local and regional matters should be taken? Is it at national government level, at regional level, or at local level? It is a very important point. I am very tempted to put down a Question to the noble Baroness asking not for a definition of "federalism" but for a definition of "subsidiarity". All I

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hope is that the signs in the Queen's Speech of a much more positive approach towards Europe by the Government will be fulfilled during this Session.

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