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Lord McIntosh of Haringey: My Lords, I hope that the noble Lord will forgive me, but the noble Lord, Lord Tebbit, has not given every other speaker three extra minutes. The noble Lord, Lord Harris, has already been speaking for more than 12 minutes.

Lord Harris of High Cross: My Lords, I apologise to the House, but perhaps I may complete my sentence.

Adam Smith, David Hume and those other great men saw international free trade as a way in which independent nation states could co-operate together, pooling such sovereignty as was necessary to remove barriers, but not getting drawn into deep political involvement and engagement with other countries.

5.47 p.m.

Lord Plumb: My Lords, I too welcome the initiative that was taken by the noble Lord, Lord Jenkins of Hillhead, in calling for this timely debate. Similar debates are taking place throughout the European Union. Indeed, I left such a debate in Brussels only this morning. Your Lordships may be interested to hear that many of the things that were being said in that debate have been said here this afternoon. In other words, there is a similar pattern throughout the whole of the European Union in preparation for the Inter-Governmental Conference.

Many people fear that that conference will take a leap towards a centralised, high-spend and interventionist Europe —a Europe dominated from Brussels; a Europe run by bureaucrats and a Europe that weakens our sovereignty. Sadly, much of that fear has been generated by Euro-sceptism at a time when we ought to be working for what is best in Britain, for what is best for Britain in Europe and when we should be shaping events

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rather than continually reacting to them. My noble friend Lord Boardman made that position quite clear when he referred to the many issues in which Britain has led the field and from which we are now benefiting.

So, a flexible decentralised European Union is the way forward, as we see it, to allow the growing diversity of the Union politically and economically to develop. That enables sovereignty to be shared in areas of common concern which require obligations and legal action in those areas to which we are now accustomed, such as the single market, external trade, the environment and many other issues of which we are all aware. It allows for more flexible arrangements, based on inter-governmental co-operation in areas such as foreign policy and internal affairs. I believe that that will be central to the debate in the IGC. As many have recognised, it also provides the forum for enlargement which is fraught with dangers and yet which is full of opportunities. If we are to press ahead with enlargement, as I am sure that we are, we have to face up to and deal with the huge repercussions that that will have in every area of the European Union and then determine how that fits into the liberalisation of trade under GATT.

That means finding practical solutions to so many issues like the cost of the common agricultural policy and its structure—the cohesion and structural funds and institutional reforms. I share the view of many that the common agricultural policy cannot operate in an expanded Europe in its present form. Your Lordships will be aware that the Ministry of Agriculture has called a few of us together to consider the future of the common agricultural policy, and I look forward to being able to present my own views on that later this year. Detailed proposals can be expected to cover areas for inter-governmental co-operation in the fields of foreign policy and defence, as well as in interior and justice matters.

Many of your Lordships have mentioned the importance of subsidiarity. That obviously needs to be entrenched further into the workings of the Community and the influence of larger states needs to be strengthened. The European Parliament will need to focus more on scrutinising and holding Commission activities and spending to account. The recent hearings which we held for the new Commissioners were a good example that the European Parliament is taking its new responsibilities very seriously indeed. Nor should the legislative role of the European Parliament be forgotten. This role was, rightly in my view, enhanced by the Maastricht Treaty and no doubt the 1996 conference will need to build on what was agreed in 1991.

I do not think it can be said too often that the Parliament complements; it does not contradict competences exercised by Members in the other place. The so-called co-decision procedure, for instance, which was introduced by the Maastricht Treaty, gives in certain areas a right of veto to the European Parliament. That veto is in no sense a right taken away from national parliaments, which have no right of veto over European legislation. Parliamentary scrutiny is not a zero sum game. But the democratic legitimacy of decision-making needs the scrutiny and involvement of national parliaments.

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In his opening speech as President of the European Commission, Jacques Santer said:

    "the Commission should do less, but what it does it should do better".

I am sure that my noble friend Lady Chalker will say, "Hear, hear" to that, particularly in the context of Lomé and overseas aid.

Baroness Chalker of Wallasey: Hear, hear!

Lord Plumb: My Lords, another issue which has been raised is fraud. Fraud has to be tackled and we must make sure that there are tough controls over spending. These issues and the many other voting changes will require proper debate, and I know that our own Government would want some convincing that we need to go further on qualified majority voting and on any extension of Community competence. I am sure that any move towards a more centralised or more intrusive Community—a move to abolish the veto or to aim for a centralised European super-state—will be vehemently opposed, but I do not expect the Inter-Governmental Conference to make proposals which would significantly change the constitutional position of the United Kingdom.

However, I suppose that the main fear concerning many people is what they see as a threat that we may be dragged into the EMU and a single currency. The principle of a multi-speed Europe, even a measure of variable geometry, is already central to the EMU provisions of the Maastricht Treaty. So before a member state proceeds to the third stage of EMU it is required to meet the convergence criteria, covering inflation budget deficits, exchange rate stability and long-term interest rates. If a majority of member states meet these conditions, then a single currency may come into being in 1997—if so decided by Heads of Government acting by a qualified majority. Of course it is likely that those conditions for EMU will not be met: there would need to be proper convergence on economies coming together right across Europe. For sterling to join EMU would have meant that we would have needed to be in the ERM for two years and that there would need to be an independent Bank of England. The economic realities in March 1995 indicate that economic and monetary union is unlikely to happen in the next 18 months, and perhaps in the 18 months beyond that.

Whatever the outcome of this conference, Members in another place and Members of your Lordships' House will have the opportunity to take the decisions they want, when they want, knowing that our Prime Minister's ability and success in negotiating Britain's opt-out give us time for full parliamentary debate before agreeing to any timescale for a single currency.

Let me conclude by saying that compromise is necessary for reaching an agreement. I do not see the changes in 1996 as a gigantic upheaval, but at the same time I do not believe in the status quo being an option either. Change is manageable, but only on the basis of flexibility and compromise.

5.56 p.m.

Lord Stoddart of Swindon: My Lords, I too would like to congratulate the noble Lord, Lord Jenkins, on

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bringing forward this debate today. I am particularly grateful to him for telling us that he was in fact part—indeed the leader, I think—of the cross-party pro-European Alliance. This is part of the fight back, a fight back which I suppose started when, from 1970 onwards, he and his fellows drove us into the EEC by securing 69 votes from the Labour Party on a three-line Whip; so we have been warned, and some of us will take that warning.

It is gratifying that so many of your Lordships are speaking at this stage of the debate, which is likely to be a long one. But of course this must not be the only debate, and certainly it is not the most important debate. I think it should be seen rather as the aperitif rather than the main course, or even the hors d'oeuvres.

I, with other people, shall expect the Government to come forward with their own proposals for discussion not only in Parliament but throughout the country as well. It is no use, on this occasion, hiding behind some absurd posture of protecting their negotiating position, because everybody in the country is now interested in this subject. They want a wide-ranging discussion upon it. It is up to the Government to set the agenda for that discussion and to listen to what this House and the other place have to say and to what the people of this country have to say. Indeed the people are increasingly sceptical, not only about the benefits of further integration but also about the supposed benefits Britain has so far secured. My own position about the European Union and our membership has always been clear. I find myself in all sorts of strange positions. In the 1970s I was accused of being an extreme Left-winger, because I was then what is termed a Euro-sceptic. I now find that I have been pushed right to the other side of the political spectrum and have become suddenly a political Right-winger, although I have stood still. The argument has in fact moved from side to side.

However, many people, hitherto content with the prevailing fashion, are now using arguments about the European Union that I and others have been using over a very long period of time. Let me quote from last Wednesday's Daily Mail— not a Socialist newspaper by any means, nor a Euro-sceptical newspaper. What does it say? It says:

    "A non-sceptic former Minister attacks the claim that the EU is this country's only life-line."

The main headline of the article is "The Great Euro Myth". It goes on to say:

    "Today, pro-EU MPs will argue that Britain's trading future depends on the Common Market. The truth is that we're dealing ever more with the rest of the world."

That was last Wednesday, 1st March. Who said that? Mr. David Howell MP, former Transport Secretary and now chairman of the Parliamentary Foreign Affairs Committee.

So the argument is indeed moving on, and people who hitherto have been very much in favour of Europe are now saying that there is indeed life outside the European Community or Union —call it what you will. The noble

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Lord, Lord Jenkins, moved for Papers. Unfortunately, he did not mention what Papers he wanted. I shall mention what Papers I and many other people want.

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