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Lord Wallace of Saltaire: My Lords, I am puzzled by what the noble Lord has just said. He made a statement that the European Union is so protectionist against these open and free-trading east Asian countries.

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Can the noble Lord assure us that the European Union is definitely more protectionist than, for example, Korea or China? That puzzles me.

Lord Willoughby de Broke: My Lords, my diction was unclear. I referred to east European countries and not east Asian countries. As I said, the social and the economic policies are unrealistic in a Europe of 15 member states, let alone in a Europe of 20 or 30 member states. But Europe can be more flexible. I believe that the Schengen Agreement is an example of how Europe can be flexible in arrangements between consenting states, without expecting everybody else to fall into line with it.

Nothing could more clearly illustrate Europe's inflexibility and obsessive dirigisme than the threats made over the weekend to force Britain to join a new and improved version of our old friend the ERM. I though that the ERM was dead and buried, but it turns out that it is only having a rest. There is no mechanism to force us to rejoin the ERM, but the Finance Ministers of Europe and the Commission are busy making our flesh creep with plans for non-EMU states to submit their budgets to Brussels for approval and other various schemes,

    "to reinforce surveillance for those who do not play the game".
As far as I can remember, the last time we played that game it cost us about £15 billion. I very much hope that we shall not be joining the party this time.

However, the good news is that under Article 109j of the treaty, which was quoted also by Dr. Tietmeyer of the Deutschesbank this weekend, we have to be a steady member of the ERM for two years to qualify for EMU, and, as my right honourable friend the Chancellor has stated that he has no plans to join the ERM mark 2, if it ever happens, and as we have not been in the ERM mark 1 for three and a half years, it seems to me that we are clearly off the hook of the single currency. I wonder whether my noble friend the Minister will confirm that in her answer.

It is clear that the Government have a struggle on their hands to build the sort of Europe that they wish--and I share their wish for that Europe. Therefore, I strongly support their determination to oppose any extension to qualified majority voting and to retain the national veto. As the single market moves to completion, the number of areas where majority voting will be required should diminish. Unanimity should always be required for any measure which will restrict economic freedom. Europe should be a union of freely co-operating states. No nation should have policies which are unpalatable to it stuffed down its throat.

The Government are absolutely right also to continue with deregulation and to pledge to amend or repeal burdensome and unnecessary directives. It was most encouraging to hear the Statement by my right honourable friend the Foreign Secretary on 12th March in another place that EU directives are not irreversible. Small and medium companies are Britain's biggest job creators. They need a deregulated, competitive single market in which to flourish and to create employment. I am sure that the Government's commitment to those aims will be welcomed by all British businessmen.

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The Government are again absolutely right to underline the fact that national parliaments are--not just "should be"--the primary focus of democratic legitimacy in the European Union. I strongly support their proposal to entrench that primary role of national parliaments in the treaty itself. I welcome the proposal to include in the treaty a legally binding minimum period for parliaments to scrutinise Community documents and draft legislation. As my noble friend Lady Elles said, that matter has caused great dissatisfaction in your Lordships' House and in another place and the Government are to be congratulated on this initiative.

Where I find A Partnership of Nations a little disappointing is in other areas such as the paragraph on subsidiarity. Subsidiarity is a slippery concept and, although Ministers have attempted to define it on several occasions, I think it is fair to say that it has not yet been pinned down in a particularly convincing way. Subsidiarity is in itself a federal concept which assumes that power resides at the centre and that the centre will graciously allow its satellites the freedom to act only when and where that centre sees fit. Subsidiarity, as defined in the treaty, has expressly no power over the pernicious doctrine of the acquired field, the Acquis Communautaire, and is therefore effectively an irrelevance. Where are the successors of subsidiarity? I see no successors. If national parliaments are to have the role envisaged for them by the Government in the White Paper, the whole concept of subsidiarity will be superfluous.

It is also disappointing to see that reform of the common fisheries policy is tucked away in paragraph 65. I realise that something has to get into paragraph 65, but smaller items such as citizenship could perhaps be put there. Surely the common fisheries policy, which has been and remains such a disaster for Britain's fishing industry, should have a slightly higher priority in the Government's book. Given the Government's wish to see changes to the CFP, could my noble friend comment on the statements made recently by the EU Fisheries Commissioner on her recent visit to this country? She appeared to indicate that changes to the CFP could be made by national parliaments. If that is the case, treaty changes at the IGC would be unnecessary. That is surely our only hope of changing the common fisheries policy in the way we would wish, because there is no prospect of our partners in the fisheries policy agreeing to changes to something which suits them so well, at least not without unacceptable concessions on our part.

The noble Lord, Lord Taverne, mentioned the beef crisis. The noble Lord is not in his place at the moment, but I have to say that he must be living on a different planet. The beef crisis has not been helped by our partners in Europe; it has been exacerbated by their actions, as was said by the noble Lord, Lord Stoddart of Swindon, and by the noble Lord, Lord Moran, in his excellent speech. Probably illegally, our partners banned our beef worldwide. They banned it in Europe. They banned our exports. They banned anything to do with our beef--all in the name of consumer safety. It now turns out that it was nothing to do with consumer safety at all; it was to protect the European beef market. I hope

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that he will be brought to book for his lies--and that is what they are, cynical lies--because he has caused untold damage not only to the beef industry in this country, but also to the dairy industry and other contiguous industries. I look forward to participating in our debate on that on Wednesday.

The Government should go to the IGC with the recognition that they have a strong hand to play. We are, after all, the second biggest contributor to the European budget--although not the second richest nation, however that is measured. As the noble Viscount, Lord Tonypandy, clearly pointed out, our trade balance with Europe is in very large structural deficit, amounting to well over £100 billion over 20 years, and £16.5 billion in the last year alone.

Our consumers also heavily subsidise the iniquities of the common agricultural policy. Our fish stocks form a disproportionate amount of common fisheries policy resources. Almost invariably, we are the most significant contributor to any European peace-keeping force. I thought that all of this would entitle us to be called very good Europeans. Therefore, I hope that the Government will not allow themselves to be typecast as the awkward member or the odd man out, as the noble Lord, Lord Richard, would have it. Like the noble Lords, Lord Chalfont and Lord Bruce of Donington, I believe that to be a good European does not mean agreeing to every proposal that comes out of Brussels or Bonn, or that the United Kingdom should be stopped from putting forward its own constructive proposals. Being alone does not mean being wrong.

Euro-enthusiasts habitually threaten Britain with the tired images of missed buses, trains, ships, planes--even M. Delors' bicycle. Buses, planes, trains and ships have a habit of either not starting or arriving at the wrong place. If the Euro-bicycle goes wobbling off in the wrong direction, I sincerely hope that we will not be on it.

9.15 p.m.

Lord Monson: My Lords, I happened to spot a report in today's Independent to the effect that in about half an hour from now the former president of the Bundesbank, Herr Karl-Otto Pohl, would tell the "Panorama" audience on BBC1 that the European Union was a post-war concept, now out of date. In the light of that bombshell from a highly respected German financier, anything that I say tonight is bound to seem more unimportant than usual.

The noble Baroness, Lady Chalker, in her opening speech reminded us that the Intergovernmental Conference was always meant to be a tidying-up exercise, not an occasion for major treaty revisions, however much some governments might yearn for the latter. The United Kingdom, therefore, has every legal and moral right to say quietly but firmly, "No, no, no", to other more interventionist-minded governments. Of course, for reasons of realpolitik the United Kingdom Government may, now and again, decide to succumb to blandishments from other governments, but they should

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never forget their moral and legal right to stand firm if they believe it right and proper to do so--as I am sure they will.

Paragraph 12 of the White Paper worries about other countries seeking to impose an unacceptable (from our point of view) integrationist agenda. The answer to this concern is surely that they may be able to impose such an agenda, but what they cannot impose is an integrationist outcome as long as we have the veto and are prepared to use it. It is most reassuring that in paragraph 27 Her Majesty's Government declare that they will oppose further extension of qualified majority voting. The noble Lord, Lord Taverne, among others, mentioned qualified majority voting, which he favoured in many circumstances. His noble colleague, the noble Lord, Lord Jenkins of Hillhead (who I am sorry is not here today), often points out that an extension of QMV is a prerequisite for any significant reform of the common agricultural policy. That is perfectly true, but such extension of QMV would not be enough to ensure that any such reform actually took place.

It is often forgotten that the CAP is quite popular on the continent of Europe, not least because there the idea that food must at all costs be cheap is not one that is widely subscribed to. Significant reform would hurt most producers and almost certainly lead to rioting and possibly even civil strife in Mediterranean and Latin countries. (Of course, the two are not quite synonymous.) For that reason, the so-called Nordic countries and the Commission are always reluctant in practice to put too much pressure on Latin and Mediterranean countries, even though under the treaties technically and theoretically they have the power to do so. Realistically, significant CAP reform is likely to be an extremely long, drawn-out business. This will cause considerable problems for eastern European countries which aspire to membership. The more one considers their position, the more one tends to agree with the Adam Smith Institute that they would be far better off in a customs union with the EU, ideally coupled with some kind of defence pact, at any rate for a few more years. The removal or drastic scaling down of tariff barriers which keep out their coal, iron and steel, textiles and other manufactured products, as well as their agricultural produce, would enormously help the position of those countries.

It is not a question of keeping eastern European countries at arm's length from us--far from it. I cannot agree with the noble Lord, Lord Beaumont of Whitley, that Poland and the Czech Republic are culturally more distant from us than, for example, Spain and modern Greece--Mozart, after all, spent a good deal of his life in Prague and composed some of his best works there. It is just that if those countries join the EU in its present form they may end up as sour and disillusioned as most of the people in Austria, Denmark, and Sweden.

I shall digress briefly from the issue of QMV for a moment to reply to a point made by my noble friend Lord Bridges, who I am sorry to see is not in his place. He urged us to be more positive about the EU and, like the psalmist, invited us to lift up our eyes unto the hills, from whence cometh our help. As far as concerns our

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BSE difficulties, we have lifted our eyes up unto the Vosges, the Harz mountains, the Apennines, the Sierra Nevada and the Austrian Alps, totally in vain.

To return to QMV, there is one set of circumstances in which a modest extension of QMV might, with advantage, be contemplated: as a trade-off for the rolling back of the powers of the incipient superstate--the partial dismantling of the acquis communautaire so that the EU would no longer have any competence in purely domestic matters with no cross-border implications.

The admirable paragraphs 5, 6, 20 and 54 of the White Paper show that Her Majesty's Government well understand that the ordinary people of Europe (as opposed to some of their rulers) do not want further integration, interference or harmonisation. If it seems that we feel that more strongly than the continentals, it is because we, in general, feel obliged to obey regulations and directives, whereas many other nationalities just ignore them. If time permitted, I could give many concrete examples of that.

Only by giving everyone more breathing space; only by preventing governments in one country from interfering (albeit by proxy) in the domestic affairs of people in other countries (poking noses into the "nooks and crannies of their everyday lives", to quote Mr. Douglas Hurd) will we have any chance of achieving that,

    "ever closer union among the peoples of Europe",
to which the Treaty of Rome rightly aspires.

9.22 p.m.

Lord Elibank: My Lords, I have, as have many Members of the House and people outside, three main preoccupations with our relations with Europe. As time gets on, and we are coming towards the end of the debate, I shall try to be as brief as possible. My main preoccupation is the gap between the leaders and the led. That has always been so up to a point--men of vision founded initially the Iron and Steel Federation, and then moved on towards their concept of Europe. The man in the street, I think--I cast back to my youth to try to remember what I thought at the time--went along with that as a noble ideal but one having perhaps little practical impact on his way of life.

As we have gone on through the decades, the spotlight of the media has been turned forcefully on Europe, and in most cases, I think, rather unfavourably. The second thing that has happened is that the man in the street is coming to realise that he will personally be affected by decisions taken in Europe. That means that he is hesitating; that means that while the leaders wish to press on, and do press on, the man in the street, not just in the UK but throughout most of Europe, is drawing back from a concept which has not been sufficiently explained to him.

The danger here is that the leaders will push that advance of Europe faster than the electorate can tolerate it. That could easily lead to the break-up of the Union. I do not disagree with the objectives of many of the leaders on the Continent for some sort of a federal union. However, I believe that by hastening the pace of change, as we are attempting to do, the whole future of

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the Union is placed in jeopardy. It is a grand concept and will not suffer by a delay of a decade or two in bringing it to fruition.

My second preoccupation relates to the lack of competitiveness of Europe. We appear to spend a great deal of time looking at each other; for instance, we may be 2 per cent. better than the French, 3 per cent. worse than the Germans and 5 per cent. better than the Italians, whether we are looking at the gross national product, rates of exchange, the bank rate or whatever. We do not look sufficiently outside Europe. The threat to Europe's prosperity will come not from competition within but from competition without.

We are rightly told that the next century will see the rise of India and China as economic superstates. I am often surprised to learn how many British firms employ Indian programers, systems analysts and so forth to write their programs. Obviously the cost of transmission is slight and the cost of labour is much lower than in this country. However, it is significant that in India and in Bangladesh there are citizens who are of sufficiently high calibre of education to be able to handle the work at least equally as well as anyone in this country. That is a foretaste of what the future may hold when the full weight of economic competition from those Far Eastern countries hits Europe some time in the next century.

My third preoccupation, which is most widely shared, relates to unemployment within Europe. Today hardly a politician speaks without mentioning unemployment, as though some magic measure could be introduced within Europe to lower it. I am no economist but it seems to me that the only cure for unemployment--and it is a temporary cure--is a boom within the country in question or perhaps within the continent. But booms come to an end and any extra employment which results is also likely to come to an end.

People talk about vast infrastructure projects; indeed, the Commission has an ambitious series of projects for trans-European roads and railways. That too would provide some employment, but, unfortunately, most engineering projects rely heavily on machines rather than on men. When the projects finish the employment finishes too.

Stress is often put on improving the standard of education of the workforce. That is a noble ideal as regards the individual, but if there are no jobs to be done, having a highly educated workforce will not solve any of one's problems. One could argue, at least in theory, that the more highly educated the workforce the fewer people are needed to conduct any particular piece of business.

Therefore, in Europe, as in this country, we turn to the conventional answer--the possibility of improving employment rests with the small and medium-sized enterprises. There is well-proven evidence that that is a successful route. At a time when the major companies are cutting labour, the SMEs can provide an opportunity for further and better employment. It is extremely important that they should not be overburdened by unnecessary taxation and bureaucracy. They must be given reasonable facilities for taking on and discharging labour.

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I should like to mention one or two what I would call constitutional points. One of those is the presidency of the European Union. That rotates every six months. When there were five or six countries in the Union, that was a reasonably manageable arrangement. Now that there are 15, it is a very poor arrangement. When the numbers in the Union climb to more than 20, it will become farcical.

Some fairly bizarre solutions have been put forward, but I believe that the only solution is the appointment of a permanent president for a fixed term of years. We all know that any permanent appointee as the head of an international organisation arouses a good deal of excitement and much negotiation. But in the end a man is appointed, whether as head of the United Nations, of NATO or of the European Commission. That seems to me a step which we should take as soon as possible.

There has been a certain amount of discussion in the House about qualified majority voting. If one looks at it the other way round, that is the right of veto. I cannot see how we can proceed much longer in the Union with a minority of one--which often is this country, but it does not have to be--obstructing the clear policies of the other 14. To the extent that the Government seek to resist qualified majority voting, I believe that they will be dragged kicking and struggling along as the right of veto is slowly eroded. It is much better to go along with whatever the majority feels at a particular time is the increasing limitation of veto rights.

The last point that I mention is the European Parliament. I suppose that that is the centre of democracy within the European Union--the one really democratic institution for which one should feel total support. I can say only from the limited dealings that I have had with its output that it seems to be more concerned with preserving and extending its own rights than with arguing the merits of any particular proposition. That is no argument for restricting its powers, but it is an argument for giving it no greater powers than it has already in the next few years. It needs time to get its own organisation right and in order. Until that is done, the powers that it has at present are more than adequate.

In general, I support the posture of the Government that, apart from making arrangements for the new entrants, the conference is an opportunity for consolidation and certainly not for dramatic change.

9.34 p.m.

Lord Belhaven and Stenton: My Lords, as I am at the bottom of the list of speakers, I do not intend to delay your Lordships for very long. Since the Maastricht Treaty, we have had the European Union. First, we became used to the EEC. We then became used to the EC. Now, it is the EU. For all the reassurances of my noble friend Lady Chalker, if words mean anything, we are already in a federal union. It has its own flag, its own parliament and its own law-making body.

Sitting in your Lordships' House, of late it has struck me, particularly at Question Time, that time and again the Minister agrees with the questioner but is powerless

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to do more than to promise to argue the matter with the Commission or the Council of Ministers. Therefore, having divested ourselves of our empire, we are now surrendering our power to manage our own affairs, which is our sovereignty.

In the little that I intend to say, I do not wish it thought that I am anti-French, anti-German or anti any nation in Europe. Indeed, I have many friends there and I enjoy visiting France, Italy and so on. But I just do not want to be a member of a European super state and go along with them and their body politic.

I should like to draw your Lordships' attention for the moment to our principal partners in the European Union. First, France has had nine constitutions since 1789 and is now in deep crisis--postponed but not solved--because the government cannot enforce the necessary measures to reduce expenditure on the public sector and restore the economy. Indeed, France may be on the edge of another revolution, another constitution, and her rulers are desperately looking around for a solution which they imagine lies in closer ties with the European Union.

To digress a little, I think that something might be done with respect to the specific French menace to our wine merchants and tobacconists. In my opinion, it ought not to be possible to take a day trip to Calais and return laden with wine and tobacco. I know that we all enjoy that sort of thing; but, unfortunately, our wine merchants and tobacconists do not. Indeed, I am very sorry for them because they are losing a fortune in trade. I would just like to know: is this the single European market?

I turn now to Germany. From reports that I have read, I gather that Germany is on the edge of a serious recession as a backlash for the cost of reunification. Italy has had three constitutions since the Risorgimento and has just had to cobble together another to try to bring a halt to the corruption which is deep seated and endemic in her body politic. Well, I wish them luck.

Spain, which is the other leading partner, has been sliding into corruption during the long Gonzalez premiership. The new government, which lacks a parliamentary majority, will probably be unable to halt the process. I shall not mention Austria, the low countries or the other members of the EC, including the unhappy new boy, Sweden, which are mostly relatively stable; and the less said about Greece, the better!

As has already been mentioned, since 1066, and until the Maastricht Treaty, England has had a continuous monarchical regime broken only by the 11 years of the Commonwealth in the 17th century. Scotland has had a continuous regime for even longer. Until Maastricht we had stability. We had a constitution and a rule of law--our own law--which was the wonder of the world. We had, and still have to some extent, close relations with the United States and with our former empire.

When we went to war in 1939, the whole Commonwealth, including the independent dominions, declared war on the same day. When we had the Falklands crisis, who came to our assistance? It was not Europe; it was the United States which supported us. In the present crisis in our beef industry all of our

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European partners immediately, and without heeding any of our arguments, imposed an embargo upon us. They were able to impose a world-wide embargo which shows the astonishing degree to which we have given up our independence. These are our so called partners and that is their solidarity! I believe that they are doing this deliberately as it is in their interest to destroy our agricultural industry so that we may buy more of their exports. I believe that many of them fancy that Mr. Blair will be more compliant than Mr. Major--though I personally have my doubts--and that they plan to bring him down as M. Delors said that he had brought down Mrs. Thatcher.

I was going to conclude that it is time for the British lion to roar, but we have heard it quoted already by the noble Viscount, Lord Tonypandy. I agreed with every word he said in what was by any standards a great speech.

We have been talking about enlargement. I have contacts in Poland and in my opinion the wish of Poland and other countries to join the European Community is not based on economics at all. They want to join the Community to secure their frontiers against Russia. If they join NATO, the drive inside those countries to join the European Community will slow down considerably because they have already had experience of Comecon and they do not want to experience something similar from the west.

9.40 p.m.

Lord Wallace of Saltaire: My Lords, this has been a long debate and many points have been made. No doubt this will not be the last debate on this subject. I have been in this House for a short time. I listened, in the week before I was introduced, to the debate on the IGC report, and I have made a number of contributions over the past few months. I welcomed the Minister's comments at Question Time this afternoon that the Government will keep us well informed as we go forward. This is, after all, a matter of Britain's long-term fundamental national interest and therefore we need to continue to debate it actively.

I congratulate the Minister on the quality of the White Paper and on its production. I found it extraordinary that the Government were so reluctant to produce one. The civil servants who have done much of the work on this document have performed an extremely useful task in spelling out the Government's position and have also supplied some beautiful maps. The recognition of the importance of public education and of carrying the public with one as one negotiates is something which failed to be recognised during the previous intergovernmental conference. Whichever party may be in power, it is important that the Government carry the public with them. I welcome in particular the firm statements in the first few paragraphs of the document. The noble Baroness repeated those statements when she opened the debate this afternoon. Paragraph 1 states:

    "The United Kingdom's role as a leading member of the European Union is vital to our national interest".

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Paragraph 3 states:

    "the European Union is the basis upon which we must consolidate democracy and prosperity across the whole of Europe ... Enlargement is at once an historic responsibility for Europe and a long-term British interest".

I must also congratulate the noble Baroness on the rather more weasel phrases tucked in towards the end of the document where the Government state that they may have further proposals to put forward, and that they will have positive proposals to make on a whole range of issues on which it is not yet politic--or indeed not always yet decided--to state what they may wish to do.

That reminded me of an occasion last summer when I happened to hear Peter Mandelson addressing a group of rather bemused French businessmen in Oxford. He assured them that by the time of the next election the Labour Party would have a European policy. I was rather puzzled to note that there were so few speeches from those on the Labour Benches today. This is, after all, an extremely important matter. We heard a worthwhile contribution from the noble Lord, Lord Richard, and no doubt we shall have another one shortly from the noble Baroness, Lady Blackstone. However, I was surprised that, apart from the noble Lord, Lord Kennet, only the noble Lords, Lord Bruce of Donington and Lord Stoddart of Swindon, felt this subject to be of sufficient importance for them to speak on it.

What we have heard this afternoon yet again is--as the noble and learned Lord, Lord Howe of Aberavon, said--that there is a cross-party consensus on a reasoned approach to European integration based on an intelligent assessment of Britain's long-term interests. He did not need to add that against this there is a cross-party coalition of opponents--of defenders of the British Union against the European Union; proponents of English nationalism against European co-operation. That is a divide which cuts across both major parties and cuts deep into the Government, and even deep into the Cabinet. It remains the case that a clear majority in Parliament in both Houses, and within the British public, when informed, favours closer co-operation with Europe. The 1975 referendum demonstrated that, as I am confident would any other referendum. The only part of the politics of this country in which there is a clear majority against closer integration in Europe is in the newspaper industry, which is largely under foreign ownership. The impossibility of the Government either providing a clear lead to a confused public or of intelligently pursuing British interests in negotiations with other European states comes from being stuck in the middle of this divide and from the sad failure of the Government from the top to clarify where Britain's long-term interests lie.

The denial of symbolic commitment to Europe, the insistence that Europe is only about practical things--cool commitments--whereas emotion is for the transatlantic relationship, with bargaining only for Europe, is part of what is wrong. I have always been struck by the difference between British Prime Ministers going to Germany to visit our troops there. We recall the noble Baroness, Lady Thatcher, riding in a tank with our boys, happy to demonstrate that there were British

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troops in Germany; and the frequent occasions on which President Mitterrand would go to Germany, always standing alongside Chancellor Kohl to review troops together, symbolising that this was part of a common European commitment.

One of the many oddities of British foreign policy, and indeed of British defence policy, is that a third of the British Army and a third of the British Air Force have been in Germany for the past 50 years. Nevertheless, we have remained apart from the rhetoric of a European commitment. The zero sum style of presentation with which the British Government have so often fallen down, in which we win and others lose and in which it is game, set and match to us, is part of what has been wrong. I remember Carlos Westendorp, the Spanish European Minister, saying, with clear reference to the British after a European meeting in Madrid, that the Spanish interpretation of national interests was one in which the interests of others had also to be taken into account.

The British, therefore, should be aware that our commitments in Europe need to be negotiated with others. The illusion that somehow we in Britain can dictate to everyone else in Europe what has to be done because we are right and the others are wrong is part of the post-imperial mythology which we have to overcome.

The political argument has moved sadly little since 1956, except that the ambitions of the opponents have become steadily smaller. We have just heard the constitutional arguments re-presented by the noble Lord, Lord Belhaven: that it is the sovereignty of Westminster which has to be defended; and the superiority of English liberties and English common law; or the impossibility of distributing power within the British constitution. As the noble Lord, Lord Bowness, made clear, there is a direct link between the debate about the British constitution and the debate about our future arrangements within Europe. Those of us who divide on this issue form a cross-party coalition against another cross-party coalition. Some of us thought that we lived in a multinational state which is itself a partnership of nations--I say this to the noble Viscount, Lord Tonypandy, as the son of a Scot--not in a single unitary state threatened by some alternative state in Europe. If we are willing to think about changes in constitutional arrangements within Britain, we can also think rather more openly about changes in constitutional arrangements with our continental partners.

However, the biggest single issue that has come out in the debate is clearly as regards Germany and France. We have to face that openly. Last year I re-read the Eyre Crowe Memorandum of 1907 about the underlying interests of British foreign policy. They were Germany and France. Eyre Crowe states clearly that once Germany was united, it became the overwhelming preoccupation of British foreign policy; and the balance between Britain, France and Germany had to be the main preoccupation of British foreign policy. It is odd to me that that is so easily denied by many people in the current foreign policy debate. John Maynard Keynes, in his first book in 1919, said much the same thing: that if

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we were to re-establish a stable and prosperous Europe after the First World War, it had to be built around a stable and prosperous Germany. Unfortunately, he failed to persuade the Prime Minister, Lloyd George, of the case.

Last year I was involved in a Dutch Government inquiry into the future of Dutch foreign policy. Unlike the British, the Dutch have the odd habit of inviting foreigners to take part in government inquiries: one German, two French, two British. The starting point for some of the Dutch was: "You don't have to ask whether or not you like the Germans; you do have to live with them. So there is no point in discussing what you think of the Germans; let's now talk about European co-operation on a reasonable basis". The saddest part of that Dutch report for me was the conclusion that there was nothing constructive to be done with Britain and, frankly, the only thing for the Netherlands to do was to go ahead in partnership with France and Germany, hoping that the British would eventually bump along behind.

I have to say to the noble Lord, Lord Beloff, that the picture of him the year before I was born in the Home Guard, guarding Britain, was inspiring. However, two-thirds of the population of Germany were born after 1945; two-thirds of the population of Britain were born after 1945. Unless we take clearly a position of racial guilt that the sons and grandsons to the second and third generation must bear the guilt of their parents, we must recognise that we are dealing with a different Germany in a different Europe.

Then there is the "anywhere but Europe" party, represented on this occasion by the noble Viscount, Lord Tonypandy, but by others on other occasions. They seem to prefer China to France as a partner or Japan to Germany or Singapore to Denmark. I recall the noble Lord, Lord Tebbit, some years ago suggesting that the proper relationship between Britain and the continent of Europe was comparable with that between Hong Kong and the mainland of China. I am not sure that he would still wish to draw that comparison, but I sometimes believe that what people are asking for is a relationship comparable with that between the Channel Islands and Britain or the Isle of Man and Britain: a nice, comfortable, off-shore base without any influence or ambitions.

Then there is the myth that we were never told--and the noble Lord, Lord Pearson of Rannoch, mentioned it--that somehow we were taken into a free trade area or that the 1975 referendum did not present the issues. As it happened, I was actively engaged in the 1975 referendum and wrote a paper for the Royal Institute of International Affairs. It sold about 25,000 copies and, as I recall, it set out many of the issues relatively clearly. I was pleased to take part in debates later in which opponents attempted to quote paragraphs from it against me and I was happy to be able to quote the rest of the paragraphs to them. I have also been reading the debates in the Labour and the Conservative Parties in 1960-61. The issues were set out quite clearly. Everyone

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recognised that there were political choices to be made and it was precisely why we found it so difficult. We understood what we were doing.

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