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Lord Graham of Edmonton: Now, answer that!

10.18 p.m.

Baroness Chalker of Wallasey: My Lords, it gives me great pleasure to seek to answer the noble Lord who is normally so silent on the Opposition Benches.

I begin by welcoming back to our European debates my noble friend Lord Cockfield. We certainly missed him in previous debates. He showed that having had a little time out, he was just as punchy as ever. It is good to see him back.

I welcome particularly the two maiden speeches of my two new noble friends. My noble friend Lady Wilcox was humorous yet factual, refreshing yet serious, clear yet concise. I shall never again eat a langoustine without thinking of my noble friend.

My noble friend Lord Bowness has special experience of the Committee of the Regions. I look forward to hearing more from him and I shall answer his points a little later. My noble friend's long and distinguished service in local government will be very valuable to your Lordships' House. We are delighted that he has joined us.

It is great to have such welcome contributions from my two new noble friends. But it was also good to listen to all the other contributions--even if, to be honest, some were a little lengthy. I shall answer as many questions in the debate as I reasonably can. As usual, I shall write to those of your Lordships whom I cannot answer tonight.

I was delighted to hear the speech of the noble Baroness, Lady Blackstone. After her noble friend the Leader of the Opposition had spoken tonight I was no clearer about Labour policy. Then I listened to all of the Labour Back Benchers who spoke--all three of them--and realised that they had a problem. Not a single Labour Back Bencher spoke up in support of his Front Bench. But at least tonight we have ended on a positive note. The noble Baroness did her best to present once again a united, user-friendly Labour policy and put

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something behind the spin, which we have received in recent weeks, as part of what the Labour Party would sell to unsuspecting British voters. I will deal with some of the individual points in a moment. I am glad that it is a lady who has beaten the spin doctor, because it is not summer yet and already there seems to be a bit of European policy about.

My noble and learned friend Lord Howe of Aberavon spoke of the need for a reasoned consensus for developing Europe. We have to take a practical, positive view which is so often masked by negative comments from a few that could almost be dangerous in achieving a positive approach for the future. A few moments ago when listening to the noble Lord, Lord Wallace of Saltaire, I thought that there must be a lot that we could do together to advance the kind of Europe that we all want. We all have to work a lot harder to sort out what is wrong in many of the comments that have been made. I say this in a spirit of sadness rather than anything else. I admit to your Lordships that I was shocked and dismayed tonight by the vehemence of some of the anti-European and anti-German speeches in this Chamber. In life, we do not always like our relatives let alone our neighbours, but those who care about reasonable relations find it sensible to make an effort to overcome the difficulties, differences and even the prejudices. This month I have achieved 35 years' experience of dealing with Germans, from my time as a student, as a businesswoman and now in politics. I do not like every German whom I meet. I certainly do not agree with every German I meet. Nor do I agree with every Brit, Frenchman, Italian, Russian or American. Therefore, I hope that we can put anti-nationality behind us and argue about the issues. We live in an interdependent world and a geographically close Europe. We are bound to have differences about issues. Let them remain differences about issues.

Lord Stoddart of Swindon: My Lords--

Baroness Chalker of Wallasey: My Lords, at this hour of the night I hope the noble Lord will forgive me if I say that he has intervened on a number of occasions throughout the day. In a final wind-up, it is extremely difficult, after 27 Back Bench speeches, to make a concise speech so that your Lordships may go home. If we start to have interventions we will continue to have interventions. I gave a personal opinion which I know from corridor discussions during the debate is shared by many Members of your Lordships' House.

The noble Lord, Lord Richard, in his opening, made much comment on Britain's alleged isolation and loss of negotiating influence as a result. I hope that we can put the loose rhetoric to one side and look at the facts. As the noble Lord, Lord Ezra, has said, the most important single achievement of the European Union in recent years is the single market. I do not see that as evidence of the loss of British negotiating influence or British isolation. Nor is the embedding of subsidiarity; nor is enlargement. This is not an agenda which the UK is being forced reluctantly to accept; it is an agenda that we are setting.

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The noble Lord, Lord Richard, mentioned three specific areas where we are, as he thought, isolated: first, the ECJ. I take it that he has not read the French Prime Minister's recent remarks. Perhaps I may quote:

    "As for the ECJ, it has to be admitted that it is becoming little by little a sort of European Supreme Court".
He then went on:

    "To avoid such an outcome, the IGC should examine the issue".
It is clear from other speeches from Alain Juppe that the French, just as much as we do, intend not merely to examine but to resolve that issue.

Secondly, the noble Lord, Lord Richard, talked about an extension of QMV. We need to look at it issue by issue. If one does, one sees that there are few, if any, individual areas where Britain would be isolated in imposing QMV. Thirdly, on EMU, if the noble Lord is criticising our policy on the EMU, he will need to tell us how he would change it. I do not know whether he or his party would renounce or opt-out, but that is one question to which we have not had an answer. Of course it is true that the UK has had to stand for its national interests, sometimes alone. I make no apology for that. Other member states do just the same, but that has not reduced our influence; rather the opposite has occurred. It has encouraged others to think about and come forward either in support or with their own views.

The noble Lord, Lord Bridges, is not here. I wish to refer back to the excellent debate we had on 12th December as a result of the Select Committee's report on the IGC. It is said that I should have spoken about it earlier, but the fact that it is covered in my wind-up speech shows no disrespect to the noble Lords who did such a fine job with that report.

In that debate I said that the IGC would not be about major treaty reform, but should be seen in the context of real change, prosperity, security, enlargement and popular support. I argued that the IGC should confine itself to what it could do to meet those challenges. That is the view which has come forward in the White Paper which was praised by my noble friends Lord Skidelsky, Lady Rawlings, Lady Elles and many others.

It is easy, during a period when we are examining the detail of treaties, to become over introspective. The detail is essential information. No one would deny that. It is right that governments, and parliamentarians if they wish, should go through them with a fine toothed comb. We shall continue to do that relentlessly throughout the IGC. However it is also important to put the detail in context; always to bear in mind the wider issues that are at stake, and what it means to us to belong to the EU.

The White Paper seeks to do that. It pulls together the ideas by asserting that the European Community, subsequently the European Union, has been a means of safeguarding stability in Europe and generating economic prosperity in which the UK has shared. My noble friend Lord Elibank was right when he said that the threat to Europe's prosperity was not from within Europe, but was coming from many miles away through the link with modern telecommunications.

I know from all the OECD and other statistics that I have read that the total overall economic advantage is significant. British trade with Europe has risen almost

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twice as fast as our trade with the rest of the world. We have been a major target of investment--a total stock of £120 billion. Only the United States has attracted more. I give as an example a £260 million investment in Lanarkshire by Chunghwa, a Taiwanese electronic giant, which will create 3,300 new jobs. The European Union has been crucial in helping to liberalise the trade.

Yes, the 1993 GATT world trade deal is most important, but it could not have succeeded if the countries of Europe had not worked and spoken together for that. The White Paper sets out that the European Union is not just about free trade and economic advantages; it is about combining forces to strengthen the European global voice in many areas. It is about working together to fight international crime and about fighting together to raise environmental standards. Vitally, it is about consolidating democracy and prosperity and maintaining long lasting peace.

Enlargement is an historic responsibility in this respect and healing the divisions which scarred our continent through the cold war. Drawing on the combined political weight of the European Union's members to help some political crises elsewhere is also a key responsibility and a key interest. I noted what was said by the noble Baroness, Lady Blackstone, about the co-ordination of foreign policy.

Perhaps I may take an issue which is rather more distant than the current difficulty. At the time of the explosion at Chernobyl 10 years ago I was asked by our then Foreign Secretary, my noble and learned friend Lord Howe of Aberavon, to take the meetings. The difficulty in coming to a decision was not because of an unwillingness to reach a conclusion together but because of the varied information--the sheer difficulty of knitting together the information in a meaningful way so that a mutually agreed purpose could be achieved. Over the years we have become better at that and because of my longevity I can stand here and say that. However, we still need to have a better system of working together and I believe that that has to happen through the co-ordination of foreign policy. It certainly would not happen if there were to be any imposition of an action. The action must be agreed by all the member states before it can succeed.

Our aim is that the principles of working together in the Union should apply not just in the present Union but in time across the wider Europe. Clearly, it is in the long-term interests of the United Kingdom to have a strong democratic and confident Europe of nation states which co-operate to achieve common prosperity and to resolve the problems which occur in life.

The noble Baroness, Lady Blackstone, also spoke about tackling unemployment. I agree that it is the greatest challenge facing Europe, but if she believes that adopting the Social Chapter will be the answer, I have news for her. In the UK we have combined two objectives--of creating sustainable economic growth and achieving high levels of job creation. We are now entering the fourth year of economic recovery. Underlying inflation is down to 2.5 per cent. Unemployment is still too large at 2.2 million, but it is down by more than 0.75 million since December 1992.

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It is now at its lowest level in five years. The proportion of the working age population in employment in the UK at 68 per cent. is higher than for other major European Union countries. We have increased our output faster than our European neighbours and our real average income in the UK increased by more than one-third between 1979 and 1992-93. The UK's flexible labour markets have helped those vulnerable to unemployment. Youth unemployment in the UK is almost half that of France and well below the EU average. Our social security expenditure has grown about 4 per cent. a year in real terms since 1979. Therefore it is not a case of not trying to help in training and other ways those who have not yet been fortunate enough to find jobs.

However, the point I make to the noble Baroness about the Social Chapter is that we drew the line at that at Maastricht because we believed it was wrong for Britain and very unhelpful for Europe as a whole. We know that there are others within the European family who agree with us, but so far they have not come along with a solution better than the existing Social Chapter. I believe that they may, because it is of grave concern in every European country.

I turn now to enlargement, about which my noble friend Lady Wilcox and many other noble Lords spoke. Of course we want to continue the push to have the security and prosperity that we enjoy enjoyed by other countries eastwards and southwards around Europe. Enlarging the European Union will bring major benefits. But we must ensure that that enlargement is successful and sustainable. That is why we shall work to create the right conditions for that by calling for policy reform, particularly of the CAP and the structural funds.

The Commission's opinions on the central European applicants will be issued as soon as possible after the IGC, and those will form the basis for the European Union to decide which applicants should begin negotiations first and when that should be. But, for the moment, we encourage all applicants to continue the preparatory work in advance of membership, raising their economic and administrative standards in the process. I suspect that the negotiations with some of the central European applicants will coincide with the start of negotiations with Cyprus and Malta, as was expressed at Madrid in December 1995. That will be some six months after the IGC.

Many other questions have been asked, in particular about qualified majority voting. The noble Lords, Lord Richard and Lord Ezra, claimed that the Government's line has been inconsistent in relation to QMV. I assure them that that is not so. We do not regard QMV, specifically and properly applied, as bad. It operates already in the treaty where it is needed; for example, for the CAP and the single market. But there is no convincing case for extending it further. My right honourable friend the Prime Minister said:

    "I do not anticipate significant extension of qualified majority voting, and it is possible that there will be no single extension at all. We are not seeking to accept any. What may turn up in negotiations lies ahead; at present, we do not intend to accept any extension of QMV whatever".

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One cannot foresee all that will happen in the negotiations but we believe firmly that there is unlikely to be any reason for feeling it necessary to have an extension of QMV.

The noble Lords, Lord Ezra and Lord Bridges, my noble and learned friend Lord Howe and my noble friend Lord Kingsland all talked about flexibility in Europe. We back a flexible Europe but, as noble Lords have said, it must be the right kind of flexibility. We do not want an o la carte Europe and it is quite clear that there are many areas such as the single market and external trade policy where conformity is right. Nor do we or our partners want a hard core. But in our view it is perfectly healthy to have different institutional arrangements for different policy areas and for groups of member states to advance more quickly in some areas than others, provided that, once such arrangements are agreed, they are agreed by all and open to all. Trying to force 15 member states, let alone 20 or 25, into the same mould will, without doubt, crack the mould. That is why we must have that flexibility.

This evening we heard a number of comments about variable geometry--that flexibility. Diversity is not a weakness to be suppressed; it is a strength to be harnessed. I have just spent four days on a management course learning about how to harness diversity in the interests of a common aim. I believe that it is a real mistake to seek conformity for conformity's sake. There may be areas in which it is possible to integrate more closely than in others. The Government certainly believe that the creation of flexible structures within the European Union must be subject to two basic criteria. First, such policies should become Union policies and draw on the Community's institutions, including the budget, only where that is agreed by all member states. In addition, no member state should be excluded from an area of policy in which it wishes to participate and is qualified to do so. That is a reiteration that policies must be open to all member states. In that way we avoid falling into the trap of creating that hard core. We spent some 40 years working to reduce divisions in Europe. It would be an extremely bad idea to reintroduce them.

My noble friend Lord Pearson of Rannoch asked me more than 10 questions. I shall write to him where they have factual answers and I shall try to explain all the many things that he has been told over many months. However, I should like to reply to one of his questions here and now; namely, that on subsidiarity. The number of proposals for primary legislation are continuing to fall. There were 61 in 1990, 52 in 1991, 51 in 1992, 48 in 1993, 38 in 1994 and 25 in 1995. The Commission proposes only 19 new legislative proposals for the whole of 1996, so we are now at a third of the figure that we were at in 1990. My noble friend has at least received one answer this evening to one of his many questions.

The noble Lords, Lord Richard and Lord Stoddart, talked about the Turin conclusions. Indeed, both noble Lords said that they were a federalist agenda, but I believe that they need to read them very much more closely. The Turin conclusions do no more than list the

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issues for consideration at the IGC. In no instance do they prejudge the decisions that the IGC will take by unanimity among heads of government.

I believe that I should say a few words about the communique which emerged from Turin because there is a degree of confusion among noble Lords on the point. As I said, the conclusions represent an agenda. They do not prescribe a determined outcome in any specific area. It is a totally non-prejudicial menu of issues. Our priorities, which I mentioned when opening the debate--examining the functioning of the ECJ, the role of national parliaments, subsidiarity and improving competitiveness--are some of the examples reflected in the document, as indeed are those of other member states. We will not be signing up to all of them; nor will all member states do so. But it is important that we get a good agenda from which to work and gradually discard those which are obviously not going to work.

A number of speakers were concerned about the issue of information, with which we dealt at Question Time earlier today. Perhaps I may simply say that the European Parliament's role in the IGC is nothing like as threatening as was suggested in an earlier speech made, I believe, by the noble Lord, Lord Bruce of Donington. At Turin, in common with France, we successfully resisted pressure for the European Parliament to participate in the Intergovernmental Conference. The IGC is intergovernmental and it will remain so. But if you do not at least communicate with and listen to what is being said, you get into the sort of difficulty that many countries had after the Maastricht IGC. I believe that to communicate with national parliaments and with the European Parliament will actually allow us to avoid some of the awful problems that we had after 1992. We certainly do not believe that the European Parliament needs new powers, just as my noble friend Lord Elibank said; nor, indeed, do the French and several other nations.

I should like to say a few words on the Committee of the Regions to my noble friend Lord Bowness. The committee plays a valuable role in European legislation, but it is a new body and it needs time to bed down before we can consider some of the suggestions that the COR has made. This IGC is really too soon for it. I believe that it will have to wait for a later stage in the development of Europe.

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Several comments have been made about BSE. Perhaps I may simply say that the remarks we heard this weekend from Commissioner Fischler underline the fact that the ban is disproportionate and should be lifted as soon as possible. We shall continue to discuss with the Commission and other member states the lifting of the ban on British beef. However, your Lordships will be debating that issue later this week.

We have had a long debate and it is late. Indeed, I am informed that it is late enough for me to finish. However, I should just like to make a final point about the ECJ and about defence. A number of noble Lords raised the subject of the European Court of Justice. I would say to the noble Lord, Lord Stoddart, and to the noble Viscount, Lord Tonypandy, that it is not possible to have a single market without the ECJ. It is not possible to have its economic benefits without a common body of law evenly enforced in all member states. Those who argue for the emasculation of the Court would throw out the baby with the bath water. I shall write in detail to the noble Lord, Lord Lester of Herne Hill, about his points because I know he knows they concern not just my department but also a number of others.

I would say to the noble Lord, Lord Chalfont, that we fully agree with him that there must be European/Atlantic co-operation in defence matters. We also believe--as the noble Baroness, Lady Blackstone, emphasised that she believed--that NATO has to be at the centre of European defence. I believe that European countries can do more to support NATO as the bedrock of security on our continent. We should build up the Western European Union for this purpose, but we shall oppose proposals designed to give the European Union a defence dimension for which it is not qualified, and for which it will not be qualified.

I thank all those who have participated in this debate. I have tried to be constructive and realistic. We are making positive proposals. We are listening to our partners, listening to Parliament at Westminster, and listening to business and all the other aspects of British life; but this IGC is an important part of our agenda both at home and in Europe. I hope that in our future debates noble Lords will understand why we must grasp this IGC chance to introduce practical reforms as well as ensure that the European Union remains the servant of its members and not a threat to their independence.

On Question, Motion agreed to.

        House adjourned at thirteen minutes before eleven o'clock.

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