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European Council, Dublin
4.40 p.m.
The Lord Privy Seal (Viscount Cranborne): My Lords, first, perhaps I may apologise to all those who
were expecting the Statement a little earlier for the delay in making it. It is a delay for which I take full responsibility.With the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister on the meeting of the European Council in Dublin on 13th and 14th December, which my right honourable friend attended with my right honourable friends the Foreign Secretary and the Chancellor of the Exchequer, and my honourable friend the Minister of State in the Foreign and Commonwealth Office. The conclusions of the Council have been placed in the Library.
The main issues on the agenda were the Intergovernmental Conference and economic monetary union. The Statement is as follows:
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"The Council discussed the prospects for the Intergovernmental Conference at some length. Shortly beforehand, the Irish Presidency had tabled a general outline for a draft revision of the treaty. This has been deposited in the House. It summarises fairly the position reached in the negotiations and the views of different member states. The views of the United Kingdom are fully reflected.
"The Council conclusions reaffirm the target of completing the IGC at the Amsterdam European Council in June 1997 and welcomes the presidency document as a good basis for the work that lies ahead. This work was in no way prejudiced by the Council's conclusions in Dublin. We will continue to advocate our own proposals and press our own concerns.
"In discussion, I welcomed the progress made in a number of areas: subsidiarity; a greater role for national parliaments; making the common foreign and security policy more effective; improving the quality of European legislation; and introducing greater openness into the workings of the EU. I also spelled out the United Kingdom position on a number of key points. I see no point in a new employment chapter in the treaty. It will not create a single job. I do not accept that an enlarged European Union needs more qualified majority voting. On defence we welcome co-operation between the European Union and the Western European Union, not merger or subordination of decision making. I will not agree to justice and home affairs issues falling under Community competence. And it is unthinkable that the United Kingdom would relinquish its frontier controls.
"I also emphasised our requirement for progress on quota hopping in the common fisheries policy and on the Working Time Directive.
"The outcome of the IGC will do much to determine the future direction of the EU. Some advocate a more integrated, centralised Europe. I respect that view but I do not share it. It would not be right for Britain. I believe the European Union must be a partnership of nation states, with Community competence where it is needed, but only where it is needed. This is more than a free trade area, but very much less than an embryo European state.
"There is only one way these competing visions can be reconciled. And that is through the development of a more flexible Europe. This is one of the most important issues before the IGC. Those who want to integrate further in particular areas should not be frustrated unreasonably although, if they wish to use European Union institutions, they can only proceed through unanimity. Those who do not must not be forced into unwanted obligations which build up resentment.
"I first set out the need for flexibility at Leiden some years ago. This is now widely accepted. But we need to ensure that it is developed in a way that protects the vital interests of those who do not wish to integrate further in particular areas. There is much more work to be done here and very little time in which to do it if the Amsterdam deadline is to be met.
"Economic and monetary union was the subject of much interest, although the European Council did not itself discuss the issues at any length. The Council agreed a report by ECOFIN covering three issues on which my right honourable friend the Chancellor has reported to the House on a number of occasions in recent weeks: the stability pact, the legal status of the euro, and the new, voluntary, exchange rate mechanism. The conclusions--to which the ECOFIN report is annexed--make it clear that these issues remain subject to our parliamentary reserve.
"If the single currency goes ahead, it is a vital British interest, whether or not Britain is a member, that it succeeds. So I welcome the progress on the stability pact. The agreement reached strikes the right balance between the necessary discipline and the need for the Council of Ministers to retain control of the disciplinary process if individual countries get into difficulty.
"The House will welcome the clear statements in the ECOFIN report that the arrangements for economic surveillance to be agreed for countries not in the single currency cannot lead to sanctions of any kind.
"I have made no secret of my doubts about whether enough countries will be sufficiently convergent to allow a single currency to go ahead safely on the present timetable. I repeated these doubts in Dublin.
"It is important that the figures themselves are not fudged. But, whether or not particular countries meet particular targets on a particular day is less important than the extent of genuine economic readiness for such a far-reaching step. I am therefore pleased that the ECOFIN report makes clear the importance of not only achieving economic convergence on a particular day but being able to sustain it over the long term.
"I should also report that the President of the European Monetary Institute presented to the Council, and subsequently publicly, designs for the proposed single currency's banknotes. These designs are the responsibility of the Central Banks--as indeed, such designs are the responsibility of the Bank of England in this country now. Everyone will have their own views on these.
"The decision on whether to go ahead with a single currency will be the most far-reaching decision the European Union has ever taken. Although we expect to meet the required economic conditions, we have the right to decide whether or not we want to join, if it goes ahead. We will make our decision when we are clear about all the necessary issues including, crucially, our assessment of the prospect for real and sustained economic convergence.
"The Council also discussed employment. Unemployment in this country is lower than in the other major European Union economies, and is falling faster. I circulated at the Council a paper on United Kingdom policies and their results, and commended it to our partners.
"The Council adopted a declaration on unemployment. My agreement to it was subject to three conditions: first, that it confirmed that primary responsibility for employment policy rested with member states; secondly, that the European Union's approach remains based on the supply side policies agreed at Essen in 1994; and, thirdly, that the declaration in no way prejudiced the question of an employment chapter in the treaty. These conditions were agreed.
"The European Council also discussed justice and home affairs, where we welcome greater European co-operation, as long as it remains firmly on an intergovernmental basis. The Council confirmed the priority of the fight against drugs, and endorsed an Anglo-French initiative to combat transit and production of drugs in the central Asian republics. It called for ratification of the Europol Convention by the end of 1997--achieved only by the United Kingdom so far--and agreed that Europol should work in conjunction with national agencies to support the fight against international crime.
"The Council also created a high-level group to draw up an action plan against organised crime, welcomed joint actions against sexual exploitation of children and trafficking in human beings, and confirmed the need for intensified co-operation against terrorism.
"On BSE, I briefed my colleagues on the steps we have taken to eradicate BSE, notably progress under the 30-months slaughter scheme. I sought and received confirmation that future decisions on lifting the ban would be taken on the basis of science, as agreed at Florence. My right honourable friend the Minister of Agriculture will be making a statement a little later on the next steps.
"On foreign policy, the Council endorsed the London Conference document on Bosnia as an excellent basis for work next year. On the Middle East, the declaration issued reflected our concern about the current state of the peace process.
"The Council also expressed its strong interest in a smooth transition to the Hong Kong Special Administrative Region next year and its support for the existing representative democratic institutions of Hong Kong. This was a welcome endorsement of our approach.
"The European Union is approaching some historic decisions over the next 18 months, both on a single currency and its future direction. The result of the intergovernmental conference may well mark a crucial turning point in Europe's development.
"The President of the European Commission said last week that the moment of truth lies ahead. There is one sense at least in which he is right. The choices made will determine not only the success and stability of Europe as a whole, but Britain's relationship with it."
4.51 p.m.
Lord McIntosh of Haringey: My Lords, on behalf of my noble friend Lord Richard, who, when I saw him on Saturday, was expecting to leave hospital today after a successful operation, I thank the Lord Privy Seal for repeating the Statement made in another place. Indeed, I thank him for delivering it with a good deal more panache and conviction than the Prime Minister himself, who tended to read his brief at a fast lick without showing much emotion. At least the Lord Privy Seal seemed to appreciate the quality of the text he had to repeat.
It will be well known that we support a very large number of the conclusions that the Government brought back from the European Council meeting in Dublin. In particular, I want to emphasise our support for the measures being proposed in the fight against terrorism, organised crime and the sexual exploitation of children, the measures on enlargement, and many of the foreign policy initiatives that were debated.
I have a good deal of sympathy for the Prime Minister and his colleagues as they return from this summit meeting. For reasons that will be obvious to all in the Conservative Party, they have to pretend that nothing has changed. Indeed, the Statement seeks to give that impression. The difficulty, if one looks not simply at the Statement but at the communique and the annexes that came from the presidency after the meeting, is that a great deal has changed. The communique uses the phrase, "further decisive progress towards European monetary union". I think it will be generally recognised that many of the obstacles that had been anticipated to European monetary union have been successfully resolved, largely by negotiation between France and Germany and very little as the result of any intervention or activity on the part of this Government. So it will be recognised that the Prime Minister has a difficult argument to put before Parliament, and above all before the different factions in his party.
There are so many issues in relation to which the Government had to pretend they were taking action and had to use phrases such as,
- "spelled out the UK position",
Perhaps I may ask the Lord Privy Seal about the issue of flexibility and what is the Government's attitude. If, as one thinks, flexibility means that it is possible for some nations to go ahead against the opposition of others, and if that could mean, as it appears it could, permanent exclusion for those others from the inner core, what action have the Government effectively taken to resist that kind of flexibility? What have the Government said about the desirability of such a change, which, were it to take place, would clearly be immensely damaging to the interests of this country? The intergovernmental conference has been described by Ministers on many occasions as dangerous to the interests of this country and some of the proceedings also as dangerous.
The Irish draft treaty, accepted at Dublin this weekend, provides, as the communique says, a good basis for negotiation. Did the Government do anything other than spell out the UK position? Did the Government achieve any changes to the Irish draft treaty? Or is it the case that the dangerous revision of the Maastricht Treaty which is to be the result of the intergovernmental conference is proceeding without us and proceeding with very little input from this country?
On European monetary union, the Statement says nothing about the stability and growth pact, and still less (if less than nothing is possible) about the French proposal that there should be a stability and growth council, which should meet before ECOFIN meets again. What is the Government's response to that? The communique makes it clear that the major obstacles on the legal status of the euro have been overcome. What was the input of the Government to those negotiations?
On the second voluntary stage of the exchange rate mechanism, is it not the case that the Government have agreed that there should be deficit limits, penalties for default, rules for exceptional circumstances and means for enforcement of them? Have the Government not agreed that there should be penalties for default in case of breach of the convergence criteria? On a number of occasions the Government have made the point that ERM2 is voluntary and that the penalties do not apply to those who do not take part in it. However, the ECOFIN report states:
- "Member states outside ERM2 and thus not having a central [exchange] rate will present policies so as to enable appropriate surveillance in the council, which can make, when necessary, non-binding recommendations. This surveillance will seek to ensure that their policies are oriented to stability and thus to avoid real exchange-rate mis-alignments and excessive nominal exchange-rate fluctuations".
The Lord Privy Seal said that real decisions are yet to be made. That is no doubt true. It is also no doubt true that all these matters are subject to parliamentary reserve and that there has to be some opportunity for further parliamentary debate. I hope that the Lord Privy
Seal will agree that we will take part in that before a new negotiating team goes to the next summit in Amsterdam.Is not the truth that the disagreements and divisions within the Conservative Party have fatally weakened the Government's negotiating position in Dublin in the coming months? Are not those divisions and disagreements made clear by the report in this morning's Daily Telegraph that 147 Conservative candidates propose to say in their election manifestos that they disagree with the Government's "wait and see" view on European policy?
I do not believe that I can conclude more appropriately than by quoting the words of the noble Lord, Lord Rees-Mogg, in The Times this morning. He said that,
- "the British have no policy and no influence [in Europe]".
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