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Lord Tordoff: My Lords, I am most grateful to the noble Lord for allowing me to intervene. The decision

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as to who serves on the European Select Committee is entirely a matter for the usual channels and not the Select Committee itself. If the noble Lord has a quarrel with that, he should take it up with his own party.

Lord Bruce of Donington: My Lords, I am most obliged to the noble Lord for that clarification. My extrapolation of the point was designed exactly to elicit the correct response that the noble Lord has just given.

I shall deal with two aspects of the documents before us. the first concerns the arrangements in the new draft treaty for the provision of information to parliaments. This is an innocuous subject that I do not believe will raise hackles in any part of the House. The second matter is employment and unemployment. I believe that it was dealt with rather lightly by my noble friend the Lord Privy Seal. With the indulgence of the House, I shall enlarge upon it in due course.

In so far as concerns information, page 136 of the draft treaty states:

    "All Commission consultation documents (green and white Papers and communications) shall be promptly forwarded to national parliaments of the Member States ... Commission proposals for legislation as defined by the Council in accordance with Article 151 of the Treaty"--
which is quite irrelevant to the subject, and we can leave it out of account for the moment--

    "establishing the European Community, shall be made available in good time so that the Government of each Member State may ensure that its own national parliament receives them as appropriate".
It goes on:

    "A six-week period shall elapse between a legislative proposal or a proposal for a measure to be adopted under Title VI of the Treaty on European Union being made available in all languages"--
all languages--

    "to the European Parliament and the Council by the Commission and the date when it is placed on a Council agenda for decision either for the adoption of an act or for adoption of a common position pursuant to article 189b or 189c, subject to exceptions on grounds of urgency, the reasons for which shall be stated in the act or common position".
In answer to that I say: bully for them! But this arrangement is supposed to have been in operation for the past 10 years, and it has not happened. The Commission has specifically ignored its own recommendation and will go on ignoring the existing position under the treaty for as long as it suits it.

The House will be aware that I have more than a passing interest in the European budget, having dealt with it in Brussels and, to some extent, here. Year after year--I am sure that the noble Lord, Lord Tordoff, will agree with me--we have applied to receive the European budget in English on time so that we have adequate time to consider it in both Houses of Parliament. That would normally mean that we should have it at least six weeks in advance. The noble Lord will agree with me immediately when I say that that has never been the case. What has happened year after year is that the rendition of the Community budget to the Select Committees of both Houses of Parliament has always been too late for it to be considered, because ideally the budget should

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have been under consideration by both Houses before our Recess. After all, it is published on 15th May. There cannot have been all that dislocation of Commissioners as a result of the British general election. It surely has not spread into the Commission colony to a point where it is completely mentally atrophied. It could have let us have it, but it did not.

This is where we come down to people, of course. It is often forgotten--I invite to this point the specific attention of my noble friend who is to reply to the debate on behalf of my party and the Government--that we are not talking of peanuts. We are talking of £3 billion net out of British taxpayers' pockets. Yet it is not even debated, and cannot be debated, within the detailed budget concept because the documents are deliberately--I stress "deliberately"--withheld by the Commission from both Houses of Parliament until it is too late, within its own knowledge of our programme, for us to give any consideration to it. I sincerely hope that I have the unanimous support of the House in saying that that is not the way for the British Parliament or the British Government to be treated by an appointed Commission responsible to no one but itself, and there by our grace only. It is not the way to treat any sovereign nation, and, more particularly the United Kingdom, which has not been without responsibility for rescuing the lot of them from a greater danger in the last great war. It is not the way in which my country, or any other country, should be treated.

There are no particulars available in the detailed budget, which we do not have, about the scandal of the tobacco expenditure. There is no detail available: it should be in our hands now.

These things go right to the root of what the European Community should be about. Is a contribution net-- I repeat net, after all receipts--of £3 billion per annum to be ignored completely, to be passed on the nod and to be immune from examination by this Parliament at a time when great budget stringency is announced by our own Chancellor of the Exchequer, going right down into detail and into much smaller sums with regard to health, education, and so forth?

On the employment side it will be observed that there are some new measures. They were touched upon by my noble friend the Lord Privy Seal. At page 54 the document states that,

    "the promotion of coordination between employment policies of the Member States with a view to enhancing their effectiveness by developing a coordinated strategy for employment".
So what? It goes on to specify, and I am talking about Article 2:

    "Member States, through their employment policies, shall contribute to the achievement of the objectives referred to in Article [1] in a way consistent with the broad guidelines of the economic policies of the Member States and of the Community adopted pursuant to Article 103(2)".
So the employment section is not without conditions. It is always subject to the policies determined by qualified majority under Article 103(2), which incorporates the Maastricht principles; in other words, "You can talk as much as you like about unemployment; you can do what

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you like about unemployment, so long as you conform to the Maastricht restrictions." Indeed, our Chancellor of the Exchequer has agreed that that is the case; that that is what is being attempted. What it really means is that the employment parts of the new treaty will be useless because they are all subordinate to a deliberately deflationary policy under the Maastricht criteria, as exemplified, and hinted at, without being specific, by the noble Lord, Lord Beloff, by the chronic 18 million unemployed in Europe--a number that is likely to increase precisely because member states are being forced, or say they are being forced, to adhere to the protocols on excessive deficits and convergence set out in the original Maastricht Treaty.

I have often wondered, as perhaps other Members have, how it is that President Kohl is so sure that monetary union will come in on time? It seems contrary to all the evidence. Indeed, it is contrary to his own action, or appears to be contrary to his own action, in asking for a revaluation of the gold holdings of the Bundesbank, which has now been cast into some doubt. It also appears to be contrary to the French Government's action, apparently with the concurrence of the enarques on the Commission itself, to privatise their pension funds and then take them over again after the critical date so that they can meet the Maastricht criteria. Yet of course the Maastricht criteria are finally under the control of the Commission itself, because the Commission is, under the treaty which Members may or may not have read, the final arbiter of the statistics that are used. It is the Commission that decides ultimately the statistical basis.

Two of the deficit criteria referred to by noble Lords--notably the noble Lord, Lord Howell of Guildford, whom I would venture to congratulate on his speech because he obviously speaks with considerable knowledge of the entire subject--are dependent on the definition of what constitutes GDP. Who is in charge of determining the gross domestic product of each state or Europe as a whole against which the other more finite statistics can be assessed? I am afraid that once again the answer is the Commission.

I am also much afraid that in the final analysis one will find that the Commission has given the game away. There must be hidden aboard the Commission a Sir Humphrey, a la "Yes, Minister", because when one examines its statistical service, in particular in relation to the concept of GNP, page 53 of the Official Journal of the European Communities, published on 12th November 1996 by way of the Commission's response to the Court of Auditors 1995 report, states:

    "The Court observes that the concept of quality as applied to the GNPs of the Member States as a whole must be seen as a combination of two independent aspects: the mutual comparability of GNP statistics and the individual reliability of each of them. The Commission has adopted a more qualified approach".

It goes on to state that the Commission,

    "does not believe that Member States should be required to harmonize their methods entirely, as these methods vary widely from country to country because of national differences (availability of sources of information) and the way statistics are organized, which is closely linked to the administrative situation in each country".

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It then states:

    "The Commission feels that it would be premature to comment on the feasibility of establishing a system for measuring the reliability of GNP".

The Commission, itself responsible for statistics in respect of two vital items, does not have a clue how to go about it. About 10 days before the statistics meeting the Commission will come forward with its own idea based on no study whatever which will immediately be claimed by every Europhile in this country and in the rest as being the absolute truth, whereas in fact it will be a fiddle. But then, on mature reflection and examining the documents, which I hope we shall all do, we may all reach the conclusion that the entire bureaucratic system from top to bottom in Brussels is in itself a fiddle.

6.23 p.m.

Lord Thomas of Swynnerton: My Lords, I, too, congratulate my noble friend Lord Howell of Guildford. I admired and enjoyed his speech. However, had it not been a maiden speech and therefore uncontroversial, I should have questioned his suggestion that our relations with Europe are not the most important in our foreign policy. I believe that our most important task is to straighten our relations with our European neighbours.

I speak as a Europhile, as the noble Lord, Lord Bruce of Donington, would describe me. I am an enthusiast for the European Union which, unlike several of my noble friends and in particular my noble friend Lord Beloff, I see as wonderful proof that nation states can get together and associate--even unite--many of their activities, in peace. Unlike my noble friend Lord Beloff, I see the achievement of the European Union after only 40 years as remarkable and I believe that it would have been even more remarkable had Britain been involved in the enterprise from the beginning.

However, like many noble Lords--for example, my noble friend Lady Elles and the noble Lord, Lord Stoddart of Swindon--I found the speech of the noble Lord the Lord Privy Seal a trifle over optimistic, even bland, in his description of the negotiations leading up to the Amsterdam Treaty. It is worthwhile taking up your Lordships' time in repeating that the treaty did not fulfil the main aim, which was to prepare for the enlargement of the Community not just to 20 or 21 members, as suggested by my noble friend Lady Elles, but perhaps to 25 or even 30.

My noble friend Lord Beloff may think that inconceivable, but the fact is that we members of the European nation states are committed to it. Any European state which is democratic can apply. That probably means another 15 states in the long term, which must and will be the European Union's main theme for the next 10 years. I have no doubt that your Lordships will have many debates on the matter.

In particular, the treaty fails to deal with the institutional reforms, which many noble Lords have pointed out as being necessary. I refer, for example, to the number of commissioners and the voting procedures. Agreement on that was not secured. The most important

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of the reforms refers to redressing the imbalance whereby at the present time the small states have an unjustifiable strength. That matter will be even more important in the future because so many small states will apply, including the state about which the noble Earl, Lord Carlisle, spoke so enthusiastically.

In history, small states have often been treated abominably by large states, and one might think it entirely justifiable that they should have their turn at the banquet of power. But retribution cannot be an effective policy for great states and something must be done about that before the next enlargement is completed.

Another aspect of the treaty which I did not like was the statement in Section 5 on flexibility, which is sometimes known as variable geometry or closer co-operation. The concept has had as many styles as did many Members of your Lordships' House at the time of the Glorious Revolution. Nevertheless, we all know what it means. That concession in legal, treaty terms could be mistaken, even if the precedent in respect of Britain at the time of the Maastricht Treaty began it. The idea of flexibility--permitting member states to create their own special associations--if taken too far could threaten the whole fabric of the constituted order that has been set up in the European Union. For example, the previous French Government spoke of the necessity for a group of countries to be the eclaireurs of the European Union, which I suppose must be the trail-blazers. Indeed, I heard an interview in which M. Delors gave his support to that idea. Surely no previous president of the European Commission would have accepted such an idea for a second.

Something else which I disliked was the long rigmarole early on in the treaty which provides that certain states can be punished if they cease to respect European Union principles. Like my noble friend Lord Cranborne, I dislike the idea of one state being excluded without being heard in its own defence. There is an implication in that very complicated and long statement that some dubiously qualified states may be able to enter. Surely that should be looked into before they are allowed to enter in the first place.

As to the confirmation of Britain's position or exclusion from the Schengen arrangements, I must say that I had a good deal of sympathy for the approach of the noble Lord, Lord Thomson of Monifieth. He regretted that we are permanently and legally distancing ourselves from the idea of a Europe without frontiers. However, I dare say that on mature reflection he may be--and I certainly shall be--comforted by the fact that our current arrangements are very easy to effect because of our geographical position; the existing restrictions at our port of entry in respect of European citizens are modest; and of course, we have a very liberal internal regime.

However, I wish to raise one question about the immigration and asylum policy. As I understand it, we are outside the European Union's policy towards that and will remain so. And yet, since we shall not wish to be thought an easy harbour and destination if, for example, there were a large influx of refugees from

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some regime perhaps in North Africa or the ex-Soviet Union, we should probably be obliged to shadow the European Union's policy.

I do not wish to be entirely critical. One noble Lord described this treaty as a curate's egg. There certainly are some positive elements. I believe--and I imagine that it was to this that my noble friend Lord Beloff was referring--that the list of principles in the preamble are rather good; in particular, the fair and square statement, which should go some way towards reassuring my noble friends Lord Cranborne and Lady Elles, that the European Union should respect national identities.

In addition, unlike my noble friend Lord Cranborne, I welcome Section J7 from which the noble Viscount quoted. This discusses how desirable it is to foster closer institutional relations between the European Union and the WEU with a view to the possibility of integration, should the European Council so decide. I know that that is something which is likely to shock noble Lords on both sides of the House. But the statement reminds us that a reconsideration of a European defence community, within the framework of NATO, will one day be again, as it was in the 1950s, a main concern within Europe, even though it is most improbable that the subject will be placed high on the agenda until the process of enlargement is completed.

I had wished to say something about co-decision but I am not at all sure that I understood the statements in the draft treaty, and I certainly bow to my noble friend Lady Elles with her superior knowledge of the matter. But is not the main reform in this treaty the abolition of the so-called third reading in Community legislation? On the second reading, if the Council does not approve all the amendments of the European Parliament and the conciliation committee, which would then be set up, fails to reach agreement on a joint text, that would be the end of the proposed legislation. If I am correct in my understanding, that certainly gives more power in some respects to the European Parliament. But both in this House and outside it, we have heard so many complaints about the democratic deficit in Europe that I believe we should look at this clause with generosity rather than hostility.

My chief regret is that the treaty does not include a general co-ordination and simplification of all the European treaties. If that could be written in, as I think is promised, in the final Act, then the public of the European Union would be greatly served. It is not at all clear in the minds of a great many Europeans exactly what are the purposes and aims of the European Union. As several noble Lords have entirely justly complained, the language of the treaty is almost as bad as that of the Maastricht Treaty.

Finally, as to the idea of calling for a referendum on this issue, which I know has been discussed by some who sit on these Benches, I greatly welcomed the doubts of the noble and learned Lord, Lord Howe of Aberavon, on the wisdom of taking such a step. I should be tempted to support the idea if I were being frivolous since the fairly low-key character of the treaty would probably, in my opinion, ensure a very low turn-out and so discredit the highly unparliamentary notion of a referendum. But

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I hesitate to make such a frivolous suggestion since I have no doubt that the consequences for the Conservative Party could easily be as destructive as was the last referendum of 1975 for the party now in power.

6.37 p.m.

Lord Bethell: My Lords, I am grateful to my noble friend the Lord Privy Seal for giving us the opportunity to discuss this important matter. I join with others in expressing my admiration for the maiden speech of my noble friend Lord Howell of Guildford. He spoke to us with great erudition about commercial and financial matters. It has made us think what a great loss he has been to another place in his elevation. I suppose that another place's loss is your Lordships' gain and another place's loss is the gain of the banking system of Switzerland. He is indeed a giant in Zurich and a very great welcome is extended to him in your Lordships' House.

A great deal of heat has been engendered by the treaty. I wonder why, because it is quite bland and a bit disappointing. It is something of a dog's breakfast--a mish-mash. Noble Lords have been tempted to pull items out of it as though they were dipping into a lucky dip and taking out this item and that item from time to time. I shall follow that example to some extent and I should like to try to answer one or two questions posed by noble Lords who have spoken.

For example, the noble Lord, Lord Bruce of Donington, mentioned the European Parliament, where I served for 19 years. It is an institution about which he has some concerns and doubts. He wondered about the allowances of my former colleagues. He will be pleased to hear that the allowances are paid to Members of the European Parliament in ecus and, because of the strength of the pound and the decline of the ecu, those allowances have gone down quite considerably. I am sure that your Lordships' allowances will not follow suit.

Likewise, my noble friend Lord Beloff wondered how on earth we had managed to reach this stage of confusion, among all the Members of the European Parliament, in the process of trying to achieve what should be a more simple goal; namely, the single market. I am reminded of the story of the apocryphal Irishman who, when asked the way to Ballymurphy said, "Well, if I was going there, I wouldn't start from here". Indeed, if we had known where we would be in 1997, we would not have started from where we were in 1950, threatened as we were by Soviet imperialism, with a devastated Europe around us. However, I venture to suggest to my noble friend and to noble Lords that considerable achievements have been made by the European Union, the European Economic Community, and its successors in recent years. We live in a happier, more prosperous and more secure Europe as a result of what the European institutions have done.

I turn now to a point which falls on the positive side of the ledger; namely, the question of papers being made available to members of national parliaments from the Commission six weeks before a matter is decided. That

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is fine, but such papers should be made available far sooner than six weeks; indeed, far sooner. In the European Parliament, copies of our draft laws were handed to us very often a year in advance, sometimes two years, before they were legislated on. They were then studied with some circumspection by Members of the European Parliament, coincidentally with scrutiny applied to them by the working group of COREPER.

I suggest that Members of another place and noble Lords would find it very easy to communicate with that working group through Ministers, if such documents were made available to them at least some months before a decision was made. I venture to suggest that that should be the natural way of communication. Members of national parliaments communicate through their Ministers and Members of the European Parliament have direct access to the Commission. It is the job of MEPs to deal with the Commission. They have the power to dismiss the Commission; the inquisitorial power vis-a-vis the Commission; and they have the power to obtain decent letters from the Commission within a reasonable space of time. Indeed, they have all the powers that Members of national parliaments have as regards Ministers. Therefore, I suggest that they must take that burden mainly upon their shoulders. Noble Lords and Members of Parliament should deal with COREPER through their Ministers.

I thought it was sad that, as a result of the draft treaty, we were unable to report that progress had been made on enlargement; not much progress at all over the CAP, and not much achieved over fishing. Moreover, very little has been done over the enforcement of European law and over bringing to account those who break European law, other than simply discovering that money has been stolen and ensuring that it is paid back. No system of fining or of punishing fraud has been brought into effect or is indeed envisaged. There is no system of penalties and no proper budgetary control. The only positive achievement, which was mentioned by other speakers, is the Government's jewel in their crown; namely, the progress over border controls. However, I believe that it is fair to say that that was, in essence, achieved under the previous government.

On enforcement, the only item that I want to mention in any great detail is the question of the human rights criterion which is now imposed and enshrined in the treaties and which provides for the removal of voting rights if a member state is seen to be persistently and flagrantly violating human rights. At the outset, I should like to say that it is essential for there to be a human rights code, a democracy code, within the European Union, because that is what we are really all about in the European Union, more than the single market and more than trade. We are about preserving our countries as democratic institutions and as observers of human rights.

I believe that we in the European institutions have made some inroads in that respect, despite what my noble friend Lord Beloff said. Indeed, he may be interested to know that the Swedish commissioner was in Gibraltar three or four months ago and very much

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took on board the disgraceful situation at the frontier between Gibraltar and Spain. I give way to my noble friend.

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