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Lord Beloff: My Lords, I am much obliged. Can my noble friend say whether the commissioner did more than take it on board because, in four months, there was surely time to put the matter right.

Lord Bethell: My Lords, I admire my noble friend's optimism. However, it will take more than four months to solve the problem of Spain and Gibraltar and, indeed, the UK. I understand that considerable pressure is being brought to bear by the Commission on the Spanish Government to try to ameliorate the situation at the frontier. If my noble friend wishes, I could try to get a letter from the commissioner on the matter and send it to him, although I dare say he could obtain one just as easily himself. Alternatively, perhaps my noble friend should consult his Member of the European Parliament who will probably be able to obtain an even better letter.

The human rights criterion is now part of the Lome Convention, the agreement on trade between the EU and African, Caribbean and Pacific countries, and has very much helped to bring about an improvement in human rights observances and non-observances in those countries. Of course, the European Parliament had to approve the entry of Turkey into the European customs area some months ago. It is monitoring the situation in Turkey very carefully. I do not believe that the human rights situation in Turkey will be solved by pressure from Europe, as such matters are never resolved in that way; indeed, it was not pressure from the European Union, from America or from any foreign country which solved many of the human rights problems in the Soviet Union. It was a combination of pressures, together with internal revulsion in those violating countries about what happened which brought about such changes for the better.

I submit that the European Union has done more that one could possibly have imagined in helping to bring about such changes. It is because of the human rights criterion set out in the treaty that we say, "Yes" to imminent Czech entry and "No", to imminent Slovak entry. We say "Soon", to the Slovenes, and to the Serbs we say, "Not for a very long time". Let that remain as it is.

As regards the concern and fear expressed by my noble friend the Leader of the Opposition, I must admit that he has a point. In the European Parliament, I remember that time after time there were attempts to twist the lion's tail by many continental groups and countries--or, let us say, attempts to indulge in a bit of old-fashioned Tory bashing by British Members on the other side. Many resolutions were flagrantly anti-British or at least anti-British Government, depending on how one looks at it. The British were chastised over the prevention of terrorism Act, over the then government's behaviour during the miners' strike in 1984, and over the hunger strike in the Maze Prison. Indeed, our whole record in Northern Ireland was looked at most scrupulously and carefully--some would say unfairly--by the European Parliament.

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On the other hand, there were times when other countries were brought to account, probably fairly, over, for example, the treatment of conscientious objectors in Greece and over the lack of a right of association for the Portuguese police. They were under military discipline and unable to exercise any rights of association.

There is a possibility that the human rights issue may be used for political purposes. However, I hope that against Britain it would never reach the level envisaged in the treaty in order to bring about some commercial advantage over social policy. For all my scepticism vis-a-vis continental views of Britain--we are different in many ways; we have different histories--I do not believe that we would be taken out of the voting system of the European Union by unanimous vote; or that the European Parliament would back that up by an absolute majority and two thirds of those voting. I sincerely hope that I am not wrong on that.

I am prepared to trust a little. That may differentiate me from other noble Lords who have spoken. Do we trust our continental partners in this matter? I have a certain amount of trust. I believe that the treaty is a disappointment. However, I believe that it does no great harm. If there were to be a referendum about it--referendums are much in vogue at present--I would probably vote in favour of continuing the treaty rather than putting a total spanner in the works, and making matters worse for British interests in Europe.

6.51 p.m.

Lord Monson: My Lords, I apologise for my name not being on the list of speakers. I doubted that I could get to London in time for the opening speech of the noble Lord the Lord Privy Seal; and so, alas, it proved.

There are a number of things to commend in these documents, notably a growing if overdue realism typified by such presidency conclusions as the desirability of a reduction in overall tax burdens; the desirability of wage flexibility, taking into account regional differences and differences in qualifications; and the desirability of the reduction of the administrative burden upon small and medium-sized businesses. The new provisions on transparency are also to be welcomed, as is the modestly enhanced role of national parliaments in EU activities, referred to by my noble friends Lord Bridges and Lord Tordoff.

However, the enhanced status allegedly accorded to the principle of subsidiarity is unfortunately more apparent than real. So long as the aquis communautaire remains totally sacrosanct, there will be little scope for

    "Community action to be restricted or discontinued where it is no longer justified".
The noble Lord, Lord Stoddart, also raised the point.

One worries about the remit of the European Court of Justice being extended to the third pillar, even in a strictly limited area, because it is the thin end of the wedge. It is right that your Lordships' Select Committee should have opposed such an extension in 1995.

The new Article 6a, outlawing discrimination on the grounds of age, religion, belief and sexual orientation, among other things, is a potential minefield as well as

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being somewhat hypocritical, since the Commission practises age discrimination by reserving a certain number of jobs for those aged 35 and under.

I have three questions of the noble Lord, Lord Whitty, who will reply. First, why did the Government agree to any extension of qualified majority voting on health matters given that so-called health considerations have been misused time and again to the detriment of this country? Surely health matters should be reserved for national parliaments, except in those happily rare instances where animal or human epidemics cross national frontiers.

Secondly, can the noble Lord give any specific examples of how the extension of qualified majority voting to research and development could be of any positive benefit to the United Kingdom?

My third and final question relates to the new Article K.2 concerning Europol which encourages,

    "the operational actions of joint teams",
somewhat ambiguously. Can the noble Lord give an assurance that Europol will have no independent power of arrest or detention, and that Her Majesty's Government will not support any effort to allow national police forces to be given the automatic right of hot pursuit across frontiers, as demanded on a number of occasions by the Germans above all?

6.55 p.m.

Lord Moynihan: My Lords, I, too, begin my speech by congratulating my noble friend Lord Howell. He made a characteristically incisive and effective speech, warning your Lordships of the possibility of currency storms ahead, and in many ways admirably underpinning the notes of caution expressed by the noble Lord, Lord Barnett, on economic and monetary union, while remaining subtly non-controversial--a rare and commendable characteristic of a hugely impressive maiden speech.

Before an unexpected visitor to the House sought leave to speak earlier today, I had a vision of Sir James Goldsmith towering above the press box and seeking to intervene in the debate. Sadly in the interests of balance, that was not to be! However, we have heard many views today, not all of which are in agreement, in a debate of remarkable breadth and depth, which I have come to expect in your Lordships' House.

I should like to seek assurance today from the Minister that there will be ample time allotted in this House--a point made by the noble Lord, Lord Stoddart--to debate the Bill in preparation for ratification when it is introduced. Perhaps the noble Lord will be able to give us a clearer idea of the timetable. That is particularly important in the light of those areas which necessitate constitutional change. Taken as a whole, the treaty raises more questions than it answers, not least whether the Prime Minister is now content to be isolated in Europe since he alone of all his European colleagues seems wholly satisfied by the outcome.

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I should like to start with the broad areas of consensus between the Government and Opposition where we shall continue to lend our support. Indeed, there is much in the Treaty of Amsterdam with which we are in agreement. I can offer our full and unqualified support for the Government's success in retaining sovereignty over Britain's border controls through the legally binding protocol to the treaty, although I must add that our support on that is not surprising in the light of the agreement reached in March when a British opt-out was first agreed in principle. Likewise, our support is forthcoming for the protocol to entrench subsidiarity and for the rejection of proposals to give the European Union an explicit legal personality. On those areas I am also happy to be able to congratulate the Government on a seamless transition of policy on Europe.

However, it seems that the genes of disappointment, cynicism, expediency and dispute so apparent between some of the leading member states at the summit were inherited by its child, the Treaty of Amsterdam.

On enlargement, the Government have our full and unqualified support to pursue the goal of enlargement which, when in Government, we continued to champion through practical assistance such as improving market access for agricultural products and disbursement of Know-How funds. The Government gave us every reason to believe that the United Kingdom would continue to be one of the foremost advocates of enlargement at the conclusion of the IGC, which, after all, was meant to be internal housekeeping to clear the way for the dual challenges of enlargement and further competitiveness. It is in that sphere that the treaty is most visibly lacking. If there was ever a raison d'etre for the treaty, it was the acknowledgement that Europe does not end at the Elbe and that institutional changes and reforms were necessary to pave the way for enlargement.

We rejoiced when the Berlin Wall came down eight years ago. Ever since then, the new democracies of central and eastern Europe have been promised membership of the same club which has benefited their western neighbours so greatly: the European Union. We have a historical obligation to these countries to fulfil this promise and to extend to them the means to assist stability and consolidate freedom so that future generations of children and grandchildren may enjoy greater security and prosperity than their parents and grandparents ever dreamed was possible. However, I fear that today's parents and grandparents in central and eastern Europe do not yet share the Foreign Secretary's perception of a restored sense of "purpose and dynamism"; nor do they share the Prime Minister's view of a post-Amsterdam Europe that is, "more relevant and attuned".

Enlargement is more important and relevant to the livelihoods of people in this country and across Europe than any processes of centralisation. True, it will fundamentally change the nature of the European Union and, as many noble Lords, not least the noble Lord, Lord Tordoff, mentioned, will involve root-and-branch reform of the European Union's institutions and practices. The recently published Commission document, Agenda 2000, contains proposals for reform

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of the common agricultural policy and the structural funds, and for future financing arrangements for the Union after the current budget arrangements end in 1999, with a view to enlargement from 15 to at least 21 members by 2004.

The issues of whether these reforms go far enough and the implications to Britain of compensation and modulation in CAP reform, the size of British contributions in the European Union budget in the future and the fate of Britain's rebate, which has saved the British taxpayer £18 billion since it was negotiated, must be left to a future debate.

But Agenda 2000 or not, it is clear that the European Union cannot afford to enlarge as it stands at present, financially or administratively. I should therefore like to ask the Minister why, when prior to the summit the Government were confident that they would return with the key institutional reforms necessary for enlargement, Article 1 of the "Protocol on the institutions with the prospect of enlargement of the European Union" simply restates the requirement to re-weight votes in the Council and to adjust the present number of commissioners. That prerequisite has been apparent since the previous enlargement, in 1995. It hardly represents progress on enlargement to return from the summit with no further agreement on those key measures.

Since the protocol effectively postponed the issue of reform of voting weights and Commission size until a new member is on the threshold of joining, will the Minister tell the House whether a further inter-governmental conference will be needed to enact the necessary treaty revisions as indicated in Agenda 2000, which proposes a further IGC to,

    "deepen political integration and reform Europe's institutions before enlargement takes place"--
interestingly enough, with an objective of the,

    "generalised introduction of qualified majority voting"?

The process of enlargement will not be easy. There will have to be compromises and sacrifices on the part of all member states. But if we compound the message sent from the summit that the power struggle between existing members is more important than any promises to help the people of Poland, Hungary or the Czech Republic, then history will not judge us kindly.

Perhaps it is not surprising that this treaty, concluded in a difficult atmosphere and with language being prepared in an artificial attempt to paste together the deep divisions that existed, not least between France and Germany, resulted in an uneven text of compromises and concessions to special interests. Britain takes over the presidency of the Union at a crucial time in its history, when an enlightened view of national interests and sovereignty will allow Europe to prosper and expand, while the alternative is to turn inwards, fragment and wither.

I should like to address briefly the issue of quota-hopping, which is of such importance, not least outside the House, and the Government's much-vaunted solution to the problem. It is simply this. If the Government have achieved such a good deal on quota-hopping for Britain's fishermen, why did the chief

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executive of the National Federation of Fishermen's Organisations describe it as a "hopelessly inadequate fudge"?

What "very tough" line did the Prime Minister take to defend the interests of British fishermen, other than to obtain a letter from the Commission that restates the existing situation, confirming Britain's rights to issue licences that require a percentage of fish to be landed in this country? Britain's fishermen know their rights. They need help from the Government to enforce them--help that was promised. That promise appears to have been broken, unless the Minister can guarantee that, in a legal challenge from Spain, which has won four European Court rulings defending its rights to buy access to British quotas, the Commission will unequivocally support Britain. This is the same Commission that agreed to Spain's demands that quota-hopping should not form any part of the treaty's negotiations.

On the subject of flexibility, this new clause allows member states to pursue a form of fast-track integration on the basis of a qualified majority if they wish to do so. There is clearly a paradox when it comes to the question of flexibility. For the European Union to fulfil its potential, it must adhere to certain core disciplines and obligations, which must not be undermined by the introduction of flexibility. However, Europe's strength is in its diversity, and some flexibility must be not only allowed but encouraged, particularly as the Union enlarges.

However, one thing is clear in this paradox. Whatever jargon is used to describe it, be it variable geometry, differentiated integration, Europe a la carte, multi-speed Europe, enhanced co-operation, concentric circles--although your Lordships would be forgiven for imagining ever-decreasing circles--flexibility must not be the foundation for a two-tier Europe, whereby an exclusive, fast-track hard core of member states lay claim to a privileged status over which the rest have no real check. For that reason, I should like to ask why the Government did not insist on a watertight veto, so that the instigation of such projects of "closer co-operation" could be decided by unanimity, irrespective of which member states then implemented them.

Does Article 1 of the flexibility clause enable groups of European Union states to use European Union institutions for what amounts to purposes for which there is no explicitly stated treaty provision? Is it not a fundamental British position that access to European institutions should be agreed by all, since they are paid for by all? Furthermore, will fast-track countries be entitled to European Union funds for their projects? If so, this clause does not seem to deliver in any way the more democratic Europe so recently promised by Jacques Santer.

In conclusion, Europe has much to offer to all of us. It has the potential to be an economic powerhouse which draws upon the energies, the identities, the sheer diversity of its member states to become far more than the sum of its parts.

I hope that the Government will use Britain's presidency as an anvil to forge a stronger Europe, a Europe that is outward-looking, that is both cohesive

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and expansive, a Europe within which we can shape our national destiny through a strong and effective partnership of nations. Perhaps this may undo some of the deficiencies of the treaty, which does little to widen Europe but much to disable it.

7.8 p.m.

Lord Whitty: My Lords, we have had a fascinating debate. It did not quite live up to the excitement provoked at the beginning by the noble Lord, Lord Thomson of Monifieth. Nevertheless, many contributions have reflected the long-standing and deep experience of European matters among those present in this House. The debate was graced by an excellent and thought-provoking maiden speech by the noble Lord, Lord Howell of Guildford. I look forward to hearing the noble Lord's contributions on this subject and other matters.

Parts of the debate have been both exhilarating and instructive; others have been rather depressing. At times I felt I was in something of a time-warp. We have moved on in regard to Europe. We no longer have to be obsessed with the divisions within the Tory Party. We no longer have to be concerned about the fundamental issues as to whether we are in or out of Europe. Our concern here, and in the treaty, as my noble friend the Lord Privy Seal said, lies with practical policies for bringing Europe into the 21st century.

My noble friend the Lord Privy Seal has been criticised for being rather too upbeat about the Treaty of Amsterdam, while almost everybody else has regarded is as a bit low key or a bit of a damp squib. I think he was about right. He said it was a good result. He did not say it was the greatest match ever. But it is, in my view, a good result.

The Treaty of Amsterdam is not the most exciting point in European history, but maybe we have had too many exciting points recently. It is inevitably a compromise and there are some loose ends, particularly as regards the institutional formulae that have been talked about; but, in general, it reflects a new realism in Europe. The grandiose schemes which were being talked about in some circles in Paris, Bonn and Brussels two or three years ago have been discarded. We have, as the noble Lord, Lord Howe, said, a less high-flown treaty. We have a practical treaty which reflects the need to concentrate on key areas, which makes easier and more effective some of the decision-making and enforcement procedures of the European institution and which goes at least some way to prepare for enlargement, although I concede that it does not go as far as many of us hoped it would.

Moreover, we should recognise that it is a treaty which, thanks to the tone, approach and preparation of the new Government and the negotiating skills of my right honourable friends the Prime Minister and the Foreign Secretary, recognises that Britain and the British Government are now truly back at the heart of European affairs. Amsterdam saw the UK make a fresh start. We negotiated with our partners and not against them, and we have significant achievements.

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First, our positive agenda for Europe on jobs, the environment, openness and the fight against fraud and discrimination has been achieved in this treaty.

Secondly, without stopping our partners who wish to go further on frontiers than we do, we have achieved legal security for our own frontier controls and we will now decide, and will have legal security in deciding, our own immigration, asylum and visa policies.

Thirdly, we have maintained the ability of the UK to defend its interests where we said we wished to defend them by maintaining the unanimity provisions on treaty changes, finances, tax, defence and foreign policy. But we have accepted that there are many areas where an extension of majority voting is helpful.

Fourthly, we have resisted the Franco-German moves to extend the European Union to become a defence organisation; and the only way in which that could go further would be by unanimity. I think we have achieved quite a lot in this treaty.

I should now like to reply to some of the points raised by noble Lords. First, we had from the noble Viscount and others what has now become a bit of an old chestnut about the social chapter and its costs. The Government make no apology for signing up to the social chapter. We did so as a matter of principle because we felt that being outside it reduced our influence within Europe and that British workers should receive at least the same protection as other workers within the European Union.

The idea that this will reduce our competitiveness is a complete canard. None of the provisions in the social chapter, likely or actual, impose serious costs on British business. Moreover, a competitive economy must invest in its own workforce. A flexible labour market, which we all want, depends on improving the employability of its workforce, not on forcing down in a competitive way the basic conditions of work. That is what the social chapter is about. Where it offends British interests we will not vote for it; but, where it enhances both our competitiveness and the rights of our workers, we believe it is a necessary part of the social dimension of Europe.

I would say the same about the employment chapter, which my noble friend Lord Bruce raised in a slightly critical way. I agree to some extent that the words do not in themselves create jobs. But I think that there are measures provided in other parts of the treaty which we can take in order to create more jobs and tackle the problem of 18 million unemployed within the European Union. I would not agree with my noble friend that these provisions are useless. They establish for the first time in treaty form the importance of tackling unemployment and put it on the same level as the other economic objectives in the treaty.

On the question of frontier controls, we heard two different views. Lord Thomson regretted that we were not able to go along with our 13 partners in this respect. But we have a different history, a different geography, a different administrative system and a different pattern of migration, and I think it justifiable to maintain the position which we promised at the election to maintain.

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We have secured legal certainty for our frontiers in the treaty, about which other noble Lords were concerned. We have also successfully resisted attempts to give the European Court of Justice the ability in this area to intervene in immigration cases brought before the UK courts. But we have also secured the right to opt back in should we wish to do so on any EU co-operation on immigration and asylum matters when we consider it to be in the national interests. We have also ensured that the UK can continue to play a full role in EU co-operation, including police co-operation, directly or through Europol, to fight international crime, drugs and terrorism. Those are very important aspects of the treaty but they are--and will continue to be--essentially intergovernmental issues.

The other great chestnut is the extension of majority voting. Again, we make no apology for promoting the extension of majority voting where we judge it to be in our interests to do so. Indeed, we have long signalled our intention to do so and were criticised for that by the Opposition, then the government, during the election period.

For example, we have advocated and achieved QMV for measures to combat fraud. If every country had a veto over fraud measures, how would we ever ensure proper sanctions? We also promoted majority voting in R&D, about which the noble Lord, Lord Moynihan, asked me. Some British universities and some parts of British industry benefit disproportionately from the R&D budget, but some of those benefits have been blocked by others exerting vetoes on us for extraneous reasons. The development of QMV in the R&D field, as in the field of openness and transparency, will greatly benefit British industry and universities.

We would have liked to extend majority voting in certain other areas, including environmental policy, but we believe that a balance was achieved at Amsterdam.

It is surely ludicrous to maintain, as the noble Viscount, Lord Cranborne, and others seem to do, that any extension of QMV ought to have been resisted. That was not the view of the Opposition, then the government, when they signed the Single European Act; it was not the view of the Opposition, then the government, when they signed the Maastricht Treaty, which extended QMV to 30 different articles of it.

As far as the Single European Act is concerned, the noble Baroness, Lady Thatcher, later claimed--or it was claimed on her behalf--that she was misled. I do not believe that to be the case. It is unlikely that on that one issue she succumbed to the silken arguments of the Commission and the Foreign Office. I believe, rather, that she saw at that time that it was in the interests of Britain and of Europe to develop the single market. Almost everybody, including even the noble Lord, Lord Beloff, has come to appreciate that the single market is a major achievement for Europe. She was right then, and we are right now, to accept that in some areas majority voting is right.

There can be no validity in any claims that the Labour Party betrayed Britain's interests in signing the treaty. The outcome of Amsterdam is very much in line with the negotiating position outlined in the Labour Party

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manifesto at the general election. I say that with particular feeling since it was the one part of the manifesto in the drafting of which my honourable friend, now the Minister without Portfolio, allowed me to have some influence. We stuck to that manifesto, and the outcome of Amsterdam is very close to it. The Opposition would do well to come to terms with the fact that the general election was, as much as anything else, a decisive rejection of their attitude towards Europe.

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