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Baroness Strange: My Lords, can the Minister tell us whether, in the event of our joining the single currency, all the British gold reserves would have to be lodged in Bonn?

Lord McIntosh of Haringey: No, my Lords they would not.

Lord Molloy: My Lords, can my noble friend tell us whether this matter was discussed at the recent meeting of Commonwealth Heads of Government? If it was not, one would hope that, as the matter is of such tremendous importance, another conference of Commonwealth Heads of Government would be called. Will he consider that proposal?

Lord McIntosh of Haringey: My Lords, I do not believe that the issue was on the agenda for the Commonwealth Heads of Government conference.

Lord Ezra: My Lords, the Chancellor placed great emphasis on companies and other interested parties preparing for the introduction of the euro, whether we join early or not, and set up a high level committee for that purpose. How is it envisaged that this process will get down to the grass roots and galvanise companies?

Lord McIntosh of Haringey: My Lords, the reaction of big business--admittedly at the moment only of big business--has been so favourable to the Chancellor's Statement that the likelihood is that the work of the standing committee and of my noble friend Lord Simon of Highbury in the business preparation at the Treasury will be successful.

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Perhaps I may remind the noble Lord of what Mr. Niall FitzGerald of Unilever said in his reaction to the Chancellor's statement:

    "What business wants above all is certainty. The Government's clear commitment to the principle of EMU and to Britain joining when the conditions are right has at last given business a firm basis on which to plan ahead".
We agree with that.

Baroness Blatch: My Lords, does not the Minister agree that something like 6 per cent. of companies in this country are in fact large businesses and that over 90 per cent. of companies are small and medium size businesses? It would be very helpful to the House to know what the small and medium size businesses are saying to the Government and what support they are giving to this positive approach to EMU.

Lord McIntosh of Haringey: My Lords, I acknowledged the importance of small business in my response to the noble Lord, Lord Ezra. As the noble Baroness will know, the president of the Association of British Chambers of Commerce has agreed to become a member of the standing committee. I am confident that, when that association and other organisations representing small business have consulted their members, their response will be as positive as it has been from the leaders of large business.

Lord Glenamara: My Lords, does my noble friend recollect that, when the referendum on EEC membership was held, the Labour Government of the day made public money available to both sides in the debate? Will the Government consider doing that when the next referendum is held?

Lord McIntosh of Haringey: My Lords, my noble friend Lord Glenamara is quite right in his recollection about the expenditure of public money on both sides, and we recognise that that is highly desirable. At the moment, as I indicated in my first answer, we shall ask the standing committee to look at the question of whether public money should be expended and, if so, in what manner. My noble friend's suggestion will certainly be taken very seriously.

Lord Shepherd: My Lords, the House has certain privileges, one of which is the expression of view. I hope that the Leader of the House will understand that those who take a contrary view to that expressed in the many questions that have been raised which are hostile to the concept have shown great tolerance. Will some consideration therefore be given to allowing the alternative view to be expressed and ensuring that Question Time is not monopolised by those of one view?

Lord McIntosh of Haringey: My Lords, the decision as to which noble Lords the House hears is a question for the House as a whole. However, I agree with the noble Lord that Eurosceptics, or Europhobes, or

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whatever we like to call them, seem to be quite well organised in that respect, as they were during the debates on the Maastricht Treaty.

Lord Richard: My Lords, we have spent 13 minutes on this Question; we have 30 minutes for the whole of Question Time. I hear what my noble friend Lord Shepherd says. Perhaps we should move on.

Lithuania: EU Membership

3.5 p.m.

The Earl of Carlisle asked Her Majesty's Government:

    What advances the Republic of Lithuania has made, over the past six months, to meet the membership criteria for early entry into the European Union.

Lord Whitty: My Lords, the Government support the Commission's recommendations on the central European applicants' readiness for EU membership. While Lithuania continues to make good progress towards fulfilling the criteria for membership, there are still a number of areas where further progress is needed before it will be ready for accession negotiations. That said, significant progress is being made, including efforts to prevent money-laundering and to impose more effective financial discipline on enterprises in Lithuania.

The Earl of Carlisle: My Lords, I thank the Minister for his reply. I am disappointed. It is not as positive or as encouraging as I had hoped. Does not the Minister agree that Lithuania has now met all the major objective criteria--political, social, economic and legal? Will Her Majesty's Government therefore take the lead at the Luxembourg council in December in pressing for access negotiations with Lithuania to begin in January 1998, a right that this great nation deserves for its record of progress over the last six months?

Lord Whitty: My Lords, the answer is no. We accept in broad terms the assessment that has been made by the Commission and we are therefore in favour of commencing negotiations with those identified by the Commission. However, I think that the noble Lord and the whole House should understand that Her Majesty's Government and other member states wish to see an all-inclusive process for all applicants. In parallel with the former negotiations there will need to be an inclusive process--which we have termed the "European Conference"--which will encourage Lithuania and the others who are not in the initial five-plus-one to engage in effective pre-accession strategies which will meet the remaining outstanding problems relating to their applications.

Lord Jenkins of Putney: My Lords, is it not the case that there seems to be an assumption that membership of the European Union by countries such as Lithuania is desirable if they can achieve it? Is that not an assumption which ought not so readily to be made?

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Is it not possible that countries such as Lithuania would be unacceptable as members of the European Union ipso facto?

Lord Whitty: No, my Lords. It is the opinion of the Government and our partners in Europe that it is desirable that Lithuania, and indeed all the central and eastern European applicants, should join the European Union. Our all-inclusive process envisages that eventually they should all join. The only question is differentiation in starting dates for the formal negotiations. We are very much in favour of enlargement and have been for some considerable time.

Lord Campbell of Alloway: My Lords, will the Minister tell us whether it is a criterion for acceptability that an applicant should be demonstrably capable of meeting the financial criteria for EMU?

Lord Whitty: My Lords, no, the question of meeting the convergence criteria of the EMU is not a consideration in terms of application for membership of the EU itself.

Lord Walpole: My Lords, is it not true that Lithuania, in common with all the other central European countries who wish to join the European Union, has environmental problems of a very considerable nature?

Lord Whitty: Yes, my Lords. Indeed, the Commission identifies the environmental area as one of the areas in which the Lithuanian Government have not made sufficient progress. If I may quote from the Commission's avis on this matter, they say:

    "Very substantial efforts will be needed, including massive investment and strengthening of administrative capacity to enforce [environmental] legislation".
That is one of the areas to which Lithuania needs to pay attention and to catch up with those who are entering into formal negotiations.

Lord Pearson of Rannoch: My Lords, will the noble Lord explain to the House exactly why, from the point of view of the central European countries, it is such a good idea for them to join the European Union when all that most of them seem to want is access to the single market, which is constantly blocked to them, and defence through NATO? If the noble Lord is serious in saying that the Government wish to back the expansion of the European Union, can he say what progress is being made on the revision of the common agricultural policy, which is generally regarded as being absolutely essential for anyone else to be admitted, but under which the majority of countries are recipients and are unlikely to vote for its change?

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