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Lord Richard: My Lords, I have always taken the view--I have taken this view consistently since I first entered politics many years ago--that if events are taking place in Europe it is important that Britain should be part of them and should be able to influence them. I merely point out that what has been achieved at Luxembourg in relation to Euro X and in relation to the enshrinement of ECOFIN as the decision-making body--the noble Lord may shake his head, but he knows as well as I do that that is the place where decisions can be taken and should be taken, and under this agreement will be taken--and the expression that it has in the communique goes a long way to safeguarding Britain's position.

Lord Bruce of Donington: My Lords, I do not think we should be unduly worried by the fact that this new committee, Euro X, will meet from time to time to discuss matters of common interest on the assumption that the members have some constructive plans of their own which may differ from the plans that the United Kingdom seeks to propose. Surely the boot will be on the other foot. They will need the expertise of the United Kingdom in order to arrive at some rational conclusion.

It must not be assumed that this unofficial committee has a monopoly of wisdom. The United Kingdom has contacts in many fields and organisations that are right outside the scope of many of those who are members of the Euro X committee. So I am not particularly bothered about that. There has been an unofficial committee in existence ever since the Franco-German treaty of 1963. France and Germany have been meeting a fortnight before every council meeting in order to determine what their joint policy will be. There is no reason why that should not be extended among the remainder of the hoi-polloi, and to the Government. I view the existence of the new committee with a certain degree of equanimity. I am quite convinced that our own intellectual, economic and ordinary contacts throughout the world are just as powerful as any combination that it may propose.

What does bother me is the degree to which it may become institutionalised. Who is to pay the budget costs of the new Euro X? Will it be like the European

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Parliament, which departs every now and again to rather more favourable climates, at considerable expense, in order to deliberate under rather more climatically favourable conditions? Who is to determine the budget for the Euro X committee and its meetings, bearing in mind that all budgetary decisions are determined by qualified majority vote?

Will the Government inform the House as to whether the Commission will be present at the new Euro X committee? If the Commission is to be part of the new unofficial committee, then I sense danger. If I were in the Government and dealing with questions of that kind I should ensure a formal insistence now that an unofficial (or informal) meeting at whatever geographical location be made without the presence of the Commission. The Commission has a genius for insinuating itself into everything that happens everywhere in the Community. Let us bear in mind that it still maintains the monopoly on making any proposals.

Subject to that, I view the visit of the Prime Minister as one of qualified success. He spoke in general terms. Of course there are always hard choices to be made; however, he spoke in general and expressed a view with which I believe most people in the country would agree. We shall watch with interest, but with an eagle eye, the way in which the Commission seeks to insinuate itself in this new development with a view to accomplishing its own ends.

Lord Richard: My Lords, my noble friend once said that he thought the Government's European policy was a qualified success. I have to tell him that I am in danger of rushing out to re-examine it! However, I am delighted to hear his comments. Indeed I could agree in part with what he said. Again, that does not always happen on European issues. My noble friend said that the committee has no monopoly of wisdom. That is true. But, with great respect, neither do we. An accumulation of combined wisdom is rather more likely to produce sensible results than wisdom in isolation.

My noble friend asked whether the Commission would be present. I understand that it will.

Lord Bruce of Donington: Ah!

Lord Richard: My Lords, he asked who will pay. Any proposals to meet expenses of informal meetings will need to be handled through the normal budgetary procedure. Officials will therefore need to discuss it. I believe that those were the only two questions asked by my noble friend until he gave us his accolade of "a qualified success", for which, to be serious for a moment, I am grateful.

Baroness Williams of Crosby: My Lords, we cannot expect to be part of the strategic discussions on monetary union until such time as we decide one way or the other whether to join European monetary union. Perhaps I may add my congratulations through the Leader of the House to the present Prime Minister for having achieved a satisfactory outcome in all the circumstances.

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Perhaps I may also draw attention to the other part of the Statement dealing with the major responsibility that the UK presidency will have to make a success of the first stages of enlargement. Given the Foreign Secretary's commitment to democratic institutions and human rights, will the Leader of the House confirm that the issue of the third requirement of new members will be very much in mind in the negotiations that will start under the UK presidency to begin the process of enlarging the European Union? Perhaps I may underline that this is one of the great historic moments of the century: the enlargement of the European Union to include the former central and east European states.

Lord Richard: My Lords, I am grateful for the noble Baroness's remarks. The answer to her question is yes--we are very conscious of it, and the Foreign Secretary underlined the issue in the course of the past month or so.

Lord Campbell of Alloway: My Lords, perhaps I may put a short question. The Statement refers to an impetus towards reform of the CAP. The noble Lord the Leader of the House referred to it, as did my noble friend the Leader of the Opposition. Which way was that impetus leading? What was discussed? Will the noble Lord give the House more information, as it appears to be the policy of both the Government and the Opposition, although it may be somewhat disparate?

Lord Richard: My Lords, I commend the communique to the noble Lord. I am glad that he was able to ask a question; however, I do not believe that he was here when I began the Statement.

Perhaps I may refer to paragraph 40 on the common agricultural policy, which states that:

    "The European Council took note of the outcome of proceedings of the Agriculture Council ... European agriculture must, as an economic sector, be versatile, sustainable, competitive and spread throughout European territory, including regions with specific problems. The process of reform begun in 1992 should be continued, deepened, adapted and completed, extending it to Mediterranean production".

That is what the Council wishes to see achieved.

    "The reform should lead to economically sound, viable solutions which are socially acceptable and make it possible to ensure fair income, to strike a fair balance between production sectors, producers and regions and to avoid distortion of competition".

The Commission has already produced proposals which will go some way--not totally, but some way--in that direction. The Council requested that the Commission should put those proposals into legislative form and bring them in front of the Agriculture Council. So to sum the matter up in a sentence: the show is now on the road so far as reform of the CAP is concerned. It is now a live issue as opposed to merely being the odd paragraph in a communique.

Lord Barnett: My Lords, perhaps I may suggest to my noble friend that he makes my noble friend Lord Bruce of Donington an official or unofficial observer at the Euro X meetings, since nothing seems likely to emerge from them that will matter very much to us. Is it strictly the case that ECOFIN can make quite sure that

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any formal decisions of an economic and financial nature will be decided by that body rather than by Euro X?

Secondly, perhaps I may thank the Prime Minister and my noble friend as chairman of the Select Committee which decided that negotiations on enlargement should be broadly in line with what has been decided. At least, I think that is the case--that they will start with five plus one, and Britain will be in charge of the start of that process.

As to the resources limit of 1.27 per cent., while I accept that that will be the case, do my noble friend and leaders of the other member states believe that they will have enough resources, both in advance of enlargement and after it, to meet the serious problems that will clearly arise?

Lord Richard: My Lords, I am grateful to my noble friend for welcoming the Statement and for the role that my honourable friend played. However, I thought that I read out specifically Clause 44 of the Conclusions which reiterates the fact that:

    "ECOFIN Council is the centre for the co-ordination of the Member States' economic policy and is empowered to act in the relevant areas. In particular, the ECOFIN Council is the only body empowered to formulate and adopt the broad economic policy guidelines which constitute the main instrument of economic co-ordination".

A little later the document uses the phrase that,

    "The defining position of the ECOFIN Council at the centre of the economic coordination and decision-making process affirms the unity and cohesion of the Community".

So there is no doubt as to where the decision-making power lies in these areas.

The key at Luxembourg is that in relation to informal discussions outside ECOFIN in which the "ins" may wish to take part, wherever matters of common interest are concerned, they will be discussed by ministers of all member states. What it says is fairly clear and, if I may echo my noble friend, it is a reasonable result to come out of the negotiations.

My noble friend asked whether I thought that 1.27 per cent. would be sufficient. My answer must be clearly and unequivocally "yes".

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