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Baroness Park of Monmouth: I hope I may ask a further question which arises from what the noble Baroness has said. So long as we are not members of Schengen, are we obliged to abide by the EU negative visa list to which the noble Baroness has referred, which contains an extraordinary anomaly that it includes countries such as India, Pakistan, Zambia, and many countries of the Commonwealth with whom we are on the closest and most longstanding terms, but, according to the EU's rules, we are required to ask them for visas? Are we required to do that or not? It is pretty odd that Latin American countries, whose nationals might be

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supposed to be bringing drugs into Europe, are not on the list. I hope that the Minister will give me a clear answer. Do we have to recognise that list or not?

Baroness Williams of Crosby: If the noble Baroness will forgive me, I had not completely finished what I had to say. I apologise, because I looked as if I was about to finish, but then I remembered that I had promised to say something about Gibraltar.

Let me make two comments about Gibraltar. First, I strongly agree with the noble Lord, Lord Molyneaux, about the illogic of excluding Gibraltar from having some voice in European elections. As long as Gibraltar is regarded in the European Union treaties as being associated with and in effect part of the United Kingdom, I believe that there must be some means of representation. If that means of representation is to make Gibraltar part of some other European Union constituency, so be it. What is crucial is that the voice of Gibraltarians should be represented in the European Parliament.

My second point on Gibraltar is perhaps more contentious. On this I completely agree with the noble Lord, Lord Molyneaux. With regard to the point made by the noble Baroness, Lady Parks, I simply want to say--contentiously, if you like--that I believe that in the long run a solution may be found along the lines of that which is emerging in the Belfast agreement, where there would be some broad discussion with Spain but a recognition that self-determination must be the final criterion, but where Spain is brought in to discuss the logistics and transport issues that arise from Gibraltar's geographical placement. I regard the Belfast agreement as possibly a model for far beyond Northern Ireland. I am delighted to see that the noble Lord is nodding in agreement.

Lord Moynihan: It is important that in the context of this Committee stage we bear in mind the important comment made by the noble Baroness, Lady Williams of Crosby, who referred to the logic, as far as Schengen is concerned, of being sucked in, whether or not we particularly want to be. The implications there are very clear. When we consider the impact of Schengen, it is important for us to concentrate on the contribution that she has made.

Throughout the Committee proceedings I have sought from a variety of Ministers one of what are almost three Opposition pillars, the first being clarification, the second being an analysis of policy differences, and the third views on areas where we in Opposition believe that the Government have been incompetent in handling the negotiations. I regret in many ways that it falls to the Minister who will be at the Dispatch Box in a moment to answer charges of incompetence, but they are important and they will be analysed in some detail, not least because they have been referred to by my noble friend and definitely affect Gibraltar.

Before I come to the conflicting views and statements from the Government regarding Gibraltar, I should say that I have tabled new Clause 45 which seeks to correct this most grievous example of the sheer incompetence

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of the Government's negotiations at Amsterdam. As I said in the Second Reading debate, the early hours of the morning appear to be a particularly low point for the Government's ability to negotiate, as is amply demonstrated by the negligent negotiation of the Schengen acquis. This agreement will move those countries who have chosen to participate in it towards a European Union without common border controls.

The Opposition welcomed the Government's seamless transition of policy in retaining sovereignty over Britain's border controls through the legal binding protocol to the treaty, although I hope that the Government recognise that our support on this is not surprising in the light of the agreement reached in March when a complete British opt-out on border controls was first agreed in principle before the general election. The Government are absolutely right to proclaim that this is a major achievement. That is exactly what it was: a Major achievement with a capital "M".

To put this point firmly on the record, let me refer to an article in the Financial Times in February 1997 which supports this claim:

    "After a decade of battling against pressure to open up the frontiers as part of the EU's single market, the UK now seems certain to be offered an "opt-out" from a new treaty agreement which is expected to set 2001 as the target for banishing customs and police checks at national ports. Mr. Michael Patijn, the Minister for European affairs in the Netherlands, said it was now an accepted political fact that the UK's borders would not be given up in the interests of European Union integration".

I am also pleased that the Government have overcome their opposition to opt out:

    "We reject permanent opt-outs or 'variable geometry'".

Time prevents me from indulging in a semantic argument over what I understand I must call the Government's right to opt in to any part of the proposals to establish a new area of freedom, security and justice.

This change to the third pillar of justice and home affairs represents the biggest change in the treaty, a point which has been recognised and echoed on many sides of the Chamber. It also represents the single largest transfer of the powers of member states to the Community contained in the treaty. Policy on asylum, immigration and visas will no longer be agreed intergovernmentally; instead we shall be "communitarised" within the European Union first pillar, into which the Schengen frontier zone will also be gradually integrated. This will allow the Commission to initiate proposals, and the institutions of the community will also participate. The European Parliament will be given a full role in these affairs, and the European Court will have legal review powers.

The creation of an area of freedom, security and justice was a main priority for other states to allow freedom of movement for people to become as much a reality as freedom of movement for goods and services. This has major constitutional importance, for, after five years, qualified majority voting will be introduced on these decisions if two-thirds of member states agree to this. This introduction of QMV after five years is critical.

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I refer Members of the Committee to the fact that, to guarantee that an area of freedom, security and justice is established gradually in the Community, that five-year period from the entry into force of the treaty during which the Council will continue to take decisions by unanimous vote came against an interesting background. At the end of five years, Community decision-making procedures may be introduced if at least two-thirds of member states agree. In fact, it was pressure from Germany's 16 Lander, which share responsibility for immigration with the federal government, which caused Bonn to reverse its position on integrating justice and home affairs. On its insistence, such decisions will remain subject to such unanimous approval for the time being, as I have outlined. Some Lander, such as Bavaria, fear that co-ordinated European immigration policies could grant third-country residents living in one European Union country the same rights of movement as European Union citizens. They have insisted that Germany retains a veto on all issues of immigration policy. The treaty aims to remove obstacles to free movement and to strengthen the means available for maintenance of security. All frontier checks and internal border controls will be abolished, with one heavily policed external border ringing participant countries.

The Prime Minister told us:

    "what we have secured, which is important and a better way of going about things, is what I call an opt-in. We have the power within the Treaty to go into any of these areas if we want to. If we do not want to, we need not, but if we do, no other country can block us"--[Official Report, Commons; 18/6/97; col. 319.]

I do not believe that that statement is correct. Subsequently the Foreign Secretary indicated that the Prime Minister's statement referred only to new Title IIIa on asylum, immigration and visas. That is indeed correct, but this seems a little strange since the Prime Minister's next sentence used the example of the Schengen acquis to illustrate his point. If the Minister tells me that the Prime Minister's statement applies only to Title IIIa on asylum, immigration and visas, can he explain to the Committee the distinction between the asylum, immigration and visa provisions under Title IIIa and the provisions of the Schengen acquis, the relationship between that title and the Schengen agreement, and, further, how the Schengen agreement will be incorporated into the treaties?

I seek clarification from the Minister on the issue of Article 4 of the protocol integrating the Schengen acquis into the framework of the European Union. I beg the indulgence and patience of the Committee while I dissect this extremely sorry saga in some detail, not least because of its importance to the people of Gibraltar.

It is my understanding that, as a result of negligence on the part of the Foreign Secretary, a late amendment by the Spanish Prime Minister, Jose Maria Aznar, was accepted into the treaty by default in the early hours of the morning of 18th June, meaning that any member state, including Spain, would have a veto over future opt-ins to the Schengen acquis which will be decided by unanimity rather than by qualified majority voting.

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That potentially hands the Spanish a powerful bargaining chip with which to exact concessions over Gibraltar. I repeat the question of the noble Lord's colleague, the Labour Member for Wrexham, to the Foreign Secretary, when he wanted to know whether this had happened simply because

    "Her Majesty's Government do not care about Gibraltar and give it a low priority, or was it just a government cock-up?"--[Official Report, Commons, 25/11/97; col. 754.]

The Government have compounded that negligence and blunder by their utter failure to produce a clear, consistent and coherent explanation of what actually happened. Let us hope that we shall receive one tonight. But to date we have heard a catalogue of confused and contradictory explanations. It is important that the Committee is aware of those, because the Foreign Secretary's first explanation for the blunder was that it had been a "misunderstanding", and that the Dutch presidency's note-keeping was, "not as much as we would have wished it to be". That gave the impression that the Foreign Secretary had failed to challenge the Spanish Prime Minister's late amendment, perhaps, I venture, as a result of the lateness of the hour.

But three weeks later, the Foreign Secretary gave another explanation. He had indeed challenged the amendment, and it was withdrawn by the Spanish, only to reappear mysteriously in the text of the treaty when the Foreign Secretary received it "a week later". He explained that mysterious re-emergence as the result of a deal done between the Spanish Government and the Dutch presidency which was kept secret from the other member states and incorporated into the treaty after the negotiations had finished. He explained that,

    "there was no cock-up in the Amsterdam Treaty negotiations".

I rather think that the government and people of Gibraltar think otherwise.

I sincerely hope that such hole-in-the-corner deals between member states following the conclusion of intergovernmental summits are not common. Certainly they do not inspire confidence in the European decision-making process.

But then, the Minister of State gave a third explanation, which contradicted that of his own Foreign Secretary. The Minister explained that the deal was not in fact done after the negotiations, but during the summit on the night of 16th/17th December before the negotiations had finished, but that it was still kept a secret from the other member states and incorporated into the treaty without their knowledge, although the United Kingdom found out about it a day after the summit concluded, when it received a copy of the revised treaty text on 19th June and not "after a week", as the Foreign Secretary had alleged.

On closer examination in another place, the Minister of State gave a fourth explanation: that it was in fact both--a deal done between the Dutch presidency and the Spanish Government in the margins of the summit and discussed afterwards, "when it was discovered there was a difference of historic interpretation".--[Official Report, Commons, 4/12/97; col. 568.]

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Worse still, in alleging that the text of the treaty was changed, to the detriment of the United Kingdom, as the result of a private deal between two member states which was not communicated to the rest of the Council, the Government have managed to portray themselves as cuckolded by the Dutch presidency and the Spanish Government.

The Foreign Secretary has also effectively accused the Dutch Government of lying about whether a challenge to the amendment was made. He has effectively accused the same member state of inefficiency by criticising its note-keeping, although subsequently the Minister of State claimed that there were in fact no provisions for minutes to be taken or for a record.

I should like clarification on this matter. Is it the case that there was absolutely no provision for a record of the meeting in question? Is it not the case that the negotiations were recorded by the Dutch presidency? Would it be possible for the Government to clarify all of this by releasing those tapes in order to clear up the matter? What representations did the Foreign Secretary make to the presidency of the European Union about the bilateral agreement between Spain and the Dutch presidency? Was that matter raised as a priority at the Luxembourg Summit last December as it should have been for the people of Gibraltar?

The Dutch Government have, unsurprisingly, clearly been concerned by these extraordinary allegations in relation to the behaviour of two member states. They wrote to the British Government as long ago as 16th July. Given the Government's commitment to open government and transparency, not to mention their dislike of fraud, will they give the Committee an assurance this evening that that letter will be published?

It may be argued by some that the question of an opt-out is a technical point. That is neither our view nor that of the Foreign Office. When I say it is not the view of the Foreign Office, let me quote from the Foreign Office's memorandum to the Foreign Affairs Select Committee, which states:

    "There may, however, be aspects of the Schengen acquis unrelated to the removal of frontier controls in which the United Kingdom will want to take part when the Schengen arrangements are brought within the EU Treaties ... there may be areas of co-operation, notably on the fight against crime and drugs, where we will want to participate",

far further than potentially being sucked in at some stage in the future. That is a direct and clear view expressed by the Foreign Office about the current benefits in areas where the Government may wish to participate in the Schengen acquis. I give way to the noble Baroness.

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