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Baroness Cumberlege: My Lords, before the noble Baroness sits down, I thank her for that detailed reply on the costings. Some of the elements that she has mentioned have been challenged by the industry. I have the correspondence here but I think it would be inappropriate to go through that tonight. Perhaps I may also ask her if she would answer my question about complying with the EU directive, especially in the light of the comments made by her honourable friend, Tessa Jowell, as to how the Government propose to get over this problem. She said that the Government are considering whether it will be necessary to implement the European Council labelling and leaflet directive by other means. Can the Minister say what those other means are?

Baroness Jay of Paddington: My Lords, I am grateful to the noble Baroness for raising the question of the challenge to those costs which I mentioned as being something the industry has taken up with the department. However, I should like to repeat that it has not come up with an overall figure of its own to counteract that.

On the issue of the alternatives I hope that in the later stages of my remarks when, for example, I spoke about the Medicines Control Agency consultation on regulations and on our willingness to consider in principle the possibility of rounding down prescriptions in order to extend their use, I gave some indication of the direction of travel on implementing the directive.

Baroness Ramsay of Cartvale: My Lords, I beg to move that the House do adjourn during pleasure until 9.5 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 9.3 to 9.5 p.m.]

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European Communities (Amendment) Bill

Consideration of amendments on Report resumed.

Lord Moynihan moved Amendment No. 12:

After Clause 1, insert the following new clause--

Re-weighting of votes in the Council

(". No provision of the Treaty signed at Amsterdam on 2nd October 1997 amending the Treaty on European Union, the Treaties establishing the European Communities and certain related Acts which extends the procedure for co-decision-making with the European Parliament shall have effect in the United Kingdom until the re-weighting of votes in the Council of Ministers anticipated in Protocol 11 to that Treaty has been agreed upon and implemented.").

The noble Lord said: My Lords, I beg to move Amendment No. 12 standing in my name. I have tabled this amendment because of the paramount importance the Opposition, and indeed the Government, rightly attach to enlargement of the European Union, as the historic and moral challenge of our generation--a sentiment which I know is shared across all sides of this House.

The present union, its institutions and mechanisms, were designed nearly half a century ago for six states. No one expects these to serve effectively a Europe of the 21st century in all its diversity. To fulfil the mission of enlargement--and it is a mission--difficult issues must be addressed and difficult decisions made, including the re-weighting of votes in the Council of Ministers. Without re-weighting, the smaller member states will have power disproportionate to their populations, enabling them to outvote the larger member states. That situation will only worsen as the European Union is enlarged to include the smaller states of central and eastern Europe.

The proposed new clause delays the extension of powers to the European Parliament until agreement is reached on overall institutional changes which the Government failed to achieve at Amsterdam. As I made clear earlier today, I do not wholly agree with the noble Lord, Lord Whitty, that the advance in the powers of the European Parliament is an important gain in its own right, certainly not in comparison with the need for the institutional changes required for enlargement. Nor can I understand how the Government can claim to have increased democracy in the Union when they failed to address the issue of re-weighting the votes in the Council of Ministers, which would more closely relate each country's influence to the size of its population.

A major goal of this IGC--perhaps the major goal--was to reform the European Union's institutions in order that they should continue to be effective after further enlargement. As I have said before, if Amsterdam had a raison d'etre, an idea behind it, a purpose to achieve, it was the acknowledgment that Europe does not end at the Elbe and that institutional changes and reforms were necessary to pave the way for enlargement. We are all agreed on that. The re-weighting of votes is not just necessary; it is vital before the process of enlargement can succeed.

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In the present voting system, the United Kingdom, like France, Germany and Italy, wields 10 votes out of 87. Yet those four states represent more than two-thirds of the European Union's population. Democratic legitimacy demands that the relative influence of the more populous states is increased. At present, the system gives one vote for every 200,000 Luxembourgers but only one vote for every 8 million Germans or 6 million people in the United Kingdom, France or Italy. Without reform, the bias against the more populous member states, which are also the largest net contributors to the European Union budget, will become even more pronounced with the accession of more, mainly small, states. Malta has only 400,000 inhabitants, Cyprus 700,000 and Estonia, 1.5 million. A European Union of 27 members containing all the current candidates for accession would include 15 with populations of fewer than 10 million people, about the size of Greater London, and only six, including the United Kingdom, with populations of more than 30 million.

Clearly, the bigger the European Union becomes, the more necessary it will be for states like our own to ensure that any risk of QMV is based on a weighting of votes which reflects the population of individual member states.

The present voting system gives rise to the possibility that small states will be given overweening power and we are drifting towards a situation in which, if many more states enter the European Union, we might have Germany, Britain or France or Germany, Britain and Italy voting together and being voted down by the combined weight of all the other member states despite the fact that in population terms, nothing like an adequate majority would have been achieved.

I have no doubt that the noble Lord will agree that a system which allows countries representing a significant percentage of the European Union's population or the major net contributors as a group to be outvoted would not be acceptable to the United Kingdom. Given the late hour at which the matter was discussed in Committee, the noble Lord, Lord Whitty, understandably, did not wish to burden the Committee with the mathematics which the Government will use to determine acceptable criteria for re-weighting. But perhaps today he will comment on the two broad approaches which have been suggested for overcoming the present bias; namely, either changing the number of votes within the current system or the introduction of a second voting criterion.

Given that other less tangible factors beside population, such as the sovereign right of even the smallest states to have a say and member states' global political responsibilities, are also relevant in achieving a sensible balance for determining relative influence, does the Minister agree that, of the two broad approaches that I have mentioned, it would be by far the better solution for this country and for the Union as a whole to reflect those wider considerations of sovereignty and global political responsibilities by changing the number of votes within the current system rather than by introducing the second voting criterion?

The issue of re-weighting votes in the Council of Ministers was raised by the former Prime Minister, John Major, during the Greek presidency. He was

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rightly concerned that the qualified majority voting should not continue on the present basis whereby votes in an electoral college are given to individual member states rather arbitrarily in a way that bears no relation to their population. So as to avoid being accused of excluding the Scandinavians and others from membership, it was agreed at the informal Foreign Affairs Council in Ioannina in March 1994 that the IGC would discuss the arrangements for majority voting, and notably the weighting of votes in the system.

Prior to the conclusion of the IGC at Amsterdam, the Foreign Secretary was unequivocally bullish in his confident assertion that he had the negotiating skills to secure voting reform in the Council of Ministers when he told another place:

    "I believe we can look forward with confidence to obtaining more votes for Britain and the larger countries from the Amsterdam summit. Enlargement could create the perverse outcome of the three largest nations, with the majority of the population of Europe, not having a blocking minority in the Council of Ministers. We have every reason to believe that we shall emerge from Amsterdam with an agreement that will give Britain greater weight in the Council of Ministers".

But, as the House knows, despite the Foreign Secretary's confidence, he failed at Amsterdam. The final text of the treaty demonstrates that this issue proved too controversial for his negotiating skills.

Protocol 11 on the institutions, with the prospect of enlargement, represents the fruits of his negotiation and is a bad apple or an unripe lemon, if ever there was one. In fairness, however, the Foreign Secretary attempted to rally and said that he was,

    "pleased to say that we have had it explicitly written into the treaty that the issue of the rebalancing of votes in the Council of Ministers must be addressed before any further enlargement takes place".

Why, when prior to the summit the Foreign Secretary was so confident that he would return with the key institutional reforms necessary for enlargement, does Article 1 of the protocol simply state the requirement, apparent since the last enlargement took place in 1995, to reweight the votes in Council and to adjust the present number of Commissioners?

The immediate effect of Protocol 11 is to postpone changes to the size and composition of the Commission and to the voting weights in Council to a later date. It also provides that, when further enlargement takes place, the Commission shall comprise one national of each of the member states. This has committed the Union to reform of the Commission; but, again, as the noble Lord, Lord Whitty, very helpfully explained in Committee, only if greater influence is given to Britain in the Council of Ministers' weighted voting, as we are one of the countries which will lose our second Commissioner.

As I understand it, Britain's position has always been that we would agree to give up our second Commissioner provided that we were compensated through vote reweighting. On Second Reading, the noble Lord, Lord Whitty, sought to confirm that that was still the Government's position. He quoted Article 1 of the protocol; namely, that the Commission

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will consist of one Commissioner per member state on enlargement, but only if,

    "by that date, the weighting of the votes in the Council ... has been modified in a manner acceptable to all member states".-- [Official Report, 16/2/98; col. 111.]

However, the only problem--and your Lordships will appreciate that I wrestled with this as I drove home late at night after the Committee considerations--is that I was sure that the Minister had missed out nine key words from his quote. The full text in the protocol reads that the provision will only apply,

    "provided that, by that date, the weighting of the votes in the Council has been modified, whether by reweighting of the votes or by dual majority, in a manner acceptable to all member states".

Therefore, in the context of the full quote, I should like to ask whether the loss of our second Commissioner by the year 2003, to which the Government agreed, is in fact compensated for by a watertight, legal guarantee to reweight the votes in Council.

Naturally, I turned to the memorandum of the Foreign and Commonwealth Office to the Select Committee on Foreign Affairs, which, I regret to say, did not inspire confidence in me on the point. It said:

    "The major institutional issues of vote reweighting and reform of the Commission were not resolved by the Amsterdam Treaty. Instead, the Protocol envisages a move towards one Commissioner per member state to take effect only on the next enlargement of the Union and provided that a satisfactory vote reweighting formula can be agreed at the same time, notably compensating larger members".

Therefore, can the noble Lord confirm that we are committed to giving up our second commissioner in a legally binding protocol, upon which others may indeed rely in the Court of Justice, in a treaty which actually only envisages a satisfactory vote reweighting formula? Can the noble Lord also confirm that there is no specific commitment in the protocol to the reweighting of votes in the Council of Ministers, and that the future arrangements envisaged provide for either a reweighting of votes or the incorporation of dual majority into Council decision-making? Does the Minister accept that the latter is not an acceptable solution for Britain?

The Minister of State in another place insisted that he would not agree to our second Commissioner being removed without reweighting. We on these Benches strongly support that stance. But why, then, did he agree to the inclusion of an alternative to reweighting; namely, the use of dual majority in the treaty text? The Prime Minister, Foreign Secretary and the noble Lord have on several occasions recorded their bitter disappointment that no further progress on the institutional reforms necessary for enlargement was made. We share that disappointment. Indeed we on these Benches share not just that sense of disappointment but also the alarm that has been echoed throughout the central and eastern European applicant nations.

Until Committee stage it was not clear why no progress had been made. During our debate in July the noble Lord said that at Amsterdam agreement was near. Last July the explanation of the failure to reach agreement was as follows. The noble Lord said:

    "We failed on the institutional side to agree the size of the Commission or the reweighting of votes but we came close to agreement. The noble Lord, Lord Moynihan, asked me why. One slightly flip answer is that we did not reach that item until four

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    o'clock in the morning. It may be that the heads of government or other states were not quite as alert at that point as my right honourable friend the Prime Minister".

To be completely fair to the noble Lord, in Committee he substituted for that flip explanation a rather more sober and thought-provoking one. He told the Committee that when the Government came to the negotiating table there was already deadlock on the linked questions of the size of the Commission and the weighting of votes on the Council, although the Government did their best to broker a deal in six weeks. That is a little different from the Foreign Secretary's brimming confidence prior to the Summit that a deal would be reached. The noble Lord, Lord Whitty, told us that with a little more time agreement might have been reached on the issue of institutional reform.

What lead did the Government take at Amsterdam and what trade-offs did they demand so that the treaty could contain those necessary institutional changes to hasten enlargement to the east? Although no progress was made at Amsterdam, and despite the deadlock on the linked questions of the size of the Commission and the weighting of votes in the Council that the noble Lord described, he is optimistic. He does not think that it will be,

    "such a colossal problem for the existing members of the European Union to achieve agreement even though ultimately there was no consensus at the summit".

Nor is he of the opinion that the present impasse will delay the enlargement process. But given that the Government's explanation for the lack of progress relies largely on the dearth of political will amongst other member states--notably not the United Kingdom in this context--and deadlock in the Council of Ministers as a result of the intransigence of other partners, will the noble Lord give the House some more detail as regards the reasons for his optimism that the issue will shortly be smoothly resolved? I sincerely hope that is the case.

The noble Lord, Lord Whitty, who has considered this matter in detail, has also said that he does not envisage a further IGC will be needed to enact the necessary treaty revisions. I am concerned about that because as I read Agenda 2000 it recommends a further IGC to deepen political integration and reform Europe's institutions before enlargement takes place--interestingly enough it mentions an objective of the generalised introduction of qualified majority voting. As Protocol 11 effectively postpones the need to take any decisions on the forms of voting weights and Commission size until a new member is on the threshold of joining, when and in what form does the noble Lord envisage such decisions will be made?

I hope the House will forgive me for having gone into this matter in such detail. Finally, what lead did the Government take in ensuring that further progress was made on institutional reforms at the Luxembourg Summit in December? Where do we go from here? That is of critical importance in the context of this amendment. The presidency conclusions last December were largely dedicated to setting out the timetable for the accession negotiations which we are all proud to have begun under the British presidency. But the

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absolute prerequisite for enlargement of the Union was given only in one sentence which states that,

    "the operation of the institutions must be strengthened and improved in keeping with the institutional provisions of the Amsterdam Treaty".

Was that what the Minister of State meant when he told another place that the Government would continue to pursue institutional reforms which would,

    "be one of the issues that would be taken forward from the conclusions which will, we hope, be reached at the Luxembourg Summit in December"?

Again the Minister's optimism was not sufficient to persuade his European colleagues.

It is to seek answers to this question that I have analysed the issue in some detail. I apologise to the House for going into that detail. However, it is critically important that these issues are resolved: the re-weighting of votes; enlargement; and the institutional changes that we all hope to see come out of Amsterdam.

It is against that background that I have tabled these questions to the Minister in the context of this amendment. I am grateful to the House for listening to me for so long on this point. I hope that some of the many questions I have asked will be able to be answered at the conclusion of the debate. I beg to move.

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