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House of Lords

Friday, 29th September 2000.

The House met at eleven of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.

Prayers--Read by the Lord Bishop of Guildford.

Health Service Commissioners (Amendment) Bill

Baroness Hanham: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.

Moved, That the order of commitment be discharged.--(Baroness Hanham.)

On Question, Motion agreed to.

Wireless Telegraphy (Television Licence Fees) Bill [H.L.]

Report received.

Licensing (Young Persons) Bill

Baroness Thornton: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.

Moved, That the order of commitment be discharged.--(Baroness Thornton.)

On Question, Motion agreed to.

Inter-Governmental Conference: European Union Committee Report

11.7 a.m.

Lord Tordoff rose to move, That this House takes note of the report of the European Union Committee on the 2000 Inter-Governmental Conference (11th Report, HL Paper 92).

The noble Lord said: My Lords, I feel a sense of disappointment, not, I hasten to say, in relation to the report itself, nor to the Members of the Select Committee who took part in producing the report who took on a considerable extra burden. The previous occasion when we examined an inter-governmental conference we set up a separate sub-committee to do so. However, this time that was not possible. Therefore, I persuaded members of the Select Committee to join a working group to take evidence and to produce the report. That, added to the work

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that they were already undertaking on other sub-committees, put a considerable strain on them. I thank them most heartily for their contributions.

The staff also undertook extra work. I thank Mr Tom Mohan, the Clerk, who, as always, made an admirable contribution to the report. As everyone knows, the Clerks make a considerable contribution to these reports. I also thank my secretary, Sarah Lappidge, who had to take on the additional task of physically producing the report.

We are also grateful to the distinguished people who gave evidence both here and in Brussels, particularly to the ambassadors of the European Union countries. One slightly amusing facet was that the German and French ambassadors insisted on giving evidence together. That moved me to suggest that British foreign policy over the past 300 years had conspicuously failed! We were grateful to receive evidence from ambassadors of the applicant countries. It was important to have their view on what the IGC should contain as they will not take part in the proceedings in Nice. I thank the noble Lord, Lord Williamson of Horton, who did not give evidence formally but spoke to us in an informal session which was most helpful to us. As everyone knows, the noble Lord, Lord Williamson, knows precisely where the bodies are buried!

I feel a sense of disappointment at the lack of progress in resolving the problems that were unresolved at Amsterdam. That is disappointing because the problems, and the possible solutions to those problems, have been known since well before Amsterdam. The situation is disappointing and, we believe, dangerous because the effect on enlargement if solutions are not found before the accession of central and eastern Europe applicant states could be catastrophic. The Select Committee's report on enlargement published last year states:

    "It is an absolute political imperative that the IGC should be completed on schedule".

We now reaffirm that at paragraph 18 on page 11 of the report. We underline the "serious and damaging consequences" which failure would have on the confidence of the applicant countries.

Noble Lords who have read the evidence will have noted that the noble Lord, Lord Tomlinson, regularly and properly emphasised the contrast between, on the one hand, the heroic efforts of many applicant countries to bring themselves in line both in a political and an economic sense, and, on the other hand, the apparent lack of willingness on the part of the existing member governments to make any progress at all.

The report fully endorses that view. We all hope that the Government will now attempt to inject an increasing sense of urgency into the proceedings and not wait until the very last minute of the very last hour, as happened in Amsterdam. We all know the consequences of that. The situation was so bad that no one seemed to know what had been agreed in the middle of the night on Schengen and we were stuck with what are now called the Amsterdam left-overs or, occasionally, the Amsterdam Triangle--which

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reminds me of the kind of black hole into which aeroplanes disappear. I hope that the Inter-Governmental Conference does not also disappear into a black hole.

In Part 3 of the report we examine the main agenda items remaining from Amsterdam. Those are the size, organisation and accountability of the Commission, the weighting of votes in the Council and the extension of QMV.

On the first point, we demonstrate our belief in paragraph 40 that it was the almost unanimous view of witnesses that the most likely outcome would be that in future there would be one commissioner per member state. We understand the desire of all states big and small to have one commissioner at all times. In particular we understand the fears of the smaller countries--both members and future members--that they might find themselves being treated as junior members of the Union. Nevertheless, we say that,

    "we are not convinced that this is a desirable result".

We argue--we were supported by the evidence of the noble Lord, Lord Brittan of Spennithorne--that the Commission is already large enough and that there are hardly enough portfolios to go round as it is. We say that,

    "a larger Commission risks being neither credible nor efficient".

I dare say that one or two Members sitting not far from me think that it is already pretty incredible and inefficient. An increase in the size of the Commission will certainly not improve that position.

We have heard the argument that national sensibilities can be taken into acount only by having a representative on the Commission. In paragraph 41 we firmly reject that argument. We say that, unless a break is made in this tradition now,

    "we feel that there is no realistic prospect of it happening in the future".

For all the reasons given,

    "we consider [that the number should be limited] preferably to below 20".

We also discuss the possibility of finding ways of restructuring the work using an increased number of vice presidents to take charge of policy areas. We mention the idea of using boards or committees to prepare topics for the full Commission. However, we make it clear that we do not favour commissioners without portfolio.

The second item is the reweighting of votes in the Council. In paragraphs 48 and 50 we note that problems will arise if the present system were to be retained unchanged after enlargement; namely, that states comprising a minority of the population could outvote those making up the majority.

The Portuguese presidency report sets out a range of options for reform which we consider. They are shown in paragraph 53 of the report. They are the need to reflect the dual nature of the Union comprising both states and peoples; the need to ensure a minimum population threshold of 50 per cent to obtain a

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majority; and a system which should not make it more difficult for the Council to make decisions. We agree with its analysis and recommend that,

    "in a double majority system, the first threshold should continue to be a weighted majority",

but that the weights should reflect the populations of the member states. We say that if the conference decides to remain with a single majority system, it is even more important to match the voting weights to population size. Again we emphasise the need for agreement to allow enlargement to go ahead.

Qualified majority voting is an area which generates a considerable amount of heat. I hope that we can help to cool the temperature and shed instead a little light. We note that the Government's response confirms that. We are grateful to the Government for the response that we received a couple of days ago which confirms that 80 per cent of the council legislation was already on the basis of QMV in 1996. We note that 73 treaty articles and sub-articles are under examination at present for change from unanimity to QMV. We are aware that some, in particular France and Germany, would like to see QMV as the norm and unanimity as the exception but we also note that this appears to have been rejected. In paragraph 64 we state that,

    "the evidence we have received on this topic suggests that this Conference is unlikely to achieve any significant extension",

where QMV does not apply already. Indeed, the German ambassador in his evidence said that there was only one issue the 15 had agreed to move from consensus to QMV: in changes to the rules of the European Court of Justice. That makes such eminent sense that I am sure no one will object to them.

Finally, in the third section we agree in paragraph 88 with the broad consensus view that the extension of QMV should bring a parallel extension of co-decision. We see this as a means of enhancing democratic accountability. Those are the three major left-overs which, again, I emphasise must be settled if enlargement can proceed smoothly.

Among the possible additional items the one which has caused the most concern in the press, and which seems to have some genuine political pressure behind it, is enhanced co-operation or flexibility. This was not formally placed on the agenda by the Portuguese presidency. But the temperature was raised by the speech by Joschka Fischer and other politicians, the French in particular. In the midst of all the excitement our reaction is, first, that there is nothing new. Transition arrangements and derogations have always been accepted. Secondly, we were not convinced that existing provisions are in serious need of revision. It is difficult to identify any concrete proposals. We felt that there was plenty of scope within the existing treaty provisions.

Let us be clear that we must avoid confusing flexibility with the ideas of an avant-garde or pioneer group which we regard as undesirable in principle. Our evidence suggests that there is a low probability of change in this area.

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I understand the view of those who suggest that it might be a good thing in itself. I draw your Lordships' attention to the amendment moved by the noble Lord, Lord Lamont, in Appendix 1 which clearly takes that position. I thank the noble Lord most warmly for the way in which he conducted his objection to that section. He made his point clearly and was happy to abide by the decision of the committee. He sincerely holds that point of view, but it was decisively rejected.

The second additional item was the size and composition of the European Parliament. We generally accept the European Parliament's proposals for reallocating seats, while maintaining a maximum of 700 members and a minimum of four MEPs per state. There is a difference between the Committee and the Government on the timing of the change, but that is not desperately significant. We believe that a two-tier move would make more sense, whereas the Government feel that it would be better to do it all at once.

There are two other items of substance that may come forward in Nice but which we did not go into in detail because they have already been dealt with in other Select Committee reports. The first is the Charter of Human Rights, which was dealt with in an admirable report by Sub-Committee E, under the chairmanship of the noble and learned Lord, Lord Hope of Craighead. That report has been debated in the House. I see this week that the French have ceased to push it as an item for the agenda and they now believe that the charter should just be a declaration rather than being put into the treaty.

The second item that may come up is the common foreign and security policy, which was dealt with in a report by Sub-Committee C that was published before the recess and will be debated shortly.

Finally, I come to an item that is not yet on the agenda but is being whispered about in the corridors of power: the possible creation of a second chamber of the European Parliament. We hear that the Prime Minister may float the idea in a speech in Warsaw next week. The Government are said to favour the creation of such a body. I do not want to make much comment on that at the moment, except to draw the Government's attention to the fact that the Select Committee considered the issue five years ago. In paragraph 305 of the November 1995 IGC report, we said:

    "We believe that the practical difficulties of fulfilling a dual mandate as a national parliamentarian and a member of a European 'Second Chamber' ... would preclude most members from making an effective contribution in both".

We went on to say:

    "Any proposal for a Second Chamber would also have to address the question of whether its members were representatives or delegates. This would entail consideration of systems of mandates from national parliaments, which might be difficult to achieve. These practical considerations led us to reject the idea of a Second Chamber. We do not in any event believe that the European Union needs more institutions".

We shall not leap to judgment today, but I trust that I can ask the Government to have the courtesy to bring the matter before Parliament and submit any

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proposals to the Select Committees of both Houses so that they can be discussed in detail before the Government go public with them. The time frame may be too short, but as a matter of courtesy, the issues ought to be brought before Parliament.

I conclude by reiterating our disappointment that further progress had not been made. I hope that today's debate does not get too sidetracked into certain happenings across the North Sea. I beg to move.

Moved, that this House takes note of the report of the European Union Committee on the 2000 Inter-Governmental Conference (11th Report, HL Paper 92).--(Lord Tordoff.)

11.23 a.m.

Lord Grenfell: My Lords, the passage of the summer months has in no way diminished the importance and timeliness of the report. On the contrary, its central message--that the Nice Summit cannot afford to fail if enlargement of the Union is not to risk derailment--has become even more urgent and cogent. I applaud the foresight of the noble Lord, Lord Tordoff, in instigating the inquiry and guiding us with a sure hand to the report's conclusions. It was a privilege to participate in the inquiry. The task of agreeing the text was greatly facilitated by the excellent drafting of our clerk, Mr Tom Mohan.

In opening the debate, our chairman has just given a comprehensive and persuasive overview of the report and its conclusions. With an eye on the clock, I shall limit my comments to our conclusions on the Amsterdam leftovers and on flexibility.

The much-noted speeches of Joschka Fischer and Jacques Chirac earlier in the summer, setting out their by no means identical visions of the Union's future, have sparked a lively debate across Europe. However, at the informal meeting of EU Foreign Ministers at Evian on 2nd and 3rd September, the French presidency rightly insisted again that a debate on the Union's longer-term future must not deflect member states from pursuing the immediate priority of gaining agreement on the items on the IGC agenda.

That does not imply that a parallel debate on Europe's future is neither timely nor desirable. As France's Foreign Minister, Hubert Vedrine, has said, with so much reaction to the Fischer and Chirac speeches, it would be "intellectually impossible" for there not to be such a debate. After all, as he insisted, the debate is not the property of France and Germany alone. I am sure that we all agree that it would be unthinkable for Britain to be absent from the debate. I am therefore much encouraged that my right honourable friend the Prime Minister will enter the debate in a speech in Warsaw next week, when I understand that he will set out, inter alia, his ideas for an enhanced role and greater authority for the European Council. Like the noble Lord, Lord Tordoff, I earnestly hope that your Lordships will be given an early opportunity to examine the proposals formally.

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On the first of the Amsterdam leftovers--the size and composition of the Commission--the evidence that we took suggested that the likely outcome would be one Commissioner per member state. One might call that the politically least painful solution. However, that solution flies in the face of the member states' declared intention to make the functioning of the Commission more efficient.

We well understand the ambitions of the applicant states and accept that the promotion of national interests is not their overriding motivation in calling for one Commissioner per state. However, a rotating Commission of no more than 20 members could work with far greater efficiency. Indeed, only in a Commission limited in size can real collegiality be achieved. Despite the overall high quality of the Commissioners, such collegiality is too little in evidence. That would make it a sufficiently weighty and influential body to balance any enhanced authority for the European Council, which my right honourable friend the Prime Minister, among others, appears to be advocating.

All may not be lost. On 22nd September, Chancellor Schro der and Prime Minister Giuliano Amato jointly and explicitly called for a Commission consisting of a number less than the number of member states. They said:

    "Italy and Germany believe an influential and efficient Commission is necessary".

I therefore ask my noble friend the Minister whether the Government will press for a similar solution at Nice. I earnestly hope so, but if the 15 instead settle for the line of least resistance, they must, as we insist, formally commit themselves at Nice to changing the Commission's working methods to accommodate such a large college.

Our views on two mooted changes that might work well, and on one that almost certainly will not, are set out in the report, as the noble Lord, Lord Tordoff, has reminded us. In the meantime, I trust that the Government will insist on a commitment to make workable changes as forcefully as I know that they will insist on a satisfactory reweighting of votes as a precondition for losing one Commissioner.

Reweighting the votes is profoundly important, as without agreement on that, agreement on the other two Amsterdam leftovers will be virtually impossible. However, I fear that we are heading into just such a deadlock.

As the report says, we need a transparent and easily understood voting system, but also--and let this be said again clearly--one that best reflects the dual nature of the Union, which is a union of states and of populations. That is why we favour the dual majority system. We are disappointed that the Government prefer a simple reweighting.

The Foreign and Commonwealth Office has told us that some medium-sized and smaller member states were joining the larger states in arguing for a simple reweighting and that the negotiations were now heading towards that conclusion. Well, perhaps the

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Foreign and Commonwealth Office will be proven right. However, anyone who is aware of the strength of the opinions which still divide France and Germany on what their respective votes should be under a simple reweighting must surely have some doubts. Germany is clearly worried that a failure to take fully into account her demographic preponderance over France will appear undemocratic to the German people and will encourage Euro-scepticism in that country.

France, for her part, has always argued that demographic weight is never the sole criterion in international organisations. And with a presidential election approaching in France, neither of the two leading contestants--neither M Chirac nor M Jospin--will want to have to tell the electorate that they have had to settle for a voting weight inferior to that of Germany. The Franco-German partnership, the French argue, cannot be based on unequal strength in decision-making.

My understanding is that, at least up to the time of the Franco-German closed-door brainstorming session at Rambouillet, Germany, unable to move France off its position, saw some form of dual majority system as the only face-saving way out of this impasse. If that view still stands, it may be premature for anyone to assume that the dual majority option has been swept from the negotiating table. Until France and Germany have sorted out their problem, obviously there can be no overall agreement among the 15 on this crucial reform. Perhaps my noble friend the Minister has more recent and more reassuring news for us on that.

I come now to the last of the Amsterdam leftovers: QMV. The IGC quite rightly decided that the articles and sub-articles which are still subject to unanimity should be examined on a case-by-case basis. In mid-June, Michel Barnier, the Commissioner responsible for the IGC, who had earlier given evidence to the committee, gave an interview to the Financial Times in which he reported that at least half the EU states were agreed on shifting half the policy areas still subject to unanimity to QMV but that different countries were supporting different areas. In other words, there was little progress to report. The most that one can make out of all that is that there will likely be no broad switch to QMV and that we, the committee, will be justified in having concluded in our report that any increased use of QMV will likely be in relatively technical and uncontroversial fields.

However, that is scarcely an encouraging situation in a Union of shortly more than 20 and eventually close to 30 members. In his evidence to us, my honourable friend Mr Keith Vaz, the Minister for Europe, said that the Government would be keeping the unanimity ring-fence firmly erected around tax, social security, borders, treaty change, defence and own resources. So be it. However, I urge the Government at least to take as positive a view as possible where a shift to QMV is being considered in areas outside their ring-fence, limited as those areas now are.

Surely there is an important political argument here; namely, that those who see efficient inter-governmental decision-making as the means of

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preventing a united Europe of states from becoming a "United States of Europe", to borrow President Chirac's happy phrase, cannot but support reforms which reduce the risk of paralysis.

I come now to enhanced co-operation or flexibility. As we all know, flexibility in one form or another has been a feature of the Union for a long time. Schengen and the single currency are simply recent and prime manifestations of it. We concluded that there appeared to be no serious need to amend the Amsterdam Treaty's provision governing its use in the first or third pillar areas. At the same time, we concluded that the removal of the emergency brake mechanism--that is, the veto provision--should pose no threat to the United Kingdom's interests.

We know that the Government remain to be persuaded of the need to revise any of the current provisions. However, they are "relaxed", as my honourable friend the Minister for Europe put it, about the debate on this issue and are aware that a compromise may be necessary. That is as well because only through compromise will any agreement on enhanced co-operation be reached at Nice.

In the course of our inquiry, we searched for evidence that the fact that the flexibility mechanism in the Amsterdam Treaty had not so far been used could be attributed to the conditions set upon its use. We were unable to prove such a link. However, I remind your Lordships that when states such as France and Germany call for revision, they are motivated less by a concern that resort to flexibility in the past may have been inhibited by the conditions than by their belief, which seems to me a logical one, that in the enlarged Union of the future there will be a far greater need for flexibility and that access to the mechanism will therefore need to be subject to less restrictive conditions. That is why their aim and that of the Commission is not simply to get rid of the emergency brake but also to reduce the participation threshold from a majority of states to one-third.

We know that the governments of Denmark, Sweden and Spain, as well as our own Government, fear that that may open the door to a two-speed Europe. However, to my mind the immediate question is: which is closer to the United Kingdom's interests? Is it the relaxation of the restrictions on enhanced co-operation, keeping flexibility still circumscribed by treaty provisions, or the refusal of any revision and facing the near certainty that France and Germany will do what they have said they will do, which is to seek more radical solutions outside the treaties for those states which are willing and able to move ahead faster? That would lead indubitably to a two-speed Europe with the brake well out of reach of Britain's foot. We cannot say that we have not been warned. Therefore, I urge Her Majesty's Government to be prepared for some reasonable compromise on flexibility to ensure that any further integration by groups of co-operating states is an orderly process conducted within a commonly accepted framework.

Can, then, the Nice Summit succeed? As late as the beginning of this month when the Foreign Ministers met at Evian, one was hearing that member states were

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still camped on their respective positions and that movement towards meaningful agreement at Nice was minimal. If that really was the case and, worse, if that is still the situation when the IGC Ministerial Conclave is reached on 3rd December, the Nice Summit will face extraordinary difficulties. We should recall the French presidency's repeated insistence that just any agreement in Nice simply will not do. That is no empty warning. As M Vedrine told the Financial Times recently:

    "An absence of significant reforms or an agreement just for the sake of appearances would both signify failure".

But that is the possibility--even the likelihood--that we face if national intransigence wins over common sense, ensuring that poorly adapted institutions will bedevil and undermine an enlarged Union.

However, let us hope that common sense and a sense of common purpose will prevail. If, happily, it does, what then? In his Berlin speech, President Chirac suggested launching after Nice a process of further reflection over a number of years on the EU's future, involving governments, parliaments and the people of both the existing 15 and the applicant countries. That process, he hopes, will lead eventually to the drafting of a constitution which would include, most importantly, a clear definition of the division of powers between the Union, its member states and their regions so that, as Andrew Duff, a Member of the European Parliament, put it succinctly:

    "everyone knows how they are governed, by whom, and from where".

The process advocated by President Chirac depends, of course, on a Treaty of Nice which really delivers the goods. If it does, to my mind the process is not unrealistic provided that it is not hurried. I cannot say the same for Chancellor Schro der's announcement on 4th September that he would propose at Nice the convening of a new IGC by 2004 devoted to what he describes as "the big issues" in the Union's future. That is clearly too soon since an attempt to negotiate agreements on far-reaching constitutional reforms without at least the first wave of new members being a party to it would be quite wrong. The Italian Prime Minister endorsed the German proposal just a week ago, but I am very happy that my right honourable friend the Foreign Secretary has made perfectly plain our Government's objection to such a plan.

As this report states:

    "The contrast between the efforts being made by the applicant countries and the lack of progress by the present Member States on EU institutional reform is striking".

I hope that the European Council at Nice will correct that shameful imbalance. However, on present form, I fear that it may not.

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