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Lord Watson of Richmond: My Lords, I am grateful to the noble Lord for giving way. Does he view the fall in turn-out during the last British general election and the ever-decreasing turn-out in the American presidential elections as signifying a real distance and a real lack of commitment to democracy?

Lord Biffen: My Lords, of course I do. If we are to bandy about statistics, the United Kingdom component of the European Union direct elections is one of the biggest and most profound challenges of all, as the figure has fallen to 24 per cent.

I turn to the second consideration. For many across the spectrum of those who endorse membership of what was then the Common Market, the prospect of open trade was particularly attractive. It included the prospect of the dismantling of tariffs, of our own industrial base being subject to more competition and of access to a wider European market. I have no doubt that in the early years that was a satisfactory consequence. However, when one looks at the position of the economy across western Europe today, it is not

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characterised by a growth in the dynamic of open trade and of liberal principles; it is characterised by a growth in regulation, in harmonisation and in bureaucracy of one sort or another that has made the balance within the European Union considerably different from that anticipated by the pioneers. As ever, it was put graphically by my noble friend Lady Park when she talked of "institutional creep". Throughout Europe there is a subterranean growth in governmental involvement in regulation, which is a serious challenge.

Thirdly, I turn to the agricultural policy. There is something Augustinian about the agricultural policy. Its reform always lies just over the brow of the future. It is a relatively reasonable situation to analyse. Agriculture has been a subject of social considerations, environmental considerations and food production considerations. They have been held in a balance. The agricultural policy has never been purely a farming consideration. It has problems and difficulties, which I shall not chronicle because they are well known and they have been acknowledged by practically every noble Lord who has spoken. The ability to resolve them appears to be beyond our reach. At the end of the day, the politicisation of the price mechanism prevents those three factors adjusting themselves to the changing national and world conditions.

I have identified three great issues--popular commitment, the liberal ethos of economic policy and the common agricultural policy--that are still at the top of the agenda in demanding major and fundamental reform within the European Union. I ask one simple question: will enlargement help the solution of those three issues? I shall quote only one witness, my noble friend Lord Renton of Mount Harry, whose views on these matters are close to those of my noble and learned friend Lord Howe, and somewhat distant from my own. My noble friend Lord Renton gave evidence to the Lords Select Committee that considered enlargement. He said at page 37 of the evidence taken on 21st October 1999:

    "We are all in favour of enlargement in general terms but when it comes to the principles of how do you create a European Union Commission, Council, Parliament that is actually going to work with 26 members we do not really see an end result that is either acceptable to us individually or acceptable to the members generally".

That is the problem. The enlargement of the European Union is seen as an extension of the institutions which were fashioned in the late 1950s and which still stand central to what is now proposed. The noble Lord, Lord Hannay, made an argument, with the hauteur and self-confidence that I would expect of the Foreign Office, based upon the continuation of the central features of 1959, as though one could proceed without a major change. Yet we are now compelled to consider a major change. I say that because the nature of Europe, the threats to Europe and the challenges to Europe are being transformed.

From now on, 11th September will always have an imprint on our considerations and judgments; it is not a quick, dramatic situation that will diminish as we adjust to it. It is bringing a greater reality to the words of Charles de Gaulle in 1959, when at Strasbourg he

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talked of a wider Europe. I can quote de Gaulle's words only in French--I apologise to my audience on that account. He said:

    "Oui, c'est l'Europe, depuis l'Atlantique jusqu'a l'Oural, c'est Europe, c'est toute l'Europe, qui decidera du destin du monde".

Of course, he was right. The Europe that we think of today is one that now stretches to the Urals. It is a Europe in which, if we were to ask the applicant countries, "Look, for the moment, you can have one or the other: NATO or the European Union", my money says that they would choose NATO. There is an increasing anxiety for the wider Europe to be seen primarily in terms of defence. We can then consider all the other challenges to do with trade and the issues that properly occupy this debate but which are none the less secondary to defence.

Once we talk of NATO and its extension to involve Russia, as the noble Lord, Lord Owen, mentioned, we must negotiate a whole series of subtle relationships that relate to Russia, defence and terrorism with our partners in the wider Europe who want NATO, but originally wanted it on rather different terms.

That is the challenge. I am not in the slightest upset that those on my Front Bench have been somewhat restrained in how they have approached the topic of this debate, because it misses the realities and challenges of today. In her opening speech, the noble Baroness, Lady Symons of Vernham Dean, talked about the treaty "increasing our wealth". It might increase our wealth, but today we are not concerned with the argument of shopkeepers; we have totally different considerations. The old-fashioned arguments about domestic product, trade and the rest of it, which may have served 20-odd years ago, do not hold central relevance to the kind of Europe that we should be considering today.

7.13 p.m.

Lord Watson of Richmond: My Lords, I must congratulate the noble Lord, Lord Biffen, on adding to the linguistic pluralism of the House. This week, we have heard Gaelic, French and a strong Canadian accent, so we become more varied every day.

We heard a wise judgment from the noble Lord, Lord Hannay, about the Treaty of Nice--that it is, if not a minimalist treaty, a necessary and modest one. None the less, it gives rise to strong emotion and raises several important issues of principle. I should like to address both an emotional context and an issue of principle.

However, I shall begin by sharing an experience with the House, like the noble Lord, Lord Lamont, who, as we heard earlier in the debate, played such a critical role in the more important conference and Treaty of Maastricht. I was present in the modest role of a journalist and remember being briefed with other journalists in the early hours of the morning in the British briefing room. A chap came across and told us in tones of hushed urgency that the Prime Minister was across the road in the other building, "surrounded by foreigners". Indeed, so he was, and rightly so.

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The emotional issue, as in all debates on Europe, concerns the basic feelings of the House and of individual Members about the nature of sovereignty. There is clearly a deep, instinctive divide. Some of us in the House and in the other place, in essence, take the view that in an increasingly interdependent world--since 11th September, the democracies of the world are interdependent to an unparalleled degree--the way for democracies to hold sovereignty is to find the right levels and the right subjects on which to share sovereignty. There is another feeling, which is that that path leads to the abolition of the nation state, and with it the freedoms that Parliament and our democracy represent.

We all find a position somewhere between those two extremes. Increasingly in the European debate, our fundamental instinct guides us to a detailed position on this or that clause, paragraph or next step. I wonder increasingly whether, if the Conservative Party could turn the clock back or forward--I do not know how that would be done--it would vote for the Single European Act or for Maastricht. Has some kind of hindsight now taken over the Conservative Party that says, "All this was a disaster; we should not have done any of it"? It is sometimes alleged that the fault lies with the noble Baroness, Lady Thatcher, because she did not read the Single European Act, or that others did not foresee what might be its consequences, that it was all a terrible mistake and that we should never have gone down that road.

The Nice treaty is a modest step, but it recognises that, in a world of increasing danger and increasingly obvious interdependence, it is important that in our geographical area of Europe we decide on which matters by sharing decision-making and sovereignty we can increase the real quantity and quality of sovereignty. The Treaty of Nice, although a modest treaty, a somewhat inelegant treaty--born of an extremely fractious and inelegant summit, despite where it was held--is nevertheless a step in that direction. Why? What is the most important thing about the treaty? Its most important consequence relates to enlargement.

Interestingly, the noble Lord, Lord Lamont, acknowledged the beneficial impact on the modernisation of eastern and central Europe and the movement of economies and democracies there into the full modern age of the acquis communautaire. Countries have had to adapt in such a way. If we did not ratify the treaty, Mr Prodi might feel that we could still get five countries in. I am not reassured by his confidence about the five; I am aware of the fact that 12 have applied. However we argue it, the message that we would send to east and central Europe if we refused to ratify the treaty would be: delay. We would be saying that we did not recognise the real historic dimension of this moment and that our own internal, domestic argument was of greater importance. And what is the result of delay? The result of delay is dismay. It inevitably will put a break on the process of modernisation and on the urgency and the focus of meeting the chapter in the acquis communautaire which

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exists and which from my experience of travelling in eastern and central Europe is a factor of the greatest importance.

My plea would be that in approaching the treaty and its ratification we should not bat our way into the 21st century with our eyes fixed longingly on the 19th. We must view this treaty in the context of the challenges that we in the European Community and Union face and are likely to face in the next decade. In that context, the Nice treaty is a modest but necessary step.

7.20 p.m.

Lord Williamson of Horton: My Lords, I am pleased to intervene from the Cross Benches today, although I feel a little like a Motherwell supporter at a Celtic v. Rangers match. It is an essential protection for our sovereignty that the United Kingdom Parliament must take the decision on the ratification of any changes to the Treaty on European Union and the treaties establishing the European Communities. Those treaties are, in a sense, the constitutional basis for the United Kingdom's position, its rights and obligations within the European Union and the European Communities. The need for the ratification of any changes, just like the earlier ratification by our Parliament of the existing treaties, is therefore once again the clear demonstration to our citizens that in the European Union it is the member states which rule, okay!

Bureaucrats cannot change the treaties; Eurocrats cannot change the treaties; Commissioners cannot change the treaties; Ministers cannot change the treaties; only Parliament is sovereign. For that reason, even if some of the changes may not seem too important, we need to be attentive to the changes which are now to be given effect in domestic law.

That was always the case when past intergovernmental conferences led to treaties, such as the most recent Treaty of Amsterdam, which were added to the treaties listed in the 1972 Act. But in the case of the Treaty of Nice, which we are discussing today, there is another element; a genuinely political element which should also weigh heavily in the balance. From the early days of the discussions and negotiations between the member states which led to the Treaty of Nice, it was widely understood that an acceptable agreement there on some institutional questions would clear the way for the completion of the negotiations now taking place with the countries of central, eastern and southern Europe which seek membership of the European Union. That has been clearly stated in this debate and we cannot avoid the obligation that that imposes on us here in the UK Parliament. There are about 108 million people in those countries which are currently negotiating accession and we all know that that will be a step-change in the nature of the Union.

When I spoke in this House immediately after we knew the results of the intergovernmental conference at Nice, I stressed the importance of the political perception of the completion of Nice for the enlargement of the Union not only within the present

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Union but within the acceding countries themselves. I believe that we must make our further contribution to that political perception by ensuring that the United Kingdom ratifies the Treaty of Nice.

Of course, I am well aware that Ireland has not ratified, but we must take our own responsibilities and not make the mistake made after Maastricht by allowing our attention to be too much diverted to what another member state has done or is likely to do. As far as the United Kingdom is concerned, I do not want us to lose the momentum of the enlargement of the European Union. Enlargement is a political change of high importance; the creation of a new type of Union because of its diversity and the traditions and priorities of the new members states. All that is, for me, positive. And we must also wake up to the greater prospects for trade, commerce and contacts between citizens within the enlarged Union.

That is what is opening up in central and eastern Europe and in parts of southern Europe. It has little or nothing to do with bureaucracy or technocracy, but it has a lot to do with enlarging our community of interests. We must recognise the even greater responsibilities which the Union will take on in the wider world as it enlarges within, I hope, the near future.

With the ratification of the Treaty of Nice by the enactment of the European Communities (Amendment) Bill, I would like to see the message go across the Channel to the Council of Ministers and to the European Commission: let us work to finish the negotiations with the applicant countries by reducing those chapters--already few, I am pleased to say, for some countries--which require the final decisions of Ministers and let the Ministers decide.

I turn to some of the specific changes included in the Treaty of Nice, in particular to the institutional changes. I am not very interested in institutional changes but I have a lot of experience of the European institutions and some changes were signalled beforehand as of importance in themselves and for the further enlargement of the Union.

The first is the voting weight; that is, the number of votes available to each member state for use if there is a vote in the Council or, for example, in the management committees. There are three elements in the changes agreed at Nice. First, there is the most important point; namely, the United Kingdom's own position. That position is improved as the United Kingdom will in future have a greater percentage of the total votes. Of course we must welcome that.

Secondly, it makes a qualified majority slightly more difficult to achieve because there is a small lift of the threshold. In addition, it introduces the requirement that at least half the member states must agree and the favourable votes must represent at least 62 per cent of the population of the Union. I see no difficulty whatever in the new criterion of a substantial percentage of the population, which is a democratic approach. As regards the higher threshold for the votes, I would personally have preferred to leave it as it was, but the difference is slight.

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Thirdly, in Declaration 20 on the votes, we now have the application of the votes in a Union of 27 members, thus avoiding a potential argument at the conclusion of each acceding country's accession negotiation. I should say that in the final stages of negotiation of the earlier Treaty of Amsterdam, heads of state and government were close to an agreement on the revised weighting of votes for the current member states. I was present on that occasion and I believe that had that point not come towards the end of long and exhausting negotiations they might have concluded then. But the fact that we now have that agreement plus the agreement on votes for the new acceding states shows the added value of Nice.

Furthermore, there are a number of changes to the prospective number of commissioners to take account of enlargement. It is well known that some smaller member states which were less well treated as a result of the changes in voting weight were all the keener in consequence to retain their commissioner while other member states wanted to set a strict limit to the number of commissioners. It was therefore necessary to reconcile the view, particularly in the light of the forthcoming enlargement.

The result is not exactly glorious, but it has the great merit of taking the issue out of the disputed domain, at least until 2010 when, no doubt, your Lordships' House, having settled a number of contentious issues about its own composition, will be able to return to the question of the number of European commissioners. We can assume that in the shorter term the number of commissioners will rise because, for example, in the period up to 2005 one will be added for each acceding country--and I hope that there will be a good number of such countries. It is only in 2010 that that number will be definitively reduced.

The treaty also contains a number of small changes which will increase the role of the President within the Commission. It will none the less remain a body which takes its positions on a collegiate basis.

A good deal has been made of the other areas of change; those concerning the areas subject to qualified majority voting and the so-called "enhanced co-operation". It is perhaps difficult to convince oneself that the change to QMV in those areas will make much difference in practice, although I would signal the potential effect on some measures; for example, the procedures for checks at external borders (Article 62)--it has not been mentioned in the debate, which rather amazes me--where the United Kingdom now has an opt-out which is rather charmingly described as an "opt-in".

When I went to Brussels in 1987 I made what I believed to be a very good speech which was immediately attacked on both sides. One British newspaper featured it under the heading "Thatcher adviser goes bush". Enthusiastic Europeans attacked it because I suggested that in some important areas the Community was, or shortly would be, at cruising speed and it did not need a spate of legislation or other changes. I hope that we are now at cruising speed on QMV and that in the coming years it will not be

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necessary to reopen the balance achieved between areas subject to unanimity and areas subject to QMV. In that respect I am exactly in line with the observations of the noble Lord, Lord Owen: if it works, don't fix it.

As to enhanced co-operation, it is a little odd to amend the text agreed so recently at Amsterdam before it has ever been used. It is said that that text was difficult to operate, which was why I liked it. I am not too concerned if there is some variation of pace between member states in the intergovernmental areas, such as the common foreign policy. But I am glad that there are still important safeguards and hurdles to protect the coherence of the Community and the rights of non-participants.

Although declarations do not have the force of treaties, it is right to recognise the importance of Declaration 23 on the future of the Union. That declaration highlights certain subjects--for example, the role of national parliaments--for a future intergovernmental conference in 2004 and the preparation for it, including the association of representatives of national parliaments. I am sure that that method of preparation will be better than that which I suffered in the three major IGCs before Nice. With the huge increase in the legislative role of the European Parliament in recent years, a better association of national parliaments and, I hope, more transparency in the Council's role as legislator, we can say that if there were a democratic deficit this would be the way to deal with it.

Some matters are not in the treaty, in particular the agricultural policy. However, as others have said, the existing treating contains only broad objectives for agriculture. All the market mechanisms and prices, already much reformed and reduced--although not noticed over here--do not require treaty amendment. Some future changes may be needed but not in the treaty that we are examining today.

It may be thought that I have damned this treaty with faint praise, but that is not so. I have praised it but only very modestly.

7.33 p.m.

Lord Tebbit: My Lords, we have had an interesting debate. Perhaps the noble Lord has added more interest than other speakers. It is not my business to sum up. I know that that task will be performed extremely competently by the noble Baroness, Lady Symons. Perhaps I may say how much I admire her stamina and resilience. She has sat in her seat almost unmoved except for one moment. It is strange that these days very few Members of this House can tell the difference between fireworks and gunfire. I believe that that was the only occasion on which I saw the Minister move, not in any sense of panic but curiosity.

There are two speeches about which I must say something. I see that the noble Lord, Lord Taverne, is now back in his place. All I say to the noble Lord about the speech which he said he should have made 30 years ago is that I do not think that it has improved with the

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keeping. I regret that the noble Lord, Lord Harrison, is not in his seat. He criticised Conservative governments, of which I was a member, of the 1980s for not getting on with enlargement. I gently remind the noble Lord, perhaps through the columns of the Official Report, that at that time several of the applicant nations were members of the Warsaw Pact and the leader of his party was dashing backwards and forwards to see his wife around the boundaries of Greenham Common. Things were rather different at that time. Had it not been for a robust government I do not believe that those countries would now be free to apply for membership.

I return to the Bill. I believe that there are three main objections to the measure which come under the following headings: what the treaty contains, what it does not contain, and the Irish decision. First, as to what it contains, there are new provisions for the voting system in the Council. It is important for both Eurosceptics and Eurofanatics to remember that there are times when the United Kingdom wishes to get decisions made or unmade. We who are attached to the unanimity rule must remember that effectively it can give one Parliament a veto over its successors. For example, the decision by this Government to submit to the Social Chapter can be reversed only with the unanimous agreement of our fellow member states or renunciation of the Treaty of Rome, regardless of the wishes of the people of this country, however expressed and in however many elections.

Therefore, we need to remember that the unanimity rule is a double-edged sword. So, too, are the provisions of the Treaty of Nice on blocking votes. I believe that the best solution to the difficulty is not to muck around with unanimity rules and percentages of blocking votes but to reduce, not increase, the size of the policy competence of the European Union. That is the way in which we help to resolve that difficulty.

The detail of the treaty is not the material of a Second Reading debate, but on this issue it is sufficient to say that the ability of Germany to block proposals coming forward under QMV would be greater than that of any other power. We all accept that Germany must have a privileged position in this respect because of the greater size of its population, but we must also remember what powers are being given to one particular nation within the European Union.

On this matter the noble Baroness, Lady Symons, and the noble Lord, Lord Williamson, produced some rather dodgy arithmetic. They both asserted that we were gaining influence in the number of votes that we would have under the treaty. As I understand it, we now have 11.49 per cent of the total voting power in the European Council. After the accession of all the candidates we shall have 8.41 per cent. That is a bit of an Irish increase, if I may say so. It is also worth noting that at the moment we have about one-sixth of the votes necessary to carry a proposition under QMV. Sometimes we do want to carry a proposition; we are not always against a proposal on the table. On my arithmetic, after 1st January 2005, in the absence of accession, we shall still have about one-sixth of the votes to carry a proposition. However, after the

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accession of the applicant states we shall have about one-ninth of the votes. I do not regard that as an increase in our voting power. I am rather surprised that the arithmetic of both the noble Lord, Lord Williamson, and the Minister goes in that direction; mine does not.

One matter that emerges from a careful reading of it is that the structure of Nice either before or after enlargement facilitates blocking minorities. It makes it easier rather than more difficult for a minority to block a proposition. It is said that that is in order to make the European Union more governable. I am not a federalist or Europhile, as the House will be aware. To make it easier to construct blocking minorities is a strange way to make it easier to govern. That is one of the fascinating but puzzling aspects of this treaty.

We find that the extension of co-determination not only increases the power of the European Parliament but the difficulties inherent in European Union decision-making. The loss of the national veto in another 39 areas is more serious in some than others. We find that industrial policy is to be subject to co-determination. Have noble Lords seen the miracles worked by the European Union's agricultural and fisheries policies? I regard a proposed European Union industrial policy only with grim foreboding.

The provisions on enhanced co-operation are entirely perverse. The way forward for member states who want, for example, to merge their tax systems, their police forces, their armed services or any other functions, or to agree that they will have a common foreign policy, is outside the Treaty of Rome. So long as that does not involve in any way the Commission, the Council or the Parliament, that can be accomplished without breaking or bending the treaty.

Why should we object if the French and the Germans wish to join into some kind of European republic? If the French want to be governed by the Germans--we have shed enough blood and treasure trying to save them from it--we should now say,

    "Well, do go ahead but outside the treaty. You can come back again into the European Community, into the European Union, as the Franco-German Republic with your place at the table and your appropriate number of votes and everything else".

There is no barrier to that, any more than there is a barrier to the United Kingdom as a union of four nations being a member at the table.

There are some objectionable attachments to the treaty. The charter of fundamental rights is one. Although it appeared in the presidency conclusions of the IGC rather than in the treaty, we should bear in mind the annex entitled "Declaration on the Future of the European Union". That is placed on the agenda for 2004. Like other moves--outside the treaty but at the IGC--towards a European defence force, this should be borne in mind as we consider the case for ratification.

Secondly, I turn to what is not in the treaty, nor in the presidency conclusions. As other noble Lords have observed, there is nothing in it about the common agricultural policy. That has been brushed off. One does not need to amend the treaty in order to amend

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the common agricultural policy. But one needs to do something to amend it. It has been slightly amended, but it has been broadly the same policy for the 30-odd years that we have been in the Community. We have been trying to reform it. But that will not come about until one or more member states goes to an IGC and simply says,

    "We are not going to agree to anything until the heads of government have agreed on the bones of a proposition to reform the CAP".

If that comes nearer to abolishing it than reforming it--it may be incapable of being reformed--so be it.

There is nothing about the fisheries policy either. That is another of the European Community's great achievements. It is one which has devastated fish stocks and our own fishing industry.

Thirdly, like other noble Lords, I must refer to the Irish decision. This treaty cannot come into effect because it has been rejected by one member state. There has been a great deal of talk about it having been agreed at Nice by all member states. It was not agreed at Nice by all member states. It was agreed at Nice by the heads of government. When it was put to a member state--that is the people of the Irish republic--they said "No". They disagreed with it. They have been told one way and another, and they have been told again today:

    "Oh, don't worry about that. Sooner or later we'll sweet-talk you into changing your mind, as we did the Danes over Maastricht. We will put some pressure on. We will make some threats and offer some inducements. We'll say that you have misunderstood it. We've all misunderstood and you'll come round".

You can vote as often as you like as long as you vote "Yes". Once you have voted "Yes", there are no second votes after that. That is it. The door of the trap goes snap.

It is an insult to the people of Ireland that we are all pressing on with the process of ratification as though they had not spoken. How would we feel if we had been granted a referendum and everything pressed on as though we had not spoken? Is that how the referendum on the euro will be regarded by the Government if they lose?

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