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Baroness Ramsay of Cartvale: Perhaps I may comment on one part of the remarks of the noble Lord, Lord Howell; that is, the PSC. Unlike him, I welcome very much the creation of a permanent committee in Brussels to advise Ministers on foreign and security matters. But there was one point raised by the noble Lord which I think is incorrect. I should like the Minister to clarify it. I do not believe that General Ha gglund is the chair of the PSC. He is on the European Union military committee. The chair of the PSC may be Javier Solana, the high representative. He almost certainly would be in times of crisis. But at other times there is a chairman in office, which may be a chair from the presidency country of the time. Unlike the noble Lord, I welcome the creation of this committee. I was pleased that our Government were active in bringing it about.

Lord Tugendhat: Can I ask the noble Lord, Lord Howell, to clarify a particular point? He and I are very much in agreement about the desirability of the United Kingdom retaining the closest possible relationship with the United States. We are also very much in agreement about the desirability of maintaining the integrity and effectiveness of NATO. But he quoted a French general—I do not know what else the French general said—as saying,

"We must be able to act alone".

An important point, on which I hope the noble Lord and I can agree, is that although we would always wish to maintain a close association with the United States, and although we recognise that effective action in

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many parts of the world—including areas on the periphery of Europe—is likely greatly to be facilitated by the participation of the United States, from time to time there may be occasions—one hopes not, but it is possible—when problems arise on the periphery of the European Union which we and other members of the EU must take extremely seriously and perhaps in which we may wish to intervene. However, for perfectly good reasons of its own, the United States may not wish to do so. That could be especially true in the near future as the United States continues to take on a number of responsibilities arising from the war against terrorism. But even the United States does not have unlimited resources. Situations could arise in which intervention is required but where, for its own reasons, the United States would feel unable to participate. On those occasions it would be highly desirable for the countries of the European Union—in particular ourselves, the French, the Germans, the Spanish and a few others, to have the means and the capability to take action. Furthermore, those means should be ready to hand—a fleet in being, as it were. It is necessary, therefore, to put in place a structure beforehand.

Perhaps I may make one further point. On those occasions when we and our European partners wish to take action but the United States is hesitant about doing so, it would recognise that, if Europe is going to take action, then it had better join in. Thus, on occasion, a European capability could act as a trigger for United States involvement.

The prospect of a European capability that can be utilised alone, on the one hand, need not be incompatible with the desire to maintain the closest possible relationship with the United States, along with ensuring the greatest possible effectiveness of NATO on the other.

Lord Watson of Richmond: It was very good to hear the statement of unequivocal welcome made by the noble Lord, Lord Howell, for any proposal to strengthen European capability. That is a positive sign. It is clear that a balance must be struck between strengthening European capability and avoiding any question mark over the role of NATO or discouraging the United States from playing its full role. Personally, I agree strongly with the comments of the noble Lord, Lord Tugendhat. The evidence may not be unanimous, but it is overwhelming that the United States wants to see Europe participate more actively in international events. Furthermore, the United States would be encouraged to participate more actively if Europe does so. Thus we are looking at mechanisms to achieve that end.

As regards the treaty, the revision of Article 17 is appropriate in order to clear away references to the Western European Union. The WEU was created out of an entirely different strategic situation. Noble Lords are well aware that it was born out of the inability to move ahead with the European Defence Community, itself originally formed to address the problems posed to Europe and the international community by

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German rearmament and so forth. The union has become irrelevant to the current situation. The European identity is now expressed in other terms.

Article 17 is important because it strikes a balance between European capacity and the essential task of keeping the United States involved. The paragraph which relates to NATO reads as follows:

"The policy of the Union in accordance with this Article shall not prejudice the specific character of the security and defence policy of certain Member States and shall respect the obligations of certain Member States, which see their common defence realised in the North Atlantic Treaty Organisation (NATO) under the North Atlantic Treaty and be compatible with the common security and defence policy established within that framework".

That is an important balancing statement. From these Benches, we adopt the attitude that the Treaty of Nice has simplified and clarified matters and does not raise any fundamental doubts over the role of NATO or American participation, all of which we welcome. For that reason, we support the treaty as it stands and we shall not support the amendment.

5.45 p.m.

Lord Biffen: With great diligence, the noble Lord, Lord Watson, has demonstrated how Article 17 can bear the full weight of a general discussion about NATO. I shall not follow him far in that direction since I wish to welcome the remarks of my noble friend Lord Howell. He said that we regard the treaty, and the context in which it is understood, as having profound implications for NATO relationships.

The majority of the applicant countries for membership of the European Union foreseen by the Nice treaty are equally, if not more, in favour of membership of NATO. It is therefore appropriate, at least in general terms, to regard the evolving nature of NATO in that context. I am fascinated and much encouraged by the interest demonstrated on the part of the applicant countries for membership of NATO. Furthermore, I believe that that process is transforming its character.

However, NATO has maintained one essential feature; namely, the dominant role of the United States. That is a role which we would do well to reassert, even though it has often been stated in the past. I make that comment because of two immediate prospects which should detain the Committee for a moment. First, I turn to the role of Turkey. That country is just beyond the arras. It is also the country whose application for membership is anticipated, but not formally declared. Yet we cannot discuss sensibly the treaty without bearing in mind the Turkish factor. As a member of NATO, Turkey plays a crucial role as the link between the existing Europe and a wider Europe.

Secondly, what has only recently arisen is a clear indication on the part of Russia that she seeks and is achieving a measure of détente with the United States. That means that now we can anticipate the prospect of an enlarged NATO being brought within the arch of

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an improved Russo-American relationship. Perhaps that in itself will influence the character of an enlarged NATO.

Although my comments may not be directly identifiable with the treaty being discussed by the Committee—I apologise to the noble Lord on the Liberal Benches for having digressed so far—I believe that it is absolutely essential to assert the historic role of NATO as well as the prospective role. That will require a great deal of Euro imagination.

Lord Stoddart of Swindon: The Minister and I have had one or two exchanges over common European defence. Those exchanges, alongside the reactions of various people within the EU—including the President of the Commission—make it difficult to understand exactly what is meant by a common defence. No one would disagree with the notion of defence co-operation within Europe; we have enjoyed that for a long time. NATO has been established for many years and has worked extremely well. Indeed, we may need to seek other ways of co-operating with individual states. Again, nothing is wrong with that.

However, what is perceived by many people is quite different. It is clear that Mr Prodi believes that we have embarked on building a European army. He said so during the course of an interview published on 4th February 2001 in the Independent and he has said so since then. It is probably my duty to write to Mr Prodi and to ask him exactly what he means because he is in disagreement with the noble Baroness and the Cabinet itself. I shall probably do that.

It is not only Mr Prodi but other people—perhaps more important than Mr Prodi—who hold that belief. For example, Mr Chirac said in May 1999 that the,

"European Union can not fully exist until it possesses autonomous capacity for action in the area of defence".

That is what Mr Chirac said, and he is the President of France. On 4th October 2001, not very long ago, he said:

"the EU can, on the ground, contribute to peace in the world. Today Europe has a military staff. It is giving itself a force projection capability. It is establishing its own intelligence machinery".

No wonder people like me—and many people more important—wonder exactly what it is about. If it is simply defence co-operation, there is nothing wrong with it. But if the intention is to create a separate European army, there is a great deal wrong with it and a good deal that can go wrong with it. That is why people like myself and others are opposed to it.

Perhaps I may ask the noble Baroness how much it will cost this country. There is a great deal of concern, particularly among military leaders, past and present, that British forces are not being given the equipment and the manpower they need to perform the tasks the Government are giving them. It is fairly clear that defence expenditure has not increased in real terms over quite a long period and that our forces are suffering because of it. We need to ensure that this new arrangement will not deplete our forces further for home defence and other tasks, and that British forces will be better equipped and financed than they have

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been over the past few years under governments of both political colours. It is not good enough. We need to ensure that they are much better financed than has been the case. Perhaps my noble friend—I called her "my noble friend"; my God, I must not do that—the Minister can give me some information about that.

We are worried that the European defence force will grow like Topsy, as so much has grown like Topsy within the EU over the past 25 years. We know that it now has its own Cabinet, its own Civil Service, its own Parliament, its own courts, its own flag, its own currency. All that is left now is a new army and a constitution. We appear to be seeing those here before us, or at least the nucleus of an army and the nucleus of a constitution, which we shall be discussing later.

I know that the Minister does not like me, or anyone else, saying these things, but that is how it appears to me and to many people throughout the country. I shall be very interested to hear her comments.

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