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Lord Pearson of Rannoch: My Lords, before the Minister sits down, I would like to refer to the amendment moved by my noble friend Lord Howell of Guildford, perhaps with his tongue slightly in his cheek.

I listened carefully to the Minister's reply, and I do not think that it will emerge from the pages of the Official Report that enhanced co-operation does not have any sort of reverse gear. I would be grateful if she could confirm that, if it is true. In other words, groups of countries can co-operate in one direction only, towards greater integration. The Minister mentioned the acquis, and that is what it says. Articles 2, 3 and 6.4 of the Treaty on European Union and Protocol 30 of the Treaty establishing the European Community make it absolutely clear that the process can never go back. My noble friend Lord Howell of Guildford asked whether it would be possible for half a dozen of

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us to get together and happily avoid the worst effects of the whole project. It would be nice to have a clear answer from the Minister to the effect that it would not.

Under any form of enhanced co-operation, we cannot avoid the directives to which my noble friend referred. We cannot avoid the vibration directive, under which no one can drive a tractor for more than two hours a day, the new directive that requires someone to be at the bottom of a ladder when one goes up it and, I am reminded, the directive on the use of chainsaws. Finally, there is a directive on dietary requirements for sedentary workers on the way. No doubt, that will interest your Lordships in due course.

Baroness Symons of Vernham Dean: My Lords, there is no mechanism for enhanced co-operation to go into reverse in the way in which the noble Lord, Lord Pearson of Rannoch, has just described.

Enhanced co-operation must take place within the provisions and scope of the treaties. However, if the noble Lord were to collect a sufficient number of his friends and colleagues in the EU who did not agree with a specific element of enhanced co-operation, he could block it thereby. No mechanism exists in the form that the noble Lord suggested. We went through the numbers involved and the rather different mechanisms on different pillars of the European Union's activities, as the noble Lord knows. The answer is not to take part in enhanced co-operation in cases in which one chooses not to and to seek for others to think likewise.

Lord Howell of Guildford: My Lords, I am extremely grateful to the Minister for answering my queries in such specific detail. The areas that she mentioned sound very interesting.

The Minister's answer—and the intervention of my noble friend Lord Pearson of Rannoch—prompted the thought that the rules set out in revised Article 43 are fairly rigid. First, eight members must be found. I hope that eight could be found for some of the attractive ideas that the Minister put forward, but it might be difficult. The Minister reminded the House, when she identified precisely what enhanced co-operation meant, that the conditions required for enhanced co-operation are fairly austere. Such co-operation must reinforce the process of integration and the acquis communautaire must not be touched in any way.

To many of us, those are extremely old-fashioned, centralised sentiments, which do not relate to the kind of network Europe or more flexible Europe that, many feel can come into being, provided that we have the confidence to push for it and do not fall in too easily with the old, backward-looking and centralising tendencies and hierarchical ideas that may have served the European Union in the past but will not serve it in the future.

However, the Minister was very forthcoming in responding to my questions. As I said, we debated the matters fully in Committee. In the light of that, I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.

Lord Howell of Guildford moved Amendment No. 8:


    Page 1, line 9, after "10," insert "other than Article 2, paragraph 19, revising Article 191 of the Treaty establishing the European Community,"

The noble Lord said: My Lords, we come now to the proposal in the Nice treaty—and, therefore, enshrined in the Bill—for new regulations governing the distribution and handling of the procedures for funding European political parties. That is in Article 191 of the treaty establishing the European Community.

In Committee, the noble Lord, Lord McIntosh of Haringey, in his usual reassuring manner, told us that the proposals in the treaty were excellent and that there was no need to amend them, because they closed up a few loopholes that had been abused. That would make everything so much tidier, so that the public funds involved—funds provided by the taxpayers in this country and others—would not be spent in dubious ways. He put that case persuasively, and, at the time, the Committee was inclined to accept it. Certainly, we did not vote on the matter.

Since then, however, I have done a little more research, and a few facts have dribbled into the public domain. In fact, the background to the issue is shocking. Perhaps we should have pressed—and I shall certainly press now—a little more vigorously to find out why those abuses arose and whether the loopholes have really been sealed off by the new regulations.

We learn from debates in the European Parliament about the matter that the problems were numerous. European political parties would provide staff for their own corresponding national parties back home and would then carry the cost of the staff on their budget and use the funding available to them for European purposes for national purposes. That was considered to be deplorable, and, not surprisingly, the Court of Auditors came down on it extremely hard and said that it was totally inappropriate. I suppose that that is what gave birth to the idea that the matter required more attention, which is what it received at Nice.

There was another wheeze. I am not sure whether it is addressed by the regulations. In order to attract funds, some small parties—there was a major debate on how small was "small" and how many votes they had—could come together for the afternoon, as it were, call themselves an alliance and say that they were, therefore, entitled to funds. As soon as they received the money, they could share out the spoils and disintegrate again. That was also identified in committee work in the European Parliament as a thoroughly undesirable trend.

Do the regulations deal effectively with such abuses? If we must have such arrangements for funding Europe-wide political parties, do we now have in place a mechanism for proper verification of budgets and party expenditure? Is there a clear threshold for deciding what is a European party? How many states have to participate in a political party before it

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becomes a genuine European party? At one stage our Austrian friends were arguing that the answer was one. They had one Austrian party which they said was nevertheless a European party and was entitled to funding from these sources. I do not know how the matter is now to be settled. Is it three, as some have suggested, five, or what?

Running alongside that issue is the question whether other enterprises, private corporations, can be permitted to contribute to the European political parties. Our French neighbours take a vigorously negative view on the matter. They do not like the idea at all and I believe that it is still being discussed. If we are dealing with the matter and if there have to be such arrangements, those questions arise.

I say "if" we have to have such arrangements. I do not fully understand why European political parties, their encouragement and funding should be a purpose of the European Union. I know what the doctrine is; that somehow, somewhere a European identity must be manufactured, riding over and above the nation states, which will give some additional legitimacy to the central institutions of the EU. That is an entirely wrong way of looking at the EU, where the democratic thread comes to the Union through the nation states and through national politics.

The commissioner, Chris Patten, described the original draft of the regulations which gave birth to the whole arrangement as flawed in principle, unworkable in practice and discriminatory in effect. Even now, I am not sure that those criticisms have ceased to be valid. They cut out parties which happen to have decided as of right—as has my own party—that they do not want to be trans-national multi-parties with branches in other European countries. They do not want to be European parties in that sense; they want their politics to be organised through legitimacy of the nation state and for the nation state to delegate the appropriate powers, instruments and legitimacy to the European Union and its institutions. Despite many proclamations to the contrary, that is the way in which it should work and indeed does work.

Therefore, what are the Government going to do to help decide which are the trans-national parties? Is it right that small parties which are not trans-national should be left out? Is it right that the arrangement should exist? The changes which we are discussing are in the Nice treaty, which is not yet law. Therefore, on what grounds are abuses being tackled at this moment? Are there legal grounds for halting some of the goings-on, the curious customs, the thoroughly undesirable misuses of hard-earned taxpayers' and public money? There certainly should be.

Even if and when the Nice treaty is ratified in law, and that is obviously some time ahead, what is to be done in the meantime to check a clear abuse of a system which has many questionable attributes? I question whether it should have been arranged at all, but it exists and it ought to be made to work in an honest, open and transparent way. I am not entirely convinced that these regulations or the existing legal structure are achieving that. For those reasons, I beg to move.

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6.30 p.m.

Lord Maclennan of Rogart: My Lords, I am not sure that the debate provides us with an opportunity to discuss the regulations so much as the regulation-making power. I would not therefore propose to consider the adequacy of the regulations but rather to raise the question whether it is the wish of the noble Lord, Lord Howell, to deprive the Council of that power because his own party does not want to take advantage of arrangements that are being devised, by common acceptance, to apply to the majority of political parties which operate within Europe or at a European level.

The need for transparency and accountability is clear. We can make our own arrangements domestically to ensure that moneys received by our own political parties are properly deployed according to the purposes for which they have been voted. However, following the line of reasoning about non-intervention in the internal political affairs of other countries which has been deployed in respect of other amendments, it might, if we were to accept that, deprive us of the opportunity of investigating the misuse of funds voted by the Community if such trans-national laws were not adopted.

We have a great interest in ensuring that the regulations are equitable and fair; that they are being applied according to the purposes which underlay their distribution; and that the measure marks a useful addition to the armoury of the Commission to take effective action where the Court of Auditors or any other EU authority draws attention to what looks like misfeasance on the part of a political party.


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