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Lord Wallace of Saltaire: My Lords, before the noble Lord sits down, may I ask whether he intended explicitly to compare America to God?

Lord Saatchi: My Lords, that was not my intention, but I am glad that the point has been made.

5.32 p.m.

Lord Stevens of Ludgate: My Lords, it is a pleasure to follow my noble friend Lord Saatchi. If I may say so, the dearth of speakers on the Benches opposite is more than made up for by the quality of the speech of the noble Lord, Lord Stoddart. I agree with practically everything he said. I cannot hope to match his oratory, but I may be able to match some of his views.

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In 1956, the Economist Intelligence Unit was approached to report on what the effects would be on the UK or Britain, as the unit called us, should we enter a European free trade area. Entitled "A study on the effects on British Manufacturing Industry of a free trade area and the Common Market", it was published in 1957. I have a copy from my Cambridge days—it was the guide to Europe for Economics undergraduates. It stated, among other things:

    "If moreover the decision is taken to join it is no less important that we should make our preparations with a full knowledge of the likely course of events".

It said later on:

    "It is the avowed intention of the authors of the Common Market treaty to complete their work by establishing a political federation of the Six. Supposing that they succeed what then would be Britain's position in World Affairs? A third great power would be added to the USA and the USSR less formidable than either but with a much greater claim to consideration than the UK. To put it at the very lowest Britain would probably cease to be America's ally number one in Europe".

Well, my Lords, how right and yet how wrong.

The train has been coming down the tunnel for a long time now and yet our Governments—yes, I include my party—seem to think that once drafts are agreed they can be negotiated away. Once the draft is published, you can either reject it in totality—veto it—or try to change it, an almost hopeless task. The only way to get a good draft on the future of Europe is for us to draft it.

The UK cannot dictate its own terms for joining the euro. We will have to negotiate with the other members, now made even more difficult by recent events.

The Prime Minister has conceded that he would accept that future Presidents of the European Commission should be elected by the European Parliament, even if there is a President of the European Council. This gives even greater power to the bureaucrats in Brussels.

The Prime Minister has stated that the UK belongs in Europe. The founders of the EEC had as their objective the ever-closer union of Europe. This has been repeated many times in the past 40 years and is still being repeated. In speech after speech, Mr Prodi, President of the European Commission, Chancellors Kohl and Schroder, former French premier Jospin and President Chirac have been laying down the principles on which a new Europe will be established.

The EU is to be expanded as soon as possible from 15 countries to 28. This increase means that there will be no right of veto in future. To quote Mr. Prodi,

    "for the veto to remain is like a soldier trying to march with a ball and chain around one leg".

Tax rates must be harmonised. Highly taxed countries like France and Germany will force those with lower rates to increase taxes. Sadly, the UK is rapidly becoming one of the highly taxed. The EU must have its own foreign policy and its own armed force, independent of NATO. I shall say more on this later. It was agreed in December 1999 in Helsinki to set up a joint 60,000-strong rapid reaction force as a first step

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in this process. It was agreed, also in Finland, to have a single EU judicial system with a European prosecutor and staff to operate throughout the EU.

Let us pause for a moment on the proposed pan-European army, particularly in the light of recent events. Its creation was sparked off by the EU's failure to react firmly to events in Bosnia and Kosovo, but there was in fact another agenda. It is a further attempt by some major powers in Europe to create a common security system which might eventually exclude the USA.

The UK's contribution was proposed to be a quarter of this force, or 15,000 troops. It would absorb a quarter of our front-line aircraft, half the Navy's operational warships. Do we really want to be subservient to Brussels in deploying this force? What would the US think of this when we are, I believe, the only country allowed to purchase US cruise missiles?

Let us return to Helsinki for a moment. Mr Prodi received a document drawn up by a committee appointed by himself. Among other things, the UK was to lose its power of veto in leading policy areas including tax, and Brussels institutions were to be reorganised in a way that was to be more similar to a parliament and a national government. Downing Street distanced itself from this report, stating that,

    "we would not be in favour of such sweeping reforms. What we need is limited reform".

The document also proposed that the power of the large member states should be curbed to cope with the future enlargement of the EU. Mr Prodi is clearly, as he has stated many times, going for a centralised, federalist system.

However, on a different note, in October 1999, we signed up to a European commitment on merging European asylum policies. Look at what has happened to that.

Why should the UK which, for centuries, has never been occupied by a foreign power and has fought for democracy in mainland Europe now join an integrated Europe when we have resisted the major European powers of the day which attempted to absorb or conquer us? We should not agree to any further attempt at European integration.

The United States was our ally in two world wars. Without the United States, I doubt whether we would have succeeded in Kosovo. It is our largest country trading partner. It has loyally stood by us. Why should we allow the anti-Americanism of some European countries to determine our future? The EU is consciously seeking to build itself up as a third world economy to the USA. It resents American influences. Do we really want to surrender our sovereignty to an EU like that?

So we arrive at the Convention on the Future of Europe. I congratulate the parliamentary resources unit on its briefing paper. It says:

    "The Convention has three distinct phases—the first was of listening which ended in June 2002".

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I quote again from Welsh Secretary Mr Hain:

    "A lot of representatives are wondering whether the people who drew up this document have been going to a different convention".

Mr Heathcoat-Amory said:

    "I tabled 100 amendments. We were each given two minutes to speak to our amendments".

The convention is not listening. It is on transmit. The Economist 1957 forecast is all too true. The agenda is a federal Europe.

Lastly, we have an alternative from the convention:

    "A procedure for voluntary withdrawal from the Union".

There is nothing wrong with a free trade area. World tariffs are much lower now than before. We normally have a trade deficit with Europe. They need us just as much as, if not more than, we need them. By all means have a referendum, but not on the convention. The referendum should be on staying in or leaving the EU, as it will exist—static, ageing, with declining populations and pensions not funded. We really do not need European influence or interference on pensions. The pension assets held in the UK are still among the highest in Europe—15 times the level of France and eight times the level of Germany. Who will finance their deficits, to give just one example? Europe also has restrictive practices, state interference galore, crippling tax rates and, above all, huge differences among the members. They even ignore their own stability pact. We are innocents in dealing with European machinations. One size does not fit all, even in the existing EU.

That is how I was proposing to finish until I read the Daily Telegraph this morning. A proposed tough secession clause in the new European constitution would make it illegal for Britain to leave the EU without the permission of two-thirds of the members. We must leave while we can. It is broke and cannot be fixed.

5.41 p.m.

Lord Williamson of Horton: My Lords, with the war in Iraq dominating our thoughts, it is difficult to concentrate on issues nearer home. But the Convention on the Future of Europe and the subsequent intergovernmental conference are of great importance and I am grateful to the noble Lord, Lord Blackwell, for giving us the opportunity to debate this subject today. He will not be surprised that I do not agree with him on everything. None the less, he may find a few gold nuggets in what I have to say. I do not agree with quite a lot of the speeches that have been made already, starting with the reference by the noble Lord, Lord Harris, to the American language. Having spent many years defending the English language, I was really hurt by that phrase. Generally, I do not share the attitude of many noble Lords, who seem to take on a little bit the attitude of Cassandra on the one hand and Savonarola on the other.

I shall concentrate on the value or otherwise of the treaty texts that have already been presented to the convention by its presidium. These are the crux of the matter. When the convention has finished with

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them, they will provide the material for the discussion, possible amendment and acceptance or rejection by the heads of state and government in the next stage, the intergovernmental conference, where, as we know, unanimity is required. Subsequently, the draft treaty must come to the process of ratification in each member state. Like others, we will have to decide how we do that. There is obviously the parliamentary method or a referendum method. The pilgrim's progress is under way and it is far from finished.

The appearance of the draft articles of a new constitutional treaty, which may replace the treaties of Rome, Maastricht, Amsterdam and Nice, as well as the Single European Act, is a staging point where careful examination and reflection are called for. In this, we have had excellent information from the parliamentary members of the convention and the active alternate members, the noble Lords, Lord Tomlinson and Lord Maclennan of Rogart. In addition, as the noble Lord, Lord Grenfell, mentioned, the Select Committee has been active and has produced good reports, most recently the 11th, 12th and 16th reports on Articles 24 to 33, on Article 31—about freedom, security and justice—and on national parliaments and subsidiarity.

Before I turn to the proposed articles and protocols, I shall make some important preliminary comments. First, the system being used for the preparation of the constitutional treaty is better than that used for the preparation of earlier treaties. I speak with some experience of earlier treaties—so much so that I have suggested to my wife that my tombstone should read:

    "He led a happy life, except for the time spent on the preparation of EU treaties".

However, we should not exaggerate the difference between the convention and earlier treaty preparation. It is evident that in any case the views of the representatives of the sovereign states are vital, as they have to arrive at consensus in the next stage or abandon the proposal. The convention has for the first time allowed some input from national parliaments and at least some limited—I know it is limited—input from civic society in general.

Secondly, I am surprised at the large measure of agreement that has been reached in the working groups of the convention and which seems likely to be reached at the level of the convention itself, despite the large number of amendments that have been put down to the treaty articles. I am one of those who believe that we are at a point when we can clearly see what the articles that will go to the intergovernmental conference look like. That is why I think it is important. The fact that there is a large measure of agreement indicates some cohesion in the European Union.

Thirdly, it is important to recognise that the convention is dealing with two different types of European responsibilities and actions. On the one hand there are the traditional community competencies, whether exclusive or shared. On the other hand there are the so-called intergovernmental pillars, covering common foreign and security policy and questions of justice and home affairs. I am not sure that the United Kingdom has fully come to terms with the differences. In the traditional community competencies, where

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decisions on substantive legislation and policies are taken by the member states in the Council of Ministers, often in co-decision with the European Parliament, there is always an important role for the Commission, the Parliament and, potentially, the Court of Justice.

I do not see any significant wish from the people of Europe to extend those competencies or to make significant changes in the balance between the institutions. There is nothing wrong with being at cruising speed. Most legislation in coming years will probably relate mainly to the accession of new countries. We do not have to want continually to do something new. We just have to manage our existing policies as well as possible.

That is an important point for me. It means that the task of the convention is primarily to clarify and perhaps improve—but not extend—the treaty provisions. Because of the concerns expressed in some member states, particularly the United Kingdom, it is wise to make clearer the application of subsidiarity and proportionality and the increased role of national parliaments. That is broadly the approach that the convention has taken. We have to judge whether the convention has got it right.

On the other hand, we have the intergovernmental structure, which is not community competence, although it falls within the general structure of the EU. In that structure the role of the Commission is supportive, not central, and the role of the Parliament and the Court of Justice is marginal or non-existent. Generally, the result is an EU law that applies throughout the Union. My plea to Europhiles and Eurosceptics alike is that the convention proposals on what are now the second and third pillars deserve the closest attention. Some have pointed out the possible effects of changes from unanimity to qualified majority in these sectors. That is important, but it is also possible to foresee some surrender of sovereignty where unanimity remains. If the Government agree to some changes of structure—for example, a command structure for defence or the creation of a European public prosecutor—the water will have flowed over the dam and it will not flow back.

A large percentage of the important documents that currently come to the Select Committee relate to the common foreign and security policy and to justice and home affairs. It is therefore important that the new articles in the constitutional treaty on these matters should be satisfactory and acceptable.

I conclude that, broadly speaking, the limited number of treaty articles we have seen confirm the situation on community competence, improve the situation on subsidiarity and the role of national parliaments and expand the Union role on questions of security and justice—that is Article 31.

The Select Committee examined Articles 1 to 16 in its ninth report. In due course those articles will surely add to the United Kingdom's book mountain on European affairs. However, they are simple and clear, which is a great virtue in a constitutional treaty.

For me, the key points are the continued assertion of respect for the identity of the member states. I note

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that the reference to an ever closer union of the peoples of Europe no longer appears. The phrase "European values" replaces "European principles", which is an improvement. More controversial is the statement that certain competences are administered on a federal basis. That may be accurate, but an alternative text would be less challenging.

Article 4 would give the Union legal personality. Other noble Lords have referred to that matter. It was recommended by the Working Group, and is supported by the Select Committee of this House. It is important to avoid one misunderstanding: the Community already has legal personality and has exercised it for many years as a party to numerous international agreements and as a member of various international organisations. What is at issue now is whether a legal personality should apply to the Union, thus being extended into the so-called intergovernmental areas of foreign and security policy, justice and immigration. Will the Minister comment on that point?

In Titles II and III, there are three important issues. First, should the Charter of Fundamental Rights be in the treaty, and thus legally enforceable? Secondly, how do we express Union competences in the treaty? Thirdly, should there be a flexibility clause allowing an extension of Union action by unanimity but without treaty amendment?

First, on the charter, I was content with the position that we took recently—that it is a good charter, but not legally enforceable. I am somewhat surprised that we have begun to move beyond that position. Will the Minister comment on that point?

Secondly, on competences, the convention has decided to treat the question in the simplest and most straight-forward manner, by simply listing the areas of exclusive and shared competence and the areas in which the Union can take supporting action, although competence remains fully with the member states. For me, the list of competences contains no surprises—perhaps I was too long in Brussels—although I suspect that many in the United Kingdom will be surprised at the extremely short list of exclusive competences of the Union. For me, those articles show a much clearer picture for the citizen.

My third point relates to the flexibility clause. I am always suspicious of such clauses. We have had them in a lot of treaties and they have never led to much joy. This clause replaces the well known, not to say notorious, Article 308 of the current treaty, giving the power to act at Union level beyond the competences set out in earlier articles. Do we really need that flexibility clause? A disadvantage is that it makes it more difficult to say to the British citizen when he looks at the new treaty, "What you see is what you get". The clause means that we may get more than we see in the list of competences.

The second set of articles deals with the structure of European law, primary legislation, framework primary legislation and subsidiary legislation. There is a proposal for some changes and better definition. That subject is known, in Euro-jargon, as the "hierarchy of

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norms". I am quite used to it, as for many years for breakfast I would have a soft-boiled egg and a large hierarchy of norms. At one stage, it ran comitology close as a specialist science.

Some colleagues see difficulties, but I see advantages in greater simplification and clarity of European Union legislative acts. It would be more sensible if they consisted of primary legislation, generally adopted by the Council and the European Parliament, described as a European law or a European framework law. The term "regulations" might be more appropriately applied to subsidiary legislation, adopted by the Council and Commission under their treaty authority or by the Commission under delegated powers. I agree with the noble Lord, Lord Howell, that the phrase "non-legislative actions" should be ditched very soon.

Article 31 and related articles deal with justice, immigration and asylum. Here we move into pillar three, which is not part of the main competences. Many noble Lords will see points where the Select Committee welcomes proposals under that heading. However, there are also some completely new provisions. For example, the European Union may adopt laws covering the rights of victims of crime. That may be desirable, but should it be a Union responsibility? I doubt it.

Article 19 extends the role of Eurojust. Many noble Lords will be irritated by that, principally because, rather than referring to a specific list of offences, it now covers all serious crime affecting two or more member states and requiring a joint prosecution. That is a substantial increase. Article 20 would establish the European public prosecutors office, which would act as prosecutor in the competent courts of the member states in relation to serious crimes affecting several member states and European Union financial interest.

On those three articles, it would be helpful if the Minister could give us a government view, or at least a provisional view. In this area, the convention seems to have "stepped into touch", to use a rugby phrase. It would be a good idea for us to consider those articles closely and, possibly, to remove them from the convention.

5.55 p.m.

Baroness Blatch: My Lords, I wish that I could be as optimistic as the noble Lord, Lord Williamson of Horton. I listened this morning to the right honourable Peter Hain answering some fairly penetrating questions from a Select Committee about the Convention on the Future of Europe. I cannot say that my fears were allayed or that I was much the wiser about the Government's position.

The same cannot be said about my noble friend Lord Blackwell, who provided this opportunity to debate this important constitutional issue. I thank him warmly for initiating the debate and for what he has written in an excellent pamphlet on the subject. I must also pay tribute to my noble friend Lord Howell, who holds Front Bench responsibilities for these issues for the Official Opposition. He has been assiduous in studying all the papers on the convention to date, and

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the knowledge and foreboding that he expressed during his excellent speech requires us all to take heed of such expert opinion.

It was only in October and December of 2001 that it was agreed to establish a Convention on the Future of Europe involving all member states. The plan is that the convention will precede the next intergovernmental conference in 2004. A root and branch review of the Treaty of Rome and all subsequent amending treaties would be undertaken. Although many papers have been produced and much has been said by participating representatives, especially by our Prime Minister and other Ministers, who have indicated the shape and form of the outcome of this work, we will see the definitive proposals only in June this year. They will go before the IGC in 2004.

My noble and learned friend Lord Howe, who is not in his place at the moment, referred to the fact that the constitution was flooded with amendments and said that there was still time to influence change. However, we have seen the Prime Minister commit himself publicly to agreement to aspects of the convention. When he visited Spain and spoke to Jose Maria Aznar, there was definitely a good hint of how he viewed the constitution in its present form.

As for the so-called democratic process, why was my right honourable friend Mr. Heathcoat-Amory given a mere two minutes to speak to nearly 100 amendments to the first 16 articles of the draft constitution? That hardly bodes well for progress on modifying the articles of the constitution. What did Mr. Hain mean when, seeing a draft of the articles, he said:

    "A lot of representatives are wondering whether the people who drew up this document have been going to a different convention"?

So much for his influence. Is there no control over the drawing-up of these proposals, if they are so out of kilter with the meetings attended by Mr. Hain?

The timetable allowed for this momentous constitutional change is very tight. Such is the nature of the changes envisaged, that it is unthinkable that there is not to be a referendum. This Government have proposed a referendum for regional assemblies in eight parts of England, but set their face against allowing the people to vote on the future of the United Kingdom. However, this Government have so devalued the integrity of the United Kingdom as a whole that that is not surprising.

Although Giscard d'Estaing, chairman of the convention, has warned of a possible delay in its work, some countries are pressing for the IGC not to be delayed. On 19th March, on BBC Online, Giscard d'Estaing warned that,

    "we cannot have the debate on foreign policy until things have been clarified a little"—

in Iraq. However, with breathtaking arrogance, the Italian Government have argued—as reported in the Financial Times on 25th March this year—that,

    "the risk of developing things too much is that we could have a stalemate with a new set of actors and no consensus".

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In plain language, that means, "Let's settle this before the accession countries enter the EU because they may not agree with our proposals". Apart from that view throwing light on why they do not want to widen the democratic debate, it also gives a broad hint of why our Government have set their face against a referendum. The new accession countries just may disagree, and the people of the UK may also reject the proposals.

I cannot believe that the eastern European countries who won their freedom from the USSR will want to enter into another superstate without first having a determining role in its formation. If the Government are confident that it is such a good package and that it will be in the British interest, then why not just put it to the test? Any comparison with Maastricht—which will no doubt be the Government's retort—will not do. Maastricht was an amendment treaty; what we have here is a rewriting of the primary Treaty of Rome and all subsequent amendment treaties.

Iraq has changed everything. The behaviour of France, the indecision of member countries, the damaged relationship with NATO and the USA—all mitigate against the convention's proposals on foreign and security policy. On 19th March, referring to post-war Iraq, one UK diplomat was reported on BBC Online as saying that,

    "no one on the British side will seek to belittle or dismiss the difficulties that exist—it will not be business as usual".

Yet, measure those words against the EU draft constitution, which states:

    "The EU shall have competence to define and implement a common foreign and security policy . . . member states shall actively and unreservedly support the Union's common foreign and security policy in a spirit of loyalty and mutual solidarity. They shall refrain from action contrary to the Union's interests or likely to undermine its effectiveness".

I agree with my right honourable friend David Heathcoat-Amory, who said:

    "democracies should not be corralled into actions against their gut instinct".

That is why I ask for two things: first, to delay this work until the accession countries can play their full part in shaping the future of their Europe; secondly, if it is to go ahead, that there must be a referendum of the people in the United Kingdom.

The Liberal Democrat leader in the European Parliament wishes to remove individual sovereign country membership of the United Nations committees and replace them with a single European vote representing all EU countries. As I said, he argued that,

    "it would constrain the unfettered exercise of American power, and Germany, France, Britain and Spain would have to agree to speak with one voice—Europe's world would prevail".

After the recent debacle over Iraq—and if that is what a legal personality actually means—God help the UK if his view were to prevail.

We need a clear indication from the Minister as to what will not be agreed in the draft as it presently stands. That would give us at least some idea of what we should not be worrying about. The Government cannot argue that the EU as a single legal entity—with

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a common foreign, security and defence policy, an entrenched Charter of Fundamental Rights, and common principles of law—would not create a shift in self-determination or sovereignty. Such a change, if it is to happen, should be endorsed by the people of our country.

Since 1997 the Government have engaged in nothing short of constitutional vandalism: ill-thought-through devolution to Scotland and Wales; changes to the House of Lords without considering fundamental powers and functions first; the creation of town mayors voted in by a fraction of the popular vote; London government; and now the complete carving up of England into pro-European regions. Scotland and Wales at least still enjoy the status of whole countries, whereas England will be completely fragmented. That combination destroys the integrity of the United Kingdom as a whole. The contempt shown for our Parliament and its democratic processes is there for all to see.

It is therefore no surprise that the Government are prepared to take the next step—to subordinate the whole of the United Kingdom in fundamental areas of policy to the European Union. As my noble friend Lord Howell said, it is a fossilised and centralised idea. It does not protect nation states, and it will involve huge new European powers. Should that be refuted by the Minister and her colleagues, then we should allow the people of this country to make their judgment on what they think of the proposition.

In a sentence, the executive is strengthening; parliament is weakening; and the axis for decision making is moving to Europe. My plea is to invite people to rise up, take an interest and not to sleepwalk into this single state called Europe. What is left of UK sovereignty is too precious to be given away by Mr Blair and Mr Hain at the next IGC. We must fight for a referendum.

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