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Baroness Ashton of Upholland: My Lords, the noble Lord makes a very important point. Discussions are ongoing with universities as to what else might be done to ensure that we have the right arrangements. The question of bursaries or scholarships is being very actively discussed at present.

Lord Davies of Coity: My Lords, the Question clearly asks,

My noble friend may not agree with the alternative, but will she concede that it is viable to raise the money through general taxation as an alternative?

Baroness Ashton of Upholland: My Lords, we could fund many things within government by raising levels of taxation, but I wonder when my noble friend would agree that we had raised the level of taxation to the point where many people would be unprepared either

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to vote for the Government or to wish to pay it. The question faced by governments in ensuring that we have the right kind of economy, can support our young people through education, have a good health service and transport systems, and so on, is all about balancing different priorities. I ask him to consider whether, were we to have an increase in general taxation, he would want us to give it as a No. 1 priority to the universities.

Police Officers: Drug Testing

3.10 p.m.

Viscount Bridgeman asked Her Majesty's Government:

    Whether the proposed drug testing for police officers in England and Wales could be considered intrusive and a breach of their civil liberties.

The Minister of State, Home Office (Baroness Scotland of Asthal): My Lords, Her Majesty's Government have no plans to extend the drug testing regime for police officers. The Association of Chief Police Officers (ACPO) has asked for it to be considered by the Police Advisory Board for England and Wales (PABEW) at its next meeting on 28th October. We welcome the discussion and will be interested to hear the views of police service stakeholders.

My right honourable friend the Home Secretary will wish to look carefully at the proportionality and intrusiveness of any procedures recommended by the Police Advisory Board.

Viscount Bridgeman: My Lords, I thank the Minister for her reply. How many police officers have been convicted of drug offences in the recent past?

Baroness Scotland of Asthal: My Lords, we have no figures in relation to this issue. One of the issues is whether there is a business case for such investigation. The noble Viscount will know that police officers in this country provide an invaluable service and at the moment we do not have an indication that random testing is necessary. However, if there is such evidence and we are persuaded that the matter should be looked at, we are more than happy to do so.

Baroness Walmsley: My Lords, in the course of the Government's discussions with the Police Superintendents' Association, will they, in addition to considering the drug testing of law enforcers, consider the possibility of the random drug testing of law makers?

Baroness Scotland of Asthal: My Lords, that has tempted people for a very long time, but, as with police officers, the case has yet to be made.

Lord Imbert: My Lords, given the likely acquiescence of the police service to the proposal to introduce drug testing because of their loyalty and responsibility, will the Minister tell me whether the

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Government intend to introduce drug testing for other parts of the public service and the public sector, as is done in the United States of America?

Baroness Scotland of Asthal: My Lords, at present, we have no intention to extend the drug testing provisions more widely than they are currently drawn. However, it is right to say that we will not dismiss any empirical data which indicate that consideration of a change may be merited.

Business of the House: Northern Ireland (Monitoring Commission etc.) Bill

3.12 p.m.

Lord Williams of Mostyn: My Lords, with your Lordships' leave, I shall make a brief statement about business on Friday and Monday. The usual channels have agreed that I may move the Second Reading of the Northern Ireland (Monitoring Commission) Bill on Friday 12th September. The Bill will come after Second Reading of the Dealing in Cultural Objects (Offences) Bill and the Legal Deposit Libraries Bill. The usual channels have also agreed that we may take the remaining stages on Monday 15th September, so I shall move the necessary business Motion on Friday.

The order of business proposed for Monday will therefore be: Questions; Committee stage of the Northern Ireland Bill; Committee stage of the Criminal Justice Bill; dinner break business, which consists of two Northern Ireland orders; Report stage and Third Reading of the Northern Ireland Bill; and then, if time allows, further proceedings on the Criminal Justice Bill.

Amendments for Committee stage may be tabled now, in advance of Second Reading, and up to 4 p.m. on Friday or half an hour after the end of Second Reading, whichever is the later. Amendments for Report may be tabled on Monday between the end of Committee stage and 7 p.m. I am most grateful to the usual channels, and of course to all Peers with an interest in Northern Ireland, for their usual co-operation.


The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the Commons message of 10th July be now considered, and that a committee of eight Lords be appointed to join with the committee appointed by the Commons, to consider and report on any draft Gambling Bill presented to both Houses by a Minister of the Crown;

That, as proposed by the Committee of Selection, the Lords following be named of the committee:

L. Brooke of Sutton Mandeville, L. Donoughue, V. Falkland, L. Faulkner of Worcester,

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B. Golding, L. Mancroft, L. Wade of Chorlton, L. Walpole;

That the committee have power to agree with the Commons in the appointment of a chairman;

That the committee have leave to report from time to time;

That the committee have power to appoint specialist advisers;

That the committee have power to adjourn from place to place within the United Kingdom;

That the reports of the committee from time to time shall be printed, notwithstanding any adjournment of the House;

That the committee do report on the draft Bill by 8th April 2004;

And that the committee do meet with the committee appointed by the Commons on Tuesday 16th September at half past nine o'clock in Committee Room 3.—(The Chairman of Committees.)

On Question, Motion agreed to; and a message was ordered to be sent to the Commons to acquaint them therewith.

Anti-social Behaviour Bill

Baroness Scotland of Asthal : My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That it be an instruction to the Committee to which the Anti-social Behaviour Bill has been committed that they consider the Bill in the following order:

Clauses 1 to 14, Schedule 1, Clause 15 to 40, Schedule 2, Clauses 41 to 66, Schedule 3, Clauses 67 to 71.—(Baroness Scotland of Asthal.)

On Question, Motion agreed to.

National Lottery (Funding of Endowments) Bill

Lord Walpole: 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.—(Lord Walpole.)

On Question, Motion agreed to.

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Convention on the Future of Europe

3.16 p.m.

The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean) rose to move, That this House takes note of the draft constitutional treaty produced by the Convention on the Future of Europe.

The noble Baroness said: My Lords, I beg to move the Motion standing in my name on the Order Paper. The timing of the debate coincides with the publication today of a White Paper, A new Constitutional Treaty for the European Union, in which the Government set out their approach to the 2003 intergovernmental conference. We made copies of the White Paper available at 9.30 this morning, so I hope that your Lordships could see it before today's debate. The text of the draft constitutional treaty was presented to Parliament in August as Command Paper No. 5897.

The publication of the draft treaty comes at a time of real significance for the European Union and for Britain. We look forward next year to the enlargement of the EU to include 10 new member states. Successive British governments have supported enlargement for reasons both of principle and of pragmatism. As the noble Lord, Lord Hurd of Westwell, said eight years ago:

    "Enlargement is not a luxury. It is a necessity if we are to build a safe and successful Europe for the 21st century".

He was right.

Enlargement is also essential for us to build a safe and successful Britain. It will end the Cold War division of Europe: in the Continent which suffered so much in the 20th century from bloodshed, division and tyranny, it will cement the values intrinsic to peace, democracy, respect for human rights and the rule of law.

It will also create a single market of more than 400 million people. It will bring the United Kingdom wealth—estimates suggest that UK GDP could increase by up to 1.75 billion—and it will bring new trade and investment opportunities for us.

It will also bring us new partners in the fight against people trafficking; in the fight against the illicit drugs trade; against environmental pollution; and against human rights abuses. It is, in the words of the Prime Minister,

    "an extraordinary moment in Europe's history . . . [which] offers us huge hope for the future".

The Treaty of Nice settled the straightforward mechanisms of enlargement in terms of voting and European parliamentary seats. But Nice left us with some unfinished business—that of deciding how a Union of 25 states really could function efficiently. The Laeken Summit agreed to establish the Convention of Europe and to consider how best to modernise EU decision-making structures to make the expanded Community a real success.

After all, the structures we are currently using were designed for a Union of six member states and we are already struggling to cope with the demands of

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15 member states. Without reform, there would be a bureaucratic gridlock when the Union's membership increases to 25.

That modernisation and reform is the goal of the intergovernmental conference which will build on the convention's text. The IGC gives us an opportunity, through agreement on a constitutional treaty, to make the European Union more efficient, simpler to understand, more accountable to the European and national parliaments and better prepared to function effectively with 25 and more members.

I believe we all owe thanks to the two Members of this House who were alternates on the convention: the noble Lord, Lord Maclennan of Rogart, and my noble friend Lord Tomlinson. Their contributions and those of the Select Committee on the European Union, under the wise leadership of the noble Lord, Lord Grenfell, strengthened the British delegation to the convention and helped it to win plaudits from commentators throughout Europe.

As an example, a leading French constitutional expert, Robert Badinter, said in a French weekly, Le Nouvel Observateur:

    "The search for consensus allowed the side showing the firmest will to take definitive control of the game, artfully trading concessions on the inessential to make sure of winning the essential . . . to the extent that we should dub this constitution for the Europe of 25 'la Britannique'".

It is certainly true that the draft treaty is a good result for the United Kingdom, and in it we have largely succeeded in achieving our aims. It provides for a more efficient European Union; it consolidates existing EU treaties into a single logically ordered text, which can give us legal certainty and stability for some years; and it sets out a more transparent and accountable structure for the EU, making clear where the Union can and cannot act.

In that context, I want to emphasise to your Lordships that the convention's text also makes it clear that the national governments of member states remain in control. The text of the draft treaty makes it clear in Article 9 that the Union's powers derive from the member states. Any powers not explicitly conferred on the Union by the member states remain with the national governments. Article 9 also establishes procedures for ensuring that national parliaments have an effective role in policing the Commission's legislative proposals, because all such proposals will have to be scrutinised for proportionality and subsidiarity by national parliaments and reviewed by the Commission should the national parliaments object. Therefore, national parliaments gain a significantly strengthened role. Indeed, I remind the House that that point is not only the view of Her Majesty's Government but is a view shared by our own House of Lords EU Committee, which, having examined this issue in detail, concluded that the effect of this and other measures in the convention's text means that,

    "it is clear that the balance of power in the European Union is going to shift from the Commission in favour of the Member States if the [Convention's] proposals . . . are adopted".

Moreover, the text includes an important British proposal—the creation of a full-time chair of the European Council. In practice, we believe that that

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will bring great continuity to the Union's actions and ensure that the agenda decided upon by national states is kept at the forefront of its operational priorities.

A further issue which has excited considerable interest when we have discussed the convention in the past and which will be a matter for the forthcoming IGC is that of the European Charter of Fundamental Rights—an issue upon which my noble friend Lady Scotland has worked so assiduously with her European colleagues in recent months. Today's White Paper spells out our position on the convention text, which makes it clear in Article II-51 that the charter,

    "does not extend the field of application of Union law beyond the powers of the Union . . . or modify powers and tasks defined in the other Parts of the Constitution".

Nothing could be plainer. The charter does not give any new powers to the European Union. Member states are affected only when implementing Union law. But the Government will make a formal decision on incorporation of the charter into the draft constitutional treaty only when we can consider the overall picture at the IGC.

Like most other member states, there are elements in the convention's text which the UK does not support. At the Thessaloniki Summit in June, EU heads of government recognised that important issues still needed to be determined. Some of those are areas where the convention was unable to finalise its proposals; others are ideas with which we disagree; and some are issues which require further technical, including important legal, work.

But it may help your Lordships if I am explicit, as I know my right honourable friend the Foreign Secretary has been in another place. We shall insist that unanimity—or the veto—remains for treaty change and that it is maintained in other areas of vital national interest, such as tax, social security, key areas of criminal procedural law and the system of own resources. We believe that unanimity must remain the general rule for common foreign and security policy, as proposed in the final convention text. In short, we shall not sign up to any treaty which does not, in our view, advance national interest.

At this point, I want to turn to the latest report of the European Union Committee on the future of Europe, on which the noble Lord, Lord Grenfell, will shortly speak. The Government have responded to the report, which they welcomed and which I commend to the House. I am sure that in his intervention the noble Lord, Lord Grenfell, will set out the recommendations of the committee's report.

I hope that the noble Lord will excuse me if I pre-empt him a little by replying now to one of the key recommendations of the report—one which we also consider to be an important objective. This was for the Government to publicise their strategy for keeping Parliament informed of the work of the IGC, as well as doing more to make known to the public the content and effect of the treaty. We are of course fully committed to having Parliament involved in the preparations for the IGC, and as it proceeds.

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Parliament will be the ultimate judge of whether the treaty serves our national interest, and it cannot have force in UK law except through Parliament's consent.

The Foreign Secretary has welcomed the suggestion of Jimmy Hood, chairman of the European Scrutiny Committee in the other place, that a Standing Committee be created on the IGC. My noble friend the Leader of the House has written to the chairman of the Procedure Committee about this. The committee would be closely modelled on the Standing Committee on the Convention, except that it would hear statements from Ministers rather than from parliamentary representatives. All Members of this House and the other place would be able to attend the committee. A standing order has been tabled today to this effect, and I hope that noble Lords will welcome that.

I hope also that the publication of today's White Paper will go some way to meeting the committee's recommendation and that it will assist the committee with its final report. The White Paper sets out what we expect the IGC to involve and how the Government will approach the negotiations, as well as explanations of EU terms and a passage on the EU's structure and recent history. It is accompanied by a leaflet which summarises the main IGC issues and background.

The paper will help to inform Parliament and is also available to the general public through the FCO website— I also note here that the Foreign and Commonwealth Office is operating an on-line forum, which it launched officially on 19th August and which will run until 4th October. The forum lets the public give the Government directly their opinions on the draft constitution in the run-up to the IGC. So far, it has recorded more than 650 postings and nearly 17,000 readings. In addition, the Europe Minister, Dr Denis MacShane, is conducting a series of visits around the United Kingdom to discuss with regional audiences the Union's enlargement and its implications for the future of the European Union.

Of course, we cannot precisely predict the ultimate outcome of the IGC, nor how long it will last. There will be many twists and turns in a negotiation involving 25 countries. What matters is that we secure the right text for the United Kingdom. The Government will not sign any treaty which does not, in our opinion, advance our national interest. But, of course, the final decision on this issue will be taken here, in this Parliament, and only after your Lordships have contributed to that decision.

Perhaps I may deal with the question of a referendum. In the United Kingdom we have held a referendum to consult on creating or joining a new institution—not on reforms to an existing institution of which we are already a member. It was right to have a referendum on whether to stay in or to leave the EU, as it is on whether to replace the pound with the euro. The party opposite was right not to hold a referendum on the major constitutional changes in the Single European Act or on the Maastricht Treaty. The proposals for the IGC would not change the fundamental relationship between the EU and its member states. Frankly, any analysis of the proposals involves less change than that embodied in the Maastricht Treaty or the Single European Act.

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Therefore, the Government have concluded, as, indeed, our predecessors did, that the right place for a decision on any outcome of the IGC is here in this Parliament. This is where the executive is held to account in both the House of Commons and the House of Lords, before the European Scrutiny Committee and before the EU Select Committee, whose experts have thus far, between them, produced 17 helpful reports.

So the constitutional treaty which we aim to produce will bring the Union's institutions and policies up to date. It will produce an efficient, transparent and accountable EU. It will give the EU the foundation it needs to continue on its historic path to embed the values of liberal democracy in Europe and beyond. That will be very much in the British interest. The Government will consequently be at the heart of the negotiations in the IGC to agree a new constitutional treaty for the European Union and Ministers will come before the British Parliament, which will take its decision on the final outcome. I commend the Motion to the House.

Moved, That this House takes note of the draft constitutional treaty produced by the Convention on the Future of Europe.—(Baroness Symons of Vernham Dean.)

3.30 p.m.

Lord Howell of Guildford: My Lords, we are grateful to the noble Baroness for setting out, with her usual clarity, the highlights of the White Paper and some of the aspects of the proposed draft constitution for Europe or for the European Union, as the UK published Blue Paper corrects the Brussels paper.

During the hot days of August all eyes were on other matters such as the Hutton inquiry, which has preoccupied the media. So this great European project for a new constitution has not received much attention and has been creeping steadily and stealthily forward, which is what many of its proponents want. Too much illumination is not considered healthy.

Back in the summer we were assured that the Government's approach in a White Paper would appear before we had this debate. That has happened. Well done, excellent—it came out about five hours before the start of this debate. I was going to grumble a little about the impossible timing, but frankly it is such a light, diaphanous document, and the flaws in it are so glaringly obvious, that one can see straight through it in one quick reading.

One cannot fault the presentational skills of the noble Baroness in putting forward the matter. They are excellent. However, the whole procedure typifies the Government's attitude to this great project, which is to keep it obscure, to keep debate narrow and on detail, to keep reassuring everyone that it really does not add up to very much and, anyway, all its aims have been achieved. We are told—the noble Baroness put considerable emphasis on this point, as does the White Paper—that the draft,

    "does not alter the fundamental constitutional relationship between the member states and the Union".

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The Prime Minister says that in the introduction and the Foreign Secretary says it with one slight modification in his conclusion. But it does—we know that it does—without any doubt whatever. The draft confirms that it does as many of us have read and re-read. The White Paper in paragraphs 62 and 74 confirms that there is a shift in powers and a change in the relationship. Does it really not alter matters; does it really not alter the fundamental relationship?

I cannot resist saying that this reminds me very much of Harold Wilson when he said that the pound in your pocket will not be devalued. It is simply implausible. It is untrue and it is unbelievable. Nor is it in any way supported by paragraph 1 of Article 1 of the draft constitution, as the White Paper quite wrongly implies.

This is a matter of the first magnitude. A free constitution of civil government is society's greatest treasure. It may well be true that not much interest has so far been shown by the general public in what has been presented as a rather arcane issue and as a matter of tidying up ends. But what interests the public and the media is not the same as the public interest. The fact remains that we are dealing with questions of stupendous significance for the future of our country which cannot be tidied away.

From Cicero, with his separation of powers, to the present day, the solemn and crucial nature of this work on constitutions and the need for popular consent has been unchallenged. So what the present plan certainly is not—we will not accept this—is a "tidying up operation". That description must qualify as one of the most idiotic remarks ever made by a Minister of the Crown. Even less can it be compared with or dismissed as the club rules of a golf club, as Mr Jack Straw tried on us back in the summer.

At least the chairman of the convention, Valery Giscard d'Estaing, had the discernment to refer to constitution-making in Philadelphia in 1787, but was that golf club rules? I do not know what George Washington, John Adams or Thomas Jefferson would have made of that even if they had heard of golf. What, too, would they have made of the fact that this draft of 200 plus pages stands against their own 40 pages in the 1787 American constitution?

We are dealing with a very strange document. I suppose it is a kind of constitution. I have read it very carefully and the draft completely forgets to mention the need to limit and to check central powers, which one might think is what lawful constitutions should be about. Instead it is more a wish list of objectives. It is a manifesto of statements of policy priority intentions. And even then, in its opening definition of EU objectives on the first page it omits many of the most important ones in a free society such as protection of private property—that is mentioned in the Charter—freedom of contract, free trade and so on.

It will be argued by its friends that this draft appeals to subsidiarity and proportionality and that those concepts somehow protect us and rescue us from over-bearing central power. They do nothing of the kind. We have bitter experience anyway to tell us that

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subsidiarity does not add up to a row of beans, especially when the offenders, who are the power-seeking centre, are the ones who finally decide what, if anything, to review, to delegate or to surrender.

The noble Baroness talked of the much vaunted concession to national parliaments to have a say in the subsidiarity process. That is a very small concession indeed, and many have said that it is entirely hollow. That is confirmed by the fact that this Parliament's delegates to the convention, including the two very able delegates from the other place and our own two able delegates, pressed in vain, again and again, for something much stronger. They wanted a serious check on the extension of competencies, the questioning of subsidiarity and the appropriateness of community action and all they received was what they called the "yellow card" of review. As the Economist stated, subsidiarity,

    "has been drained of all power",

in the new proposals. I believe that the Economist was right. Instead, I urge those who have not read the text to read it and they will see beyond any assertions to the contrary that huge new central powers are demanded by the draft—it is only a draft—on top of existing, exclusive powers.

The old distinctions between community and intergovernmental roles have been concertina-ed into a single towering structure. This reinforced European Union is to extend control, according to the draft, through so-called "shared" powers over all economic and competition policy, over social and employment policy, over social and territorial cohesion—whatever that may mean; it could mean anything—over environment, consumer protection, transport, research and technology, together with complementary, or co-ordinating action—which means interference—in public health, industrial policy, culture, education, vocational training, youth issues, sport and civil protection.

The cynic may say and I suppose the Government would say, "What's new? It is all in the existing treaty". What is new is that all those powers of involvement are now to be enshrined in the laws of the constitution, enforceable in the courts. What is newer still is that the draft gives the central institutions, not merely extra powers, but power to take more powers still—that is the infamous passerelle clause, Article 24(4), which I hope will be negotiated out of the document.

Most of those goals and activities would have been far better left to the member states. It would have been better management and wiser politics, but that simply is not the spirit in which the draft was drawn up.

The noble Baroness mentioned the Charter of Fundamental Rights, an unnecessary document that invites its ridicule. It is ridiculous because it elevates to a basic right such things as protecting the physical and moral integrity of sports persons, and the right of children to express their views freely.

I spent most of August with my grandchildren, who were staying with me, and all I can say is that I am wholly opposed to children expressing their views freely. I am wholly opposed at least to that aspect of

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the Charter of Fundamental Rights. It is unnecessary, anyway, because it duplicates our national rights and the European Convention on Human Rights.

The whole inspiration of the work of the convention from the start plainly was that big is beautiful, that the world needs super-blocs and superpowers, and that they must be a counterweight to the American hegemony. I have never believed any of those things. If they were once valid, they are no longer so. I do not accept that America really has the power to be so "super", or that it can go it alone and do what it likes. So both the arrogant neo-Cons in Washington, who think it can, and the anti-Americans throughout Europe, who fear that it is already doing so, are wrong. They are united in what the noble Lord, Lord Skidelsky, once perceptively called "diagnostic alliance"—on a wrong diagnosis.

These constitution builders have forgotten about the human scale in government. Incidentally, the American colonies had 2 million people in 1776 and around 3.5 million in 1787. We are dealing with more than 500 million people now. These enthusiasts have forgotten, or never grasped, that centralisation makes no sense in the network age. They have forgotten that Europe's true interest is to preserve its diversity, which is where its true strength lies.

Above all, they have looked straight past, or been wilfully blind to, the key injunctions from the Laaken Council of Ministers that set them up in the first place—namely, to bring the EU closer to the people and to make it more accountable. There is not a whiff of that remit in the document. On the contrary, we would end up with the EU still more remote from everyday interests and still less accountable to the citizenry, not least because of the substantial extension of QMV, which the Government favour in general, although they have some reservations in particular.

Not a single power is transferred by the draft to lawfully elected national legislatures nor to national executives. Power is simply shuffled ambiguously between the three central institutions. The document certainly strengthens the central EU institutions all right but it does nothing at all to strengthen the power of the people at the grassroots.

The noble Baroness mentioned the negotiating positions that they shall not pass—the famous red lines where the Government have said that they will try to keep the veto, especially on tax, social policy, foreign affairs and defence, aspects of the judicial system and criminal law, and the system of own resources, which presumably means our budget rebate. We will have to see whether those red lines hold against the first cannonade. The omens do not look good. Several European leaders have already sworn that the treaty draft should not be changed and that amendments must be kept to a minimum. We on this side have no confidence whatever in a government whose negotiators think it is all about tidying up and golf clubs.

Besides, the red lines have already been crossed in fiscal matters and in the conduct of foreign policy. The long finger of intrusion is now to instruct us on how and what to tax and at what levels, as provided at Article III-6, for those who are interested.

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A new Union foreign minister, under a new permanent president, is to tell us what the foreign policy line is, how we,

    "shall comply with acts adopted by the Union",

as stated in Article 15, and how we must stick to them, although they may well have been decided by a qualified majority under the powers of Article 39.

Indeed, with the EU's new and divisive military ambitions, which have caused so many headaches and achieved so little, we will be told how and where to defend these non-existent common foreign policy aims. The new Union minister—the new phraseology rightly worries some people—will somehow work both to the Council of Ministers and the Commission. To whom will he be accountable? I think that the noble Baroness and the Government are worried about that also. It will have to be cleared up. As for extending EU powers to criminal law harmonisation and the judicial system, the front door has been closed but all sorts of back doors remain open in this document that need to be very carefully guarded.

For this constitution to go ahead broadly as drafted requires the assent of each member state. In the interests both of our nation and of Europe the Government should withhold their assent unless there are the most radical and major amendments—that seems highly unlikely. That will not be the end of the world for the Union. Giscard d'Estaing has said that things would just go on as before; they would revert to their present pattern, and we would then have room and space to develop a more democratic way forward instead for a greater Europe or a new Europe, a Europe of equals instead of one of enarques.

The UK used to be described as the sick man of Europe. Nowadays they are the healthy man of a sick Europe. To oppose either the euro or this constitutional treaty is not—I repeat, not—to be in some way anti-European, as Mr Straw tried to argue in a truly contemptible speech 10 days ago. On the contrary, it is to recognise that the best hope for the EU and the best path for an enlarged Europe lie in different directions from these "old Europe" proposals—directions that we have outlined in detail many times, and that many in Europe are now calling for. That includes the 15 nations that met at Prague at this weekend, who said that they want major changes in the constitutional treaty.

So our watchwords are: reform, return powers to parliaments, decentralise and democratise. That is the kind of lead that we should take.

Above all, if this constitution, overriding our own unwritten one, is to be approved in a broadly unaltered state a national referendum is necessary. It is not good enough to say that we should rely on the parliamentary processes. Lobby groups do not seem to understand that. They have been writing to me and, I expect, the Minister to seek the alteration of certain words. They do not understand that there is no opportunity to amend this treaty once it has been settled. We will have a Bill all right; we will be able to examine the constitution but we will not be able to change it. There is a little con-man element in the White Paper that

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says, "It is all right; Parliament will be allowed to look at this in detail". We will not be able to change a single word of the treaty.

I know that joining the EC when it was based on national treaties and co-operation between nation states was a big decision, although it was based on national treaties. Anyway, as the Minister reminded us, Harold Wilson had a referendum even on that. But subordinating the whole Union to the higher powers and higher laws of a new constitution is quite another order of decision.

Other countries are having a referendum. The Government should come down off their high horse and listen to the people. At least, they certainly should not rule out a referendum so peremptorily. I cannot understand why they have done that. If they change tack, and when they do—they will have to in the end—our advice to people will be to vote "No" to this sorry document from the convention, and "Yes" to something much more up to date, much more suited to modern conditions and far better both for our nation and for the whole of Europe.

3.50 p.m.

Lord Wallace of Saltaire: My Lords, we need some changes in the structure of European co-operation. We are on the point of expanding from a Union of 15 to 25 and we should start by welcoming this magnificent extension of democracy, security and prosperity from Western to Eastern Europe. That is the context in which we should discuss this document.

When I listen to those on the Conservative Benches, I sometimes imagine that they think that the world stands still, that we are still in a world in which one travels occasionally to France by night ferry and the British economy has very little connection with the Continent—or with anywhere else except for the British Empire. However, the world does change and we must change our structures for European and international co-operation with it.

Last week, when I was reading something on post-war history, I was interested to find some references to conversations between Ernest Bevin and Dean Acheson in which they agreed that one did not want the United States simply to dominate the West in the post-war period. They agreed that it would be better to have a multipolar western system—the phrase was used by Ernest Bevin—in which Western Europe would act as a useful counterweight to the United States. I believe that he was right. Her Majesty's Government have got themselves into a bit of a tangle in resisting the rather over-aggressive French interpretation in this context.

The role of Europe in the international order is extremely important. We need to strengthen that role and this larger European Union of 450 million people, which is responsible for well over 20 per cent of world GNP and is the largest single contributor of world development aid, must play its role. The draft European security strategy that Mr Solana presented to the European Council in Thessaloniki starts by saying that Europe is unavoidably a world power and that we must take on some of those responsibilities.

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The draft that we have before us is, like most drafts negotiated by committee, a bit of a curate's egg. It is not the wonderful, simple clear language for which the Laeken declaration hoped. Part 1 is shorter and good enough for the average graduate student to understand after nine months' study. There are some awkward bits in it that have clearly been inserted by the Spanish to protect their structural fund until 2009 and a whole host of other such things. However, let us not be over critical. If we look back at the United States constitution, it has some very odd bits in it that protect the interests of the slave-owning states in the south and the proportions of white people for which slaves should be accounted. That constitution has its own compromises. I was told by Larry Siedentop some months ago that, as they came away from Philadelphia, one of the delegates wrote to his state assembly saying that he thought that they had not done too bad a job and that it might possibly last as long as 50 years. It has lasted a little longer so let us not propose to have too many high standards.

We on these Benches think that the advice from this House should be that the Government should seek a limited number of changes at the intergovernmental conference but should resist unpicking the package. The draft is a compromise. It is not, in every single element, what we would have liked, but it is an acceptable compromise.

We on these Benches retain a certain sense of disappointment in the style and approach which this Government, like their Conservative predecessors, continue to take to the European Union—all this talk of winning the arguments rather than of finding and constructing mutually acceptable agreements with others. The Government appear to be so in fear of the Murdoch press and the Daily Mail that they accept their continual, extraordinary errors and misrepresentations and appear to object to and go for only the BBC. The Government are, in some ways, in danger of following the same track as John Major's Conservative government—starting by saying that they want to be at the heart of Europe and slowly drifting towards the fringe.

I agree strongly with the noble Lord, Lord Howell of Guildford, that the Government's attitude to public consultation on this matter has not been very helpful. We should have had rather more ministerial speeches and a White Paper should have been published before the summer. This White Paper is very thin. I had also intended to protest that it had been published only at 9.30 this morning, but it did not take very long to read because there was not very much in it. During the intergovernmental conference we need the Government to take a much more constructive approach and I welcome the proposal for a joint standing committee.

I was interested to hear what the noble Lord, Lord Howell, said, because listening to Michael Ancram on the radio this morning, I thought I heard a rather different, more negative position. In July I was rather shaken to hear the deputy leader of the Conservative group in this House going all the way down the road with the Bruges Group in seeing the European Union as an almost alien power. We have been inside the European

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Union for 30 years. We must accept that we should be making it work, talking about how to make it more effective and about how to promote our interests better in collaboration with others, not about whether we stay in or leave.

I am looking forward to hearing some of the speeches from more sceptical members of this House. Some of the language used by those members goes over the top. In a speech on the EU (Implications of Withdrawal) Bill in June, the noble Lord, Lord Stoddart of Swindon, used the word "conspiracy" six times. He did not tell us what sort of conspiracy the European Union is. I remember that, in my youth, old Labour members used to regard it largely as a Catholic conspiracy. Is it still a Catholic conspiracy or some other sort? I could run through all the various other sorts of international conspiracies that have been suggested—Masonic, communist, capitalist or whatever—but that sort of language does not really help us get to grips with how we further tactical international co-operation with close neighbours who are also democratic.

We welcome a number of aspects of this convention, especially the proposals on budgetary reform, which at last end the distinction between compulsory expenditure on agriculture and non-compulsory expenditure on everything else. The proposals therefore open the door further to reducing the level of expenditure on agriculture through the Community budget.

We also welcome the proposal for a legislative council as a marked improvement in co-ordinating the way that too many different councils of ministers operate and a move towards greater transparency.

We welcome the acceptance that legal personality adheres to the European Union as a whole. That simplifies international negotiations. We welcome the expansion of the role of High Representative, which has been a great success with Javier Solana, to EU Foreign Minister. The biggest problem with that task will be the sheer weight of responsibility that will fall upon one man or woman, but it is a means towards a more effective use of common European interests on a global scale.

Many of us are not yet entirely convinced about the new President of the Council or how the relations between the President of the Council, the Foreign Minister and the President of the Commission will develop—I suppose it depends a great deal on the personalities of those appointed. However, we would like to see some limited changes, and I agree with the noble Lord, Lord Howell, that the most important of those is to strengthen the role of national parliaments. The protocol on subsidiarity, proportionality and the role of national parliaments is too weak. Gisela Stuart was quite right to criticise it. Common sense was resisted in the convention and we trust that Her Majesty's Government will find support in other governments in strengthening that.

On qualified majority voting, I hope that Her Majesty's Government will resist the Spanish and others in wishing to return to the more complicated Nice formulae, because we now have a straightforward formula of a majority of states and a majority of

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population that is clearly the way forward. I am not sure that sticking to unanimity on so many matters relating to common foreign and security policy is necessarily in Britain's interest. It gives power to the last state that wishes to object. Simple majorities are allowed for in the treaty. We are almost always in the majority on matters of foreign policy, and we would be more effective if we were able to manoeuvre around the minority of awkward countries that, occasionally, wish to stand out against the majority.

There is a huge hole in the proposals on the size and composition of the Commission. There are to be 15 commissioners—one from each state—plus 10 non-voting commissioners. The comments that Wolfgang Clement of the German Government made yesterday were very much to the point: if each small country insists on having its own commissioner, why should not Germany insist on having two? That is a category mistake by the representatives of the small states. They want to have extra permanent representatives in the Commission, which will lead to our having a weaker Commission. We need a strong, effective Commission. I hope that Her Majesty's Government will rally to what has been the French position throughout; namely, that there should, perhaps, be as few as 11 commissioners, nominated collectively without reference to their nationality.

Incidentally, we should worry about the Commission becoming less effective. We are heading towards another scandal about corruption in the Commission with Eurostat. Her Majesty's Government should be concerned to see that the new Commission to be elected next year is more capable of doing an effective job.

I also agree with the noble Lord, Lord Howell of Guildford, that the social dimension is overloaded. There were too many old believers at the convention who clung to the belief that the more power that is transferred to the Commission and to Brussels, the better for European integration. Some of the phrases not just in the Charter of Fundamental Rights but in Article 3 about children's rights and social exclusion are wonderful rhetoric, but they do not belong at the international level of government; they are things with which national, regional and local government should be concerned.

On defence, the British Government have been too defensive. There is no need to react so strongly to some of the nonsense on defence coming at the moment, I am afraid, from the Belgian Government and suggest that we should not have a mutual defence clause in the EU treaty. After all, we had one in the Western European Union treaty. It is inconceivable that, if there were an attack on a member state of the European Union, we would not all go to its defence. Her Majesty's Government have, again, fallen over too far backwards.

There are between 70,000 and 100,000 troops from EU member states operating on peace enforcement and peacekeeping missions outside the EU. Without having defined it properly, we are edging towards a common defence policy. We have not got it together

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yet. Her Majesty's Government should lead the effort to make it more coherent and make sure that Europe uses what it has more effectively.

I also regret the fact that the section on economic governance bears all the signs of having been written by a group of people who are expert on institutions but do not know much about policy output. In that respect, I hope that Her Majesty's Government will use the Sapir report that came out in July—An agenda for a growing Europe: Making the EU economic system deliver—and was presented to the Commission to improve that dimension of the intergovernmental conference.

Much comes back to the role of the British Parliament. The Government, together with other parties, must consider how we can make sure that we play a more constructive role in developing European integration. A joint committee will be a step forward. I suspect that a joint committee that meets Ministers to discuss overall agendas for the EU ought to become permanent, not just part of the intergovernmental conference. We ought to make more of the potential links with British Members of the European Parliament. Other national parliaments do it; we should do more of it. We should certainly build closer links with the scrutiny committees of other national parliaments through the British Parliament's office in Brussels and elsewhere.

What about a referendum? The Conservatives are calling vigorously for a referendum on this occasion, if not on previous occasions when they were in office. It sounds like a cover for wanting to leave. We want to wait until we see what the IGC proposes and we see whether there is a case for a referendum. Above all, we want to see an intelligent debate in this country about the best means of European co-operation. There might be a case for a double referendum on this and the euro. We must make sure that we have a constructive debate on both and that we start from the assumption that British national interests are best served by closer co-operation with our partners on the other side of the Channel.

Overall, we give a welcome—cautious, in places—but we start from the assumption that European integration is a key dimension of international co-operation in which the British Government should continue to play the fullest possible part.

4.6 p.m.

Lord Grenfell: My Lords, it is a privilege to speak at such an early stage of a debate in which so many distinguished noble Lords are participating. I fully expect the debate to be in the best traditions of the House, with considerable expertise and independence of mind available and freely given. I look forward to hearing what noble Lords have to say about the draft constitutional treaty and the forthcoming IGC. It will certainly inform the work of our Select Committee. Whatever our individual views, no one can doubt that the work of the Convention on the Future of Europe has brought us face-to-face with policy questions of the profoundest importance.

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As chairman of your Lordships' Select Committee on the European Union, I will formally move the Motion to take note of our latest report. As is usual in the circumstances, I speak not in a personal capacity, but as chairman of the committee. As noble Lords will know, the committee has produced a series of 14 reports on the work of the convention, addressing a wide range of questions which we identified as the earlier drafts of the treaty proceeded through the convention. Our latest report, which is the subject of the Motion on the Order Paper today, is a progress report, in that it simply lists the questions that, the committee feels, need to be addressed as we move from the convention to the IGC. We intend to produce a more substantive report in October that will, we hope, inform the IGC.

We decided on the timing so that the report could take into account a number of developments expected during September. That will now obviously include the White Paper published this morning; the Commission's own paper, which will be out next week; and, of course, your Lordships' debate today. The timing of the publication of the White Paper on the morning of the debate is, however, a bit disconcerting—to put it mildly—and I hope that the Government will understand the importance of providing your Lordships with a further opportunity to express views on it, once it has been fully digested.

I will not dwell long on the convention. The product of its work—the draft treaty—is before us, and it is to substantive questions of process and policy that we must turn our minds. I want, however, to take the opportunity to say a word about the four parliamentarians who laboured so hard in representing the United Kingdom at the convention. The other place sent Gisela Stuart, who played an outstanding role on the Praesidium and, perhaps of particular significance to us today, served as chair of the working group on national parliaments. She was a tireless champion of the national parliaments in the European context. David Heathcoat-Amory also made a valuable contribution and ensured that the views in which he passionately believes and which he eloquently expounds were robustly argued in the convention right up to the end.

From this House we were most fortunate to have two exceptionally distinguished representatives. One was the truly indefatigable noble Lord, Lord Tomlinson, whose contribution to the convention was wide-ranging but of particular weight in financial matters. The other was the noble Lord, Lord Maclennan of Rogart—who I am happy to see will be taking part in this debate. He, too, worked tirelessly on the convention, on a range of issues, and made a particular contribution on foreign affairs and defence.

All four parliamentarians also worked hard to ensure that both Houses were kept informed of the work of the convention, by producing written reports and by appearing both before specialist committees such as my own and in the novel forum of the Joint Standing Committee. I am sure the whole House will agree that these four parliamentary representatives served us extraordinarily well.

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I want also to pay tribute to the right honourable Peter Hain, now Leader of the House of Commons and Secretary of State for Wales, who represented the UK Government at the convention. He, too, made an enormous contribution, most ably supported by the noble Baroness, Lady Scotland, who too has since moved on to higher things.

As always, I am most grateful to the Minister, who is both opening and replying to the debate. As always, she has taken great pains to keep this House informed of developments. I am delighted that she secured this significant debate today and that she has so ably set out for us the Government's position.

I turn to my first major theme: openness. The provision of information by the Government is one of the most significant questions that my committee has identified as we move from the convention to the IGC. The convention was a remarkably open affair. Vast amounts of information came forward on the convention website. No one can dispute that the material has been there for all those who wished to keep up with it. Our own Government have continued in this spirit, publishing in July two command papers giving the background and the full text of the treaty; and now we have today's White Paper, which will need to be carefully digested.

Today's debate, and a similar debate held in another place in July, reflect the Government's willingness to engage in dialogue, and Ministers' willingness to appear before specialist committees and in open fora. The Government are to be commended for launching a public debate on the Internet, which is indeed a welcome initiative.

Going forward to the IGC, however, we need to be certain that this good work will continue. The IGC is by its very nature a body where diplomatic and political negotiations take place. That, by definition, imposes constraints on what information can be released. But it would be a crying shame if the open spirit that has characterised discussions so far were allowed to become lost in the traditional secrecy of inter-governmental negotiations. I have glanced quickly at paragraphs 37 to 40 of the White Paper which deal with Parliament and the IGC, and I am only mildly encouraged. The Minister went a little further in her opening statement on the Government's strategy for releasing information about the IGC, and for that I am grateful. I am sure she will understand that what we need are the basics—factual details such as who is involved, what is to be discussed and, most importantly, the outcomes of those discussions.

The Foreign Secretary has made a good start by promising to make draft agendas available. But the key requirement is for records of deliberation and conclusions to be made quickly and freely available. I hope the Minister will be able to offer us something on that.

More importantly, there should be regular reports back by Ministers to this Parliament on substantive issues being deliberated on at the IGC. To that end, my committee would support an opportunity for this House to hold to account the Secretary of State for Foreign

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Affairs and other Ministers representing this country at the IGC. I am therefore very happy that Her Majesty's Government are proposing the establishment of a Commons Standing Committee on the IGC, where your Lordships can attend and speak, and which will engage with Ministers. This proposal was placed on the agenda of your Lordships' Procedure Committee for consideration at its meeting this very afternoon. I hope, therefore, that this welcome proposal can be speedily agreed. This may seem like a dry procedural matter, but it goes to the heart of what will be a crucial element in the success or otherwise of the convention's work; namely, the question whether, when the decisions are finally taken by the IGC, parliamentarians, commentators and, most of all, the public can be confident that the decisions arrived at really are in their interest.

That is enough on process and on the need for transparency. I now turn briefly to the substance of the draft constitutional treaty itself. I base my remarks on the comments made by my committee in its report, which is on the Order Paper for debate today, and which are set out in paragraph 8 as a list of questions which the committee will be considering over the next few weeks. Perhaps I may refer briefly to one or two of them.

One matter that has been exercising the House, and indeed the public, is how far the proposed new treaty is in fact new. Are we on the verge of signing up to something which is totally novel, or do the proposals in the main add up to no more than a consolidation? My committee will be looking carefully at this question, but I have little doubt that we shall find the truth lying somewhere between the two.

To that end, the committee has already pressed Her Majesty's Government to provide Parliament with a comprehensive written analysis of how the proposed constitutional treaty differs from the existing EU treaties which it replaces; and in particular how far the treaty would extend QMV. The committee will then seek to determine what significant improvements will be made by the proposed treaty and, in the other direction, where the "thick red lines" are that the Government should not cross in negotiations.

We want also to be clear on what are the most significant reservations that other member states have about the treaty. As we know, a number of states—many but not all of them among the smaller states—want certain issues re-opened. That is neither surprising nor inappropriate—quite the contrary. My committee will be watching to see how other national parliaments are reacting to the concerns that are being raised by governments about parts of the draft. At the COSAC meeting in October, where the treaty is to be debated, we shall have an opportunity to inform ourselves on that.

One area where our Government clearly have reservations is defence—this has already been referred to. The committee has been monitoring closely suggestions that more decisions on common foreign policy and security matters should be taken by QMV. We also intend to take a close look at the role of the

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proposed Union Minister for Foreign Affairs. Others will no doubt talk more about that in the course of the debate.

More generally on QMV, however, perhaps I may be permitted a personal aside. Where the national veto remains, it may not, as a matter of practical politics, be realistic that one member state would seek to frustrate the common will of the other 24. The difference between unanimity and QMV may not be as significant in some areas as some might believe. There is, moreover, an unfortunate tendency, when speculating on a 24:1 divide, that the "one" will always be a small country. It might well be a large one. It could be the United Kingdom. It could be over the budget rebate.

Another issue of particular concern to the committee has been the future position of the various existing national "opt-outs" under the new draft treaty. We have had assurances from the Government—which will be published with our final report—that the UK's Schengen and euro opt-outs will be maintained by the new treaty. That is no doubt reflected in the White Paper.

As I have emphasised, questions of democracy and accountability lie at the heart of the process by which the treaty has been prepared. It will be important to test how far the proposals do in fact make the European Union more democratic and accountable.

My committee will accordingly be probing how far the draft treaty represents an increase in the powers of the democratically elected European Parliament and whether these developments are compatible with the current inter-institutional balance.

We will also be particularly concerned to examine whether corresponding provisions should be made for national parliaments to scrutinise decisions by their own governments where the European Parliament and the Council will be acting together under the co-decision process.

The treaty also raises a number of significant institutional questions which need examination. One is the role of the proposed non-voting Commissioners and how an EU of 25 will be able to function efficiently until the proposed changes to the Commission take effect in 2009. Another concern raised at the Riva del Garda ministerial meeting—this time by Poland and Spain—was over the interim weighting of votes in the European Council and the Council of Ministers. That is clearly another major issue to be addressed.

A further key institutional question concerns the post of President of the European Council, for which our Government have been arguing most forcefully. Part I, Article 21 in Title IV, devotes a mere 165 words to the creation and functions of, and method of election to, this important post. My committee will be seeking assurances that this proposal really has been thought through, especially as regards accountability.

A similar question is how the proposed legislative council—if indeed we need one—is intended to operate. Will it be any more than a rubber stamp? How will open and accountable discussion of policy be secured? What records of deliberations should be made publicly available? Very importantly, how

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precisely will it ensure—as Part I, Article 23 demands—consistency in the work of the Council of Ministers?

Another key area that requires consideration concerns proposals for national parliamentary scrutiny. I sense that my committee and the Government agree that in an EU composed of sovereign member states where many decisions are taken by elected and accountable national Ministers or their representatives, it is a duty of all national parliaments to subject their Ministers to rigorous scrutiny and to hold them to account.

In that spirit, my committee looks forward to working closely with the Government and another place to implement the treaty's proposals to strengthen national parliamentary scrutiny of subsidiarity. But we are also concerned, as are the Government, that the proposals giving national parliaments a "yellow card" procedure on subsidiarity do not go far enough—something to which the noble Lord, Lord Howell, referred. The Government have informed my committee that there is a case for pressing at the IGC the strengthening of these provisions—perhaps by ensuring that there is a "red card" option which would allow a number of national parliaments collectively to block a Commission proposal, rather than just causing it to be re-examined, as currently proposed.

I am conscious that I have, by necessity, been raising questions and not proposing answers. I look forward to the rest of the debate and to working with your Lordships' Select Committee on the European Union to ensure that the House continues to make a timely, informed and effective contribution to the debate on the future of Europe.

4.22 p.m.

The Lord Bishop of Peterborough: My Lords, on behalf of my colleagues on these Benches, I welcome this debate and thank the Minister for introducing the draft constitution with characteristic clarity. I am honoured to follow the noble Lord, Lord Grenfell, and thank him and the Select Committee for their work.

In an earlier debate in January, my friend the right reverend Prelate the Bishop of St Albans voiced his concern about two issues:

    "first, the values that are implicit in the work of the convention and in the European institutions; and, secondly, that deathly silence about things European within British society".—[Official Report, 7/1/03; col. 919.]

Almost exactly eight months later the silence may have been replaced by a whisper, but the issues that we are debating today have yet to catch the nation's interest and imaginative response. Six hundred and fifty postings on the website are indeed welcome, but hardly overwhelming.

I therefore hope that today's debates will produce a change of heart and provoke the public debate that the European Council and the Government desire. However, one problem is the sheer length and complexity of the constitutional treaty, with 59 articles, which compares unfavourably, for example,

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with the seven articles of the United States Constitution. The noble Lord, Lord Howell, has already referred to that.

Throughout this process, the Churches and religious communities of Europe have voiced a number of concerns, some of which have been met in the drafts now before us. The respect for the status, under national law, of Churches, religious communities and non-confessional organisations in the member states and the recognition of the specific identity of Churches and religious communities is now enshrined in Article 51. We are encouraged by the commitment to maintain an "open, transparent and regular dialogue" with these Churches and organisations. We await, with interest, further indications on how that dialogue will be structured. We want to make it a living reality. The faith communities also welcome the continuing provision for the respect of religious freedom in all its dimensions by the European Union.

These provisions led the Conference of European Churches to issue a statement at the end of May:

    "We welcome the growing consensus on the place of religion in the future E.U. as reflected by the amended draft article 51 (previously article 37). This article guarantees the EU's respect for the status of churches and religious communities in the Member States based on their different constitutional traditions. The provision for open, transparent and regular dialogue reflects the specific contribution of churches and religious communities distinct from secular authority, at the service of society as a whole".

In a further statement CEC commented on the preamble which recognises,

    "in an inclusive way the contribution of Europe's religious heritage—of which Christianity is a major part—in determining . . . the process of European integration. A Europe which disavowed its past, which denied the fact of religion, and which had no spiritual dimension would be greatly impoverished in facing up to the ambitious project which calls upon all its available energy: constructing a Europe for all".

That returns us to the principal concern raised by the right reverend Prelate the Bishop of St Albans in January. I recognise that, as one of my correspondents has described it, the aims of the convention are to streamline the running of the Union and to provide the Union with more transparency and legitimacy in the eyes of its citizens.

Nevertheless, many religious people will be surprised that the preamble refers to "the values underlying humanism" without making specific reference to the role that theistic belief, and Christianity in particular, has played in the development of these values, as well as in the cultural and economic life of Europe. The right reverend Prelate said:

    "'Europe' can and does cope with private expressions of religious belief, but it is not coping, cannot cope and wilfully will not cope with institutional or communal forms of religious belief, of whatever faith that belief may be".

That concern, I fear, remains. He continued:

    "To want to be at the heart of Europe and yet, at the same time, to ignore the soul of Europe would be to make a profound mistake".—[Official Report, 7/1/03; col. 920.]

All religions welcome the defence of human rights and human dignity, but they would also wish to remind us of human responsibilities: to each other, to

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our world and to "the common good". The language of duties and responsibilities to our fellow citizens may not be fashionable, but it points to values which are in some ways higher than "equality of persons, freedom and respect for reason". These are certainly subsumed in those higher values which could lead us to speak of the duties of citizens to serve society in their work, in their care for the young, the elderly or the disabled, and so forth.

To give the Charter of Fundamental Rights constitutional status has positive merit, but it leaves with the courts the discretion to decide how conflicts between individual rights and the common good are to be resolved. It must therefore remain a matter of concern whether Article 52 of the Charter provides an adequate safeguard to defend the democratic rights of a community to define and protect "the common good", and to protect the legitimate rights of groups as well as those of individuals. In that context, some Churches and religious groups retain a concern about the relationship between the need to combat discrimination in employment practices and the desire of a religious group to safeguard its beliefs in and through its institutions.

There is much that we welcome in this complexity of documents. Religious groups look forward to a constructive dialogue with the European institutions and hope that the seeming remoteness of Brussels, the lack of adequate media attention and the poverty of our knowledge of European laws will not result in a lack of accountability to the people they serve. A remote political culture helps no one. If we are to add a European identity to a national and increasingly regional identity, we have a large and vital task of education. I hope that this debate will prove to be a worthy beginning to that process.

4.31 p.m.

Lord Judd: My Lords, I should like to echo what has already been said in tribute to those who have worked in the Convention, and in particular our colleagues from this House. I should also like to echo the tributes made to my noble friend Lord Grenfell and his committee. Not only the committee but the whole House is fortunate to have at the helm at this juncture someone with so much international experience and wisdom as reflected in the words of my noble friend in his powerful contribution to the debate.

In one sense it is undeniable that the noble Lord, Lord Howell of Guildford, is right: the constitution does belong to the people. We are practitioners within the context of the constitution. But that is why the referendum held in the 1970s was so important. It established the constitutional context within which we were going to move forward. In commenting on the words of the noble Lord, Lord Howell, what the noble Lord, Lord Wallace of Saltaire, had to say is important. If, within the intergovernmental negotiations, it became clear that what ultimately was substantively proposed were to take us away from the understanding, commitment and context entered into as a result of the 1970s referendum, then undoubtedly the issue of a

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further referendum would become important. But I suggest to the noble Lord, Lord Howell, that it is far too early to say that such an eventuality will arise.

We are faced with a paradox. Two realities about the nature of existence constantly challenge me. On the one hand, the world is undeniably interdependent. The noble Lord, Lord Howell, referred to his grandchildren. Not infrequently I find myself looking at my own grandson and reflecting that there is hardly a major issue that will affect him and others of his generation during their lifetimes which can be handled effectively or resolved within the context of the nation state alone. Almost every major issue now has to be tackled in the context of international co-operation.

But the paradox is that, against this reality, people are anxious, insecure and looking for identity; they feel a need to belong. That is why, as the Government take forward their consideration of the draft convention, it is important that they take the issue of subsidiarity very seriously indeed and drive along that road as hard as they can. It seems absolutely essential that everything affecting people which can be decided in ways as close as possible to what they understand and of which they feel a part, should be decided in that way.

But it is not only as regards the issues of subsidiarity that matters should be left to national or even regional decision-making; there is also the issue of how people can feel that they have a say in the major issues being decided at the macro-international level. Obviously the European Parliament is terribly important here. How one strengthens its role and the part it can play in ensuring accountability is crucial, but I suggest that it is not simply a matter for the European Parliament, even on those policies that are decided in Brussels or elsewhere. National parliaments must also feel that they too have influence, and that is a difficult issue with which to grapple. However, it is one which we cannot dodge because if we look honestly at what has happened so far in the history of the European Union, it is undeniable that the European Parliament is extremely remote from ordinary people.

When elections to the European Parliament take place, we know that seldom do the issues of that parliament predominate. The elections become a kind of litmus test of the popularity of the government of the day and of the prospects for the opposition, expressed in terms which people do understand and which frequently are not the major issues facing the Union. I hope that the House will forgive me if I reflect that perhaps we did not get it right at the beginning. I take some responsibility for that because at the time I was the Minister of State at the Foreign Office working in this sphere for the noble Lord, Lord Owen. However, if the records are examined, they will show that on occasion I put forward questions about this issue. Sometimes I wondered whether we were right to move to direct elections to the European Parliament, and I am glad to see the noble Lord, Lord Owen, nodding in agreement with the fact that at the time I drew attention to this.

The result is that we have a European Parliament which is remote from ordinary people and not part of the reality of politics for them. Further, we have

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national parliaments which do not bear the everyday responsibility of making a success of European policy. Therefore the game of populist criticism and negativism is played too easily. I emphasise, therefore, that in our approach to what is being proposed the Government cannot take too seriously the role of national parliaments, the European Parliament and, as they continue down the road, how the role of regional assemblies is to be related to the work of the European Union.

That brings me to the issue of the Commission. The Commission comes in for much abuse, and certainly there have been not infrequent elements of what most of us would regard as administrative madness in some of the excesses of overly zealous bureaucrats. However, when looking objectively at the history, I ask where we would have been with the evolution of the European Union without the Commission. It is a body of people with an historic responsibility to see the development of the Union undertaken successfully. However, that role must be tempered with the accountability to which I have referred, and it must be balanced with a strong Council. I have few illusions that if everything had been left to the Council, we would not have moved very far forward in the evolution of Europe, but we need a strong Council. If there is to be a strong Council, then I believe that the concept of more continuity in its chairmanship is a proposal worth taking seriously.

It would be impossible to make any observations on the issues before us without referring to the common foreign and security policy. I have always regarded myself as an Atlanticist, but recent events have sent me back to the drawing board. I believe that a unipolar world is a very dangerous world indeed. We need checks and balances. We do not want rivalry—God forbid—between Europe and the United States; we want co-operation. That is the way in which we will make a success of the world in which we live. But we want a meaningful balance and therefore cohesion and the ability for Europe to act alone when necessary—and to be a force that is taken seriously—are very important.

However, I should say to my noble friend on the Front Bench that if we are to go down that road there will be a bill. It will be no good merely talking about the need for checks and balances. We will have to show that we take the cost of international security as seriously as our American colleagues and that we are prepared to contribute to what is necessary to make a meaningful success of what we advocate.

We have seen that security cannot be achieved within Europe alone. One issue at which the Government will need to look closely is how they are going to replace, however imperfect—and they have been far from perfect and fairly amateurish—the provisions which were at least theoretically there, for example, in the Western European Union as it was emerging. They have given parliamentarians from outside the European Union the opportunity to share in the analysis, discussions and deliberations about what is necessary in security terms.

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My noble friend referred to the ending of the Cold War. I hope that we are all agreed that that has happened. But we have to be careful that as we move forward we do not inadvertently make the dividing lines between what is included in the Union and what is still outside more significant than they have ever been. Therefore, as we discuss a common foreign and security policy, we need to think very hard about how we engage those European states which are not yet members of the European Union and how we engage Russia.

Let me refer to one other issue in regard to the common foreign and security policy. I hope that we do not inadvertently slip into the mistake that the Americans have made and fall into a mould of greater nationalism as distinct from internationalism—Britain can no longer do what it wants to do or would like ideally to do itself—neither can France—but, my God, as the European Union we will be able to do these things. If one thing has become abundantly clear in the past decade it is that order in the world cannot be imposed. Order has to be built, and that involves the engagement and stakeholding of the widest possible cross-section of the global community. Therefore our relationships with those countries in the wider Europe outside the European Union—and, as I said, with Russia—are very important.

The United Nations should feature far more centrally in any constitution than it does at the moment in the proposed draft. There are ritualistic references to the United Nations, but one does not get the feeling that an understanding of the indispensability of global inter-dependence has registered.

Let me make two final points. First, as regards human rights, one of the great achievements in Europe in the post Second World War period has been the Strasbourg institutions—the Convention on Human Rights and the Court of Human Rights. We need to consider very carefully the danger of assuming that the issue of human rights in the member countries of the European Union will be handled exclusively by our own legal systems within the European Union. In my view that would devalue the significance of the European Court for the wider Europe and, indeed, for Russia. This is not the time to do that. This is the time—indeed, I am glad to see the references to the European Union signing up to the convention—to strengthen the institutions in Strasbourg with their wider responsibilities.

My second point—I declare an interest because my whole professional life has been spent in this area—is that I am glad to see in the proposals references to development assistance. However, I wish that the references to the kinds of charitable, philanthropic responsibilities of the European Union were balanced by more hard political thinking about the damage the Union causes by insensitive trade policies and the common agricultural policy. We should not get into the contentious arguments about this issue in the constitution, but if we are going to talk in the constitution about our responsibilities to the Third World we need to consider how they are reflected in our domestic European policies, and how these

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policies affect the Third World and arguably have far more significance than many of the things we may do in terms of providing aid.

I hope that we shall see these next months as being positive, imaginative, creative; that we come to terms with global inter-independence and see it as a challenge. I hope that we are able to look our grandchildren in the eye and say, "Yes, we are preparing for the future of which we are all inescapably a part". I hope for the success of international co-operation as reflected immediately in the more European setting and the European institutions that matter.

I shall feel very sad if, yet again, Britain goes down in history as a neurotic, insecure nation which is so worried about its own immediate self-interest that it throws away the chance to influence global thinking because it has not joined, participated and belonged. If ever there was a time to join, participate and belong, this is it.

I understand the pressures that led my noble friend to say what she did, but I was worried—we are good friends and so she will forgive me—about the number of times that she referred to "national interest". I do not understand what the term "national interest" means in this modern world. I understand why it is often used in rhetoric. The lesson that we have to accept, and on which we have to win over the British people, is that in the inter-dependent world in which we live—and it starts in Europe—no national interest can be served separately from the interests of the wider international community.

4.47 p.m.

Lord Howe of Aberavon: My Lords, I have often shared debates and scenes with the noble Lord, Lord Judd, and towards the end of his speech I found a certain degree of the temperamental differences between us beginning to emerge; I am a less emotional creature than he is. Having said that, I find myself agreeing with a large part of what he had to say about the role of the European Union and our approach to it. His speech was one of a series of speeches of distinction that have so far been made.

I extend my thanks, as others have done, to the noble Lord, Lord Grenfell, and the members of his committee. I endorse absolutely his tribute to the activities of our fellow parliamentarians in relation to the convention.

I also express my appreciation of the two speeches—indeed, three speeches, but I refer to the two principal protagonists—from the Front Benches of the noble Baroness, Lady Symons, and my noble friend Lord Howell. I should say to the noble Baroness, Lady Symons, that her speech was a great improvement on the golf club rules and the "tidying up". It was a clear, comprehensive presentation. My noble friend Lord Howell was equally clear.

In a way they reminded me of my reactions to the proceedings surrounding the Single European Act some 18 years ago in which there was a tendency on both sides to proclaim victory or disaster when, in

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truth, as so often on such occasions, we ended up trying to distinguish between the half full and the half empty glass.

There is another similarity between our proceedings now and those then and that is the passionate search in which we all rightly engage for the presentation of these documents, these issues, in language of limpid clarity, to be read by the ordinary man and woman in the saloon bar. Such a search is almost always fruitless. What could be more lucid, compelling and attractive than devolution, for example? Yet a glance at any of our devolution legislation shows an absolute dog's breakfast. It is almost impossible for an institution as well established as the European Union now is to distil a document of the apparent clarity, as you glance at it, as the American Declaration of Independence. The document we have is certainly more compact and workable than the present texts, for those who have to work in such a hideous jungle, as it were. It can be accessed by politicians, civil servants and other human beings who have to deal with it, even if it is not popular reading.

The document reflects an observation that Winston Churchill made way back in 1949. On a train ride to Strasbourg, Robert Boothby asked him what exactly he meant in his Zurich speech by talking about a "kind of" United States of Europe. Churchill refrained from giving an answer, and said, "You must remember, we are not making a machine, we are growing a living plant". Living plants tend to be pretty untidy.

That is exactly what happens today as the institutions with which we are grappling reflect an intermingling of executive and legislative power which is at the heart of the system as it has evolved. The institution's character is hybrid, with the hybridity changing as one moves forward and looks at one issue rather than another. That guarantees that it is a thousand miles away from being a federal state. This will not be a superstate—the institutions, as they have evolved, stand in the way of that happening. They serve, in many ways advantageously, to maintain the role and the authority of the nation state as the dominant unit of accountability. I will come back to that when we discuss the role of national parliaments.

In fact, the proponents of federal union or anything like a superstate, who have constantly played a part in these debates, have been held at bay—substantially, if not completely—on many of the key points. The European Commission will not be a government of Europe, although it has an important role to play. The president and his colleagues will not be chosen by and drawn from the European Parliament. The Commission will not extend its exclusive right of initiation into home affairs or foreign policy. Qualified majority voting, although rightly widened, will not extend to such areas as taxation, own resources, treaty reform, foreign policy or defence. As others have emphasised, and as the Minister herself acknowledged, it is vital that Her Majesty's Government maintain her position and our position on that.

However—and the House would be surprised if I did not say this—several aspects of the document before us fall well short of delighting me. I agree with the noble

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Lord, Lord Wallace, my noble friend Lord Howell and, indeed, the noble Lord, Lord Judd, on a number of these points. I urge the Government to pay those reservations great attention and, in doing so, to remember, as has already been said, that only the intergovernmental conferences have the last word on these matters. At this stage, we have a draft convention and the ruminations of many others who have contributed to it. Similarly, at Luxembourg, we had the Spinelli draft treaty purporting to present a completely new Europe, just as we had the—in retrospect, rather curiously named—Genscher/Colombo Final Act. That was another presentation of a constitutional utopia. But when we got to the point in Luxembourg, the intergovernmental conference called the shots, and so it must be here.

I should like to mention one reservation which others have not made a great deal of but which worries me a lot—this wretched charter of fundamental rights. From the very outset I have wondered what on earth that was intended to be for. The Select Committee, presided over by the noble Lords, Lord Grenfell and Lord Hannay, pressed Mr Peter Hain very hard on this, and rightly so, when he gave evidence to the committee.

What purpose does the charter serve? As the noble Lord, Lord Judd, pointed out, we have the European Convention on Human Rights; the European institutions will be signing up to that and will be bound by that, as we have been. What on earth is the point of having a parallel, potentially conflicting, separate text, which will serve to confuse rather than enhance matters? If it has to feature in the text of the treaty to the extent that it does, I hope that it will be surrounded by a huge barrier of verbose insulation to ensure that it remains no more than a piece of not-very-impressive window dressing.

My second anxiety has been reflected in a number of speeches. I refer to the substantial increase in the legislative and budgetary powers of the European Parliament. I find that surprising, given the experience of the Prime Minister, among others, of the capacity of that institution for loading additional social and environmental burdens on business throughout the Union, often against the will of our Government and that of others. I am surprised that, so far, people have been persuaded of the case for surrendering more of the powers of the Council to a rival body whose public legitimacy is, to say the least, not overpoweringly impressive. I agree with the way in which the noble Lord, Lord Judd, looked at that.

Is it not rather startling—perhaps it is not—that in all the debates in which I have taken part in this House on this issue, nobody has ever cited a word of observation from anyone or any document emanating from the European Parliament? I believe the documents produced for this House are quite often cited in the other place. But it seems very much one-way traffic.

I am surprised by the extent to which it has been given an enhanced role when I reflect on an observation made by one of the vice-presidents of the Convention, a

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former Italian Prime Minister, Professor Giuliano Amato in a very notable Ditchley Foundation lecture in the mid 1990s. He said that the European Parliament,

    "was not enough to establish that a European people already existed. That Parliament was the symbol of a community that might be seen in the future, rather than representative of an existing one".

It is an aspirational institution, and we may well have been wrong in believing that democratic accountability is best transmitted through that agency.

I shall move on to some rather more positive insights, and make some more exhilarating points in that direction. The first one is a natural counter to that: I welcome the opening up of the legislative work of the European Council. The fact that its legislative activities will be conducted in public and it will be taking a much plainer role seems a better way of meeting the democratic deficit than seeing it give away powers to the European Parliament.

I welcome, as others have done, the more straightforward rules for calculating qualified majority. And I welcome the tentative step towards establishing a more substantial role for national parliaments, particularly regarding subsidiarity. I agree entirely with what has been said by my noble friend Lord Howell, the noble Lords, Lord Wallace and Lord Grenfell, and Miss Gisela Stuart, who did marvellous work on the convention and, indeed, by the noble Lord, Lord Judd, in welcoming that.

The most important and critical institutional invention of all—again, for the reasons given by the noble Lord, Lord Judd—has been that we pressed on the rotating presidency of the European Council the introduction of a so-called permanent chairman of that institution. I believe it could be the most important change to emerge from this convention, because it will introduce a sense of continuous dynamic, and give some continuity to the work of the Council. This will, I hope, enable the President of the Council to oversee the work of other ministerial councils. It could well establish that institution as almost the key junction box of the entire system. It is rightly matched by the establishment of the new post of European Foreign Minister. I am not sure I would call it that, but I am not quite sure what else to call it. Some people think it might be called Foreign Secretary, but that would be equally confusing. But these are important changes which will strengthen the effectiveness and identity of the European Union.

I am struck by the extent to which these key changes, these enhancements of the decision-making power of the Union in all fields—but particularly the economic—the enhancement of our common and foreign policy, actually reflect the original agenda in Luxembourg 18 years ago.

At that time there was a partnership between my noble friend Lady Thatcher and myself, supported by another partnership between the noble Lords, Lord Hannay and Lord Williamson. We had two objectives. One was to secure the necessary changes—by extending qualified majority voting—to secure the speedy implementation of the Commission's White Paper Completing the Internal Market; a White Paper not prepared by some remote

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unknown antique foreign commission, but by my noble friend—I am sorry he is not with us today—Lord Cockfield. He had been despatched to Brussels with the express intention of generating such a document, as an agenda for completion by 1992. At that moment of glory in Luxembourg in 1985, my noble friend Lord Cockfield was able uniquely to secure the joint admiration, if not adulation, of both M Jacques Delors and Mrs Margaret Thatcher. So it was an important part of the agenda then and it is an important part of the agenda that we are trying to achieve now.

The other feature of that discussion was the importance of seeking a common foreign policy. The first article of Part III of the Single European Act states:

    "That being members of the European Community, we shall endeavour jointly to formulate and implement a European foreign policy".

The history of that text is important. It is drawn from a draft treaty on foreign policy co-operation, prepared in this country and handed by my noble friend Lady Thatcher to Chancellor Kohl in my presence on 18th May 1985 for incorporation in the forthcoming Single European Act. It is a British product. It was something about which the Prime Minister at the time was questioned, when she reported on the Luxembourg 1985 council, on 5th December 1985 by one of our honourable friends, whom all of us will remember and mourn with sadness, Nicholas Budgen, a robust champion of national independence. He asked my noble friend this:

    "Is not the pretence and rhetoric of a common policy on foreign affairs dangerous in that it leads to muddle and misunderstanding?".

My noble friend read the article that I have just quoted. She went on to say that it is,

    "in the interests of all member states to act together if we can on certain matters because we are very much stronger by so doing".—[Official Report, Commons, 5/12/85; col. 439.]

That is what the substance of this debate is about: can we achieve greater influence, greater impact on behalf of the people of this country by working, as the noble Lord, Lord Judd, said, in partnership, governed by the unanimity rules with our colleagues in the European Council? That is what we should be trying to do.

I must say two things on that issue before I close. The first relates to our present international scene. I think it is and will be seen to be a tragedy that the Prime Minister, in his understandable over-reaction to the tragedy of the events of 9/11, has too often and too dramatically taken us too far away from that route. I think that had we concentrated from an earlier stage on a common European reaction to those tragic events, we might have avoided events that could yet prove almost more tragic.

I am concerned also that my own party— uncharacteristically and I think for a short time—has so misled itself that it is ready at this stage to commit itself to a referendum on anything that may emerge from the constitutional convention, not before the ink is dry but before half the wet ink has been put on it. We do not yet know what is going to emerge. It may prove to be an issue so dramatically different from those we

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have subscribed to in the past as to deserve that response. But I hope very much that my own party will consider carefully the wisdom of committing ourselves in advance to a referendum on this issue before we know what is going to emerge.

I hope finally that the Government will take account of the several important qualifications that I have made to what has so far been achieved, for I do very much agree with the number of colleagues who have already made very similar points.

5.4 p.m.

Lord Thomson of Monifieth: My Lords, I very much agree with the final words of the noble and learned Lord, Lord Howe, as to the precipitate approach to the question of a European referendum. I am bound to say that I remain rather an old fogey regarding national referendums: I prefer to see parliamentary democracy work if it possibly can. And I certainly do not think the case for having a national referendum on these proposals from this convention has yet been made. We must await, as the noble and learned Lord, Lord Howe, said, the outcome of the discussions in the IGC. It is to be hoped that the question of a referendum on the convention may coincide with the need for a referendum on British membership of the euro. I shall comment on that issue at a later point.

I agree with all noble Lords who have spoken about this being a very important report. It comes at an historic stage in the development of both the European Union and, as the situation in Iraq has shown, at a critical point in the development of the transatlantic relationship. I join with others in the tribute to those who have served so well on the convention; in particular my noble friend Lord Maclennan of Rogart and the noble Lord, Lord Tomlinson. They have done an excellent job for this House and indeed for the country as a whole.

I want to concentrate briefly on the significant realities that the forthcoming IGC will have to face if the enlarged Union is to work effectively for its citizens and play a constructive role on the world scene.

While the proposed constitution creating a greatly enlarged Union is a formidable challenge, it does not in my judgment propose a qualitative change in the character of the Union; rather, it knits together the succession of the earlier treaties. It moves in fact, as the noble and learned Lord, Lord Howe, said, more towards a union of national states and parliaments than in the direction of any superstate or a closer European federation.

The proposed constitution demands significant changes however of practice and procedure rather than of principle. I very much agree with my noble friend Lord Wallace and, indeed, with the chairman of the Select Committee, the noble Lord, Lord Grenfell, about the many important matters that still remain to be resolved in the IGC's discussions and of the importance of maintaining an adequate parliamentary scrutiny of these developments.

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First, a Union of 25 nation states simply will not be able to work without qualified majority voting on a substantial scale. The areas where a right to a national veto is recognised will have to be carefully defined and agreed and, I hope, very much limited in their area.

However, a corollary of expanding qualified majority voting and limiting the right to veto will have to be an expansion of subsidiarity—deliberately leaving areas of decision-making to national administrations. Again, the draft constitution document is fairly thin on this issue and will need a great deal of work at the IGC.

The European Commission and the European Parliament will both in my judgment—and I speak as a long-time ago former member of the European Commission—have to practise the self-denying discipline of Talleyrand pas trop de zele in harmonising the details of our daily life.

If a European Union of 25 is going to work, it will have to concentrate on the strategic priority areas of economic integration and of monetary integration through the single currency. That will best protect and promote living standards of its citizens and give the Union maximum negotiating power within the global economy and political clout in international affairs. The proposal therefore to elect the future president of the Council of Ministers in place of the present six-monthly rota, which will become unworkable with 25 members, will enable the European Union's influence to be deployed more coherently in world affairs. That, together with the appointment of a European Foreign Minister, accountable to both the Council of Ministers and the European Commission, will, as the noble and learned Lord, Lord Howe, said, be potentially a very important development indeed. In fact, it is the best way forward to shape Europe's partnership with the United States in the face of the 21st century's new threat of international terrorism, with its tragic ranks of suicidal volunteers.

I conclude my brief remarks by saying that the sad thing is that, at this critical stage in the development of the European Union, the Government's original wish, on being elected, to be at the heart of Europe has been damaged and diminished—I hope only for the time being. First, it has been damaged and diminished by our delays and dithering over joining the euro, and now by the degree to which we decided to go it alone with the United States' President instead of deciding to use the more constructive road map of being part of a European effort, through the United Nations, to establish a timetable and policy to deal with Saddam Hussein's Iraq.

In the long run, in the 21st century, what will matter is not the American/British relationship but the American/European relationship. That will be the case whether or not Britain is positive and active and at the heart of that relationship. It would be sad if, given the history of this country's role in international affairs, we were deliberately to allow ourselves to drift into a marginal role in what will be the fundamental relationship in international affairs in future. If we were to allow that, we would not enable ourselves to

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play a proper part in making a success of an enlarged European Union, which is of such fateful importance for the future.

5.12 p.m.

Lord Hannay of Chiswick: My Lords, it is a privilege to follow the noble Lord, Lord Thomson of Monifieth, again. I say again because, a little over 30 years ago, I followed him at a rather greater distance on the way to Brussels.

When the House last debated the Convention on Europe, on 7th January, one could already discern the shape of things to come, but much of the detail remained obscure. Now, much has been filled in, although there are still areas of obscurity and ones which will need careful scrutiny and possibly amendment at the inter-governmental conference which will begin its work next month. We are thus at a decisive point in what has to be regarded as effectively a single process and which is likely to result in a constitutional agreement early next year. We have the draft of such an agreement as the convention established it. We need to say what we think of it, and thus help the Government to determine their own attitude in the months of negotiation that lie ahead.

First, I should like to say a word about the significance of this document as compared with others this House has ratified in past years. We have already been treated to a good deal of hyperbole on the subject in the press, in which the phrase "a thousand years of history" crops up rather frequently. Why one should cut out the Anglo-Saxons, who contributed a good deal to our constitutional history, I have never quite understood. But I leave the choice between one lot of continental invaders and another to those who have that mind set.

A glance at the document shows that it is certainly not just a tidying up exercise, although that is in part what it is. But nor, at least in the view of this observer, who was involved in one way or another in negotiations on most of the other European treaties, is it in any way the most significant or far-reaching of those treaties. It is not as significant in this view as the original Treaties of Rome and Paris, which we ratified in 1972; nor as the Single European Act 1986, to which the noble and learned Lord, Lord Howe, referred, which quite literally changed Europe's economy; nor as the treaty of Maastricht, which established a single currency and laid the foundations of a common foreign and security policy.

In the view of history, the document may not even be considered as significant as the various accession treaties which opened the door to countries which had suffered from fascism and communism, the most recent of which we are currently in the process of ratifying parliamentarily. But it is surely more significant and far-reaching than the Treaties of Amsterdam and Nice, those rather botched jobs whose failure to deal effectively with the challenges facing the enlarged Community provides part of the rationale for the present negotiations. So it is somewhere in the middle of the spectrum.

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How much of it is tidying up? That we do need to know, and I hope that the Government will set out the details clearly and persuasively, and perhaps a little more fully than in the White Paper, on which our speed reading abilities were put to the test. It really makes no sense to regard a statement about the supremacy of European law as some kind of innovation, when rulings of the European Court of Justice, which we respect and which apply in this country, have been based on that principle for decades. Equally, the significance of references to a closer Union, a concept that was in the preamble of the original Rome treaty, hardly seems to merit the importance attached to them. The present Union is becoming a closer one all around us each day, as our economies and societies organically respond to the removal of artificial barriers. In any case, no one seems to dispute the political need for a clearer, tidier set of rights and responsibilities. So what is tidying up should not be contentious and should be welcomed.

Then there are the innovations which, clearly, we must examine with great care. The proposal to bring the whole area of immigration, asylum, crime and counter-terrorism—what used to be called Pillar 3—within the scope of the Community method and in many cases but not all within the scope of majority voting, seems not to be greatly contested. Certainly, recent experience of the old inter-governmental methods in this area have not been a brilliant success. But if we are to move in this direction, I hope that we will set out very clearly that the objective is not to create a fortress Europe, repelling all those less fortunate and less prosperous than ourselves, but rather to achieve a judicious balance between the need to avoid unmanageable surges of immigration and our own duty and interest to keep our doors open. There will be other, probably quite modest, areas where a switch from unanimity to qualified majority voting will make sense, but in some—the Government's red lines on defence, tax, harmonisation and social security— that will need to be resisted.

As to the institutional innovations, these seem to me quite clearly to provide more authority to the representatives of national governments and parliaments than hitherto has been the case, but to do so while at the same time strengthening the Parliament and the Commission. It is simply not in our interest to have a weak Commission. How is competition policy to be enforced by a weakened body? How is impartiality and even-handedness to be achieved in a Union of 25 disparate countries? But to expect the Commission to become more of an executive body, better at performing the many functions that it already has, and less of a trend-setting innovator does not mean that it needs to become weaker.

The new provisions for calculating majority voting also seem to me an improvement, giving the larger member states a greater weight than at Nice. Do those in this country who oppose the convention text actually want to move back to the status quo, which is in many respects less advantageous to Britain than what is proposed?

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An area which will certainly require much meticulous work at the IGC and perhaps some adjustment is that dealing with common foreign and security policy. There are of course those in this House and elsewhere who believe that the European Union should not be trying to move further down that road—and "further" is the word, because we already have a functioning CFSP in the Balkans and in the Union's participation in the Arab/Israel peace process. I do not imagine anyone is proposing to pull back from that.

I do not myself agree with that negative view. Iraq was of course a traumatic experience for all of us, for those who supported the war, as I did, and for those who did not. But, if it showed one thing clearly, it was surely that a divided Europe has little influence in Washington and risks being marginalised so long as it is divided. It also highlighted the greatest challenge for any CFSP that is going to be worth having—how to build a transatlantic partnership which can face the challenges to our values and our interests that will be thrown at it, without splitting apart or developing into a "me too" approach, but also without systematising our disagreements with the Americans, which must be resolved, not proudly proclaimed.

Against this background, the proposals in the convention text—a number of which I proposed myself in our debate last February—seem to me to make good sense. The fusing of the role of the high representative with that of the Commissioner for External Relations, with the resultant foreign minister chairing the External Relations Council and not being institutionally subordinate to the Commission, is worthy of support. I would have liked to have seen two further elements—a foreign affairs committee of the whole Union bringing together representatives of national parliaments and of the European Parliament to provide support and democratic legitimacy for the foreign minister, and, secondly, recognition of the need for a strengthened CFSP to develop an organic link with the US to underpin the partnership to which we should commit ourselves from the outset.

Are there ideas in the convention text to which we should object or which are missing? I certainly think so. It is absurd to be contemplating an extension in the membership of the Court of Auditors to 25 or more when the existing court of 15 is already top-heavy. This House has proposed a slimmed down version, and I hope that the Government will commit themselves to working for that. The proposal for a public prosecutor seems to me at the very least premature; let us hope that it could be set to one side.

The idea of a wide-ranging general power enabling the member states to make changes to the constitutional agreement without requiring national ratification seems to me undesirable and should be resisted. That is the passerelle clause to which the noble Lord, Lord Howell, referred. Such a provision can be useful when it is limited to a particular area of policy, as it was in the earlier treaties which gave a power to the member states to reform the European Court of Justice. It could be that some such provision relating to the institutional aspects of the European Central Bank and to the growth and stability pact would provide just that potential for

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greater flexibility that is desirable in the current circumstances. However, a catch-all provision risks letting the future development of the Union slip away from the hands of the member states that compose it, and that would be highly undesirable.

So there is much to be done in the six months or more which lie ahead and much for Britain as a key European player to do. But to be effective we have to be constructive and we have to be able to enlist the support of others. An approach which consists of opposing the convention's proposals root and branch will bring nothing but isolation, as the initial reaction of all member states, old and new, at Thessaloniki, in June, demonstrated.

We need to work hard to define our interests and how to further them at the intergovernmental conference, not to lose ourselves in a politically opportunistic debate about how in due course we will approve whatever the outcome may be. And let us have no illusions; for us to reject an outcome which all others accept would have far-reaching implications not just for that treaty but for our membership of the European Union as such. Far better surely to work for an outcome that all can support, to work to strengthen a relationship which remains central to our future as a nation and to our role in the world.

5.23 p.m.

Lord Lamont of Lerwick: My Lords, it is always a pleasure to follow the noble Lord, Lord Hannay. He and I have our disagreements, and we both sit on Sub-Committee A, but—perhaps slightly to the surprise of us both—we have agreed on quite a number of things. I have always benefited from listening to him. Both of us sit under the chairmanship of the noble Lord, Lord Grenfell, to whom I am very pleased to pay tribute. He chairs our senior committee with a very light and wise touch, which makes it a pleasure to be on that committee, from which I shall very shortly be retiring—much, I am sure, to his relief and that of most other members of the committee.

The noble Baroness, and indeed the Prime Minister, said that the convention and the proposed constitution were a remarkable event. Certainly the conclusions of the convention on the draft constitution were unveiled with a great fanfare. At times it seemed as though there had been nothing like it since the Field of the Cloth of Gold. The champagne flowed. President Giscard d'Estaing stood ramrod straight while that music so familiar to citizens of the former German Democratic Republic, the "Ode to Joy", was played. President d'Estaing was even compared to Socrates. He, however, preferred to compare himself to Thomas Jefferson at the time of the Philadelphia convention, in 1787. It was President Jefferson who, according to President Giscard,

    "installed leading ideas into the system".

In fact, in 1787, Jefferson was in Paris, not Philadelphia. When he read the conclusions of the Philadelphia convention he was deeply depressed, fearing it threatened an over-mighty government. He might have a similar reaction to what is proposed in the convention.

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Even by the limited standards that the Government have set for themselves, the constitution is surely something of a failure. It is not the easily comprehensible, clear document that will connect Europe with its citizens. In the opinion of the Economist magazine, it has actually made matters worse, less comprehensible and less clear and has confused further the division of powers within the EU. While the US constitution is 15 pages long and the accompanying Bill of Rights specifies 10 liberties and procedural rights, and the UN constitution fits into the pocket, this document runs to more than 150 pages.

I am not opposed to the idea of a constitution. I think that there is a lot to be said for having a clear document that defines the different powers of the different institutions. In many ways, I think that we would be better off with a federal constitution so that we could actually have an end to the endless institutional tug-of-war and competition for power. However, this document has not provided it.

If the purpose was solely to amalgamate existing treaties—which would be a genuine tidying up exercise—then there was hardly any point in having the convention at all. Any parliamentary draftsman with a computer could have brought the treaties together in one volume. Indeed, the private sector has already done that, and, with the permission of the House, a consolidated set of treaties is already available in the Vote Office and has been for some time.

Winston Churchill once allegedly, and uncharacteristically rudely, observed about a speech that,

    "it has every platitude apart from please lift the seat and adjust your dress before leaving".

Much the same could be said about the European constitution. The noble Lord, Lord Howell, reminded us that we are solemnly told that,

    "children may express their views freely."

In fact, it goes on to say:

    "Such views will be taken into consideration in matters which concern them in accordance with their age and maturity".

The document says that,

    "Everyone has the right of access to a free placement service".

It is just as well that it did not say that everyone has the right to free tuition at a university, as it might have done a few years ago. It states:

    "The Union shall enjoy a high degree of environmental protection".

The constitution stops somewhat short of proposing women-only shortlists for commissioners, but it does specify that one third of the candidates for the Commission should be women. Some of the points made and some of the principles and policies are worthy, while others are more debatable. However, they have no place in a constitution.

As George Will observed:

    "A proper constitution does not canonise as rights elevated beyond debate the passing policy whims of the moment".

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The purpose of a constitution is to distribute power between the legislature, the executive and the judicial institutions so that the will of the majority can be expressed while power is also limited in order to protect minorities.

The Prime Minister, in his foreword—perhaps it was written by Alastair Campbell—claims that the constitution does not bring about a fundamental change in the relationship between member states and the Union. That is the spin—the tumble dryers are in overdrive. However, note the word "fundamental". The fact is that merely having a constitution is itself a significant change and does itself alter the relationship between member states and the EU. Constitutions have unintended consequences. And there are many other ways in which this constitution is a step towards a more centralised Europe.

In July the Government presented the draft constitution as a White Paper. Rather curiously the Government's version left out 100 pages which were dismissed by the Foreign Secretary as largely technical. The omitted pages included the areas where QMV is to be extended, the EU's involvement in criminal law and the new European public prosecutor, which the Government themselves are committed to trying to get removed, but that was not included in the draft that the Government presented.

Foreign policy, defence, criminal justice, police matters, all for the first time come under the EU. The EU has, like the Habsburg Empire with its two-headed eagle, two presidents—a President of the Commission elected by the European Parliament and a President of the Council now to be elected for two-and-a-half years by the directoire of serving heads of governments. It is not in this document, but I read that the Eurozone may elect its own president as well. I wonder whether I am alone in my anxiety that the EU is somewhat in danger of debauching the currency of European bigwigs.

But I have left out the Foreign Minister. Europe is to have its own Foreign Minister, not as the Government of this country wanted, a high representative, but a Minister with a department and embassies and a Minister who is also to be a member of the Commission. He will be a very important person but, of course, the mystery remains of what will he say to his opposite number, the US Secretary of State, if there is a deep division in European foreign policy, as there has been in recent months. Even this Government have their red lines, QMV on foreign policy, QMV on taxation. We know what the Government want, but it is inevitable and in the nature of things that some of those battles will be won and some will not.

Then we have the Charter of Fundamental Rights, compared at one time by a Minister in the Government to the Beano. The Government originally said that this bizarre document was acceptable only as a political document and so could not be made legally binding. But the draft constitution now puts the whole text of the charter in part two of the constitution.

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The Government say that the scope of the charter is limited to the institutions of the EU. The way they put it, you would think they were talking about the fair employment equal opportunity policies of people working for the Commission. The institutions of the EU, the Council, the Parliament, the Commission, are law-making bodies whose legislative actions will come under the charter. Many important policy areas covered by the charter are from now on in another part of the treaty to be "shared competences". So it seems highly probable that the influence of the charter will grow and that those areas will come increasingly under the European Court of Justice.

Even if the Government are right and there is some kind of Berlin Wall between the charter and the rest of the constitution, what on earth is the ECJ meant to make of a constitution that affirms certain fundamental rights and then, if the Government are to be believed, denies them to most EU citizens? The Court of Justice would surely be justified in trying to extend those rights. I believe that it would be well justified. What is the point of them otherwise?

The Government argue that they have included a reference to the commentary in the treaty and they refer to the strong horizontal clause II-51. But the Government's position is plainly not watertight. We saw that in the wording that the Minister used. It is plain also from the wording in the White Paper. On 9th July the Leader of the House of Commons, Mr Peter Hain, referring to the charter, said:

    "After the final IGC negotiations . . . we shall see whether we can accept the proposal".—[Official Report, Commons, 9/7/03; col. 1268.]

So the Government cannot pretend that the charter is not a problem. It has been admitted by Mr Hain and, I believe, again today that it is potentially a problem.

The charter also entrenches into the constitution the Geneva Convention of 1951 on refugees, which covers asylum policy. Noble Lords will remember that not so long ago the Home Secretary floated the idea of repealing and amending the convention on refugees. Some of us wondered whether that was the tumble driers in action again—just more spin. When Mr Hain appeared before the Select Committee, I asked him about that. He said,

    "We are perfectly happy with the convention on refugees".

But certainly any change in future will be impossible now that it is part of the European constitution.

Power is to be given to the Union to approximate criminal laws and penalties across member states for a list of crimes with a cross border dimension. Who is to decide whether those crimes have a cross border dimension? There are no prizes for answering that. This is the first time that the EU has intruded into criminal law. Criminal justice procedures are to be harmonised. Perhaps criminal justice Bills in your Lordships' House will become less regular events. That would be a relief to many to us but one wonders how so many eminent lawyers would pass the time.

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The EU is to get legal personality—the word is used advisedly. At present, the EC, the first pillar, has such a capacity. The new Union will absorb the two intergovernmental pillars into a single organisational structure meaning that the Union will have exclusive competence to sign international agreements. Perhaps when the Minister replies to the debate, she might tell us whether member states are able to sign treaties in areas outside shared competence or outside areas of exclusive competence of the EU. Are there any areas in which the British Government can sign treaties on their own?

Sadly, the proposals in the convention for giving a larger role to national Parliaments are a small brown mouse. National Parliaments are allowed to express views but then, as the draft constitution says,

    "the Commission shall review its proposal . . . after such a review the Commission may decide to maintain, amend or withdraw its proposal".

It is little wonder that that was strongly criticised by the House of Commons European Select Committee. It is a great pity that the proposal put forward by Gisela Stuart for a yellow and red card system that would be binding on European institutions through national Parliaments was not followed up.

Libraries, it used to be said, filed the French Constitution under periodicals. To quote George Will again,

    "the more detailed a constitution is in presenting political outcomes as elevated beyond the reach of elected and changeable majorities the more certain it is to become dated."

The Constitution carries on the tradition of the EU speaking to the peoples of Europe rather than listening or providing an opportunity for the peoples to speak to the EU.

    "Democrats should hope that the European Union's Constitution will be filed with the daily newspapers".

5.37 p.m.

Lord Watson of Richmond: My Lords, usually on matters European I find myself on the other side of the argument to the noble Lord, Lord Lamont, and so I do, I am afraid, this afternoon. However, I very much agree with something that he said at the outset of his remarks; namely, that there is too much in the draft constitution of fad, the temporarily politically correct and statements with a philosophical approach rather than concrete constitution making.

I confess to your Lordships' House that I have a certain fondness for the preamble of the draft constitution and in particular for the penultimate paragraph which states:

    "Convinced that, thus 'united in its diversity', Europe offers them [the Europeans] the best chance of pursuing, with due regard for the rights of each individual and in awareness of their responsibilities towards future generations and the Earth, the great venture which makes of it a special area of human hope".

The phrase which my eye alighted on, and I was delighted to see, was, "united in its diversity". There is a reason for that which, as it casts a slightly wider light on the draft constitution, I should like to share with your Lordships. In passing we should note that although the preamble quotes Thucydides, it does not much sound like him. But that particular paragraph and that phrase are important.

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Some two years ago, I was asked by the late Lord Jenkins of Hillhead to stand in for him at a meeting in Brussels, the purpose of which was apparently to choose a motto for Europe. The committee was to be chaired by the formidable Jacques Delors and was to meet, slightly strangely, in the Swiss Hotel in Brussels. When we arrived, we were confronted with a shortlist of mottoes for Europe, all 10 of which were displayed on a screen. They had been shortlisted from a great many more mottoes, which had been debated, discussed and voted on by tens of thousands of schools across the European Union.

Mr Delors said, right at the beginning of the discussion, that there was not much need for discussion as it was self-evident which motto we should recommend. The motto that he chose, if my memory serves me correctly, read: "Europe—solidarity, prosperity, democracy, pluralism and justice". It is the sort of motto with which one would spring out of the bath in the morning and say, "That's it". We then had a debate about the motto, and I expressed the opinion that solidarity carries, certainly in the United Kingdom, too much ideological baggage, and perhaps was a word with which we should be prudent. I did not win that argument, but the Germans did. A lady who had come from Germany—an abgeordnete of the Bundestag—said, "We Germans understand solidarita: it means that we pay for everything", so solidarity sank.

We then spent some time talking about the American motto, "E pluribus unum", or "From the many, one". It was the feeling of everyone in the room and reflected the views of the children across Europe that, whatever else might happen, we would not end up as one in the sense of a single nation, state or people. The feeling was that we were in fact quite different—that we were a coming-together of nations very proud of their character and history. That is why we chose the phrase, "United in diversity", which I am glad to see has arrived in the preamble.

One could argue—I would—that Europe's unity in fact turns more on adversity than on diversity. It springs from necessity. We take action together because of the need to compete globally and to provide the United States with a more equal partnership. On that note, I would like to say how much I agreed with what was said by the noble Lord, Lord Hannay. A number of us who belong to Sub-Committee C visited Washington shortly before the beginning of the Iraq war. We represented a wide variety of views. Some were slightly more or less Antlantacist or pro-European, but we were all startled by the degree to which it was made absolutely plain to us by pretty well all the people whom we met in Washington, particularly in the Pentagon, that unless Europe got its act together to a significantly greater extent it could not be seen, would not be heard and would not be able to help. That is a need.

We need to protect the environment from degradation, and by definition we cannot do that unless we co-operate to achieve it. We need to co-operate to an unprecedented degree to protect our societies from terrorism. The motor of the European

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Union is necessity, but European unity—and the European Union constitutionally—cannot mirror that of the American union, with its "E pluribus unum", for that very reason. The phrase that the French use all the time is, "A union of nations". Because we are a union of nations, we are attempting something unique, a new experiment. We are not creating a super-state, and we are not imposing the dominance that historically has always been the pattern of one nation in Europe on the other nations of Europe. We are attempting, on a voluntary and democratic basis, to do something that is more than co-operation, a confederation, or a series of bilateral arrangements. We are attempting to create something new.

It is for that reason that this experiment is so relevant to the rest of the world. In particular, it is that dimension of the European Union that makes it, in the terms of the preamble,

    "a special area of human hope".

It is also why the Council of Ministers remains the most powerful and decisive European institution, a position not changed by the draft constitution. Indeed, it is arguably reinforced by it.

There is one dimension, however, where we should be bolder in emulating the United States and its constitution, and that is in a greater determination to make a direct connection between democracy and power in the European Union. It is there that Articles I-25 and I-26 absolutely miss the challenge of beginning to bridge the democratic deficit inside the European Union. They deal with the European Commission and its presidency, proposing that:

    "The Commission, as a College"—

the term now used—

    "shall be responsible to the European Parliament".

Yes, to the European Parliament, but not to the European electorate. As the next clause makes clear, the presidency of the Parliament will be determined by the Council, which will indeed take into account European elections, but will then put its proposed candidate for the presidency of the Commission to the Parliament.

To bridge the democratic deficit, we have to find a way to demonstrate to voters across Europe, particularly with the enlargement of the European Union, that how they vote in European elections has a real impact on what Europe does. In other words, we must show that there is a real connection between the will of people in the Union and the agenda of the Union. How could we begin to resolve that problem? Not in the terms proposed in the draft constitution.

The president of the European Commission should indeed be chosen by the Members of the European Parliament, subject to ratification by the Council and not, I would argue, the other way round—in effect, chosen by the Council with the ratification of the Parliament. However, a way should be sought for the presidency of the Commission to reflect the political majority that results in European elections. For that, at the end of the day, we will have to come to a view on a common electoral system for the European elections.

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If we do not make that connection, we will be faced with steadily declining electoral turnouts for European Parliament elections. Just as it is not in our interests that the Commission should be fatally weakened, nor is it in our interests that the Parliament should never develop real democratic credibility. In that, we should learn from the United States' experience, which accepts that there is a certain balance of power between institutions and that there is—this is democratically not a bad thing—a tension between institutions in the Union. The idea that somehow all the institutions cohere is fundamentally unrealistic. The institutions have to reflect the diversity of political view within the Union.

Historically, we in this country are always rather proud of our understanding of democracy. We believe ourselves to have a robust instinct for it, and in many ways that is correct. Therefore, it seems to me a pity that Her Majesty's Government have chosen to draw a red line around large areas instead of focusing their attention on putting the red ink where it will make a real difference to democracy.

5.50 p.m.

Lord Owen: My Lords, I believe that the debate will once and for all end the illusion that we are involved merely in a tidying-up exercise on the constitutional treaty. Indeed, the Government, in their White Paper, state at page 27, paragraph 43:

    "Important issues still need to be determined".

I would add "very" at the beginning of that statement:

    "Very important issues still need to be determined".

I pay tribute to the House of Lords Select Committee and its chairman, who spoke so eloquently at the beginning of the debate. For those of us who have been trying to find our way through this complex constitutional treaty, its series of reports has been extremely important. First, it has tried to establish genuine consensus, but where it is not genuine they appear to have clarified the dissenting issues. That is an important contribution.

Now, it seems to me, we must move away from generalities and come down to particulars. In that spirit, I submitted detailed amendments to the House of Lords committee and I cannot possibly cover any or all of them here today. I understand why the Government in their White Paper could not reveal too much of their hand and list every amendment they wanted to make and shown in every respect where their bottom line was drawn; indeed, it would have been unwise of them to do so. I welcome some of those bottom lines and some of the issues they have taken on. Some of them I shall cover today. However, fundamentally, there must be a real determination to knock on the head the idea that the treaty can merely be glossed over with a formal ratification procedure at the end of the Italian presidency.

By all means, have a second Treaty of Rome and give the Italians that satisfaction and in many ways, they deserve that. However, it will not and cannot be completed by December. This is a long process and it should not be hurried. Above all, we must carry public

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opinion right across the European Union, let alone across this country, and we are a long way from doing that at present.

Moreover, I hope that the Government will show a readiness to pick out early on, and to obtain the quiet support of other countries over some of these essential issues. If the House will allow me, I want to deal with some of them in a little detail. First, the current draft treaty, amended at the last moment, leaves open the possibility that a president of the Commission could also become President of the European Council. If that were ever done, it would be a massive consolidation of power in one person and would, in effect, mean that the Union would be led by someone with most of the powers of a head of government of a single state.

At present, under the draft treaty, that could happen by a mere qualified majority vote unless Article 21.3 is amended to state that the President of the European Council,

    "may not be a member of another European institution",

as appeared in an earlier draft which was changed at the last minute.

That draws attention to a serious issue. These last-minute amendments and some others are made by serious politicians. We should not underestimate them. They genuinely want a superstate. It is absurd for us to go on pretending that they do not. Some of them have been heads of state and heads of government. Some of them have held high office, and some still do, in many member states and they have not produced these amendments out of a hat or argued their case within the convention and elsewhere by accident. They are deliberately designing a treaty which can evolve over time to create what they want. They want the essential powers of a member state currently held in areas of defence, foreign policy, some questions of internal security, economic policy and in a few other areas, taken centrally at the European level by qualified majority voting. In so doing, they are deliberately reaching the point at which we cross the threshold of a self-governing member state to a situation in which member states no longer individually, if they wish, uphold those essentials—the internal security of their own territory and the independent conduct of foreign and defence policy—which are the hallmarks of a self-governing state. That is not accidental; it is deliberate.

I come to the second essential point. In Article 21.1 the words should be reinserted that appeared in the earlier draft; that anyone chosen as President of the European Council—the new post—should have previously been a head of government. In my judgment, it is a democratic safeguard that this post should be held by someone who has been able to win the support of people in his or her own country to hold the highest democratic position in that country and then go on to win the support of a qualified majority of fellow heads of government, many of whom will have served with that individual within the European Council.

The third change which I believe to be essential relates to Article 22 and the use of the term "Union Minister" for the first time ever. That has been mentioned by a

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number of speakers and it is clear that the Government have considerable reservations about the proposal. This is a massive political threshold, and we should not duck that, towards a superstate. People understand what a Minister is. A Minister is a government in a state. For that reason, throughout the evolution of the European Community, we have not used the term. It is no accident that we have chosen terms such as "Secretary General", "High Representative" and "Commissioner". We have never used the term "Minister" and we should not start now. That should be deleted and we should use the term "High Representative for Foreign Affairs". That is what people have understood. That job has been well-conducted by Xavier Solana and there is no reason to change it other than a pretension to being a single state with a government. Unless we take that stand now, it will not be long before they come up with a Union Minister for economic affairs.

Fourthly, the High Representatives—that post carries out intergovernmental common foreign and security policy, which I strongly support, and also the new European security and defence policy, which now it has been much modified after the meeting in Nice I support, and I am pleased that the governments have done that. The High Representative should be appointed only by the European Council, but not as is currently done, appointed by a qualified majority of the European Council and with the agreement of the President of the Commission. The President of the Commission should not be involved in that appointment. Nor should the High Representative be a vice-president of the Commission; nor, as in the draft, should they have their names submitted with the rest of the Commission for the approval of the European Parliament. This is an intergovernmental post and we should be quite adamant that there is no creep, using the device of double-hatting.

It is helpful that the High Representative can cross over to external relations, which is a Commission function. I believe that that can be broadly done within the wording of Article 27.3, which is itself a compromise, that in exercising responsibilities with the Commission on external relations, and only for those responsibilities, the High Representative shall be bound by Commission procedures. The High Representative would not therefore be shared equally between the Commission and the European Council, which puts the individual in an impossible position. He or she would be firmly within the European Council. The Government used the expression "a foot in the door" of the Commission. On current proposals, the Commission has a great deal more than a foot in the door and that needs to be modified.

The fifth essential amendment relates to Article 6 on legal personality. We must make it clear that member states retain their current rights in terms of representation on international bodies. Since we took the intergovernmental pillars and collapsed them into one Union treaty, that is not clear. The effects are from three elements, all of which are referred to in the treaty: "Union competence" on the treaty-making capacity of member states; the implications of the "Community way" of law making; and the "primacy" over the law. All contribute great doubt as to whether we have yet

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settled this question. The Prime Minister has made absolutely clear that the retention of current rights in terms of representation on international bodies by member states must not be undermined.

On my sixth point, I come to Article 40, which covers defence policy. Currently it goes way beyond what was agreed at the IGC in Nice under then government red lines. The existing position, and that which has pertained for some years maybe in the European Community and certainly now in the European Union—it may have come in first at Maastricht or perhaps prior to that—is that the emergence of a common Union defence policy might occur. The emphasis is on the word "might", but it is not something that will occur. Yet the word "will" now appears in the draft treaty.

It is also vital that we do not establish structured co-operation, which, the treaty admits, is purely a new name for what was agreed at Nice in relation to enhanced co-operation. But at Nice we were explicit: enhanced co-operation, which I supported, would come in but it could not be applied to matters having military and defence implications. Yet, a mere few years later, they have returned to this fundamental question. We should continue patiently to develop European security and defence policy along the lines of the important negotiation that took place in Berlin plus between the European Union and NATO. That went a long way to satisfy American anxieties and, perhaps I may say, the anxieties of European military commanders. Yet it has been basically torn up by the attitude that structured co-operation can now be created when four, five or six members effectively go their own way.

My seventh point is that Article 24.4 must be deleted. I am glad that the Government made it clear that they are not prepared to support the so-called "escalator" or passarelle clause, again inserted at the last moment, which allows the European Council to replace unanimity requirements with qualified majority voting in any area it wishes, provided it is unanimous. That allows a temporary European Council to create permanent changes. It opens the perspective of extending the competence of the Union without the proper procedures for amending the constitutional treaty provided within the treaty itself, which I believe are good provisions. Basically, what has been there in the past has been kept. I cannot see how any parliament in a member state can allow this clause to go through. It would provide an open season on moving the Community by stealth—or certainly by clear steps—towards a superstate. I do not believe that that could be accepted by this House or the House of Commons.

Finally, I turn to the question of what we are going to do. There is no doubt that in this paper the Government have started on the process of serious change. Are they going to stick to it? I profoundly hope that they will. I have voted for every single treaty that has come before us and I do not want to vote against this one. But I certainly could not vote for it in its present terms and I expect the Government to say the same. I believe that the

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Government must recognise that they do not have a prayer of obtaining the full-hearted consent of the British people at present. Ted Heath was right. He did not obtain it but one does need the full-hearted consent of the British people when such changes are made.

This is certainly one of the big treaties. We can argue about whether it is the third or the fourth biggest. We were right to have a referendum in 1975 and, for a long period, it gave us the democratic legitimacy in this country to hold out against temporary moods of opposition—not least that which came from the Labour Party all through the 1980s. It was a democratic safeguard. Personally I believe that we should have had a referendum on the Maastricht Treaty, but at least the then government could say that the treaty was ratified after an election when it was clear that all three political parties were in favour of ratifying Maastricht.

I do not believe that these important constitutional treaties can come into being without the agreement of the people. It is a weak form of democracy which considers that such things can be decided purely and simply by governments. Someone has already made another point which I remember as Foreign Secretary: once a treaty is signed, it comes back to this Parliament—the House of Commons and this place—and it cannot be changed; it cannot be amended.

We all try to compromise. I know that I shall have to compromise on this treaty and that I shall have to accept some things that I totally dislike. But I also want some things which I do like and I want some constitutional stability. I hope it means that we shall not have IGCs every three years, which has been the case over the past decade or more.

However, I hope that I can vote for the treaty because it has been fundamentally amended—perhaps substantially amended is a better way of expressing it. I hope that I can vote for it in this House and that I can go out and campaign in the country, as I did in 1975, for the positive endorsement of the British people. Only cowardice stands in the way of dealing with this matter in this way. It will be very embarrassing if more and more other European member states hold referendums and we, who like to think of ourselves as the mother of democracy, refuse to do so. I also genuinely believe that it would immensely strengthen the Prime Minister's hand in the negotiations if he said, "I, like you, am going to go before my public and I have to take account of them, as you do". There will have to be a great deal of very determined efforts to persuade people about the values of this treaty.

However, like others who have spoken in the debate, I have no doubt that our continued membership of the European Union is a vital aspect of British political life. I wish us to be a constructive and serious partner. But—I know that this is still controversial—I also want the situation in this country whereby a British Prime Minister can argue for a foreign policy on which he cannot obtain unanimity or consensus in the European Union and then act on it. I recognise that the period since the rather amazing military victory in Iraq has been very difficult, and I know that the post-war

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period has not been conducted well and that some serious mistakes have been made. I hope that, as a result of the Hutton inquiry, some lessons will be learnt about collective responsibility and collective Cabinet decision-making. I hope that the JIC procedures will not be corrupted in the way that they have been. That has shocked many of us who have worked with the JIC procedures over many years.

That said, the fundamental substance of what the Prime Minister argued—that we had to involve ourselves in Iraq—was correct. I wish that he had not put the emphasis on weapons of mass destruction but on maintaining all the UN resolutions on the ceasefire. But he was able to act as the Prime Minister of a self-governing nation and able to take an independent judgment on the conduct of foreign and defence policy.

I believe that if this treaty is not amended in a serious way, a future Prime Minister will not have that freedom. That, in my view, makes the word "stupendous", which I believe was used by the noble Lord, Lord Howell, in his opening speech, quite correct. This matter is of stupendous importance to the people of this country. It may be boring and it may be difficult, but we must somehow make it a very successful negotiation. The more we can remain united in this House and in the other place, the better.

6.7 p.m.

Lord Haskel: My Lords, I, too, want to congratulate our parliamentary colleagues who have worked so hard on this constitution. They deserve our thanks and gratitude for all the work they have done.

The reason that I put my name down to speak in this debate is simple. Like the noble Lord, Lord Wallace, I was disturbed by some recent speeches in your Lordships' House about Europe. I was disturbed by accusations of conspiracy and deceit—conspiracy and deceit by all our governments over the past 30 years. Like the noble Lord, Lord Wallace, I was particularly disturbed by the Second Reading debate on 27th June on the European Union (Implications of Withdrawal) Bill. That, together with growing misinformation about our responsibility to bale out other member states with financial problems, spurred me to add my name to the speakers' list.

However, I am delighted to see that many noble Lords far better qualified, more knowledgeable and more distinguished than me are to speak about how it is in our national interest—social, economic and political—to be part of Europe, and how being part of the single market has brought prosperity to our country while, at the same time, introducing us to different lifestyles and forms of society. I agree with the Minister. Quite simply, we are better off in Europe. Of course, that is why the draft constitution is so important.

But that is not to say that everything in Europe is wonderful. As my noble friend Lord Judd implied, the public still perceive Europe as too complex, too bureaucratic and too remote. People are wary of the political deals done in back rooms—deals which affect

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their lives and leave them uncertain as to where power lies. If we are not careful, enlargement will add to those uncertainties. I think that the constitution will allay some of those uncertainties; allay them by clarifying the division of power between Europe's institutions and the individual member states, about which your Lordships' Select Committee has been so insistent. I hope that the final text will make it very clear that the Union draws its powers from the member states and not the other way round.

However, there has to be an exception to that. The EU is a trading bloc. As a customs union it must have exclusive powers within the single market in certain matters to make it work, such as the rules for competition, commercial policy, a common policy for fisheries and agriculture and some aspects of monetary policy. Without those exclusive powers one cannot have a single market. It is right that that should all be carefully laid out in the constitutional convention.

However, the convention goes further. It goes on to set out objectives; well-intentioned, social objectives about which the noble Lord, Lord Lamont, was rather sarcastic. Those objectives seek to promote a more gentle form of capitalism, an objective about which I am sympathetic. It speaks about a Europe of sustainable development based on balanced economic growth; a Europe with a social market economy; yet a European market that is highly competitive, aiming at full employment and social progress and a market that protects and improves the quality of the environment.

No one can argue with those aims. In terms of political correctness they cannot be faulted. But the trouble with political correctness is that it changes with time. Ten years ago it would have been politically correct to speak of a choice between a strong economy and a social market economy—one could not have both. Today we think that we can, thanks to John Smith's concept of a fair society and a strong economy going hand in hand.

Can we be sure that what is politically correct today will be politically correct in 10 years' time? I do not think so. The signs of change are already there. The Chancellor of the Exchequer has started to point them out. He has pointed out that these politically correct objectives deal with the well being and trading relationships between the members of a trade bloc. They look inward. What is now becoming apparent is that the European Union must consider itself as a trade bloc that has to compete globally with other trade blocs. So instead of being a customs union with a commercial policy directed towards internal competition and competitiveness within the single market, we have to be a single market that looks outwards and competes in world markets with Asia, America and Japan. Europe has to become globally competitive because the global economy will not give Europe a free ride.

We in Britain believe that we can achieve that through innovation, skills, investment, leadership, technology, adding value and indeed through people rather than through institutions. So in the constitution I would prefer to see the more lasting values of people

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being enabled, encouraged and inspired and having the economic freedom to carry out their tasks rather than the currently politically correct institutional concepts.

Indeed, instead of referring to politically correct competitiveness or social full employment, I agree with the noble Lord, Lord Thomson, that the constitution should seek to achieve the more practical reforms necessary to complete the internal market. After all, we are still awaiting completion on crucial matters such as opening up Europe's energy market, creating a single European airspace, opening road and rail transport to international competition, integrating financial markets and spreading the use of the Internet and other new technologies, all of which will make Europe a more competitive single unit in world markets.

My other reason for saying that the constitution should speak of more outward-looking economic policies is the hope that economic pressure from outside Europe will help to impose the discipline of checks and balances on the Commission. The noble and learned Lord, Lord Howe, spoke of limits and checks on central powers. I agree that those checks and balances are necessary, but only in the rules of the single market where the Commission has exclusive powers. I do not agree with him that that can be left to the member states. The individual nation states are probably too fragmented to do that themselves.

I hope that the Minister will be able to assure me that there are sufficient safeguards where the European Union has exclusive commercial powers and that the commercial objectives will eventually be much more outward looking. Such an assurance is not only helpful to European citizens, but it will also be helpful in our relationship with the other countries outside the Union, particularly with the United States. Despite much recent comment that the Anglo-American alliance has become simply the subordination of Britain's policy to the US, I still believe that most Americans prefer to have in Britain an independent friend, a friend who speaks its language, who possesses a major voice in the European Union, a friend that has an independent weight in world affairs so that it is capable on occasion of telling Washington some home truths and uses its independent influence to get Washington's attention. All my American friends, family and business contacts tell me that. Remember that America is the biggest foreign investor in the UK and almost 1 million people in Britain work for American companies.

I hope that the public will come to welcome this constitution. I think that they will when they understand that it will help to raise and to maintain their standard of living and create new and different lifestyles and forms of society. It should provide the greatest choice both in lifestyle and consumption for our citizens. It will certainly increase British jobs and prosperity and that will make the European Union probably the most successful regional organisation that the world has seen.

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6.17 p.m.

Baroness Park of Monmouth: My Lords, the noble Lord, Lord Owen, has already said what I want to say far better than I could, but I shall crave the indulgence of the House and say what I think anyway.

I supported, and still support, this country's action in going to war at the side of the Americans and I believe that the transatlantic alliance is more important to us, and indeed to Europe, than any exclusively European relationships if a choice must be made. I am therefore concerned about the recent Franco-German-Belgian initiative, which is clearly designed as an alternative to NATO—the organisation that commits the US to Europe. We should not have to choose. Unfortunately Article 40 paragraph 2 of this draft treaty refers only to the,

    "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".

It also states:

    "The policy of the Union . . . shall not prejudice the specific character",

of these policies and obligations.

However, it is difficult to see how that can be reconciled with the statement in the same article of the requirement of,

    "the progressive framing of a common Union defence policy. This will lead to a common defence".

Where in that formula are the United States and Canada, whose logistical and technical support is essential for any country of the EU to conduct a serious operation? Where do they fit in to the common defence? I do not see how using the red card can prevent the effective sidelining of NATO, and that is serious.

It will be said that decisions on defence can be reached only by unanimity, and that therefore we have the power to reject this and other proposals and to maintain the veto whenever we need to do so. That is not so. Article 22 states:

    "Except where the Constitution provides otherwise, decisions of the Council of Ministers shall be taken by qualified majority".

That appears to be accepted by Her Majesty's Government. I wish it were not so. It appears to be accepted that foreign policy decisions, as distinct from defence decisions, may in general be taken by qualified majority vote (QMV). That will be very widely interpreted and could have implications for decisions on aid and trade policies as they relate to our foreign policy. More important still, foreign policy decisions can have defence implications and lead to action in the defence area. The French and German foreign ministers proposed in one of the working parties that where a country, to protect its vital defence interests, were minded to use its veto the president of the Council of Ministers and the proposed EU foreign minister should try to persuade the recalcitrant country to waive its veto. If it did not, the president should call a Council meeting and proceed to a vote by QMV.

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That proposal, in those stark terms, has not appeared in the draft treaty, and that is reassuring. However, unanimity on vital political issues that could lead to defence decisions is not guaranteed. Article 22.3 states that, except where the constitution provides otherwise, decisions of the Council of Ministers shall be taken by QMV. One of the provisions, or derogations, expressly allows action taken as a result of a common position or strategy to be taken by QMV; thus if the Council had agreed a common strategy on, say, supporting the road map in Palestine, action to implement that strategy by providing troops would require only QMV. It is easy to see how that could present us with serious commitments that we had not foreseen but could not refuse, and I do not believe that Article III 202.4 protects our position, given the other provisions in the treaty, particularly Article 22.

Given the ever-increasing tasks being placed on our seriously over-stretched Armed Forces, the Government will clearly not willingly accept constitutional provisions that could remove our veto in matters of defence. But the great danger, as in all European legislation, lies in the hidden provisos and exceptions that lurk on every page. The exception that I have cited is only one of several.

The Minister for Europe, speaking to Sub-Committee C, shared our concerns about the Franco-German proposal and said later that HMG would be reluctant to see any derogation ultimately of intergovernmental control of foreign policy. He said:

    "The issue of whether one could move, say, to QMV, on the discussion of a policy, in other words adopting a policy position, beyond the sensitive areas that we have already mentioned [means that] we could have QMV on adopting the policy but if it came to implementing a policy that might involve, say, the deployment of soldiers, that would remain a question of unanimity".

He said later, discussing the question of national interests, that the possibility that the whole development of Europe's presence around the world might be blocked by one country, big or small, that had a unique national perspective on that particular problem, preventing Europe moving forward at all, would be dangerous for us and dangerous for British interests.

However, I wonder whether it is right that we should accept the principle of QMV in general for foreign policy if it will, in effect, deprive former bloc countries and satellites of their right to veto what they believe to be against their interests. The veto is essential to them precisely because they have no big battalions and they have emerged from the Soviet bloc, where for long years they were equally deprived of political independence. It is, moreover, playing into the hands of the common strategy—QMV implementation formula—largely to empower, not countries, but a faceless non-elected entity, the Union.

I found Dr MacShane's relaxed view disquieting, not least because military crises arising out of political situations often blow up out of a relatively clear sky, and, as happened with the Congo deployment in May this year, we were told there was no time for scrutiny.

The other trap in the draft treaty is the very broad powers that the EU has taken to itself in the fields of foreign and defence/security policy. Given the

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continuing inability of the EU countries, apart from France and ourselves, to produce a convincing military capability or to spend what needs to be spent, it seems both arrogant and absurd to insist on the progressive framing of a common defence policy as a firm requirement or to introduce a solidarity clause, when we already have NATO provisions under Article 5 for such contingencies.

Equally, it is both absurd and impractical in Article II-206 to require states that sit on the Security Council to request that the so-called EU foreign minister be asked to present the Union's position. Quite apart from the fact that the Union position, presumably taken some time before the Security Council meets, will be out of date in any fast-moving crisis and is likely to have been based, in any case, on the lowest common denominator, we shall be creating a bloc that will devalue the UN and encourage, for instance, the African Union—President Gaddafi's creature—ASEAN and who knows what other blocs to demand similar representation. Fortunately, to agree to this arrogant proposal would require revision of the UN Charter, and that seems unlikely to happen.

There are many other disturbing features of this treaty, but my first main concern is that the devil is in the small print, and in such a complex interlocking series of provisos, exceptions and stipulations it will be very easy indeed for Ministers in late-night sessions, even with the best of briefing, to lose their way and be ambushed, especially in the grey area between foreign policy and the possible eventual military consequences, which, because they are simply implementing a policy, can be decided by QMV. We would lose our veto in that situation.

It would frankly be a great deal better if we could retain unanimity for foreign affairs as far as is humanly possible. This treaty is full of new commitments, both in the political and military field, which are designed to create something we do not need. We do not need to be forced into yet more double-hatting of scarce resources. We do not need to complicate well tried relationships in both the UN and NATO. As one of the only two effective and experienced military powers in Europe, we should not accept, or allow ourselves to be forced to accept, any dilution, by whatever formula, of our absolute power of national veto when our national interest is at stake.

The Belgians, the French, the Germans and the Luxembourgers do not own the treaty. Too many British governments of all complexions have yielded too much already in the sacred name of pragmatism and practical compromise. We are in the EU and must stay there to make it work, but not on terms designed to transfer the powers of elected national governments, who can be changed, to an unelected bureaucracy that requires member states to ensure,

    "through the convergence of their actions, that the Union is able to assert its interests and values on the international scene",

to ensure that their national policies conform to the position of the Union, and to accept that,

    "European decisions shall commit the Member States in the positions they adopt and in the conduct of their activity".

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Somewhere else the treaty says that we must not do anything that would be awkward from the point of view of the Union. I can see no reason why we should accept domination of that kind, especially from an organisation part of which, in its present form at least, seems unable to account properly for the way it is spending our money. That is what will happen if the treaty goes through. Everything will be yet more unaccountable than it is now.

6.26 p.m.

Lord Dahrendorf: My Lords, the contribution that I wish to make is a brief footnote to the substantial statements that we have heard. I share quite a few of the doubts so clearly expressed by the noble Baroness, Lady Park. I also share many of the basic sentiments expressed by the noble Lord, Lord Owen: the commitment to European co-operation, the appreciation for what has been achieved and the analysis of the various stages through which we have gone. Yet I do not share the conclusions of the noble Lord, Lord Owen, so far as concerns this text.

Let me give my reasons briefly. It has long been my view that the greatest problem of the European Union in relation to the citizens of its member states lies in the vast gap between the language of aspiration in which the Union is often described and the limited practical significance of its actions. If rhetoric and reality diverge, as they do in the case of the European Union, citizens will be, at best confused, at worst misled, and, as a result, disillusioned before long.

It does not help that in some countries, notably on the Continent, it is the advocates of the Union who exaggerate its importance and the sceptics who point out the limited and often dubious realities, whereas in other countries, such as the United Kingdom, the sceptics overstate the significance of the Union and its basic texts while the supporters play down as a mere tidying-up exercise what is clearly more than that.

The text produced by the European Convention does not help in that regard. Even the printed version—at any rate, the Brussels version—suggests that it is a constitution for Europe and puts the key phrase before those words in a much lower case—"Treaty establishing" a constitution for Europe.

The point that needs making and that has important ramifications is that the text is not a draft constitution but a draft treaty. The difference matters. Put in the simplest form, a constitution has reference to, and derives its legitimacy from, the people in a given territory. A treaty is an agreement between states through their governments.

On precise reading, the convention's text makes the difference clear. One would hardly speak of a constitution for the United States of America, but one cannot speak of a constitution of Europe. The so-called constitution is not given by or applied to the people of Europe. Even the high-flown language of the preamble avoids that claim and speaks of the "peoples of Europe" in the plural. The convention's many distinguished members—I share the appreciation of

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the work done by those of your Lordships who were members and by other representatives of the country—never claimed to represent an imagined European people. It was a convention of appointees reporting to the European Council and to an intergovernmental conference.

Significantly and correctly, the result will be agreed according to the procedures for the ratification of treaties foreseen in national constitutions. What is more, any future changes will be made in the same way—by the unanimity of national governments and parliaments. In the words of the German constitutional lawyer, Dieter Grimm,

    "It is not Europe which gives itself a basic law but such a law is given to it by its member states".

Those are not sophistic niceties, but facts of practical relevance in the months to come. For example, the convention's text has no particular status which would make it at all difficult for the IGC to change it. On the contrary, the IGC has a greater legitimacy than the convention, since its members are elected representatives of their countries. The question of the referendum should also be decided in light of the fact that this is a draft treaty.

There are countries—and situations—in which treaties require popular assent for their ratification. However, it could be argued in this case that a referendum could play into the hands of those who want to mislead citizens about the nature of the beast. Therefore, let me repeat that this is not a constitution, and no national referendum will change the fact that it is an international treaty to set up a limited number of supranational procedures and institutions.

The underlying hope and intent of these comments is to make sure that, when talking about Europe in this country, we talk about the real European Union and not some figment of Utopian or apocalyptic fantasy. That may be a vain hope, but one must never stop trying.

6.33 p.m.

Lord Skidelsky: My Lords, I am one of those who welcome the draft constitution—or international treaty, as the noble Lord, Lord Dahrendorf, would prefer—as a modest attempt to overhaul the EU's institutions and policies in the face of the challenges of enlargement and disturbing international events. I will concentrate my remarks on the latter aspect, because the wider issues have been comprehensively covered in speeches that we have already heard.

On foreign policy, the draft constitution proposes to establish a new post of European Union minister of foreign affairs, who would merge the roles of the current High Representative for Common Foreign and Security Policy and the Commissioner for External Relations. The new foreign minister will be answerable to the Council of Ministers, whose meetings on foreign policy he or she will chair. Some have objected to the phrase that member states should support the Union's common foreign policy "actively and unreservedly"—words taken from the Treaty of Maastricht. But there will be no foreign policy unless national governments want it. I

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disagree in my interpretation with that of the noble Baroness, Lady Park of Monmouth: I take Article 1:39/7 to be overriding in this connection. It states:

    "European decisions relating to the common foreign and security policy shall be adopted by the European Council and the Council of Ministers unanimously".

In other words, the unanimity rule is preserved. That is unambiguous.

On defence policy, the constitution provides for a "capablities agency" to co-ordinate defence technology research and encourage harmonised procurement. The constitution would also allow smaller groups to co-operate more closely on military matters to improve the EU's military effectiveness. In sum, I believe that the draft convention leaves foreign policy and defence firmly in the hands of national governments. Why? The reason is that there is no consensus for a common European foreign and defence policy. The veto recognises that. An autonomous EU foreign and defence policy requires Europe-wide agreement on what European interests are and, specifically, a clear view on Europe's relations with the US.

Europe is split down the middle on that question, between those led by France, who want Europe to be a counterweight to the US—I was fascinated to hear that Ernest Bevin had the same view—and those led by Britain who want Europe to be a permanent and unswerving ally of the United States, through NATO or separately. The British position, needless to say, suits the Americans very well. In the American conception of burden sharing, Europe shares the burden of supporting American foreign policy. It does not contribute to the making of it. As President Bush put it two days ago, America's allies are expected to do their duty. Of course, differences over where one's duty lies is the essence of the debate.

I am puzzled by the position of those who argue that, on the one hand, foreign and defence policy should remain in national hands—that it should not be shared in any way—and on the other hand, that the EU should not develop a foreign policy or military capacity independent of the United States. What value is sovereignty if we are never prepared to use it, but only to hoard it? It loses any potency.

Independence is not entirely illusory. Both Britain and France have national forces which are able to undertake small-scale military operations on their own. The French do so in North Africa and we fought a war over the Falkland Islands, although we probably would not have been able to win it without tacit US support. However, in the larger picture these are tiny capacities. No European national forces in Europe exist that could have brought peace to Bosnia or stopped Milosevic massacring the Albanian Kosovans. I wonder whether the British and French forces in combination could have launched the type of expedition necessary to topple Saddam Hussein. Nobody doubted in 1956 that Nasser could be overthrown, although many doubted whether it was wise to attempt to do so.

True enough, Britain and France still have their nuclear deterrents, but Britain's is not independent and both are purely symbolic, even less useful than the

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gold that used to be buried in the vaults of their central banks. The reality is that these small national forces become effective for larger purposes only when they are part of a collective effort. The issue is whether that collective effort should ever be exerted for distinctively European purposes, even if they conflict with those of the United States, or are purposes in which the United States has no particular interest.

Our Government have championed the creation of a European rapid reaction force attached to NATO but are fiercely opposed to the French plan for an independent European rapid reaction force. Thus, we come to the conclusion that France and Britain support the unanimity rule for different reasons: the French to stop the British blocking their efforts to build up an independent European foreign and defence policy and the British to stop the French doing that. Preservation of the unanimity rule is, thus, a recipe for inaction.

Is there any way out of that impasse? Not unless Britain accepts the value of multi-polarity. In an eloquent and passionate speech, my noble friend Lord Owen talked about the supreme value of national independence and the danger of a European superstate. I submit that there is only one superstate in the world: the United States. The United States must be balanced. I do not see how one can study international relations without understanding that. It is only the British who have a defect in that understanding because, perhaps, they believe that the pax Americana is a worthy successor to the pax Britannica. That is not the way that the world works; sooner or later, the balances will emerge. If it is not the European Union, it will be someone else. The idea that the British can constantly evade the issue and say that there never need be a contradiction between European commitment and support for the United States is an illusion bred of a particular British history which has much less resonance elsewhere in the world.

I believe that a group of European countries will develop a common foreign and defence policy to start to balance the preponderance of American power. That will be done outside the formal structures of the European Union. Those structures, with their unanimity rule, do not allow that development to happen. For this reason, the post of European Foreign Minister will be largely redundant. The Euro-sceptics will be able to sleep quieter in their beds, for the grand experiment of European unity will have broken down.

6.42 p.m.

Lord Tugendhat: My Lords, I am the last of the three former European commissioners to speak in the debate. As I am the youngest, that is appropriate. One of the advantages of being a Member of your Lordships' House is that it is possible to be 66 and still the youngest of something. It remains to be seen whether that brings wisdom.

I welcome the reflective and constructive tone of the debate. We are at a stage in the evolution of the constitutional treaty at which we can consider what has been done, exchange views and, most important of

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all, recommend changes that should be taken up at the intergovernmental conference. It will be only after the intergovernmental conference that we will be able to decide whether there should be a referendum. It was a mistake by the Government to rule one out absolutely at the outset, but it would also be a mistake, at this stage, to insist on one absolutely. We should judge the issue on the basis of the outcome of the intergovernmental conference.

I believe that it was right to set up the convention. The European Union is on the verge of the biggest change in its composition since it was created, almost 50 years ago. It needs a new basic document, and it needs to rationalise and amend its procedures. It is impossible in the time at one's disposal to cover the whole range of the proposed treaty. Like others, I shall concentrate on a small number of issues.

I start from the proposition that there have always been two views about how the European Union should develop. On the one hand, there are those who think that it should be based on the member states, to which the institutions should be subservient; on the other, there are those who want the institutions to become predominant, with the member states being subordinated to them. The draft before us reflects the tension between those two views, a tension that is evident in all the treaties that have been signed since the Coal and Steel Community was set up in the early 1950s.

I have always put the member states first. My experience of serving for eight years on the European Commission confirmed to me that the European Union can be based only on the member states; it is only they that can command the loyalty and obedience on which civilised society depends. It is with them that the citizens of Europe identify themselves and define themselves. Therefore, I rejoice that the convention has based the report and draft constitution on that principle. It is explicit about that, with its statement that it is the member states that confer competencies on the European Union, as the Minister pointed out, and that the European Union can act only within the limits set by the member states.

I welcome too the clear statement that it should be the heads of state and government, meeting in the European Council, who should define the European Union's priorities and set its political direction. I consider them to be the ultimate repositories of democratic legitimacy in the European Union.

The work of the European Council will be greatly facilitated by having a permanent president or, at any rate, a president whose term will last for two and a half years or, possibly, for five years on the lines set out in the report. The present six-monthly revolving presidency is no longer suitable and will be hopeless in the context of an enlarged European Union. The Union needs someone who can act as an expression of the European Union's collective will and ensure that it is carried into effect within the Union and, to the extent that it is possible, beyond the Union. He or she should be the servant of the heads of state and government while also having the personal authority

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to hold them to what they have agreed. One of the biggest difficulties in the management of the European Union is that, although the European Council agrees all kinds of different things, it is difficult to hold the heads of state and government to what they have agreed. One of the tasks of the permanent chairman should be to do that.

In the light of that proposal, I see no need for an EU Foreign Minister. On that point, I disagree with my friend, the noble Lord, Lord Hannay of Chiswick. I accept that the present arrangement, involving Mr Solana and Mr Patten, is unsatisfactory, but a Foreign Minister is not the answer. I agree too with the noble Lord, Lord Owen, that the use of the word "Minister" in that context is objectionable and with his point that, over the 50 years or more since the Coal and Steel Community was set up, the European Union has always eschewed the use of that word.

My objection is not simply to the use of the word. If there is a president of the European Council, there is no need to have a Foreign Minister as well. It would be better for the Commissioner for External Relations to be left with the technical aid and trade tasks that fall within the Commission's purview at the moment and for the European Council president to take over the big policy and strategic issues. To do so, he should chair the Foreign Affairs Council and any other relevant council in that area.

I see two advantages in proceeding in that way. One is that it provides the continuity and consistency between the European Council and the Council of Ministers that have not always been evident in the past and, thus, provides continuity between broad strategic guidelines and specific policies. Secondly, it avoids the potential conflict and rivalry that might arise if we had a European Council president and a Foreign Minister, who would in many respects be competing for the same terrain.

One further point is that the hybrid nature of the Foreign Minister is an insuperable problem. The idea of someone chairing a council that is subordinate to the European Council while being a vice-president of the Commission—which is supposed to be independent of both—is a dog's breakfast; then, in turn, having him accountable to the European Parliament but on a different basis from his colleagues in the Commission is a recipe for a great deal of muddle.

I referred to the European Parliament. An awful lot of nonsense is talked in the European Union about a democratic deficit, as if the European Parliament were the only valid expression of democratic will within the European Union. In my view, that is not so. The two principal instruments of the will of the people of Europe are their heads of state and government who meet in the European Council on the one hand, and their national parliaments on the other. The pivotal role of the European Council has, I believe, been satisfactorily settled in the proposals before us. It needs to be matched by bringing the national parliaments much more formally and effectively into the whole process of the European Union. Therefore, I welcome the draft proposals on the role of national parliaments and the

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application of the principles of subsidiarity and proportionality. But I agree with those noble Lords who have said that they do not go far enough and wish to see the potential role of national parliaments considerably enhanced.

None the less, this is a welcome first step. It provides a foot in the door. Experience of constitutional development, whether within individual countries or within the European Union, is that, once a foot is in the door, it is possible to widen that opening very considerably. So I hope that the Government will press for the national parliaments to have a bigger role. But whatever role they are formally given in the document, I hope that the national parliaments will make the maximum possible use of whatever powers they are given.

Finally, I refer briefly to the charter of fundamental rights. In its present form it is an unhappy mish-mash of rights that are indeed fundamental, such as the right to life, equality between men and women, and freedom of expression and information on the one hand, and the kind of political and trade union wish-list exemplified by the right to a free placement service on the other. It is demeaning to basic human rights to put those two categories together. To have the right to life and the right to a free placement service in the same document is a reductio ad absurdum.

I believe that the whole charter should be looked at again. Like some other speakers, I confess that I am far from convinced that the constitutional treaty requires such a thing at all, but it certainly needs to be looked at again. If we are to have such a charter, it should deal only with rights that really are fundamental to our societies.

I welcome this document. As Mr Peter Hain was quoted as saying in some forum or other, it provides a very good starting-point. But there is quite a long way for the Government to go. When we have seen the final result, then we shall be in a position to judge whether a referendum is appropriate.

6.54 p.m.

Lord Rees-Mogg: My Lords, I begin by saying what a pleasure it is to be taking part in this debate and how impressed I have been by the knowledge and moderation of the contributions on all sides. I found myself in substantial agreement with the speech of the noble Lord, Lord Owen, and in broad agreement with the remarks of the noble Baroness, Lady Park of Monmouth, and the noble Lord, Lord Dahrendorf.

There is a group of Members of this House who have a greater degree of anxiety about the possible outcome of this document. When the noble Lord, Lord Tugendhat, said that he welcomed the document, it came immediately into my mind that I do not welcome it. I do not believe that it achieves the objectives it set out to achieve. The noble Lord, Lord Owen, made the point that it deliberately moves Europe closer to being a single state—whether a superstate, I am not sure, but at any rate one in which the nations are less independent and the centre is more powerful. When one reads the whole document there can be no question about that tendency.

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I was in Denmark last month, which is to hold a referendum on the constitution when it finally emerges from the IGC. Current figures indicate that only 18 per cent of Danes are in favour and will vote "Yes"—obviously, that figure may increase. I asked one Dane why people there were so strongly against the document. It was on this very point—the creation of a single European state in which, as a very small part, they would feel that their interest was crushed and pushed down. That is a strong feeling among the smaller countries. He said: "They've got a president, a Foreign Minister and a public prosecutor. How would you have those three offices in your constitution if you did not intend to form a single state?". That is rather a plausible view. But it is not what worries me most.

The failure is of a rather different kind. Many of us have been casting round in our remarks for the key point in the discussion of this document. I believe that the key to which we ought to return is the intention of the Laeken Council. It had three or four objectives, one of which was to remedy the democratic deficit. The key question is whether this draft constitution does in fact remedy the democratic deficit. That is the question on which we should determine whether we welcome it, or do not welcome it and are concerned about it unless the Government can get major changes.

I do not see at all that this document makes things more democratic than previously. It confirms and increases powers that will be held by the non-democratic institutions, or by the partially democratic institutions, largely at the expense of the national parliaments, which are the democratic institutions of Europe.

If one looks at a recent incident, one can see just how dangerous that is—and dangerous to Europe. I do not at all want Europe to be damaged by having a bad constitution. That would be a disaster. Recently, the French Prime Minister, Mr Raffarin, said that there is a crisis of authority in Europe. What did he mean by that? He was talking about the conflict between the Commission and the French Government over the stability pact. He said that at the last election the French Government committed themselves in their policies to restoring a good level of economic growth in France and to reducing unemployment. That is the democratic decision of France. The result is that we are to have a 4 per cent GDP budget deficit in the current year. That is what must happen because we cannot see any way, if we sit inside the 3 per cent of the stability pact, in which we shall be able to restore a satisfactory level of growth to the French economy.

Why is that a crisis not between two institutions, but a crisis of authority? It is because authority rests in democracy. In this House, we are usually wiser and more prudent and in every way more loveable than in the place down there. Nevertheless, we have much less power and authority. The reason is that they are elected and we are not. The same is true of the institutions of Europe. If the French Government want to stand up to the Commission and refuse to do something to which they have agreed, and which the Commission is perfectly entitled to tell them to do,

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there is nothing on earth which, in the end, will be able to stop them so long as they have a majority of the French electorate behind them.

Therefore, we are looking at a building up of the weakest part of Europe at the expense of what is ultimately the strongest part. There is a building up of the powers of the non-democratic institutions at the expense of the powers of the democratic institutions. If we are to have a constitution, how can we deal with this? My noble friend Lord Owen is right. Full informed consent is the test. This plainly is a different European constitution. Very important changes are being made. We may argue about precisely how great. Nevertheless, certainly they are very important. If we are to make this change the British electorate must be behind it.

There are arguments used by the Minister against having a referendum. There is the argument that we had one in 1975, which is now rather a long time ago. We cannot just say that we had a referendum 30 years ago and so that is it for all time. The situation now is that no one under 47 voted in that referendum—if they did, they did not vote legally. Whether or not we adopt this constitution, we need at some point to satisfy ourselves that people between 18 and 47 years old, as well as those over 47, genuinely want to have this type of relationship with these European institutions.

What is the other argument used? It is that Parliament can do it. We sit in Parliament and know the limitations of dealing with matters of this kind. The White Paper states:

    "This means that MPs will be able to examine line by line what is in the final Treaty; and only with their assent will effect be given to the new Treaty in terms of transposition into UK law".

It is hard to conceive of a more misleading way of putting a procedural proposition to this House. We know that if it comes to us for ratification—as, presumably, eventually it will if the IGC does not get fed up with it—it will come forward as both a treaty and a Bill. The Bill will be a constitutional Bill, but the treaty will be embedded in the Bill, and treaties cannot be amended. Indeed, it is obvious why treaties cannot be amended. If the Government had to negotiate with 24 other governments, all the governments had to go back to their parliaments, and all the parliaments had 100 amendments put forward and passed, there would be an arithmetical impossibility in ever achieving a successful treaty negotiation. We all see that. It is a real difficulty.

On the other hand, there is an equally grave difficulty on the other side. This is a constitution. It is a constitution for Europe. We might say, "Well, the treaty rule applies as far as our relationship with Europe is concerned so it's unamendable". I should be unhappy about that, but perhaps we might do that. But this is also a constitution for the United Kingdom. It is something that we have never had before. At any rate, it is the biggest constitutional development since the late 17th century.

When we changed the relationship with Scotland and set up the Scottish Parliament, we had debates, amendments, Committee and Report stages, Third

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Reading and the full scrutiny of Parliament. Subject to its relationship with the other place, there was complete freedom for this House to make changes that it thought necessary in the interests of getting that constitution right.

It is not a constitution only for the United Kingdom or for Scotland. It is also a constitution for Wales. It changes the way in which the Welsh Assembly will be able to exercise its powers. It is a constitution for Northern Ireland—a matter raised by the noble Lord, Lord Howell, and my noble friend Lord Owen. In the other place it was raised by Mr David Trimble. The Northern Ireland point is not an insignificant one. It is difficult enough to get the constitution right for Northern Ireland, but to have it changed without it being possible to amend it adds a further difficulty which elected Members of Parliament from that Province have every right to feel concerned about.

We must obtain a more democratic rather than a less democratic constitution. That means that instead of the exclusive competencies going to the non-democratic or partially democratic bodies, there are exclusive competencies for the national parliaments themselves. We need then to put it to the people. "Trust the people" is the right motto for the Government when they come to decide how to ratify this Bill.

7.9 p.m.

Earl Ferrers: My Lords, that was a fascinating speech. It is a great privilege to follow the noble Lord, Lord Rees-Mogg. I, too, have found this a riveting debate. No one could be other than impressed by the knowledge and experiences which noble Lords have related today. I feel a sense of great humility in taking part.

Europe is at the centre of our lives, whether we like it or not and whatever our views may be. Some long to be right at the heart of it, trying to lead this group of nations in its future destiny, while others want to maintain the uniqueness of Great Britain and to be responsible for the way our country goes in the future. In a rather hopelessly vacillating manner, I tend to flop backwards and forwards like a reed in the wind, trying to understand each point of view.

Periodically, indeed frequently, the Government come up with new proposals for strengthening, advancing and widening our involvement with Europe, almost always involving greater restriction and greater bureaucracy. They are always presented very plausibly, as the noble Baroness has done today, but it is what happens some years later as a result of those proposals which is so alarming.

I have not taken part in these very fundamental debates before because if one is not a so-called "expert", one can so easily become lost in the soup. But I venture to do so today for reasons which I hope will become clear. Many years ago I started off by being, in simple black-and-white terms, anti-Europe and pro-Britain. Britain had always looked after herself well and therefore it seemed that there was much to be said for staying in charge of our own affairs and for not getting too involved.

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Then in 1974 I had an enlightening experience, although to say that it was akin to that of Saul on the road to Damascus might be pushing things a little too far and unjustifiably elevating it. I was at the Ministry of Agriculture and Jo Godber was the Minister at the time. He could not attend the Council of Ministers and so I was sent in his place.

The experience was illuminating. There were all these people from different countries, sitting around a table trying to thrash out the problems of the day together. Yet, 30 years earlier, they had been bombing and blasting and killing each other with unbelievable hatred. Now all their energies were being spent in a common effort for the collective benefit of all.

On that occasion these previously warlike characters were giving the United Kingdom appalling stick for having raised the price of milk by a shilling a gallon without having let them know of it in advance. I floundered in defence and I did my best, but it was not very good. I thought, though, that if that was the greatest discord remaining, what a monumental change there had been. How remarkable. This must be built upon. And I became what might be described as a pro-European. But as things have progressed, in particular over the past six to 10 years, I have become increasingly disenchanted.

Of course we want Europe to succeed—economically, emotionally and politically. But in my view the leaders have been going too fast. No sooner has one political mountain been scaled, they move on to the next, apparently forgetting that they have a whole wagon-train of bemused countrymen of all the component nations to drag along with them. The leaders have never stopped to consolidate their position. They seem to have forgotten the elementary principle—and I should remind your Lordships that I never rose beyond the dizzy heights of a second lieutenant—that those fighting in the front line must not push on too quickly or their supply lines will become so distanced from the main body of the army that they will be cut off. And that is precisely what has happened. The leaders have become separated from the ordinary man in the street, who is bewildered by what is happening, most of which is beyond his comprehension.

The Government say that they do not want a referendum. Like the noble Lord, Lord Thomson of Monifieth, I am not a great referendum person either. The Government say that they do not want one because this is just a "tidying up exercise" and anyhow it is "too complex an issue". But if we cannot understand what the Government are doing, heaven help us. It is one thing to be part of a community where each nation trades on similar terms to one another, where there is equality of opportunity and where common resources can be put to the common good, but we have moved on from there.

We are now told that we should have a common currency, a European Minister of foreign affairs, a Union Minister and a common police force. Who wants Greek policemen arresting Englishmen in England and transporting them back to Greece for offences allegedly committed on Greek soil?

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Who wants to be a member of the euro just because, on a certain day, we happen to have met certain financial criteria, whatever they may be? No one, short of a super-economist, seems to know or to understand what they are. But they are criteria which, six months ago, we might not have been able to meet and which, in six months' time, we might also not be able to meet. But by then we will have joined and we will have been lumbered—irrevocably, in perpetuity and for better or worse—with that decision.

Each country values and treasures its customs acutely. I well remember the row—I was in the Home Office at the time—over French gendarmes coming to England on Eurostar and landing up in London carrying guns. "British police don't carry guns", we said, "so you cannot carry guns". "Carrying guns is part of the gendarmes' uniform", said the French. "In no way will we see our gendarmes improperly dressed". An accommodation was arrived at. As usual, we gave in. But the point is that countries, not only Britain, value their traditions, their customs and their history. You cannot just tread all over them. But that increasingly is what the European Community is doing.

Who wants a common agricultural policy—I declare an interest in agriculture—where, in 2002, the price of milk in Italy was 7p per litre more than it was in the United Kingdom and where, over a decade, the average price of milk in the European Community was almost 2p per litre more than it was in the United Kingdom? What is "common" about that? The common agricultural policy is not only the greatest expense in the European budget but, in common—I hate to say—with the present Government, has virtually bust British agriculture. Try to reform it and one finds that one can never reach agreement because there are too many countries which have done so well out of it—such as Ireland—and which do not want to see the system changed. Of course there are a few attempts at reform now, but they are merely tinkering with the leaves of the tree and not getting at the trunk.

Who wants to give all the taxation of this country over to an unelected, and unsackable, bureaucrat in Brussels rather than having our financial affairs looked after by an elected Chancellor of the Exchequer? Is it really thought that there is one level of taxation, whichever level may be chosen, appropriate to each and every European country at any one time? Yet that is the way all the European Community fingers are pointing.

There are supposed to be fewer bureaucrats in the European Community than there are in the Scottish Office. Yet they churn out directives at such a rate that, if your eyes blink, you have missed them. These are directives which each country is bound to incorporate into its law. There is nothing democratic about that; it is dictatorial. Many of them are totally unnecessary and totally offensive.

Recently the Commission produced a directive banning 300 different food supplements from this country, supplements which have been on the market for years and which are regulated and totally safe. But now they have been banned. Why is that? It is not to make

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things better, to make things safer, and it is not in response to public demand. Rather, it is to make things common throughout Europe. The cost to manufacturers and the inconvenience to purchasers is disregarded. Unelected bureaucrats in the Commission say that this must be done, and so done it is.

Let us look at the Directory Enquiries Service, 192. It was one of the best and most efficient services from British Telecom. The telephone was answered immediately and the information requested given instantaneously. It was a wonderful service. Now it has been abolished and replaced by 16 alternatives, although I understand that 80 to 100 licences have been granted. Goodness knows what is going on. Who wants 16 alternatives? How do you know which is the cheapest? Which may be the cheapest for a one-minute call may well not be the cheapest for a two-minute call. Who has the time, the desire or the mental alacrity to work it all out? Why has this been done? Article 5 of European Community Directive 2002/77 states that all exclusive directory services are to be abolished. So out they go. I suggest that that is another example of unacceptable and unnecessary interference by the Community in our daily life. It goes against the public interest and the public's wishes.

Your Lordships may say that these matters are trivia compared with the grand plan that has been discussed today. But I do not believe that they are trivia. They are the windows through which the average man in the street looks at the community and decides on his view about the European Community.

I feel fed up with the way in which the European Community meddles unnecessarily in our lives. It is turning away so many people. I am haunted by the words of a much-respected judge who, when talking about the European Community, once said to me, in the clear and succinct way that lawyers so often have, "It will all end in tears". I hope that it will not. But when the noble Baroness says, "Here is another super-duper European package for your approval. It is only a tidying up exercise and another step along this great road to European unity which will make things better", I am afraid that my reaction is, "Watch it. It may be another step into the quicksands of control, rigidity and nonentity".

This may not be a very helpful contribution to the debate. It is a sad thing to say for one who longs to be a good European—who longs to be a good European from the heart and not only from the mouth—but it is caused by the way in which the European Union has conducted itself. I fancy that I may not be alone in that opinion.

7.22 p.m.

Lord Livsey of Talgarth: My Lords, the noble Earl, Lord Ferrers, may be surprised to know that one of the proposals to simplify the European Union contained within the new constitution is to reform the whole system of European regulations, in particular the directives to which the noble Earl referred. They will not exist any more under the proposals for the constitution.

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It is a great privilege to speak in the debate. Many of the points that I wished to make have been made by many other speakers and by my noble friends on the Front Bench, particularly in the powerful speech made by my noble friend Lord Wallace of Saltaire. I wholly concur with the general principles he elicited in regard to the draft constitution.

The draft constitution should not be treated like an unexploded bomb but should be embraced, not necessarily in its totality—many speakers have made that point—but for its necessary reform of the practical workings of the European Union. The draft constitution has involved a great deal of detailed work. It is a practical and sustainable compromise which should not be tossed aside by narrow interests at the IGC in October.

Any constitution of this magnitude should not be treated lightly. It must be seen in the context of an epoch-making increase in membership of the European Union from 15 members to 25 members. It paves the way for far greater European stability and democracy than ever before. The next generation will castigate us and lament if we do not grasp this opportunity.

The draft constitution addresses the issues of powers, fundamental rights, the legal bases of policies, the force of treaties and the revision of procedures. These are absolutely vital aspects for a secure and peaceful future for Europe. However, I shall not repeat what has already been said.

I wish to address a number of issues that have not been previously addressed in detail in the debate. In particular, I wish to refer to the existing treaties that will be incorporated into the new constitution as proposed in the draft. It is no secret that this aspect of reform was not given sufficient time at the convention. Indeed, there is a case for producing a Part 3 of the draft constitution to cover this particular aspect.

These treaties created the CAP, to which the noble Earl, Lord Ferrers, referred, into a single market. That is one issue that I wish to raise in the debate. Secondly, I wish to raise the issue of subsidiarity, which is contained in the draft constitution in the form of a protocol.

As regards the CAP, one must consider the vast rural areas of the 25 countries that will shortly be contained in the totality of the EU—not least the area contained in Poland. Its basis was originally contained in the Treaty of Rome and it impacts greatly on the budget of the EU. In fact, it forms almost half of its budget. Reforms are changing matters but agricultural spending is still nearly 50 per cent.

The Treaty of Rome set out a number of CAP principles. For example, it refers to the optimum utilisation of the factors of production, which, classically in economic terms, are land, labour and capital, with particular emphasis on labour. It also emphasises the principle of a fair standard of living for the agricultural community, which, as we have heard, does not exist in certain parts of the UK at the present time.

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The stability of markets was also a principle contained in the CAP when it originally started. However, in the UK we have seen this stability for producers distorted in some respects by the supermarkets. Also in the Treaty of Rome is a principle in regard to the availability of the supply of food. As far as concerns consumers, this food should be provided at a reasonable price. It also guarantees the social structure of the countryside and the evening-out of geographical disparities—for example, those found in the mountainous regions of the Community.

The reforms that have recently occurred to the CAP—for example, last June there was a decoupling of production from the support given to it—clearly alter the relationship between production and support. They are no longer joined in the same way. The value of environmental goods will be an important aspect and will alter the economic input/output relationship.

No doubt this will be an improvement but only time will tell if living incomes from the land can be sustained in the European Union. The constitution when it comes—in whatever form—must underwrite economic reform to sustain a living income for all citizens, whether or not they are employed in agriculture. Indeed, this should apply wherever they operate in the European Union. It is a matter that very much needs to be addressed.

There certainly needs to be a guarantee that the sustainability of rural areas will be maintained. It is surprising to think that farmers are still abandoning land in the central massif of France. It is not surprising that sometimes the French do not wholly embrace rapid change of the CAP for those reasons, which are rarely publicised.

Indeed, we are looking forward now to the Cancun conference of the World Trade Organisation and the issues that will be raised there. It is rather trite to say that there are not problems of incomes from the land in the European Union when challenged—rightly so in principle but not necessarily in practice—by countries which feel severely disadvantaged. There needs to be an overall worldwide agreement, but that is very difficult to achieve and will be in the WTO conference that will take place soon.

The other issue is subsidiarity in the protocol. It must be agreed—and I agree with the Government here—that it must be strengthened. The convention did not focus on this in enough depth. Indeed, it looks as if the protocol is an add-on as far as the draft document is concerned.

I particularly want to raise issues that affect the area that I represented for a long time and of which I am a native—Wales. The GDP of Wales is 20 per cent less than the EU average. We have today heard the startling news that 60,000 highly skilled people of economically active age are not seeking unemployment benefit. Farmers are earning about 5,000, which is less than the national minimum wage. There are solutions in the hands of the UK Government.

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There are a number of issues of principle in the protocol that concern me greatly. I do not know how much force a protocol will have in terms of Europe and whether it is of sufficient force to change things. However, it says in paragraph 1 about subsidiarity:

    "Each Institution shall ensure constant respect for the principles of subsidiarity".

Fair enough. But it goes on to say in paragraph 3:

    "The Commission shall send all its legislative proposals and its amended proposals to the national Parliaments"—

note the plural—

    "of the Member States".

It goes on to say that that will be the case. However, in the United Kingdom, there is only one other Parliament apart from the one in Westminster—the Scottish Parliament. It means that the Welsh Assembly is disenfranchised in this respect, as is the Northern Ireland Assembly.

Paragraph 5 states:

    "Any national Parliament or any chamber of a national Parliament of a Member State may, within six weeks from the date of transmission of the Commission's legislative proposal, send to the Presidents of the European Parliament, the Council of Ministers and the Commission a reasoned opinion stating why it considers that the proposal to question does not comply with the principle of subsidiarity".

Frankly, this is a nail in the coffin for Wales. In that context, it only has an Assembly and it will not be able to make representations except by proxy. There is a simple answer—the Government in Westminster could grant the Richard Commission proposal that Wales has a Parliament of its own and will be fully connected with the European Union from which it appears it will be excluded by this protocol. This is extremely important for Wales. That is the contribution that I wish to make to this debate.

7.34 p.m.

Lord Harris of High Cross: My Lords, I believe there will be universal agreement that we have enjoyed a remarkable feast of oratory and the deployment of exceptionally wide knowledge and practical experience of the European Union. Nevertheless, wide differences still remain and some of us have to play our part in maintaining the argument. We have had a good deal of repetition but, from my point of view, not enough repetition. We have had some conscientious doubts from the Euro-sceptics and the endless easy, rather smooth reassurances from those whom I call the Euro-phorics.

We need to be rather wary of reassurances. We have been fed for some 30 years on a diet of reassurances, from a long line of Ministers and even Prime Ministers. It is not only the early reassurance of Prime Minister Heath about the limits of the Common Market which proved rather fraudulent. What about the repeated promises of successive governments, Labour and Conservative, to defend the British veto? What was all that talk from Prime Minister Major about subsidiarity? What confidence can we now have in the present Cabinet when the Minister in charge of the negotiations dismisses the whole operation as mere tidying up and unimportant?

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Mr Blair has made a great deal of his victory in getting the word "federal" removed. To remove "federal" from this constitutional rigmarole is one thing; the trouble is that it would take nothing short of brain surgery to remove "federal" from the aims and aspirations of the French, German and Benelux ruling elites.

The draft treaty is full of extensions of what its francophone authors call "competences" which, in plain English, means "powers". "Competence" implies the ability to deliver, whereas the Commission has proved incompetent to provide the first requirement of honest, uncorrupt administration. The prospect of enlargement of its powers over national governments is defended indignantly by reference to the increased numbers of members of the European Union. Would it not be more logical to offset an increase in numbers by a diminution in powers and, in this way, to prune much of the superfluous activities that we detect and have talked about? The truth is that the Brussels fonctionnaires have a truly Napoleonic appetite for power, as flaunted by the grand, superior former President of France, who would put our own George Nathaniel Curzon in the shade.

Why should Britain not turn away from this endless game of compromise and backstage deals by cynical powerbrokers? Why not set an example in candour? Why not admit that we have fundamentally different approaches in Europe? Ours is governed by both our economic outlook and our political background, and we should not apologise because our island history, our international stance and our national character are in sharp contrast to some of those that we detect on the Continent.

My own ideal of good neighbourly relations with Europe was exactly caught by Churchill in 1953, when he declared:

    "We are with Europe, but not of it. We are linked, but not comprised. We are associated, but not absorbed".

So far from being a "little Englander", this incomparable world leader constantly preached the virtues of free trade as not only promoting prosperity but as bringing nations together in peaceful intercourse.

Rather than rely, as I usually do, on Adam Smith, I shall offer a brief extract from Churchill's speech, way back in 1905. I have cribbed it from the quite outstanding biography of Winston Churchill by the late Lord Jenkins of Hillhead. I quote Churchill:

    "The dangers which threaten the tranquillity of the modern world come not from those powers that have become interdependent upon others, interwoven by commerce with other States . . . ".

He went on:

    "We do not want to see the British Empire degenerate into a sullen confederacy, walled off like a medieval town".

That brought to my mind the anxieties that some of us have long expressed about the danger of the European Union moving towards a fortress Europe, to look America in the face, but to enjoy a continuing relative economic decline. The proposed constitution, undoubtedly—we have all more or less agreed—marks a huge step away from any coherent concept of a

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vigorous straightforward free trade area. Britain's best response would now be to negotiate joining the rest of the world outside this restrictive, rather self-obsessed bloc.

Short of regaining our full freedom in one bound, what can Her Majesty's Government now do by way of damage limitation? I have a number of helpful suggestions. The first would be to follow up a proposal I first heard from the noble Lord, Lord Cockfield, in an earlier debate, which was that the CAP should be repatriated. Repatriation of the CAP is a splendid wheeze. It would free Britain, first, to lift trade barriers that, as the noble Lord, Lord Judd, has told us, impoverish poor overseas farmers; secondly, it would save a large part of the present budget, as the noble Earl, Lord Ferrers, mentioned; thirdly, it would scrap a large part—perhaps the larger part—of the 100,000 rules and regulations in the ragbag known as the acquis communautaire; and, finally, it would disengage us from an odious corruption which still disfigures the common agricultural policy.

A second modification would be to insist on the restoration of our opt-out from the Social Chapter, which is already burdening our own economy with costs that have visibly borne down the German and French producers and helped to inflict unemployment of above 10 per cent.

A third requirement is now, I hope, generally accepted and will be surely implemented by the Government, which is to remove the European Charter of Fundamental Rights, for the devastating reasons, I thought, which were given earlier today by the noble and learned Lord, Lord Howe.

A final reflection is that unless the Government curb the aggrandisement of the over-stretched Brussels Commission, the demand for a referendum will clearly become irresistible. The reasons are robustly set forth in the current issue of the European Journal by the distinguished historian, the noble Lord, Lord Blake, whose absence from this debate through immobility and not, I should explain, through incapacity, will be widely regretted.

"Unique" is no doubt an over-used adjective in these excitable days, but one totally unique feature of the threatened new constitution is that when the final text comes before this House, we will be denied the customary right to debate its contents with a view to amendment and improvement. If we look at the agenda for the week, we see that on Friday we have before us the Second Readings of four Bills of varying significance. All of them may be transformed or rejected outright at your Lordships' pleasure. I ask the Minister: how can the country be expected to understand that, in these great matters before us, when Brussels proposes, this House, this Parliament, this nation, is impotent to dispose?

7.44 p.m.

Lord Eden of Winton: My Lords, the description "Europe" is almost universally used as shorthand for the 15, soon to be 25, sovereign members of the European Union. In that sense I want Europe to

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succeed. For it to succeed its further development must rest upon the whole-hearted consent of the people. This is especially true in the context of current moves towards "ever closer political union".

The imminent prospect of enlargement has understandably caused Europe to look critically at its powers and institutions. I acknowledge that attempts have been made in the direction of their clarification and definition. But a great opportunity has been missed. There has been no attempt to reduce the 97,000 pages of existing Community law; there has been no proposal to repatriate a range of powers to member states; there has been no serious intention to build in greater flexibility in the structures; and there has been little attempt to make much more effective the processes of accountability.

I took heart from the Laeken declaration when it was published. It is now reproduced in the White Paper. I quote from pages 52 and 53 of that document. It states:

    "What they [the citizens] expect is more results, better responses to practical issues and not a European superstate or European institutions inveigling their way into every nook and cranny of life".

It later states that,

    "there is the question of how to ensure that a redefined division of competence does not lead to a creeping expansion of the competence of the Union or to encroachment upon the exclusive areas of competence of the Member States".

I agree with those observations. But I suppose that I should not have been surprised that the familiar ratchet has been hard at work; the integrationists have got hold of the whole process and are promoting changes which, pace page 24 in the White Paper, involve fundamental changes in the relationship between the EU and member states.

This has been, as has already been said, far more than just a tidying-up exercise, as the hard work and watchfulness of the Select Committee and the questions posed in the speech by the noble Lord, Lord Grenfell, clearly show.

In defining their negotiating position, the Government have put down several markers, which they call red lines, where they will insist—their word—on changes to the draft. Paragraph 36 of the White Paper refers to the use of the veto. In what circumstances will the veto be used? Will it be used, for example, in respect of paragraph 49, referring to our Security Council membership, or paragraph 53, whether revenues should remain a matter for member states, or paragraphs 62, 66, 74 and 76, which refer to treaty changes to be made only with the assent of the national parliaments and on the basis of unanimity, especially in areas of vital national interests, such as economic policy, taxation, social security, defence, criminal law and EU revenue-rising mechanisms?

How serious are the Government when they say that they intend to oppose the European public prosecutor, or to uphold NATO? I hope that in that latter respect they will be determined, as that is of the greatest importance, particularly in our USA/European relationship. European foreign policy should be driven by Ministers of national parliaments and not by a Community representative, however eminent and

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whatever he may be called. That is particularly sensitive surely to us in the light of recent events, bearing in mind the attitudes and ambitions of both France and Germany. So I ask the Government: will the veto actually be used? If not, they are in a weak negotiating position and that would be very serious indeed.

I turn from red lines to red herrings. Any criticism of the European Union is immediately caricatured as being "opposed to Europe"—which is one of the most facile of observations. Withdrawal from Europe, in my view, is neither realistic nor necessary. Yet, we get the usual hair-raising projections as to what would be the cost of exit from the EU, and there are plenty of them in the Government's White Paper. However, that is not under contemplation. There is loose talk about how we would lose billions in exports and millions of jobs were we to be denied access to the continental marketplace—all apparently on the basis of the calculations of one think tank. I should have thought that the Government were pretty chary about importing observations from outside organisations after a recent experience.

If, however, it ever did come to a fundamental renegotiation of our relationship with a hardcore, centrist Union, we would still have access to Europe's markets. Europe would still need and still want our goods and services. It would still look to the United Kingdom as a model of parliamentary democracy, ministerial accountability and the rule of law. I confidently predict that it would still, in international dealings, take into account our long diplomatic experiences, and it would certainly still rely on the competence and professionalism of our Armed Forces.

If it should ever be necessary because the integrationists simply will not give way, then let an inner hard core bind themselves ever more tightly together, tied down by an immovable constitution if they will. Our vision, as with our international responsibilities and our trading interests, has to be global, not just continental.

Finally, if the Government intend this to go ahead, let them fairly and honestly put it first to the British people in a referendum. Tell them that they are about to agree to a treaty that will lead to a constitution which would be unamendable and take precedence over the corpus of traditions and character of our country and would impose a formal constitution with its widespread ramifications. Tell them that as citizens of the European Union they would have not only the EU passport but an EU flag, an EU anthem and the EU currency; and they would be subject to EU laws, EU courts, EU taxation and EU economic direction, as well as diplomatic relations and defence that are more under the direction of Brussels and Strasbourg than Westminster, Edinburgh, Cardiff or Belfast. Tell that to the people. They may want it—I do not know.

However, I say to the Prime Minister that if he really does believe—to quote his words in the foreword to the White Paper—that enlargement is,

    "the most significant development since the foundation of the EEC",

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and that this constitution which is consequent upon it is of considerable significance, then it should be put to the people in a referendum. Perhaps trust is a sensitive word to the Prime Minister these days, but on this issue, which could not be more important to our country, he should trust the people to give their verdict.

7.53 p.m.

Lord Jenkin of Roding: My Lords, at this stage in the debate, with a round dozen more Back-Bench speeches still to be made, I shall be very brief.

I, too, suffered a process of disillusionment, perhaps not to the extent of that described so graphically a few minutes ago by my noble friend Lord Ferrers, but from having been in my early political days a tremendous enthusiast for what we then called the Common Market. More than 40 years ago, I published an article entitled "Integration or Isolation". In the context of what was then on offer, that was a real choice, and we chose integration. Like other speakers, I campaigned for a "Yes" vote to joining the market in 1975. However, I have been progressively disillusioned—and I say this despite the supposedly reassuring words written into the draft treaty—by what seems to me to have become an inexorable march to what may eventually become a united states of Europe. That is not what we agreed to join, and that is not the Government's intention—they have been very firm about that. However, that seems to me now to be a very genuine fear.

I shall not repeat all the arguments that have been so eloquently advanced during the course of this debate. I shall refer only to one, because it seems to me to be an important touchstone of this fear that there will be a progressive centralisation of the powers of the European institutions, in defiance of the principle of "subsidiarity". That is an awful word, but I fear that we must use it.

The Government have recognised the fear very clearly and have assured us, in paragraph 57 of the White Paper, that:

    "The application of an important principle of competence—'subsidiarity'—is a priority for the Government".

However, one then turns to the protocol, to which a number of speakers have referred, and it looks rather different. It is presented in the Government's White Paper, at paragraph 59, as an emphatic restatement of the principle and as being one that is reinforced by a new mechanism,

    "to make sure the principle is enforced".

However, if one actually looks at the words that appear in the protocol—although they have been quoted by other noble Lords, they bear repetition—one gets an entirely different picture. They fall well short of what the Government are trying to reassure us about.

Yes, there is a procedure for the advance notification of EU legislation to national parliaments; and yes, there must be a justification for the proposal having regard to the principle of subsidiarity and

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proportionality; and yes, there is a six-week period for national parliaments to object and give their reasons. And then there is an obligation on the Commission to review the proposal if there are enough national parliaments to reach the figures in the protocol. However, we then come to what I would describe as the killer words. The protocol states:

    "After such review, the Commission may decide to maintain, amend or withdraw its proposal".

I am irresistibly reminded of the Welsh radio producer who wrote back to an aspiring author and said, "Well, we like your play very much but we are sending it back to you".

Perhaps a mention of Wales brings me to the remark of the noble Lord, Lord Livsey of Talgarth—I wrote down his words—when he said that he thought that, "The Government believe that the protocol must be strengthened". With the greatest respect, there is no evidence for that at all. The Government, on the other hand, have made it very clear that they think that it is a very significant step, and they go on to argue that in practice it would be very difficult for the Commission to ignore the strongly held views of one third of the national parliaments, or indeed for governments to do so if the matter were debated in Council. If I may say so with great respect to the noble Lord, I do not detect any indication that at present the Government do recognise that that protocol needs to be strengthened. To my mind, it has to be.

Yes, the protocol gives an appeal to the Court of Justice; but, with the greatest respect, there are few people now who would take much reassurance from that. We have seen over the years again and again and again that the Court of Justice seeks to promote the European Union case in all but the most blatant infringements of the treaties. I do not feel any confidence that we can rely on that.

With so many new shared competencies written into the draft treaty, the temptation for EU institutions to whittle away what are supposed to be the reserved rights and powers of member states will be overwhelming. I do not share the Government's optimism in that regard. There must be more specific real protections in the interests of subsidiarity. The noble Lord, Lord Grenfell, endorsed the view of that admirable lady, Gisela Stuart, that what is needed is not just a yellow but a red card. There must be written into the treaty a bar on any further European action if there is sufficient opposition from national Parliaments.

I wish to comment on the marvellous speech of the noble Lord, Lord Rees-Mogg. I am sorry that he is not present at the moment. It was a brilliant speech in which he took apart the Government's view that Parliament will have an opportunity to debate the treaty line by line. As the noble Lord pointed out, the White Paper is a very dishonest presentation. I take that one stage further. Either in this House or in another place there will be an amendment to the Bill to require a referendum. If the Government stick to their view that there should not be a referendum and if their very large majority in another place agrees with that but this House does not, will the Government invoke

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the Parliament Acts? I should be interested to hear how the Government could possibly justify invoking the Parliament Acts to deny the people a referendum on an issue of this kind. I hope to goodness that it will not come to that, but that may turn out to be the real moment of choice. I cannot believe that Ministers would welcome that.

8.3 p.m.

The Earl of Sandwich: My Lords, this debate is not about Europe today, but the Europe which our children and grandchildren will enjoy in 25 years' time. Similarly, the new European constitution is not only defining Europe but shaping the world in which Europe must play a leading part. What we have seen this year—largely because of our role in the US moral crusade in the Middle East—are two developments: the erosion of European foreign policy and the subservience of a global outlook, as forecast at Laeken, to narrow European and bilateral objectives.

It is worth recalling what the Laeken declaration said in December 2001 as it paved the way for a broad-based convention:

    "Now that the Cold War is over and we are living in a globalised yet also highly fragmented world, Europe needs to shoulder its responsibilities in the governance of globalisation. The role it has to play is that of a power . . . wanting to change the course of world affairs in such a way as to benefit not just the rich countries but also the poorest. A power seeking to set globalisation within a moral framework, in other words to anchor it in solidarity and sustainable development".

I accept that some of those sentiments are reflected in the White Paper on page 51, but supporters of this Government who anticipated this policy after 1997 now feel a growing sense of betrayal. They include members of voluntary organisations and Churches, and here I declare an interest in at least four such organisations. These mainly young people are concerned at the direction of European foreign policy. They see the cynical use of the war against terrorism to follow political objectives at the expense of international development.

One obvious example of that to my mind is the impotence of the European Union and its member states as regards Israel and Iraq. As the noble Lord, Lord Thomson, said, Britain's alliance with the US, far from boosting our world status, has compromised our position with Europe and the developing world, neutralising our claim to international liberalism. President Bush's recently late "conversion" towards the UN is more attributable to his opinion polls than to our own foreign policy. One wonders what Downing Street is currently offering in place of the heady internationalism proclaimed in 1997. Indeed, I wonder what advice the Prime Minister's own Department for International Development is offering.

There are ringing phrases in the draft treaty preamble. There are also positive proposals from the convention placing sustainable development, human rights and poverty eradication among the strategic objectives for EU external policy. Yet the treaty itself is disappointing. Aid is clearly going down the European political agenda. There is already a division

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of responsibility between the Development and External Relations Commissions. The EU has now also abolished biannual Council meetings devoted to development issues. There are ongoing criticisms of EC aid effectiveness. There are fears that development co-operation and humanitarian aid are subservient to defence and foreign affairs and could be further manipulated through the appointment of a new foreign minister. The reality of today's foreign policy issues seems to have automatic precedence over tomorrow's looming problems of poverty eradication.

There are concerns among NGOs, too, about the inevitable effects of enlargement. How many new members will have experience of or interest in wider global issues? Will they now turn Europe inwards because of so many internal problems of adjustment, inequality and regional aid? How can the new Europe afford to look beyond its own shores when it can hardly reach the elements of a common asylum policy? As my noble friend Lord Hannay almost said, we must not let asylum one day be seen as fortress Europe's alternative to international development.

Then there is the trade agenda. As James Wolfensohn, President of the World Bank, reminded us yesterday:

    "Many rich countries continue jealously to guard trade-distorting policies".

The principles of the valuable Cotonou agreement are being threatened by the new economic partnerships. The Cotonou partnership should be a model of our future relations with the Third World, not something to throw to the winds of globalisation.

In summary, the NGOs have key messages for the Government. Development must not be subordinated to EU foreign, security or commercial policy agendas. The autonomy and impartiality of aid must be safeguarded and not become an instrument for EU security policy. Finally, EC aid should be founded on a commitment to partnership in development co-operation.

8.8 p.m.

Lord Bowness: My Lords, as the day has proceeded, I have become more and more aware that those who have preceded me and those who follow me have a combined experience of European matters that is very distinguished and that I cannot hope to match. However, I am encouraged by the fact that one of the objectives of Laeken was to bring the European Union closer to the people, so perhaps it is appropriate that someone who is not and has never been a member of any political elite might express a view.

I join other noble Lords in thanking the noble Lords, Lord Tomlinson and Lord Maclennan, for the role that they played in the proceedings of the convention. I welcome the report of the committee of the noble Lord, Lord Grenfell, which poses the important questions to be asked. Particularly, I welcome the suggestion of a written analysis showing the changes proposed in the draft constitution, compared with the existing treaties.

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Like the Select Committee, I wonder what has happened to the existing protocols, which cover a wide variety of different subjects, from the UK's opt-out of the single currency to Greece's concerns about Mount Athos. I also note the reference to the Charter of Fundamental Rights and its incorporation as part two of the constitution. Of course, as my noble friend Lord Tugendhat said, there are some strange bedfellows within that document. Nevertheless it was, following that convention, a compromise.

The question that I want to ask is about the fact that the presidium of that convention published a document that was a commentary on each article and detailed the legal basis of the same. This present convention has looked not only at the charter itself, but at that supporting document. Relatively minor changes were made. Although the charter itself is in part two, the revised explanatory memorandum, although published on the present convention website, is nowhere to be found. It should be at least referred to in the definitive document, and not left floating around the edges.

Having been present when the United Kingdom's case for the charter was argued by the noble and learned Lord, Lord Goldsmith, I am satisfied that, whatever its shortcomings, the charter as prepared was addressed to and applied to the European institutions of the Union and the member states when implementing European legislation. However, the provisions of the explanatory memorandum are important. For the sake of certainty, and to avoid confusion and conflict, the Strasbourg court and its jurisprudence, which was referred to by the noble Lord, Lord Judd, should at least come into the document somewhere.

The protocol on national parliaments has been welcomed, but, without going into its value and what amendments need to be made, I want to ask what happened to the proposals for the congress of Europe and how they came to be dropped. Is the proposed protocol robust enough to preserve the rights of national parliaments, not against Brussels but against the increasing tendency of national governments to find reasons for overriding the scrutiny procedures of Parliament, and especially given the increasing importance of the Council as opposed to the Commission?

I turn to the draft itself. I have no problem with the concept of consolidation of the existing treaties, setting out the different roles for the different institutions and member states—with a document that tries to ensure that the institutions work more effectively, given the form into which the European Union has evolved and is expanding. Too much is being made of the perfectly sensible title given to the document. I recall saying to colleagues elsewhere that if they were going to bring forward a consolidating treaty, please would they find a word other than constitution, which would present huge difficulties in the United Kingdom.

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I think that the people will find the discussions about the draft constitution, or whatever it should be called, somewhat unreal. On one hand it is described as a tidying-up exercise, and on the other it is said that it is of such huge constitutional importance that it threatens the independence of the realm. I am not attracted to either argument. There are of course significant proposals, such as the introduction of an elected president of the Council. Although I accept the need for changes to the six-monthly rotating presidency, and although there are welcome proposals below the level of the presidency designed to engage all member states, there is a danger that the presidency will become the preserve of large member states. I hope that account will be taken of the concerns of the smaller states, which will be expressed, I suppose, at the IGC.

Also of undoubted significance is the proposal to appoint a Foreign Minister and the concerns of noble Lords with great experience in these matters have been expressed today. The proposals for a common foreign policy are ambitious and I do not suppose for one moment that that will be achieved on all issues for a long time ahead.

But is that a reason for not endeavouring to achieve it in as many instances as possible? A united approach by Europe where possible is surely to be welcomed. Unfortunately, all too often it seems that this notion is opposed in case that policy is not on all fours with those of our US allies.

I have to say to my noble friends on my Front Bench that I find it particularly sad to hear some in my party picking up the language of Secretary of State Rumsfeld on the divide which he may not have started but certainly fostered with his "old and new Europe". He has reportedly carried on the attempts with suggestions—if now not a fact—that some accession states that supported the United States over Iraq will nevertheless be penalised in military and financial assistance because of their failure to enter into bilateral agreements with the US to exempt them from the provisions of the ICC.

I have to say to my noble friend Lord Howell of Guildford—I am sorry he is not in his place—that I have yet to be convinced at this stage of the necessity of a referendum. Much of the wording of the draft is already in the treaties in substantially the same form. Even the apparently contentious sections on the foreign and security policy owe much to Articles 17 and 18 of the Treaty on European Union.

Citizenship of the Union has already been established by a previous treaty. The suggestion that the draft brings the EU into hitherto untouched regions of national preserve is not supported by the 20 titles in Part 3 of the treaty establishing the European Communities, ranging from transport, to employment, to social policy, to culture, to the environment, or indeed the references to the many activities and political developments in the Laeken declaration.

Many distinguished commentators declare that the supremacy of the UK courts is threatened by Article 10 giving supremacy to the constitution and the laws

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adopted pursuant to the constitution. Others claim we joined a trade organisation and it has turned into something we did not expect. But are either of those new or are either of them true?

The Hansard report for the debates which took place in your Lordships' House and the other place at the time of the decision to apply for membership of the then EEC and at the conclusion of the negotiation shows these to have been matters of concern and indeed not in any way denied.

I particularly noted the words of the then Lord Chancellor who said that,

    "the Treaty of Rome is more than an economic grouping. It is also a great venture in political co-operation; and we welcome this political co-operation.—[Official Report, 3/8/61; col. 305]

Almost 12 months later his successor as Lord Chancellor said:

    "I fully accept that such regulations"—

referring to Community legislative Acts—

    "would have to be given effect to in our law as they stand. Should they conflict with existing Statute or Case Law they would over-ride it".—[Official Report, 2/8/62; col. 420]

Those are hardly attempts to deny what was envisaged or evidence that the matter was overlooked when the issue was debated.

If this document is a state constitution, the constitution already exists under a different name; the various treaties. If they make the EU a state, it already exists. However, I believe what we actually have is a unique organisation having some elements of an association of states, a confederation or a federation.

What would the question be in a referendum? It was simple on the previous occasion. I understand the arguments of those who say that any constitution should have the consent of the people, but in this instance I would argue that calling a document a "constitution" does not make the organisation to which it relates a state. An organisation with some elements of a state, yes, but a state, no.

Given the nature of European debates in the United Kingdom, however vigorously denied, any referendum will become a referendum on our membership of the EU in its present state and not just the EU in its post-constitution state. There is no point in holding it otherwise because we have already agreed to much of what is in the document. Even if it were agreed by QMV, we were a party to making those issues the subject of QMV. We will put our commitment to the European Union in question; we will go back to arguing for a free trade area; all the arguments will be against the main thrust of a developing European Union; and there will be no vision of wanting to be in a Europe which is anything other than a marketplace. Rejection of the jurisdiction of the European Court of Justice will mean, presumably, that we wish to reject that for all purposes except to protect our trade, but no other. We shall be seeking to have all the benefit and none of the burden.

I do not believe that within a developing, co-operating European Union we shall lose our own distinctive identity and independence—something which, if true, would be equally true of other ancient and proud nations, some recently liberated from

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tyranny. Surely we are not so superior or patronising as to believe that they have not thought about that or do not care.

I do not believe that the document is sacrosanct. Many issues are to be argued during the IGC. But I hope that, in arguing them, we shall argue the issues and not give the impression that we would prefer not to be involved or that we wish we had joined a different club altogether. Ultimately, there will no doubt be some element of compromise. Is that such a bad thing? I am inclined to think that it is the hallmark of civilised friends and, indeed, the hallmark of civilised nations. The alternative is to walk away, regardless of the damage done to ourselves and others.

8.20 p.m.

Lord Thomas of Swynnerton: My Lords, I found myself in agreement with the noble Lord, Lord Lamont—an old friend—when he said that he was basically well disposed towards the idea of a constitution for the European Union. What has been disturbing has surely been doubt as to whether the allegedly insatiable appetite of the Commission for further activities might reduce or even render illegal some old customs or activities to which we are attached.

All clubs have rules and the European club should have them as well. That is particularly the case as the European Union, however one judges it, is an exceptionally complicated arrangement of interlocking and intermeshing powers and institutions, sometimes apparently acting in what would otherwise be thought to be a federal way, sometimes acting confederally, sometimes acting as an alliance and sometimes acting as if not connected with each other at all.

I thought it was a good thing that President Giscard d'Estaing should be the person to try to produce a draft on this matter. He is, after all, a former president of our greatest European ally over many years. He is a distinguished writer and I, like other Members of your Lordships' House, have read his work on democracy, his memoirs and even his brilliant novel in which he describes how a country solicitor picks up a girl in the street, lives with her for a week or two and then she says, "Well, don't call me, I'll call you". She never calls back. Later, he explained on French television that he was the country solicitor; the girl was France. Well, someone has called back—that is, Europe.

I turn to the document before us. I hope that the Government will consider commissioning a new translation of it. It contains some terrible expressions, as I am sure anyone who has read it must agree. For example, in the preamble, we hear of something called the "central role of the human person". Surely there is a better way to express it than that. Later, we hear how one of the purposes of the Union should be to "flesh out" the Union's external powers. We hear in the charter—not, admittedly, in the text—that everyone has the right of access to a free placement service. What could that mean? The word "solidarity" is used four times on one page. At one point, the word "policies" is used three times in three lines. For the translator—perhaps for the author—there is obviously a love affair with the word "conferral". That

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is not an English word. We want a better word than that. We never hear of authority or power; we hear of competencies. One may feel that those are minor matters, but language is extremely important. If any government want to gain public support for this document they must get the language right. The noble Lord, Lord Dahrendorf, touched on this matter and I believe that he is completely right. It occurs to me that perhaps it is not a matter of the pronunciation, but of the original language. Perhaps the original language was bad. I shall return to that point on another occasion.

I have two significant complaints to make about the constitution itself. As in the past in relation to the European Union, under President Giscard d'Estaing, under the convention and in the document presented to us by Her Majesty's Government, all the institutions have dry, dull names, all beginning with "C": Commission, Council of Ministers, European Council. One will not find British public opinion to be in support of this major constitutional change unless warmer words are used for the institutions that we all recognise will be significant.

My second complaint, which echoes something that the noble Lord, Lord Lamont, said, is that lists of policies or aspirations are written into the constitution as if they are a part of the structure. But a constitution should not talk of policies or matters such as solidarity; a constitution should not say that the people concerned support a social market economy. It is for the Government or the Union in the future to decide such matters. Perhaps there will be a time when the majority of member states—participants in the European Union—wish to have a more socialist policy than the words "social market" would suggest; perhaps they will prefer to have a policy of much more free enterprise than the term "social market" would suggest.

All those words, and a great many others, should be excised. A small point in relation to the document is that I noticed that the preamble contains the phrase:

    "Believing that reunited Europe intends to continue",

and so on. Which Europe is being re-united? If it is Rome, then some countries were not participants in the Rome experience but they are now full and enthusiastic members of the European Union.

I refer briefly to the planned intergovernmental conference. It is essential that that conference should be used to improve the language as well as the content of the draft constitutional treaty, bearing in mind that language, even in the age of the e-mail and the Internet, is the nerve of intelligent living and freedom. Of course, we should take seriously the point made by the noble Lord, Lord Hannay, that we should take the intergovernmental conference seriously and that we should be seen to do so. We should also press the important points made by the noble Lord, Lord Owen, in an extremely important speech, that we should, if necessary, insist on more time to deal with improvements that we would like to make to this document, the significance of which is probably at least as great as the noble Lord, Lord Owen, said.

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Our European friends would certainly criticise us if we make wrecking amendments but, in my view, they will be grateful to us if we insist on spending an extra month trying to improve Article 15 on the European common foreign and security policy, or if we spend time trying to make the constitution as proposed by the convention as short as that of the United States. I am afraid that in the 21st century we cannot expect that the document could ever rival the United States constitution as a work of literature. Committees cannot write; nor can modern statesmen write as 18th century enlightened statesmen could. But we could seek hard to make what emerges from the IGC a worthy political document of which our generation can be proud.

8.30 p.m.

Lord Saatchi: My Lords, the noble Lord, Lord Grenfell, said that the debate had so far been in the best traditions of the House, and so it has. Perhaps he will allow me to say that the same applies to the various reports of his committee, including the latest one, which poses 16 pointed questions to the Government, to which I hope he will receive an answer later this evening.

The noble Lord made one key recommendation, which, as the Minister said, is:

    "The Government . . . should do more to make known the content and effect of the Treaty".

The noble Baroness said that the Government would do that. I have a question for the Minister about that. Perhaps noble Lords will allow me first to put the question into a political context, as I think the noble Lord, Lord Owen, did.

I have wanted very much to solve a puzzle: why our partners in Europe have such a different attitude to us. Why are they willing to share sovereignty when our country seems unwilling? Why is there no row or fuss in their countries about the convention and the constitution, which have largely gone unnoticed in their media? One possible explanation would be that their governments, like ours, have been obscured—I think that that was the word used by the noble Lord, Lord Howell. Perhaps those governments have denied that any such sharing of sovereignty is taking place. Perhaps they have also said that the convention is just a tidying-up exercise.

In fact, that is not the explanation or the solution to the puzzle. In France and Germany, for example, sharing of sovereignty is understood, acknowledged and completely accepted. It is described by the German Foreign Minister as:

    "The most important treaty since the foundation of the European Economic Community".

The Spanish Foreign Minister described it as:

    "A framework for political union".

Mr Prodi, the president of the EU, says that we need,

    "a single government for all countries who share the money",

because, as Monsieur Trichet, the new head of the ECB, reminds us:

    "Monetary union is the essential precondition for political union".

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There is no misunderstanding in those countries. They are not victims of a cover-up of the reality of shared sovereignty. They understand it; they accept it; they actually welcome it. Why? I asked that question in France and Germany this summer. In both cases, the first answer—the noble Earl, Lord Ferrers, knows it well—was peace.

I shall start with France. I was told that France lost 1 million men in one year, 1915. I was told that not one family in France had escaped that loss, and that that was why President Mitterrand declared that nationalism was war.

However, if pressed, other things emerge. With a Gallic shrug of the shoulders, I was told that this constitution or convention was the way of the world and a matter of economics. In France they have accepted, ironically, the American Harvard business school notion of globalisation that unity is strength. If there is a Darwinian process of natural selection, size is all, the strong go forward and the weak go to the wall. Mergers of companies are inevitable, I was told. So, too, must be mergers of countries.

If one pressed a little more, one would certainly learn more about resentment of America. France's culture minister resents American cultural imperialism; how it paves over precious French national identity with a homogenised US version of life. France's finance minister is unhappy that seven of the top 10 banks and eight of the top 10 companies in the world are American. I was told that that was not competitive capitalism at work, but monopoly capitalism.

The defence minister is uncomfortable that this year's increase in the US defence budget is equal to the entire defence budget of the euro-zone. France's foreign minister is dismayed by US unilateralism. Le Monde calls it the "cretinisation" of American foreign policy.

All that is why former French foreign minister, Vedrine, coined the phrase "hyperpuissance" to describe what he called the "hectoring hegemon", America.

The French Government now make it crystal clear—and one must acknowledge their consistency, as my noble friend Lord Howell said—that their aim is to create something big called Europe to rival something big called America. According to President Chirac, the explicit purpose of the recent Franco-German initiative with others in the area of military capability was to balance the US in a multipolar international system. That is what Mr Giscard d'Estaing means when he describes his dream for Europe:

    "It will be respected and listened to as a political power that will speak as an equal with the largest powers on the planet".

If we add to that the question of the environment and terrorism, we complete the rational and emotional case for a multipolar world, in Bevin's phrase, involving multilateral solutions, supranational bodies, transnational due process and negotiation to adjudicate disputes and so forth. In the French view of Britain, what are we? We are exactly what we were to Charles de Gaulle—America's Trojan horse in Europe.

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To turn to Germany, the first answer that I received concerned peace. Chancellor Kohl spelt out in his famous Louvain speech. He said,

    "Integration . . . is a question of war and peace".

He reflected the thoughts of Hamlet, that:

    "I have in me something dangerous which let thy wiseness fear".

On the other hand, the chief archivist of the German bank advised me to examine the German word "Heimat", which means homeland, to explain German thinking in the abandonment of the Mark, which he said was the equivalent of Heimat to the German people. He said that their willingness to give up the Mark and accept shared sovereignty was because Germany had always been successful when it had looked to the East, and that enlargement of the EU would fit that ancient strategy. Certainly, the seven East European countries are intertwined with Germany. Poland, the Czech Republic and Hungary are in no doubt of their need to remain in step with Germany.

What do the Americans make of all this? There is a certain ambivalence, but America helped to rebuild Western Europe after 1945. Even as America promoted economic and political integration, it recognised the risk of creating the geopolitical equivalent of Frankenstein's monster. As Dean Acheson, then the Secretary of State, said, Americans wanted to prevent Europe from,

    "becoming . . . [an] opposing force".

hat is the political background to my question to the Government.

One of the main effects of the convention that is not disputed by anyone is the fact that there will be an extension of qualified majority voting. It is, therefore, reasonable to ask the Government, "What is the system of voting to achieve a majority? How many votes will we have?". When we joined the EU in 1973, it was on a "one country, one vote" basis. We were equal partners, and we had an equal share of the votes. The constitution ends that principle of equality. Now that votes will depend on population, Germany will outvote Britain for the first time. The Prime Minister, the Foreign Secretary, the noble Baroness, Lady Symons of Vernham Dean, and today's White Paper have remained silent on that point.

The convention makes a dramatic change in the balance of power between EU members. The public should be made aware of that and allowed to consider its implications.

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