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Lord Peyton of Yeovil: I am sorry to detain the Minister once again. I thought that I had asked him what kind of people are to make these assessments on behalf of CHAI and what form of training they will be given. Before we give people powers of this kind, I think that we ought to be satisfied that they will be properly equipped to use them. While I do not want to

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go into all the arguments, there is an increasing army of people in this country whose role is to check up on other people working in sharp-end jobs. Only a limited number of people in the health service are capable of making anyone better at what they do, and it is doubtful how many of those would be included in the ranks of CHAI; indeed, it would be a waste of their time if they were.

I return to the question I asked the Minister earlier. If he does not answer it, rather than simply responding in accordance with his official brief stating "reject", he ought at least to leave it open until the Report stage and offer to reflect on it. The summary advice headed "reject" mutilates argument and does not do anything to convince Members on this side of the Committee that the noble Lord is really taking seriously what is being said.

Lord Warner: I reject the noble Lord's last comment. On a number of occasions I have offered to take matters away and to consider amendments in regard to particular issues.

The noble Lord must have the arguments on his side. As regards the present arrangements, we have the Social Services Inspectorate, whose representatives are well trained. They have not been criticised on any lack of training or on how they carry out the inspections which will be used to form the basis of the future CSCI ratings. There will be transfers of staff there.

The Commission for Health Improvement undertakes the star rating system, based to a great extent on information provided by NHS trusts themselves. That work is undertaken by well trained and knowledgeable staff who will be transferring to CHAI. It will then be for Sir Ian Kennedy and his colleagues to decide, as an independent body—noble Lords have made great play of its independent status—what further training may be required. It is not for the Secretary of State to lay down the skills and competencies required by this independent body.

Baroness Barker: May I ask the Minister to give his response to Amendment No. 284?

Lord Warner: Amendment No. 284 seeks to specify those groups that CHAI must consult in determining criteria for determining the award of performance ratings. I certainly do not agree that we need to specify which groups, if any, CHAI, as an independent body, may wish to consult in developing its performance rating methodology. Clearly, CHAI will wish to engage patient representatives and those experts, clinical or otherwise, that it feels will be appropriate in developing such review criteria, but we do not think it would be proper for us to place in the Bill a duty on it to do so.

Again, I come back to the point that noble Lords cannot have it all ways. If an independent body is being set up and people are concerned about its independence, it is right and proper that that body

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should be given a degree of freedom of manoeuvre in how it consults. We must trust it to do that in a sensible way.

Earl Howe: This has been a useful debate and I hope that the Minister will want to reflect on the concerns expressed by my noble friends Lady Cumberlege, Lady Carnegy and Lord Peyton, as well as the noble Baroness, Lady Barker, and, from the Minister's own Benches, by the noble Lord, Lord Turnberg.

I agree with the noble Lord, Lord Hunt, that there are variations in the performance of NHS bodies and that those variations do need to be identified, and I agree with the Minister in what he had to say in that regard. I have no difficulty with the concept of performance indicators; it is the star rating system which is too much of a blunt instrument. What I sought to suggest in Amendment No. 282A—to which I am not sure whether I said I was speaking, although I hope the Committee will realise that I was doing so—is that performance ratings should be formulated by CHAI itself in a more sophisticated way than is the case at the moment, and that perhaps a linguistic form of rating would achieve the kind of sensitivity described by the noble Lord, Lord Turnberg.

I agree with the noble Lord, Lord Hunt, that we want to motivate staff, but you simply will not do that if those members of staff have no confidence in the way that their star rating was arrived at. The trouble is that the targets on which star ratings depend are, in many cases, artificial. I mentioned targets for out-patient appointments and cancelled operations. Another is waiting times in A&E, because the performance is assessed on the basis of a snapshot in a particular week. In-patient waiting times targets take no account of clinical urgency and so are unrelated to what really matters. A huge management effort is put into chasing such targets and that effort could, I believe, be better used.

My noble friend Lady Carnegy said that star ratings could learn some lessons from car ratings, and I think she has a point. By no means do I want to sweep the whole system away, but it does need to be refined and I hope very much that Sir Ian Kennedy will be allowed complete freedom to devise systems in which everyone has confidence and which really do indicate the variations that exist in the health service. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 282A not moved.]

Lord Grocott: I beg to move that the House do now resume for the Statement.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

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European Council

3.47 p.m.

The Lord President of the Council (Baroness Amos): My Lords, with the leave of the House, I should like to repeat a Statement made in another place by my right honourable friend the Foreign Secretary. The Statement is as follows:

    "I should like to make a Statement about the European Council which the Prime Minister and I attended in Brussels on 16th and 17th October. I saw the Prime Minister earlier this afternoon and am pleased to be able to report that he is fine and has totally recovered.

    "EU Heads of State and Government had their first substantive discussion of the draft constitutional treaty, focusing on the size of the Commission, the role of the Chair of the European Council, changes in the rotating presidency and the weighting of votes after enlargement. The Prime Minister set out the United Kingdom's position in the terms of our White Paper published on 9th September.

    "The Council discussed the European economy and agreed a number of measures to encourage growth. I have placed a copy of the conclusions in the Library. These stress the EU's commitment to structural reform, flexibility of capital and labour markets, and innovation and investment in research and development.

    "But between now and the Spring Council on European Reform work needs to begin to reform European competition policy, to make the new system of regulatory assessment work effectively, and to take forward the ideas of the recent report by a leading Belgian economist, Professor Andre Sapir, on how the EU budget can be focused on economic reform priorities. The reform agenda remains a high priority for the Government. We are working closely with the Irish Government who, as EU Presidency, will chair the economic summit in the spring.

    "The European Council discussed defence at a Heads of State and Government dinner. The EU has mounted two ESDP military operations this year, both of them with UK contributions. In March, an EU-led military mission took over from NATO in the stabilisation role in Macedonia. And in June the EU deployed troops to the DRC to support UN activities there. Both operations followed the approach agreed by the Prime Minister and President Chirac in launching the European Security and Defence Policy initiative at St Malo in 1998, that the EU will act militarily only,

    "where the Alliance as a whole is not engaged".

    "In Macedonia, NATO has decided to terminate its mission and to support an EU successor force through the Berlin Plus arrangements. In the case of the DRC, the EU decided to deploy a force after consultation with NATO and once it was clear that NATO did not intend to engage militarily in the Congo.

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    "It makes sense for EU nations to strengthen Europe's contribution to the alliance and to enable Europe to act in circumstances where NATO does not want to. What would not however make sense and is unacceptable to us would be for the EU unrealistically to aspire to provide a territorial defence commitment. That remains for NATO. Three years ago in Nice, the European Council recognised that, in approving the permanent arrangements for ESDP,

    "NATO remains the basis of the collective defence of its members".

    "The Government believe in a strong Europe and a strong NATO. Our leading role in European security and defence policy has been based on these twin commitments. They are widely shared across the enlarging European Union and the Atlantic alliance. They will be at the heart of the development of European security and defence policy in the Intergovernmental Conference and beyond.

    "Let me now turn to Iraq. The European Council welcomed the unanimous adoption of UN Security Council Resolution 1511 on Iraq on 16th October. Its successful passage by 15 votes to nil reflects weeks of intensive negotiations and is also a testament to the tireless work of the US Secretary of State, Colin Powell.

    "The resolution sets a deadline of 15th December by which the Iraqi interim governing council should provide a timeline and programme leading to an Iraqi constitution and democratic elections. We want to give control of Iraq back to its people as soon as possible and practicable. Iraqi Ministers are already heavily involved in much of the day-to-day business of the country.

    "The resolution confirms the central role of the UN and encourages UN member states and international bodies to support the reconstruction of Iraq. The next step will be the Madrid donors' conference at the end of this week. There the UK will pledge a further 300 million assistance over two years. Together with money already committed this will bring the UK assistance for the three years from April 2003 to 550 million. This is on top of the contribution we are making through our commitment of British troops.

    "The security situation, especially in the Baghdad area, is not satisfactory. But since Saddam Hussein's downfall the coalition has made huge efforts to rebuild the infrastructure of Iraq. Power generation is now exceeding pre-war averages. Last week, oil production reached 2 million barrels per day for the first time since military operations ceased. Nearly all schools and hospitals are open. Iraq has a new currency. Banks have reopened and businesses are coming to life. Security sector reform remains a key focus for the coalition. The challenge is to put Iraqis in charge. Iraq now has 40,000 police, and this number will rise to 70,000 within a year. The first battalions of the new Iraqi army have graduated. Training for additional Iraqi military continues and there is now an independent judiciary. The Prime Minister asked particularly that I emphasise his

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    personal tribute to the UK servicemen and women, other UK personnel and other coalition partners who are working selflessly in difficult and dangerous circumstances for the good of the Iraqi people. Much still needs to be done. But much is being achieved.

    "The European Council also discussed Iran and again urged the Iranian Government to co-operate fully with the International Atomic Energy Agency. Resolving the doubts surrounding Iran's nuclear programme is of grave concern to the EU and to the wider international community. Immediately after this Statement, I will be travelling to Tehran to join my French and German colleagues for talks on the issue at the invitation of the Iranian Government. We will be pressing on the Iranians the urgent need for compliance with all of the requirements of the resolution passed last month by the board of governors of the International Atomic Energy Agency. That means we shall be seeking full co-operation and transparency to enable the agency to resolve outstanding questions and pressing the Iranians on key issues raised by the resolution. These include the early signature, ratification and implementation of an additional protocol to Iran's existing safeguards agreement and the suspension of all enrichment and reprocessing activities.

    "The European Council considered the worsening situation in the Middle East, condemning the intensification of suicide attacks and other violence, in particular the attack that killed three US citizens in the Gaza Strip on 15th October. The European Union called again on the Palestinian Authority to do all it could to fight against extremist violence. It also expressed particular concern over the route of the so-called "security fence". Apart from the humanitarian and economic hardship this is already bringing to many Palestinians, this project could make the two state solution impossible to implement.

    "We shall work hard to achieve a successful outcome of the Intergovernmental Conference under the Italian presidency this year. We are very grateful to the leadership of the Italian Government in this negotiation.

    "The draft constitutional treaty is designed to improve the way the European Union works after enlargement by reform, clarification and consolidation. The claims made by the Opposition and others that this treaty would undermine Britain's independence are absurd. These are, in truth, arguments not against the draft treaty but against British membership of the European Union. Their logic would be to take Britain out of the European Union altogether.

    "The European constitutional treaty has got to be one based on independent sovereign nation states co-operating together, not some federal superstate—and so it will be. A constitutional treaty embodying these principles will contribute to a strong and successful European Union. That is essential for our economic prosperity, our security

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    and for Europe's stability. We believe that this patriotic approach is in the interests of this country and I recommend this approach to the House".

My Lords, that concludes the Statement.

3.57 p.m.

Lord Howell of Guildford: My Lords, I thank the noble Baroness for repeating the Statement. The House, of course, will be united in wishing the Prime Minister a rapid return to complete full health. I am very happy to hear that that is indeed the situation. I combine what I suspect are your Lordships' feelings with friendly advice, such as that offered with amazing prescience last week by my noble friend Lord Hurd in a newspaper article: that in future it probably will be wise for the Prime Minister to go a little slower in his activities, carrying, as he does, enormous burdens.

We applaud some aspects of the Council's conclusions, such as its robust views on addressing the unending Palestine tragedy; the combined approach to the Iranian nuclear programme, which the noble Baroness described; and the latest UN resolution on Iraq, which is welcome.

Despite the desperate security situation in some parts of Iraq—which our troops are handling with their customary skill and superb qualities and bravery—I agree that clearly there has been progress. However, not many of the advances—for example, the fact that oil production is now back to 2 million barrels per day; the currency reform; the new investment and so on—get reported. We welcome the progress that has been made and hope that the donors' conference in Madrid next weekend will be successful. We acknowledge that the 550 million already committed by the United Kingdom is a good start, as is the 1.5 billion US dollars now committed by Japan and a number of other commitments. It is a start and a move in the right direction.

However, we are far less impressed by the communique and the Statement, which contain endless paragraphs and presidential conclusions full of tired "Oldspeak" references to "relaunching Europe", "growth initiatives", government plans for somehow magically producing jobs, and even to that old chestnut "industrial policy". I thought we had seen the last of that kind of thing. The drafters of the communiques and conclusions do not seem to realise what the public long ago grasped—that nowadays the most effective and innovative economic and social change comes not from more central government plans and initiatives but from outside central government. It comes from market competition and deregulation; in the social case, it comes from non-governmental organisations, from the private sector, from voluntary groups and even from the media.

It is a pity, too, that the summiteers did not pay more attention to the robust rubbishing given to all this kind of thinking by the Chancellor of the Exchequer, Mr Gordon Brown. He said in last Thursday's Wall Street Journal,

    "the policies of trade bloc Europe are not just out of date but counterproductive".

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He added that Europe,

    "must conclusively rule out tax harmonisation"


    "resolve that tax competition is the basis on which Europe can compete".

I presume that can only mean that he would like to see lower taxes. Of course, he does not practise what he preaches in that respect, but that is a debate for another time. But at least he is speaking along the right lines.

We are, frankly, left mystified by the twists and turns of government policy on defence and security, although the noble Baroness sought, in the Statement, to explain the position. What exactly have we agreed to? Last week, the US Ambassador to NATO, Nicholas Burns, described the EU plans as,

    "one of the greatest dangers to the trans-atlantic relationship".

The Americans—and my friends confirm this—tell me they believe they are being kept in the dark. We need some more illumination about what is happening. Are we falling in with the increasingly explicit French and German plans, just confirmed in the German Ministry document, for a European army with its own command structure, or are we not? The Prime Minister, of course, assured President Bush a few weeks back that there would be a joint command between EU forces and NATO. Is that still the policy or have we shifted? How does that fit in with Monsieur de Villepin's recent lecture to us about,

    "expanding German and French ambitions"

to use his slightly chilling phrase.

Thirdly, we come to the constitution plans, which the noble Baroness mentioned. What do the Government say to the Italian Government's proposal to table a "take it or leave it" document on the constitution next month? Have we been consulted on this procedure, or will we just be caught by surprise again, as often seems to happen?

As for the nature of the draft constitution, how can Ministers say with a straight face that the constitution will not fundamentally change the European Union or our relations with the rest of the Union, when it places the new constitution above our own, when most of Europe's leaders describe it as an absolutely major constitutional change—amended or not—and when at least six other countries are having referendums on it? Is it any wonder that the Prime Minister's closest advisers are now said to be cautioning that the Government's dogmatic rejection of a referendum here is an untenable position?

Constitutions are supposed to be about checks and balances to prevent too much central power and the tyranny of the majority. Are we going to inject any of our national experience on these matters into the draft, which is at present devoid of all such considerations? If so, when are we going to speak up?

Finally, this country used to be seen in central and eastern Europe—I am referring to the enlargement development—as the champion of the smaller states. Did we, this past weekend, stick up for them and their deep worries about not having commissioners in

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Brussels, about a centralising presidency or about anti-Americanism in Paris and Berlin? Or did we just side with the big powers against the small? It would be nice to think that our country was on the side of democracy and a more equal kind of Europe—in fact, a better Europe. But in the presidency conclusions, and in today's Statement, there is no sign of that at all, and I wonder why.

4.4 p.m.

Lord Wallace of Saltaire: My Lords, we on these Benches also extend our best wishes to the Prime Minister after the unfortunate incident yesterday and hope that he will be fully recovered.

We welcome the Statement. I note that the conclusions had a good deal more on the Lisbon agenda and the growth initiative than is provided in the Statement. If I may make a marginal correction to the Statement, the recent report of the Sapir group was by not only leading Belgian economists but a multinational group of experts, including a British expert, Professor Helen Wallace, whom I know moderately well.

The growth initiative talks about trans-European networks and their funding. The Belgian, Luxembourg and French Governments were particularly concerned that these should be in the centre of Europe. Could the Government assure us that they are pushing hard for funding for transport initiatives to be in the peripheral areas where possible, particularly in the new states, and not across the Alps and between Brussels and Strasbourg, as has been suggested?

Can the Minister tell us a little more about what is planned on the research expenditure of a major element of European knowledge in the Lisbon agenda? May I ask, for future reference but not now, that, at some point in the near future, the Government will come to the House and tell us what is happening among higher education institutions in what is known as the Bologna process? I note that communiques from Ministers of higher education, all part of the Lisbon agenda, have not, to my knowledge, yet been reported in any way to this House.

I am happy that the better regulation initiative is being extended from Britain to the European level, and I hope the Government are pushing that very thoroughly.

There is very little mention of the border management issues, as covered in the presidency conclusions. They make a reference to a border management agency, with maritime and air components. Do Her Majesty's Government intend to take part in that, particularly given that the presidency conclusions say that the outline of this border management agency is due to be agreed in principle before December's European Council?

Much of the Statement covers defence. We welcome the Government's insistence on a European pillar in NATO, but are puzzled by the extent to which Her Majesty's Government appear to have been giving incoherent messages to their different partners over the past few weeks.

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We were strongly in favour of the St Malo initiative of 1998, and I am glad to see that the Government are back on track. Some of us remember that 40 years ago or more, John F. Kennedy talked about a European pillar within NATO, and it seems to us that that is the direction in which we should be moving. There has always been deep American ambivalence about what that European pillar should be. Yet again, each time the Europeans move in that direction, Americans question whether we will be as loyal as we should be.

We are puzzled by the depth of the Government's opposition to the inclusion of a territorial defence commitment in the constitutional treaty. We lived fairly happily with the Western European Union treaty and its strong territorial defence commitment among European states for many years. It is inconceivable that there should be an attack on any member of the European Union without all members of the European Union, whether in NATO or not, being engaged. Perhaps we are being over-loyal and theologically purist about NATO in resisting that.

We welcome the emergence of EU forces in eastern Congo and Macedonia. I know that there have been some discussions about the use of peacekeeping forces in Moldova and whether the force in Bosnia will transfer from NATO to the EU.

Finally, there is a certain amount in the Statement on the constitutional treaty. We on these Benches welcome progress towards the constitutional treaty; we do not intend to discuss it in depth here, beyond hoping that the Standing Committee, which will be meeting at 5 o'clock, will attract a large attendance from your Lordships' House. We welcome the fact that the Foreign Secretary will be there. Discussions should be actively pursued over the next few weeks and months in that forum.

4.10 p.m.

Baroness Amos: My Lords, first I thank both noble Lords for their comments about the Prime Minister. He has now recovered. However, I have to say to the noble Lord, Lord Howell, that it would be a very brave person indeed who advised my right honourable friend the Prime Minister to go a little slower. Perhaps I shall send him a copy of Hansard rather than raise the matter with him myself.

The noble Lord, Lord Howell, asked specifically about tax. Our position remains as set out in the White Paper, which was published by my right honourable friend the Foreign Secretary in September. Paragraph 66, on page 32, makes it absolutely clear that,

    "we will insist that unanimity remain for Treaty change; and in other key areas of vital national interest such as tax, social security . . . key areas of criminal procedural law",

and so on. Our position remains exactly as set out in the White Paper.

Both noble Lords asked me a number of questions in relation to defence. After the Brussels summit, our position on European defence is the same as it was before. I should like to quote the Prime Minister in Brussels on Friday, when he said:

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    "We need of course strong European defence, but nothing whatever must put at risk our essential defence guarantees within NATO".

That remains the position.

In response to a question asked by the noble Lord, Lord Wallace of Saltaire, we have said that collective or territorial defence is for NATO, and that remains our strong position. We see European defence being on a basis fully compatible with the NATO agreement. In our view, European defence has no future as a competitor to NATO.

In relation to the constitutional questions, particularly the question of a referendum, let me repeat what has already been said in this House. Under our constitutional arrangements, Parliament makes the law. In certain circumstances, Parliament has decided that particular laws should come into operation only after a referendum has been held. In practice, they have been held only where there is a wholly new constitutional structure proposed, and not otherwise. Referendums have been held in Scotland, Wales and Northern Ireland, so that the people there could decide whether they wanted a parliament or assembly. Only one UK-wide referendum has ever been held—in 1975, when the question was whether the UK should stay in or withdraw from the European Union. The Government are committed to holding a referendum on the euro. The position on referendums remains the same. A number of European countries have come to a different decision, but that is in line with their own constitutional arrangements.

The noble Lord, Lord Wallace of Saltaire, asked specific questions about funding for transport arrangements and research expenditure on higher education institutions. I hope that the noble Lord will allow me to write to him on those points. I shall put a copy of the letter in the Library of the House.

The answer that I have on Moldova does not answer the noble Lord's point. My brief states that the European Union reiterates its continued support for the OFC efforts for a comprehensive political settlement in Moldova, but it does not go to the heart of the points that the noble Lord raised. If I can find further information about that, I will be happy to write to the noble Lord. I should add that my right honourable friend the Foreign Secretary will unfortunately not be attending today's Standing Committee, as he will be on his way to Teheran, but he will try to attend all other sittings.

4.14 p.m.

Lord Tomlinson: My Lords, is my noble friend aware that, while I welcome the Statement that she has repeated, the Statement is vastly preferable to the presidency conclusions, which we have had more chance to read? Does she accept that many Members of this House, having read the presidency conclusions, will agree with the extremely critical comments made by the noble Lord, Lord Howell? In future, perhaps they should wait until after a Council meeting before writing presidency conclusions. Occasionally, instead

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of continuing to repeat the promises of the past, they should give an evaluation of how far they have gone in achieving some of those things.

I should like to ask a specific question arising from the presidency conclusions, under the heading "Iraq". Paragraph 63 refers to the conference to be held on 24th October in Madrid and how the European Union "will announce a pledge" of 200 million euros. Does my noble friend agree that that represents a somewhat obscure sense of priorities, when one contrasts that paltry figure with the 1 billion euros that is the annual subsidy in the European budget for tobacco manufacturing?

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