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Lord Lea of Crondall: My Lords, shall I rise to the bait? I think my noble friends would be disappointed if I did not say, "Yes".

Europe is the league we are in. I do not know whether the noble Lord, Lord Stevens of Ludgate, is still with us in spirit, but perhaps I may respond to what he has said. The noble Lord did not address the fact—he may not have noticed—that the European Union is a great magnet for attracting countries that wish to join. As Chelsea proved last night, the league we are in is one in which we can win. That is obvious at the level of the demotic, but it is not yet obvious at the level of the political.

The noble Lord, Lord Stevens of Ludgate, also did not address the question of why it would be dangerous for Britain to be isolated. It seemed to me that the noble Lord's speech added up to saying, "Stop the world, I want to get off". It is blindingly obvious that a policy of, "Fight them on the beaches and fight them in the hills" will not get Britain anywhere.

The six-month presidency will be suspended if the treaty is ratified, but we hold it for the moment and it is a golden opportunity—the noble Lord, Lord Tomlinson, made this point—for us to ask basic questions and to have them answered in a language that everyone can understand. We should not rely on focus groups, which are a contradiction in terms. All that focus groups do is prove that there is 99 per cent ignorance and then ask the people—as if they were as wise as Aristotle, Plato and every philosopher in Greece and Rome put together—to provide a strategy on international development. Clearly that is a contradiction in terms. We have to show leadership and explain at the same time.

Where do we want Europe to position itself in the world? Should we not try to get away, do we not want to get away, does the noble Lord, Lord Stevens, not want to get away from the American coalition of the willing? If we do want to get away from that, what do we do? A new chapter opened up a couple of weeks ago when President Bush went to Brussels—he did not come to London this time—and said that he supported European unity in being a great strength for stability and progress in the world. That does not come naturally to someone from Texas. We hope that the penny has dropped in Washington. Even the US can feel isolated. That is a negative perspective. But we have to pursue positive aspirations for democracy and other desiderata—and development—together, as the right reverend Prelate emphasised.

I would like to give another example of how Euro-sceptics—and let us call them by their proper name, Europhobes—miss the way the world is going. Let us take the enormously important development of negotiations through the EU big three on Iran's attempt to build on its nuclear power programme and weapons-grade materials. That is contrary to the Non-Proliferation Treaty.
 
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The stuff that history is made of has occurred in the past six months. History does not necessarily come in the most obvious, overt big jumps. It comes through Jack Straw, M. de Villepin and Joschka Fischer saying that we ought to lead the negotiation with Iran together. Last November they started systematic reporting to the Council of Ministers for the first time. It is very important that an agreement is reached. If it fails and we go down the Security Council road, we will end up with somebody bombing Iran's nuclear facilities. That could be even more dangerous than Iraq. The EU is now taking the lead on that matter. I do not know whether the noble Lord, Lord Stevens of Ludgate, does not want the EU to do that, but it an important thing to do in the world at the present time.

Everybody is confused and schizophrenic about the development of common foreign and security policy. People are schizophrenic because they do not know that unanimity means unanimity. It means that you can anything as long as you agree to do it and you cannot do anything unless everybody agrees that you do it. That is relatively simple but it causes a lot of people a lot of confusion on whether we have a European foreign policy, a European diplomatic service, a European this, that or the other. There is no reason why we cannot develop in that direction if we do it together with unanimity. That is the agenda in the treaty.

After the election, on all these matters the Government should throw caution to the winds. If we work on the assumption that a Labour Government will be returned—and most people do so, including most of the people on the Conservative Benches—we have to throw caution to the winds and start to raise our game in explaining what we are doing from the appropriate date in May.

I would like to pick up on the financial position and the issue of the rebate. I welcome the report of EU Sub-Committee A. The chairman of the European Select Committee, the noble Lord, Lord Grenfell, is going to make a contribution in a few minutes. I welcome the suggestion that there is a trade-off between the cost of the common agricultural policy and our rebate.

My noble friend Lord Tomlinson does not like the idea of horse trading, so I will not call it that. It does not make much difference what we call it—as Shakespeare said,

If we think back to The Hague in 1969, there has been a direct connection between the way in which Customs duties and the financing of the agricultural policy works with our trade pattern relative to the French. That has always been the implicit trade-off that some time had to be addressed head on—and we do address it head on.

I am not sure that we can stick to figure of 1.00 per cent. A figure nearer to 1.14 per cent will come out of the negotiations because we have to go with a lot of the aspirations of the EU on development policy. Many of those proposals are predicated on the figure of 1.14 per cent. This is a negotiation, but we have to get real on it very quickly after 1 June.
 
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I am attracted by the suggestion of the noble Lord, Lord Tomlinson, about repealing something. It would be nice if there were a "bent banana" directive because then we could repeal it. If we start a competition, I am sure that we will find something similar but I have not yet been able to identify it.

When people start to address the problems of the detail of so-called redundant directives they do not get very far because the acquis communautaire has, in general, stood the test of time. In the field of employment law, the quality of contracts of employment for everybody in this country—be it in transfers of undertakings, equality of opportunity, migrant workers, information consultation—has passed the test of time.

I have given the Minister notice of this point. If the services directive goes ahead, it must be accompanied in the Warwick agreement by the Temporary Agency Directive. We must reassure people that the freedom to operate services is not incompatible but goes side-by-side with protecting people working on sub-contracts. That is an important part of the agenda for the next six months.

6.47 p.m.

Lord Watson of Richmond: My Lords, I would like to join in congratulating my noble friend Lord Dykes on securing this debate. I have known him since Cambridge. His record as a consistent, comprehensive and enthusiastic advocate—indeed, champion—of European union is exemplary. At Cambridge I left the Conservative Party and joined the Liberals. It has taken him four decades to achieve the same decision, but we on these Benches congratulate him on that.

The debate has produced some interesting contributions. The noble Lord, Lord Stevens, has introduced a new theory of conspiracy—the "uh-huh" theory. It joins a long series.

There have been many good points. I was particularly interested to hear my noble friend Lord Russell-Johnston refer to his federalism. He made the point that federalism is normally understood to be about the devolution of power, not the concentration of power. I vividly remember being invited to address a meeting in Munich. A rather enthusiastic Bavarian came up to me afterwards and said the he found the British position of federalism very difficult to understand because he believed it to be the most important element in securing the independence of Bavaria. So federalism is understood differently in different places.

It is in some ways slightly esoteric to discuss the UK presidency before the general election. We know that the UK will hold the presidency but we will not finally know what political personnel will hold it until the people decide. I would like to suggest three areas in which whoever happens to be there might be able to make a distinctive contribution to European thinking and planning during those six months.

The first stems from the draft constitutional treaty. That treaty, which is long and complex, and which sometimes appears to please no one because it has not
 
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delivered the whole of the argument to any side—personally, I believe that that is one of its great virtues—enshrines the principle that, in future, national parliaments should review all Commission proposals. If one-third of them take the view that a Commission proposal, in effect, ignores or contravenes the principle of subsidiarity—some blueprint for a federal super state—then that Commission proposal falls.

That is a significant proposal. It is a great invitation and challenge to national parliaments to become much more seriously involved in European legislation. As the noble Lord, Lord Kerr, has written, how we respond to that invitation will be an important test of the British instinct for democratic and parliamentary control. During the UK presidency it would be very useful to test how European national parliaments can take up that challenge.

We have a system of reviewing European legislation in this House and in Westminster to which changes are being made. If we are to be effective in reviewing Commission proposals, there has to be a new degree of co-operation, a new level of efficiency, proficiency and speed of response in the way in which national parliaments consider such proposals. It would be very valuable if, during the presidency, the UK tested the areas of possibility. After all, one of the great reputations that we have within the European Union and one of the reasons that people like Monnet so welcomed British membership is that it is believed that we will add a new dimension, a new toughness, to democracy within the European Union. I would be interested to hear from the Minister whether something could be done.

There is an important additional dimension to that matter. Within a European Union of 25 countries, the review of proposed Commission directives ,and so on, takes on quite a different complexity. An obvious example could be a harmonisation proposal that affects food hygiene. What would be appropriate for Spain in the summer would not be appropriate for Finland in the winter. Therefore, a level of diversity and complexity has to come in to national parliament's review of Commission proposals. The constitution hands national parliaments an initiative and a potential that they have not had before. It is very important that this country leads the way in responding to that.

Secondly, I agree with the remarks that have been made about the US President's visit to Brussels. In some ways it was a slightly bizarre visit, but it was an important, useful and hopeful one. During the presidency, the UK could take a lead in pursuing some of the initiatives and ideas that came out of that visit on mending the transatlantic relationship. How do we move from slightly statuesque conferences, which are meant to bring together a transatlantic, US and EU perspective, to make that more of a reality?

It is urgent that we do so, because although we were treated to the somewhat unusual spectacle of the President listening, there is a background to the situation; for example, Condoleezza Rice, before the
 
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inaugural speech of the President, listed—not in alphabetical order—six outposts of tyranny: Iran, North Korea, Burma, Cuba, Belarus and Zimbabwe. During his speech, President Bush quoted Abraham Lincoln:

On previous experience, we have an administration in the United States which might just believe that God should be given a helping hand and that there should be some facilitation, perhaps through the deployment of force in some way, in bringing in the just rule of the Almighty. Given the perilous world situation in which we live, it is critical that the transatlantic relationship is improved in quality, in detail, in speed, and in regularity.

The final area in which I believe that the UK could make a positive difference during the presidency is, as a number of noble Lords have already pointed out, on the Lisbon agreement and its implementation. A real problem with that is that it defines almost everything as a priority. Looking at the original Lisbon agreement, one sees that priority is to be given, for example, to research and development; policies for the information society; structural reform for competitiveness and innovation; completion of the internal market; modernising of the European social model; investing in people; combating social exclusiveness; and funding the right means for the right macro-economic political mix, among other things. An old adage is that if everything is a priority, nothing is.

One area where the United Kingdom could place great emphasis, because of its importance to this country and our track record, is on the urgent need to enhance Europe's research and development capability. The facts of the situation are that 2.67 per cent of the United States GDP is committed to research and development, whereas only 1.83 per cent of the enlarged EU's GDP is committed. That is very dangerous for Europe and for us.

I declare an interest in that I chair the Chemistry Advisory Board at Cambridge. I noticed that the Vice-Chancellor of Cambridge University, Alison Richard, a very fine and outstanding vice-chancellor, responded to the president of the European Commission who was publicly bemoaning the fact that in Europe we have no MIT. She wrote a letter saying, "What about Cambridge?". That is fine, but at Cambridge we have an excellent state-of-the-art chemistry ability, which is generously privately supported, but in other universities, chemistry departments are closing. If, over the next couple of years, we do not take seriously the R&D challenge within Europe, we shall lose out significantly. I believe that that is an opportunity that will occur under the UK presidency.

Six months is a short period of time. There is not much time. There will be a huge EU agenda to deal with and the danger is that it will submerge any sense of priority or any distinctive initiative. I would urge on the Minister and on whatever government emerges after the election that it is important that what we do during our presidency adds value, is characteristic of the best of our political and economic capability and makes a positive difference in Europe.
 
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6.59 p.m.


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