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Lord Howell of Guildford: My Lords, we are all grateful to the noble Lord, Lord Triesman, for repeating the Statement. I confess that I am a little surprised that in the other place the Prime Minister did not himself make the Statement, because, as the noble Lord, Lord Triesman, has reminded us, it is at the heart of government strategy and raises questions of the utmost profundity.

However, even if the Prime Minister had made the Statement, I would still be answering, because my noble friend Lord Strathclyde is in Huntingdon for the sad occasion of the funeral of my noble friend Lady Blatch. I know that all your Lordships will share our sorrow at the passing of this remarkable and redoubtable Member of our House. Her robustness and deep conviction were a lesson to us all—and she was a very, very close friend.

Regarding the Statement, last week was momentous in the history and development of modern Europe. My hope is that the Government have learnt the right lessons, or are, at least learning, from the events across the Channel. From the tone of the Statement, it does not sound like they have learnt those lessons one little bit.

The Government have left us and themselves in the worst of all worlds. They refuse to acknowledge the obvious, that the constitution, as drafted, is now a corpse. I can understand their grief and indecision, since the constitution, which the Government have already signed—as the Statement reminded us—was very much their creature. It certainly was not ours. Those of us who urged opposition and warned that the treaty would damage Europe and the Union were repeatedly dismissed as xenophobes, anti-Europeans and isolationists—and there were other abusive statements. We were shrilly asked who our allies in Europe were, with the implication that we had none. Now we have the answer. It turns out that the people of Europe, or a large chunk of them, are the good Europeans and it is the governments, or some of them, who have been going in the wrong direction.

Voters in France and Holland may have had widely varied reasons for voting the constitution down, but there was a common theme and it was clear, as it is here. People fear excessive centralisation of remote power. They do not reject Europe or the European Union, but they want more say in keeping their own models, arrangements and systems under their own laws. Some people may be to the left on the economic spectrum, some to the free market right and some may have completely different purposes and concerns.

The constitution, imposed as it was by a convention from on high, with all the overblown references to the USA, the Philadelphia convention and so on, went, and obviously goes, too far in favour of centralisation and central institutions. It upsets the balance with
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which the European Union has made great progress in the decades since it was founded. In a sense, it is like the game "grandmother's footsteps" where, after all the success, the fatal step goes too far and wrecks everything.

On these Benches, we see this as an opportunity. We greatly favour enlargement, and we favour sensible rules for organising a growing Europe. By the way, we want an assurance that the accession arrangements for Bulgaria and Romania remain a priority, even after the débâcle of last week, with other countries, including Turkey, to follow. We support all of that and want to see it.

But what is the Government's position and response? The question remains open, even after this Statement. It appears to be to stab at the pause button, as recommended by Mr Mandelson, the commissioner from Brussels. But to put everything on hold is the worst option of all. To say that we should muddle on as before is the second worst option. Much the best option would be to seize the moment and bring forward clear proposals for a more flexible, modest, network Europe with powers returned to nation states and absurd ambitions for world stage foreign policy dominance curbed.

The current Bill before Parliament, which provides for a referendum on the constitution, should not just be shelved, as I understand is proposed, but should be taken away altogether. Of course, if there is any attempt to introduce a revised constitution by the back door, we would naturally insist on a referendum on that and on any moves that change the powers of this Parliament under our constitution.

Later, in the resumed debate, I shall be commenting on the excellent report on EU finance by the committee chaired by the noble Lord, Lord Radice, and on the economic aspects of this farrago. Of course, I shall also be making a comment on the most interesting and expert maiden speech of the noble Lord, Lord Kerr. I shall be saying something on the rebate and the net contribution to the budget. Suffice it to say that the euro, which we were lambasted in intemperate terms for not wanting to join, and which was always a political construct, now looks distinctly shaky after the events of last week. Withdrawal is a headline issue in the newspapers in Italy, where I was yesterday, and has even been muttered about in Germany.

None of this is doing Europe, or Britain, any good at all. It is no use blaming the people for not understanding or governments for not explaining the alleged wonders of the constitution adequately. We must ask what the British Government are so tremulously waiting for. They ought to be grateful that they have momentarily escaped the referendum axe. Are they now waiting for a lead from Luxembourg or the Scandinavian countries? What is the change of circumstances mentioned in the Statement in which the Bill would apparently be brought back? We are left wondering.

This should be a time not for dithering but for creative ideas and leadership from London to help Europe prosper once more, which it is not doing at the
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moment, and to help Britain benefit as part of a reformed Union, as our presidency of the EU comes along in the next few weeks. Yet the Statement shows no clarity, no contrition for past crass errors and no awareness of the heavy duty on the shoulders of the British to refresh, revitalise and democratise this Europe of ours, which we have saved in the past more than once, and which we should now save again by our exertions and example.

4.15 p.m.

Lord Wallace of Saltaire: My Lords, I must also say how much we will miss Emily Blatch. I had many enjoyable conversations with her about higher education, which was one of her great concerns. I can also remember many long, late evenings in Committees on Bills as she fought amendment after amendment from the Conservative Front Bench.

Unlike the Conservatives, we very much welcome the constructive and multilateral approach that the Government have taken in this Statement and the surprising and welcome emphasis on co-operation and consultation with our European partners, which is appropriate in the circumstances. The results in these two referendums, in particular in the Netherlands, were a massive rejection of the current proposals. As it happens, I was in The Hague on Wednesday afternoon and evening and, from the comments of my Dutch hosts, was well aware of how unexpected and decisive a rejection it was.

We are more aware than we were of the extent to which Brussels institutions appear remote, not just to our own population but to the populations of all other member states, and of the failure of political elites throughout the European Union, certainly throughout the original west European member states, to explain and justify the development of common policies and institutions. We on these Benches believe that it has been a particular failure of the leadership in all four major states: in France most of all, but also in Germany, Italy and the United Kingdom.

We believe that one of the greatest failures of the government over the past eight years is the failure to make a positive case at home for multilateral European co-operation and in domestic political debates in the European Union to make the case for the economic policy reforms to which we are committed. The last thing that we think is desirable in these circumstances is for the British, yet again, to suggest that we are going to lead Europe, save these poor benighted continentals from themselves and tell them all what to say, as we heard from the Conservative Front Bench. That will not help anyone, least of all ourselves.

The constitutional treaty, as the Statement said, was a necessary compromise. I have to say to the noble Lord, Lord Kerr of Kinlochard, that I regard the treaty as a curate's egg. I would happily have done without Part 3. Parts 1 and 2 would have been quite sufficient. Nevertheless, there are a number of useful steps forward. The achievement of a European Union of 25, to be extended to Bulgaria, Romania and the
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Balkans, and, in time, to Turkey, is a consolidation of European security, democracy and prosperity of which we should be proud and which I regret that the Government have made so little of so far.

Can the Minister tell us whether the Government will now pursue some of the useful steps forward proposed in the constitutional treaty that do not require treaty amendment? The noble Lord, Lord Kerr, has referred to some of them, for example, the Council meeting in public in its legislative capacity, the strengthening of national scrutiny and so on. Do the Government accept that the most important thing to do now, in the pause that we rightly say we have to have, is to discuss the balance of policy priorities that we need for a European Union of 25? That has been the most massive failure of Chancellor Schroeder and President Chirac. After all, institutions exist to serve policy objectives, not simply for themselves. This crisis—which is not the first crisis that the European Union has had and will certainly not be the last—is also an opportunity to debate strategic priorities.

We also ask Her Majesty's Government to do their best to combat the dreadful and negative Gaullist attempt to go back to the old stereotypes of Anglo-Saxon capitalism versus the European social model. There is no single European social model. The French model is not that which governs in the Netherlands, Sweden, Denmark or Ireland. The British economy is by no means the same as the American. It is perhaps an Anglo-Irish model, but followed to some extent by the Swedes, the Danes, the Finns and possibly even the Portuguese.

As the Prime Minister comes empty-handed back from Washington later this week, perhaps the Government will admit that the only way for Britain to deal with such issues as climate change, global development, terrorism, international security and the management of the world economy is to work constructively, conscientiously and multilaterally with our European partners to maximise our influence in the world. We therefore welcome the Statement.

4.21 pm

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