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Lord Kingsland: My Lords, this has been a characteristically stimulating debate in your Lordships' House on developments in the European Union.

I am particularly grateful to my noble friend Lord Howell of Guildford for setting the scene with his 16 points. I trust that the Government have taken a very careful and comprehensive note of them. I am also most grateful to my noble and learned friend Lord Howe of Aberavon and my noble friends Lord Lawson of Blaby, Lord Waddington, Lord Stevens of Ludgate, Lady Noakes, Lord Inglewood and Lord Selsdon for their excellent contributions.
 
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I shall try to be relatively telegraphic. I would like to say a few words about the next six months which face the Government. Perhaps I may start by asking the Lord President whether she can confirm that the Government regard the constitution as dead.

The noble Baroness in her opening remarks rightly laid great emphasis on the question of enlargement. I most respectfully support her fully in that wish. My noble friend Lord Lawson of Blaby also rightly underlined that this is a political aspiration of the European Community. But the fact that it is a political and not an economic aspiration should not in any way undermine or weaken its importance.

The European Community had as one of its original goals the objective of security on the Continent. That remains in the eastern parts of the Continent still a precarious matter. It is, in particular, crucial that Turkey becomes a part of the Community. As the noble Lord, Lord Dahrendorf, said, it is also hard to see how the Balkans can remain stable without a full relationship with the European Community. So we fully endorse what the noble Baroness has said about enlargement and hope that the Government will place it in the forefront of their objectives during the next six months.

Much has been said about the common agricultural policy that takes up 40 per cent of the budget and of the high proportion of that proportion that goes to the French farming community. I, like all of your Lordships, take the view that that is outrageously excessive. But the particular point that I want to pick up is the impact of the CAP on foreign trade.

The noble Baroness is second to none in her grasp of international trade matters between Europe and the less developed countries. The noble Baroness, therefore, will know just how damaging the impact of the CAP has been on the development process. Will she undertake, on behalf of the Government during the next six months, to direct a searchlight on the system of export subsidies and import levies that are right at the heart of the damage that trade in CAP commodities does to the less developed world? It is only by reforming that aspect that countries, particularly countries in Africa, will have any chance of finding markets on our continent.

Many of your Lordships raised the question of a European foreign policy, which was firmly and rightly rejected by the voters in France and the Netherlands. Can we now be assured by the noble Baroness that the Government regard the idea of a single European policy and a single European Foreign Minister as dead? It is very deceitful of the European public to pretend that the European Community is in any way a government. Yet, by giving the Community foreign policy responsibilities, we are in effect holding out the Community as an institution with governmental powers. All that does is make us look ridiculous when we fail to agree on foreign policy.

The worst instance of that I recall was during the tragic years of the conflict in Yugoslavia where the most elaborate institutional arrangements were made to formulate a joint foreign policy, which was consistently
 
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undermined by disagreements between Britain, France and Germany over what was going on in Yugoslavia. It is counter-productive to pretend that something exists when it does not, above all in an area so crucial as foreign policy. These are matters for nation states, to be decided intergovernmentally; and I trust that this lesson has now been firmly learnt at the hands of the electorate.

Indeed, I would extend that point further into the constitutional arrangements of the European Community itself. I was particularly struck by the remarks of the noble Lord, Lord Blackwell, about democratic authority in the Community, and respectfully agree with a number of his observations. The system of democracy in the European Community is indirect, not direct. The European Parliament has an important role because it makes the Commission accountable, and it also has joint legislative responsibilities with the Council. But it is not an institution that possesses democratic legitimacy; even though it is elected, it lacks legitimacy in the eyes of the voting public. It is a curious fact, by the way, that your Lordships' House is unelected, yet it has a legitimacy in the eyes of the British electorate. The European Parliament is elected but it lacks that legitimacy. In many decades' time, the situation may change; but at the moment it does not have legitimacy.

This must mean that a much more important role than hitherto must be played by national parliaments in the process of European law-making. The noble Lord, Lord Grenfell, showed us the way in his excellent speech at the beginning of the debate. Will the noble Baroness undertake to put this matter in the forefront of discussions in the Council during the next six months?

There is another dimension to this. It is not even enough for national parliaments to play this role. They must be in constant contact with their own electorate to ensure that people are being brought along with the thinking of their representatives. I am sure that I am not alone in concluding that the arrangements in your Lordships' House and another place are less than satisfactory in ensuring that the electorate are properly informed about the developments of law-making in the European Community. Here is a real opportunity for the Government to take note of what has happened in the referendum and put in place proper institutional measures that engage the electorate and, at the same time, enrich the process of representative government.

I wonder what the result of the referendum would have been if the European economy was running at as successful a rate as the Chinese economy, the Indian economy or, indeed, the United States economy. Supposing that instead of having 19 million people unemployed, the European Community had full employment, with everybody looking forward to the prospect of an adequate pension. What would the result of the referendum have been then? It is hard to say, but the European Community, whatever its merits, would have been associated with economic success. But the electorate associated the European Community with economic failure; and that has to be one of the crucial components in why the referendums went the way they did.
 
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Here I think is the most important lesson for not just the Government but all of us about where to go in the next six months, six years, six decades. The European Community will stand or fall by its success in competing in a global economy. Therefore, right at the heart of what the Government do over the next six months must be to go back to the fundamentals of the Community—the freedom of movement of goods, services, labour and capital—to do everything in their power to ensure that the Community is re-equipped to cope with the challenges of a global economy. Whatever else they do in Europe, if they do not succeed in doing that, the European Community will crumble.

What proposals do the Government have in the next six months? I am aware of their desire to establish the services directive. That is an excellent objective, and I wish the Government well in it. But I was rather confused by something that the noble Baroness, Lady Amos, said about the social dimension. She coupled the importance of the single market with a social dimension; but does the social dimension, as the noble Lord, Lord Lawson of Blaby, asked, really belong at the European level?

At the time of Maastricht, the right honourable John Major, the Prime Minister, as he was at the time, fought very hard, and rightly in my submission, to keep the Social Chapter out of the Maastricht Treaty. In the end, we had an opt-out. That opt-out, as the noble Lord, Lord Inglewood, said, was "opted in" by the Government in 1997, greatly to the detriment, as the noble Lord, Lord Waddington, said so eloquently, of the British economy.

As the noble Lord, Lord Lawson of Blaby, also said, we have no objection to any individual country in the European Community providing whatever level of social protection it wants to its citizens; but that should not be imposed on the other countries. That is a matter for each individual country to decide. That is not to say that we as an Opposition are against social protection; it is simply that we regard that as an aspect of subsidiarity, as something that ought to be dealt with at the national rather than at the European level. To deal with it at the European level will simply lead to harmonising to the level of the country that gives the most social protection, which is a disastrous recipe for international competition.

So whatever else the Government do during the next six months, I trust that they will reinvigorate the original principles of the European Community to the benefit of the economy. These are going to be difficult months for the Government, but they also provide them with a bigger opportunity than any government have had in the European Community since, I suppose, the earliest days. I just hope that the Government have the courage and vision to grasp it.

9.27 pm

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