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Viscount Bledisloe: My Lords, the Minister may remember that, from the very start, the Lord Chief Justice expressed grave concern that the effect of the new Ministry of Justice would be that spending on new prisons would impinge on expenditure on the

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court services. Will he give a categoric assurance that neither the capital expenditure nor the higher income expenditure that will obviously be necessary on warders and so forth will impinge on the courts budget?

Lord Hunt of Kings Heath: My Lords, I welcome the question because it allows me to pay tribute to my noble and learned friend, the former Lord Chancellor, who sitteth behind me. I pay tribute to the contribution that he made to the Carter review and to the creation of the Ministry of Justice. The noble Lord will know that there has been engaging and lively conversation between the Lord Chancellor and the judiciary on that point. I should have thought that the fact that today we have announced more than £1 billion extra to help with the expansion of prisons shows that we have not eaten into any other aspect of the Ministry of Justice's budget, but that new money has been created to deal with this challenge.

The Lord Bishop of Liverpool: My Lords, having announced the £1.2 billion—and we welcome that extra expenditure—has a figure been attached to the extra expenditure on restoration, education and training programmes? Obviously, the success of penal policy is measured in the end by the number of people who go to prison only once, and that depends very much on education and training programmes in the prison.

Lord Hunt of Kings Heath: My Lords, I certainly agree with the right reverend Prelate about the importance of training programmes. We have debated a couple of times recently the whole question of restorative justice. On that, there will be a fourth research report looking at the cost-effectiveness of restorative justice, which will help us plan for the future. There will have to be careful consideration of how this programme is to develop and of the budget, but I assure the right reverend Prelate that matters of education, health, restorative justice and rehabilitation are all germane to taking forward a much more rational approach to prisons and sentencing, which is what the Carter review is designed to achieve.

Lord Falconer of Thoroton: My Lords, I express my support for what the Minister said about prisons and I express my admiration for what my noble friend Lord Carter has done. He has selflessly devoted himself to a whole series of public policy issues and has produced reports that show real perception. This report is one of them. I also pay tribute to the Prison Service led by Phil Wheatley. The impression given by some of the questioners is that there is a decline in decency and security in our prisons because of “overcrowding”. Nothing could be further from the truth. Decency and security have improved over the years and we should pay tribute to that.

I strongly welcome my noble friend Lord Bradley being asked to investigate the mental health issues that urgently need investigation and I can think of nobody better than my noble friend Lord Bradley to do that.

I also raise a question on the critical issue. Since 1987, as my noble friend Lord Carter pointed out, the Executive have repeatedly got wrong how many

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prison places are needed as against how many people the judges are sending to prison. I express strong support for the solution proposed by my noble friend Lord Carter. Will the Minister confirm that the lead principle will be to make the punishment fit the crime? However, inevitably and rightly, resources will also have to be taken into account because there must be justice for every other part of government. There are only finite resources for prisons.

Lord Hunt of Kings Heath: My Lords, I am grateful to my noble and learned friend. I agree with his analysis of the improvements that have taken place within the Prison Service. Yes, there are many challenges, but I know from my recent visits compared with visits that I undertook as a health Minister seven or eight years ago that there have been some real improvements. I pay tribute to the Prison Service and its partners, such as the National Health Service, for what has happened.

My noble and learned friend is right about the forecast. I am somewhat of a connoisseur, having tried to forecast the number of junior doctors required. I would not claim conspicuous success on that. It is a very difficult task. That is why my noble friend Lord Carter has so eloquently and excellently suggested the structured sentencing framework. It may well be, and I am sure it is, the best way to have greater certainty about future projections. I very much agree with what my noble and learned friend said. These matters cannot be considered in a vacuum; there will always be finite resources. I go back again to what I said to the noble Lord, Lord Henley. There is no question of any fettering of the individual decisions of individual members of the judiciary. I am very happy to reaffirm that.

Baroness Howe of Idlicote: My Lords, I join other noble Lords in welcoming this further insight into government penal policy. I shall welcome even more the Statement, which I believe comes out tomorrow, on the Corston report and how that will fit in. However, I will not ask about that now. Like everyone else, I am concerned about resources and the large amount of the current budget that, probably rightly, will be going on pay. Given the importance of stopping the reoffending of the young offender and the clear pattern of resources and support from voluntary and other sectors that could be used in that respect, I hope that this aspect will not be downgraded in the Government’s thinking.

Lord Hunt of Kings Heath: My Lords, my right honourable friend the Minister for Prisons will issue a Statement tomorrow on the Government’s response to the report by my noble friend Lady Corston, which will be very important.

On the question of reoffending and rehabilitation programmes, the implementation of the report of my noble friend Lord Carter in the way that we have outlined will give us the best foundation for ensuring the best use of resources, making sure that the money for running prisons is spent as effectively as possible and also having the resources to invest in the very programmes that the noble Baroness is keen, as I am,

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to see developed. The greater the stability and certainty about being able to provide the right number of prison places, the better the foundation for doing all the other things that we want to do to improve the outcome for prisoners.

Lord Mackay of Clashfern: My Lords, will the review of the noble Lord, Lord Bradley, also encompass the resources available to the courts when sentencing people to give light on the mental situation of the offender? That is a very important aspect of the remit that has been given to the noble Lord.

Lord Hunt of Kings Heath: My Lords, that was very much a point that arose from our debates on the Mental Health Bill. My noble friend is working with my ministry and the Department of Health on the details of the review. I do not want to commit myself to responding to the noble and learned Lord today, but I will make sure that his point is taken into account.

European Council: 13-14 December 2007

4.28 pm

The Lord President of the Council (Baroness Ashton of Upholland) rose to move, That this House takes note of the forthcoming European Council in Lisbon on 13 and 14 December.

The noble Baroness said: My Lords, the European Union’s ability to deliver for the citizens of Britain will be significantly enhanced by the signing of the EU Reform Treaty, which we expect to take place on 13 December, and the other decisions to be discussed next week at the forthcoming European Council.

The reform treaty will settle the EU institutional debate for the foreseeable future. The European Council will, we hope, agree a declaration on globalisation, which will commit the EU to playing a leading role in the development of an open global economy and a free and fair multilateral trading system. We also want to see the EU renew its commitment to an ambitious response to climate change, coinciding with the end of the UN climate change conference in Bali. So taken together, the treaty signature and the Council will allow us both to equip the enlarged EU to work more effectively and efficiently on our behalf and to focus on the policy challenges which we need to address together to ensure increasing prosperity and security in the 21st century.

The first task of the forerunners of the current EU was to concentrate on rebuilding Europe after the ravages of the Second World War. The creation of a “common market” was designed to make further wars between the European powers physically impossible and, by increasing prosperity, to ensure that all nations had a vested economic interest in co-operation. The radical vision at the heart of the developments across Europe over the past half century is a Europe genuinely without barriers. That vision is rooted in the principles which lie at the heart of the original treaty of Rome:

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the four freedoms—the free movement of goods, free movement of people, free movement of services and free movement of capital.

These commit the EU to ensuring that people can sell their goods and services, set up businesses, move money, and live, work, study and travel in every member state across Europe. This has led to the gradual creation of the single market, the world’s largest trading bloc, which now accounts for 20 per cent of all global trade. It has brought huge benefits to the British economy: 57 per cent of total British trade is with the EU and an estimated 3 million jobs in the UK are directly or indirectly linked to the export of goods and services to the EU.

Britain’s citizens already gain from the practical benefits which flow from Britain’s membership of the EU. So, for example, people in this country can now apply for jobs advertised in any EU country, have their UK qualifications recognised throughout the EU, travel anywhere in the EU without a visa and with guaranteed access to free or low-cost healthcare with a simple health card, retire to another member state and draw their UK state pension there, buy property anywhere in the EU, buy goods from anywhere in the EU with protection similar to UK statutory rights, and sell goods around the EU without paper forms and formalities. These are real, practical benefits—benefits for people everywhere in Britain. But as a country, and as a key player in Europe, there is more to do fully to achieve the original vision of a Europe without barriers, and ensure that it can deliver greater prosperity in the 21st century global economy.

Our starting point must be ensuring that the EU of 27 countries, and beyond, is equipped to face the new challenges. Just four years ago, there were only 15 EU member states, all of them western European states with a shared post-war history. Now the Union stands at 27 members, with a further two, Turkey and Croatia, on the road to accession. For Croatia, membership may come fairly soon. For Turkey, the path to membership is likely to be longer. Nevertheless, both countries will, we believe, be part of the EU.

The enlargement of the EU has brought in many of the former communist states that have transformed into liberal democracies, which would have been unimaginable 20 years ago. That transformative power is one of the European Union’s greatest strengths. This enlargement has been a success for Europe and for Britain. In 2006, British companies exported almost £150 billion worth of goods to EU countries—a rise of 25 per cent on the year before. In 2005, British companies invested more than £17 billion in the European Union—up from £11.5 billion the year before. To take just one example, UK exports to Poland rose by 89 per cent between 2003 and 2006, coinciding with Poland’s accession to the EU in 2004. But in order to make the enlarged and enlarging EU function more effectively, institutional changes are needed.

This issue is not new. The recent debate on EU institutional reform goes back at least seven years and has developed in three distinct phases. It began with the drafting of the treaty of Nice in 2001, which made the first changes to prepare for an enlarged EU. But

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the countries of Europe realised that this was not enough and that it would not achieve the more efficient, streamlined EU we need as the EU enlarges further.

The next attempt was through the constitutional treaty in 2004. This was an attempt to create a new treaty structure, replacing the existing treaties with a single treaty designed to make the EU more effective, more accountable and easier to understand. However, following the rejection of the constitutional treaty by the people of France and the Netherlands in referendums in 2005, it was clear that this approach was not the right one. As all EU leaders agreed in June, it has been “abandoned.”

Instead, for the third phase, we have returned to the approach of a classic amending treaty. This is very much in line with the principles that the Government set out for a new treaty before Parliament in December 2006: pursuing British interests; a modern and effective European Union; consensus among 27 member states; an emphasis on subsidiarity; making the best use of existing treaties; and openness to global change. The reform treaty will help to achieve that.

I turn to what this treaty will actually do—something that I know the noble Lord, Lord Grenfell, and his committee will be assessing in depth. First and foremost, the treaty reforms and streamlines the EU’s institutions. That is its avowed purpose. The preamble to the treaty says that the member states have drawn it up in order to,

There are several ways in which the reform treaty will achieve that. On the presidency, it will provide greater continuity in the actions of the European Council—the institution through which member states set the EU’s agenda—through the creation of a full-time President of the European Council, appointed by the member states for a period of two and a half years and replacing the current six-month rotating presidency.

On security, the EU’s common foreign and security policy has helped the United Kingdom to make progress on our foreign policy aims. There are many specific examples, including sanctions against Iran that go beyond those put in place by the UN Security Council, and imposing sanctions against the military junta in Burma, while at the same time being the biggest humanitarian assistance donor, focusing on food aid, health and education. In addition, EU military and police support helped the first democratic elections for 40 years in the Democratic Republic of Congo to pass off peacefully; and, finally, EU solidarity over the Litvinenko affair.

To strengthen external action where the EU is in agreement, the reform treaty also creates a High Representative of the Union for Foreign Affairs and Security Policy. He or she will be appointed by the European Council—in other words, by the member states—with the agreement of the Commission president and will carry out the Union’s common foreign and security policy “as mandated by the Council”. This new role merges the two existing roles of High

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Representative for Common Foreign and Security Policy and the External Relations Commissioner. Strengthening the European Union’s voice in the world, where we agree, can help better to deliver our global aims in future.

The treaty will also reduce the size of the European Commission with the aim of ensuring that it can work more effectively as the EU enlarges. From 2014, the number of Commissioners will be reduced so that only two-thirds of member states will provide a Commissioner at any time, with every country taking equal turns.

The treaty introduces a new system of majority voting. Under the double majority voting system, a minimum of 55 per cent of the member states representing a minimum of 65 per cent of the EU’s population must vote in favour in order for European legislation to be passed. This will come into force in 2014, with a transition period to 2017. As the new system is more strongly based on population size, the United Kingdom’s share of votes in the Council of Ministers will increase.

For the first time, national parliaments will have a direct say in making European laws—something that I am sure your Lordships’ House will welcome. Every national parliament will receive proposals for new EU legislation directly and may judge whether what is proposed conforms to the principles of subsidiarity. If one-third of national parliaments object, then the proposal will be sent back for review by the Commission. If a majority of national parliaments oppose a Commission proposal and national Governments or MEPs agree, then it can be struck down.

In the light of a question which has been raised about these new powers, I should make it clear that they are permissive. The Government are clear, as are all other member states, that national parliaments are under no obligation to exercise these powers. We have secured changes to the text which, in our view, remove any doubt on that point. In summary, the reform treaty will streamline the EU’s decision-making and make the enlarged European Union’s action more coherent and more efficient.

The treaty will also bring specific practical benefits. Qualified majority voting is extended in a number of policy areas where the UK wants to see more effective action. For example, the treaty will make it easier, by qualified majority voting, for self-employed people to work in other EU countries. Qualified majority voting already applies to the mutual recognition of formal qualifications to help self-employed professionals practise in other member states. The reform treaty will remove exceptions which currently allow any member state to block liberalising rules on training and access to the professions; help companies protect their ideas across the whole of the single market, fostering investment in innovation and research through QMV to create EU-wide intellectual property protections; take action on energy security and liberalising energy markets across Europe, which could help speed up delivery in these vital areas; and release urgent financial aid to third countries faster, by majority voting, as well as enshrine the principles of “impartiality”, “non-discrimination” and “neutrality” for the deployment of EU humanitarian aid.

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The remainder of the moves to QMV are primarily minor extensions in areas such as transport, where we already take many decisions by QMV. Several of the new articles which will be subject to QMV reflect the existing practice for EU legislation in that field; for example, for the appointment of a High Representative for Foreign Affairs and Security Policy. The reform treaty will also streamline and speed up decision-making in a number of technical areas; for example, appointments to the European Central Bank’s executive board.

My experience at the Justice and Home Affairs Council has shown the practical value of measures designed to facilitate dispute resolution and improve access to justice across borders. Delays, high costs and the confusion of a foreign system made seeking a remedy in another country a daunting process. For instance, the recently agreed European small claims procedure will make it easier for citizens or business to make small claims in cross-border cases, in circumstances where at present it can be uneconomic to do so. The European enforcement order permits an uncontested judgment from one country to be automatically enforceable in another. That does not represent a revolutionary step or undermine the UK’s own systems and processes. Rather, it allows people across the European Union to conduct cross-border business more effectively.

Nevertheless, however great the practical benefits of co-operation, the UK has always insisted on maintaining ultimate national control in the key areas of justice and home affairs, social security, tax, foreign policy and defence. Ahead of the June European Council, the Government set out four red lines that any new treaty would have to respect. These were: protection of the UK’s existing labour and social legislation; protection of the UK’s common law system, and our police and judicial processes; maintenance of the UK’s independent foreign and defence policy; and protection of the UK’s tax and social security system. These objectives have been achieved. We secured new safeguards to ensure that each of the red lines is fully achieved.

The safeguards were: a new legally binding protocol which guarantees that the Charter of Fundamental Rights provides no greater rights than are already provided by European Union law, and that nothing in the charter extends the ability of any court, European or domestic, to strike down UK law; common foreign and security policy in a separate treaty—express language excluding the European Court of Justice’s jurisdiction over common foreign and security policy and a new declaration confirming that nothing in the new treaty affects the existing powers of member states to formulate and conduct their foreign policy, including at the United Nations; the extension of the UK’s current opt-in arrangements on visas, immigration, asylum and civil law, to cover areas of criminal law and police co-operation; and a strengthened emergency brake, including a veto power, on social security.

I have set out some of the principal benefits which the Government believe the reform treaty will bring, and the protections which we have secured on the areas fundamental to our national sovereignty. With the institutional debate settled for the foreseeable

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future, the EU also needs to look ahead to address the practical challenges on which our citizens wish to see effective action. That will be the primary focus of the December European Council, which is an opportunity for the United Kingdom to drive forward progress in securing a European Union which is better focused on delivery and globalisation.

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