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The Government set out in October our view of the global challenges facing the European Union in the pamphlet Global Europe. We want to see the European Union leaders agree next week to a continuing commitment by the Union to free trade and openness to investment; to ambitious language on the European Union playing a leading role in the development of an open global economy and a free and fair multilateral trading system; to a clear commitment to the right internal policies to ensure a more effective Union—these include policies on the single market, competition, better regulation, telecoms and energy liberalisation; and to an agreement to establish an EU package, to be finalised at the spring or June Council next year, which shows leadership and provides an ambitious EU contribution to achieving the millennium development goals.

Of course, the December Council coincides with the closing day of the UN climate change conference in Bali. We want the Council to emphasise the EU’s commitment to an ambitious response to climate change and our determination to accelerate the transition to a high-growth, low-carbon economy. At the spring European Council this year, the EU agreed ambitious targets to reduce its own greenhouse gas emissions. We need to show, in ambitious proposals to be published in January, how exactly we will deliver that commitment. EU heads can give that message clearly next week.

The ongoing need for a strong, clear message on foreign policy issues from all EU member states is underlined by the situations in Kosovo and Iran. On Iran, following the Prime Minister's Mansion House speech, we will want the European Council to increase pressure on Iran to comply with the obligation to cease nuclear enrichment activity as mandated by the UN Security Council. On Kosovo, the European Council can pave the way for EU action in January to resolve Kosovo's status in a managed fashion as part of our strategy to promote security, stability and a European perspective for the countries of the region. The Government will also seek conclusions on Burma in support of the UN process and to increase pressure on the regime.

The signing of what will become known as the treaty of Lisbon on 13 December will mark an important moment. It will settle the important debate about institutional reform of the enlarged EU for the foreseeable future. It will guarantee that the UK’s red lines—the protection of our fundamental sovereignty—are achieved, and it will mark a new stage for the EU to move on to focus on the new global challenges which a more outward-looking, open EU must address and deliver for our citizens in the 21st century. We believe in the importance of European co-operation for delivering the global objectives of this country—to enhance our security, our prosperity, a sustainable future—and to deliver justice across the world, especially for its poorest

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people. The reform treaty will better equip the European Union to focus on and deliver on those challenges. Britain should and will continue to play a leading part in ensuring that Europe acts on those priorities.

Lord Maclennan of Rogart: My Lords, before the noble Baroness sits down, does she not agree that, in promoting the benefits of the treaty as positively as she has, she might have made some reference to the strengthened democratic procedures, most notably the requirement of co-decision-making with the European Parliament, which is now to become the legislative norm? Is not democracy important, as well as efficiency?

Baroness Ashton of Upholland: My Lords, I was merely saving some things for my closing speech. The noble Lord is of course correct. I beg to move.

Moved, That this House takes note of the report of the forthcoming European Council in Lisbon on 13 and 14 December.—(Baroness Ashton of Upholland.)

4.50 pm

Lord Howell of Guildford: My Lords, I am sure that noble Lords are grateful to the noble Baroness the Lord President for moving this Motion and giving us the opportunity, in theory, to have some input into the processes leading to the reform treaty. Of course, the reality is not quite so encouraging, because what is to be signed in Lisbon next week is already fixed and cannot be amended. It will come as no surprise to the noble Baroness that we will seek to amend the Bill, but the treaty is set in granite already and that granite is about to be dumped on us. We cannot change it.

I shall not spend too much time arguing about the contentious and controversial issue of a possible referendum on this treaty. The noble Baroness and everyone else know our position. We say that there should be a referendum because the treaty is plainly a remake of the original constitutional treaty, which came to grief. The Labour Party and the Government say no. We agree with most leaders in the European Union, such as the German, Spanish, Irish, Czech, Finnish, Danish, Austrian, Belgian, Italian and Luxembourgian Prime Ministers, and several others, that this is the constitution in all but name, and we agree with Valéry Giscard d’Estaing, the father of the former treaty, who says that it is the same word for word, with not a comma changed. We also agree with the other place’s European Scrutiny Committee, which made exactly the same point. On the other hand, the Labour Party, plus one Dutch opinion that the noble Lord, Lord Hannay, mentioned, disagree with that.

Sometimes we Conservatives are accused of being alone in the European Union. In this case, it is the Government and the Labour Party who are alone. Labour promised a referendum but will not deliver, so there it is. We shall have to see whether they can hold out against the facts and the overwhelming wish of the British people that there should be a referendum. I leave that for the moment. The issue will, no doubt, come up in the debate, because it is a matter of trust and a commitment by the Government in their manifesto that is now, apparently, to be overthrown.

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In the past, the noble Baroness asked me a question that I was rather hoping she would ask me again today. The question she put to me before was what we, the Conservative Party, would do in government if the treaty had already been signed and sealed and had entered into force. In one way, it is a very flattering question, since it assumes that the next Government will be Tory. That is a realistic assumption, but it is quite an admission from a Cabinet member.

Baroness Ashton of Upholland: My Lords, I made no such assumption. I did not ask the question again because I had already asked it and I know that the noble Lord is a noble gentleman who would answer the question as soon as he had an answer. It is simply a theoretical and hypothetical question that all opposition parties of merit need to answer about what they would do if the circumstances were such.

Lord Howell of Guildford: My Lords, it is hypothetical for the second reason that I was going to come to, because it assumes that we would lose the referendum battle. I believe that that is wrong. We intend to win it, so the more relevant question is what Labour would do if there was a referendum and the treaty was rejected, as is perfectly possible. It happened with the previous constitutional treaty, which Mr Giscard d’Estaing says is identical word for word.

I turn first to the famous, or infamous, passerelle clause—the so-called simplified procedure or self-amending provision in Article 33.7 of the working draft that we have here; we still do not have a final text. Last time, leading members of the Government said that it was unacceptable. It still stands in the middle of the treaty, so I imagine that views have changed on it. Article 33.7 allows the Council to move to majority voting in any of the areas outside Part 3 of the treaty, which is the detailed bit, covered by unanimity, including foreign policy but excluding defence. The change would not need to be ratified by national parliaments.

There is a provision that, if a parliament complains within six months, such a proposal will not go through, but the presumption would be reversed from what we have known in the past. Unless the Government, having already signed up to something, allow Parliament time to vote against it, it goes through automatically. That would unquestionably undermine the role of Parliament in controlling treaty changes. It is quite the opposite of what the Lord President said: it would mean a shift of power towards the EU’s leaders and away from national parliaments.

We have been through all this before. In the 2003 White Paper, the Government said:

It seems that that opposition means nothing now and has been overthrown. No twist of logic or debating dexterity can erase or obscure the fact that this transfer is a big slice of power away from national parliaments into the hands of central EU institutions. You may think that it is a good thing or a bad thing, but it is a

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fact. I hope that we will never again hear it asserted that such a treaty as this one, let alone the one before, transfers powers back to member states, because it does no such thing.

I must, without making too many demands on your Lordships’ time, say a little about the red lines, because the Lord President has placed considerable weight on them. First, the red lines do not cover—this is aside from whether they work, which I will come to in a moment—the new two-and-a-half-year, and presumably five-year, EU president. Some people urge—it is not in the treaty but many people urge this—that this EU president should also become the Commission president and therefore a sort of Mr Europe. The red lines also do not cover the renamed Foreign Minister or the substantial new diplomatic service, and they do not cover the fact, which I think the Lord President missed out, that the high representative or Foreign Minister is also to be a vice-president of the Commission under Article 9(e), thus serving both supranational and intergovernmental masters. That is a matter that your Lordships will want to reflect on, as it is very significant. Moreover, the red lines do not cover the single legal personality, the 60 vetoes lost or the ratchet clause to which I have just referred.

Although the Government were not happy before about most of these things, presumably they are now happy. As to the red lines themselves, they are more or less the same as last time. The last report from the European Scrutiny Committee of another place was brutally frank about them. On the Charter of Fundamental Rights, the committee does not accept that the protective protocol,

Also, everyone knows that the European Court of Justice can and will make rulings that may arise from cases outside the UK, from which we will have no escape whatever.

On the red line on foreign policy, there is a declaration in the treaty of freedom for the United Kingdom, but that is really where it all stops: it is a declaration, not even a protocol. In fact, the treaty proposes 11 new areas of foreign policy where the veto is removed and it puts forwards the requirement that the EU high representative should state the Union’s position at UN meetings. It goes without question that we should co-operate closely with our EU neighbours on specific world issues; of course we must. For example, if, as some hope, the prospect of EU membership can heal divisions that are looming again in Bosnia-Herzegovina, that would be excellent and positive. However, that the whole pattern should be frozen into a process by law is, to my mind, far more dubious. In some cases, it would be plain silly.

The Select Committee goes into huge detail on the justice and home affairs red line. I fear that we will be returning to this, but its view is that the transitional measures over five years,

and that the opt-in decision under the proposals will become one that,

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Not much of a red line there.

When the time comes, we shall also have to look closely at the apparent obligation that the treaty imposes on national parliaments—the Lord President mentioned this—and the proposition that national parliaments contribute to the good functioning of the Union. The committee, having noted that the “shall” in the phrase “shall contribute” has now been omitted, says that that is still highly ambiguous. The protocol on national parliaments, which was one of the good things in the former treaty, seems to have been watered down. I should like the Lord President’s guidance on this. Earlier, the proposition was that it would require a third of national parliaments to block a measure. Now it seems that, although a third of national parliaments can register dismay, half the national parliaments are needed to block a measure. Perhaps the Lord President or somebody could clear that up. It is very hard to elucidate the real position from the text, which has no contents and no guide for the reader.

We shall also need to examine closely the new power proposed over employment policies, which the UK Government tried to delete, but gave up; on energy policy, where our interests and those of mainland Europe obviously diverge enormously, given the continental reliance on the trans-Siberian and Russian systems; and on climate policy, which the Lord President mentioned, where the EU Emissions Trading Scheme has been judged by independent, factual reports to be a dismal failure and appears to be leading not only to no cut in carbon emissions but to an increase in carbon emissions in the European area. In all those areas, we need to watch very closely that the right hands are on the lever, not the wrong ones.

Over all this looms the power of the European Court of Justice. As your Lordships pointed out when examining the previous treaty, the new proposals in effect make the ECJ unquestionably the supreme court with ultimate powers over the Union and over the boundaries and limits of all competencies as between member states and the EU institutions. As the Economist magazine pointed out,

Jurisprudence will be created from now on based on the charter, and it will create precedents that all member states will be obliged to respect, opt-outs or opt-ins or nothing at all.

Just as we want smaller and more effective central government here at home—we certainly do not have it at the moment—so we also want the central EU apparatus and its budget to reflect the same aims. We believe that veiled threats that the UK would somehow be marginalised or isolated if we dared to challenge current EU trends, or dogmatic assertions that alternatives to the present direction are “not on offer”, are absurd. Far from being marginalised in a second-class Europe, as I have heard suggested, we would be in the first-class section. It is the so-called core countries, saddled with

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over-regulation, overcentralisation and low productivity, that would be lagging behind.

None of that needs arise. We do not need Europe to go that way. We can and will achieve a more sensible organisation for Europe's future. Once this backward-looking treaty, which stands in the way of a better Europe and not on the path to a better Europe, has been cleared aside, we will be in an entirely new situation, brimming with opportunities for reform. The gateway will be wide open, not merely for remodelling many aspects of the old EU, designed in the last century, but for the EU’s transformation into an enlarged organisation far better suited to Europe’s needs in the 21st century.

To be told that because one questions this treaty one therefore objects to a better EU is frankly a silly debating point. I totally reject the defeatism of those who say that we are stuck and that we cannot halt and change the slide of the present EU towards ever greater integration. This kind of defeatism comes to us from both sides. It comes from the dismissive Europhiles, who say that everything from Brussels is marvellous, that Franco-German dominance will always outwit us and that if we query it we will always be in outer darkness. It also comes just as much from the “let us withdraw” brigade, which likewise insists that we will always be outwitted and should therefore abandon ship. None of these people seems to realise that we are one of Europe’s biggest economies and strongest nations, with the full ability to use our power as well as our highly skilled diplomacy, for good or bad, in deciding the European future. Obviously I am determined that it should be the former.

What is not debatable is that the UK must always—I stress always—remain engaged in Europe, as it always has been in our history except for one or two disastrous periods. Our place today is also in the wider networks of the rising Asia, but we must be the best practitioners of regional co-operation. We must be good Europeans. I think that, when we debated this the other day, I heard a jeering noise from the Lib Dem Benches. In fact, I would claim that we are much better Europeans, and always will be, than those who want to foist a divisive and intrusive new legal order on to Europe’s ancient nations. We certainly want to work closely with our European neighbours in all matters of security, as well as in many other areas. Our European neighbours are our allies, our friends and our partners, but they should no more be our bosses than our equally valued partner, the United States of America.

In the end, our best strength as good Europeans, as well as good citizens of the world, has been and always will be in our own inner resources, our confidence and our commitment to the key values of democracy and the rule of law in an open and fair society. Nations are more than ever today the building blocks of a sound and peaceful international order. Much of our best contribution to that order is to be confident guardians of our own security and national interests. When we are in government, we shall deal with European and EU issues firmly, confidently and in that spirit.

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5.07 pm

Lord Wallace of Saltaire: My Lords, I apologise for my voice. I hope that it will survive my speech. I start with some rapid comments on the contribution from the noble Lord, Lord Howell. We on these Benches do not see the Conservatives as alone inside the EU. We do, however, see the current Conservative Party as embarrassingly close to the populist, nationalist, right-wing parties in other European countries and sadly far from the mainstream of Christian democracy and conservatism, which are the constructive links that they ought to have.

I have heard only one source for the suggestion that the positions of the president of the Council and the president of the Commission should be merged, and that is Open Europe, the British Eurosceptic think tank. I know of no other source for that suggestion. Anyone who knows a little about the European Union knows that small countries would never accept the merger of those two positions, so can we kill that canard before it gets far beyond Open Europe, the Sun and the Daily Mail?

Next January, Britain will have been in the European Union for 35 years. That is two political generations. The generation that took us in has long since retired, and many of its members have passed away. Edward Heath stated clearly that Britain’s future lay in partnership with our European neighbours, rather than being subservient to the United States. Harold Wilson had tried to take Britain into the EU in 1967 to 1968 until he was blocked by President de Gaulle. When he returned to office in 1974, he drifted towards a referendum, not out of conviction but to accommodate the divisions in his party and to make up for his unwillingness to provide clear, political leadership on the issue. All these years later, we remain a reluctant and semi-detached member with a Government who do not promote British interests in the EU effectively because they are forever looking over their shoulder at an unpersuaded public at home.

This will be the fifth revision of the treaty since we joined. Two previous reform treaties were carried through under the Conservatives and two by Labour. One of Margaret Thatcher’s greatest international achievements was the launch of the single market programme with the Single European Act that accompanied it. John Major’s negotiation of the Maastricht treaty, the most radical reform treaty so far, was undermined at home by faction fighting in his divided Cabinet. Tony Blair’s greatest failure, after Iraq, has been the drift back from the partnership with France and Germany in the EU that he promised in 1997 to today’s semi-detachment, which was driven by his cowardice in relation to the right-wing media—particularly the Murdoch press—leaving their Eurosceptic narrative as the dominant European message that the British public receive.

This debate marks the opening of a long six months of detailed scrutiny in both Houses. We need to focus on how the proposed changes fit in with Britain’s long-term national interests and not lose ourselves in the familiar fables of conspiratorial continentals that so often threaten to drive informed debate and informed Members out of the Chamber.

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There is, as the noble Lord, Lord Pearson of Rannoch, admitted to me in a radio discussion the other week, a “nutter-on-the-bus” problem with the most determined Europhobes—others do their best to move as far away as possible when they get up to speak.

Can we at least agree some ground rules and exclude some of the worst nightmares of Europhobic rhetoric in the long months ahead? Can we discuss European defence co-operation, a British initiative—it was Tony Blair’s one significant European initiative while he was Prime Minister—without mentioning jackboots or suggesting that it is imposing a militaristic Europe on peaceful Britain? We all know that “jackboots” implies that Germans are still militaristic Nazis rather than the reality of pacifistic politicians who hesitate to commit troops to hard fighting or to fly their helicopters in Afghanistan at night.

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