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Lord Howell of Guildford:I appreciate that that was what the noble Lord thought he was saying, but I made exactly those points at Second Reading and at the beginning of Committee this afternoon. They are perfectly clear to everybody; we cannot amend the treaty. I thought it was clear to most people that if we are to examine this line by line in the interest of the public—the wider public who look on Parliament askance at the moment because we let so much through—the only procedure is by tabling amendments of this kind. There are amendments that can improve the Bill without changing the treaty, and we will hope to have some support from free-thinking Members from all parties for those. We shall see. These are ways of

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examining the treaty. They are perfectly accepted ways. They were explained very clearly at the beginning, and the fact that they were raised again by the noble Lords, Lord Tomlinson and Lord Lea, alarmed me a bit because it sounded as though they were gunning for us and were not in favour of full discussion of this treaty. I accept from what the noble Lord, Lord Lea, said that he did not mean that, but that is what it sounded like, and I felt I had to intervene to say that. These are the only comments I wish to make on this amendment, which we shall not support.

The Lord President of the Council (Baroness Ashton of Upholland): This is another interesting debate. I shall add my pennyworth to the issue of procedure. I am in the hands of your Lordships. We shall discuss whatever your Lordships wish. The only constraint we have is that we have, by mutual agreement, said that we should do this within six days, so my concern is twofold. First, we perhaps range far too wide on our discussions, and I hope we can do exactly what the noble Lord, Lord Howell, said and look at these issues in detail and in so doing confine ourselves to that. Secondly—this may refer to this amendment—there are some amendments where we could usefully have half a day's debate on the issue. They are not directly about the treaty, but they are not unimportant by any stretch of the imagination. A discussion about the whole way in which structural funds are used is worthy of a much bigger debate in your Lordships' House as well. I take nothing away from my desire to do that at 9.10 pm on the first day of Committee, but, from my perspective, we might have got more out of it.

I begin with the comments of my right honourable friend the Prime Minister, who was, when he made the comments, the Chancellor of the Exchequer, and then relate that to where we are in structural policy. The article to which the noble Lord, Lord Pearson, referred was in 2003, in the Times, which I think he followed up by a television appearance. My right honourable friend was debating how best to deal with funds designed to support regional development in nation states that were not among the poorer members of the European Union. To put the issue in a nutshell: is it better for nation states to think more strategically by funds coming directly from the centre to regions?

Noble Lords will know that my right honourable friend is a great believer in devolving funding through the devolved Administrations and through the regional development agencies. That was the point that he was getting at: is it better for us to do it nationally and take control of that and prioritise it—while still being very much part of developing the structural funds of the European Union—but especially thinking of those nations which we are trying to raise up to a better standard of living, and to deal with some of the structural issues from which they were suffering? That debate has continued since 2003. Indeed, the Government have been in discussion about how we might do that.

The noble Lord, Lord Willoughby de Broke, referred to the European Union Committee report. At paragraph 150, it states:

“Using the same logic which argues for shifting the burden of financing the Common Agricultural Policy back towards the

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Member States, we believe there is a strong case under the principle of subsidiarity for national governments to fund and manage their own regional policy. There is no collective benefit of EU-funded income transfers between richer Member States—which could and should be funded nationally—whereas there are tremendous gains to be made from enabling the new Member States to catch up towards the average level of wealth in the Union”.

We know that the Prime Minister—as he now is—has continued to develop that. The rules have been changed quite significantly for the funds for 2007-13. A much more strategic approach has been introduced with a much closer alignment between regional, national and EU priorities. We have moved in the direction that the Prime Minister, as long ago as 2003, suggested was right to approach this—for nation states to be more highly involved in determining development in their regions but still to support the structural funds.

It is probably worth saying something about our objectives for the cohesion policy for the next few years, as this is an area in which I know that noble Lords are interested. Noble Lords know the purpose of the cohesion policy and structural funds, which is to reduce economic disparities. I have as much information as noble Lords can stand about the benefits in each of the regions of the UK in the opportunities that have been provided through finance to provide jobs and opportunities, from jobs in industry to, for example, jobs in the Prince’s Trust, which has been able to provide particular opportunities for young people. I will not go into the detail, but I am very happy to provide it for noble Lords because it is an interesting read.

Let us look at the objectives. The first is convergence, which helps the least developed member states and regions catch up more quickly with the EU average. We do that by trying to improve the conditions for growth and employment. The second objective is regional competitiveness and employment, to strengthen the competitiveness, employment and attractiveness of regions other than those that are the most disadvantaged. The third objective is European territorial co-operation, which strengthens cross-border, transnational and inter-regional co-operation. Those are very important. The noble Lord, Lord Blackwell, was worried about the notion of objectives, and perhaps about their status. He will know that they are not new; they exist in EU and EC treaties. I suppose that I would describe them as providing a kind of overview of the aims and tasks of the European Union. In the individual articles, one can see the details of the powers and the policies, but perhaps the objectives are part of the interpretation of what we seek to achieve and what we hope we can do as a consequence of some of the changes that have been made in this treaty.

9.15 pm

There is no difference in terms of where the Government believed in 2003 that it was important to put their focus. They said, in effect, that where nation states could devolve their ability to support regional development in the broader sense to the devolved Administrations, they should do so. Equally, it is very important, as part of the European Union, to support member states. One has only to look at the support that has been given to some of the newer member

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states and the trade and development opportunities that have arisen for the UK. I think noble Lords would see that there is a huge economic benefit to this country as well as to those members of the EU.

Lord Pearson of Rannoch: I thank all noble Lords who have contributed to this debate. The noble Lord, Lord Jay, praised the cohesion funds. I confess at once that the aim of the amendment was not to get at cohesion funds but to get at regional funds, the Labour Party’s attitude to them and to social and labour policy and the Conservative Party’s attitude to that. However, I say to the noble Lords, Lord Jay, Lord Tomlinson and Lord Sewel, that the well known Europhile theory that giving lots of money to the poorer countries in the European Union is eventually good for the British economy is at least debatable, and debatable at much greater length than we have time for now. It does not ring true with many of us who have run international businesses in the real world and who tend to feel that much of this money should go to regions in the world that are poorer than the ones to which it actually goes, and that the United Kingdom would do far better to escape from the overregulation of the European Union and all that goes with it and to take its place in the world beyond the recipients of the cohesion funds—the world of China, India and so on.

As I say, the amendment is really aimed at the Labour Government’s response to Mr Brown’s suggestion that regional policy should be repatriated. I should say in response to the noble Baroness the Leader of the House that Mr Brown used the word “subsidiarity” in the quotation that I gave at the start of the debate on the amendment. All I can say is that we in the UK Independence Party thoroughly approve of Mr Brown’s proposal that regional policy should be repatriated.

As to the Conservative Party, I think that we have taken on board its answer to the question that I put to it. I thought I knew what it was going to be, and I accept that it is, “We would rather not talk about it”. That is fair enough, but one day it will have to.

Finally, the noble Lord, Lord Dykes, once again used the expression “sovereign member states”. He said that this project—I trust that I have made it clear to the noble Lord, Lord Lea, and others that we object to it—is merely sovereign nation states getting together and deciding things. I do not want to prolong the debate—we will come back to it—but I ask how a nation can be sovereign if most of its national law is made beyond its reach and beyond the reach of its elected representatives. The continued use of “sovereign nation” to describe the United Kingdom perhaps does not reflect the reality of the position to which we have been unfortunately reduced by our membership of the European Union. Having said that—

Lord Kinnock: Although the hour is late, I wish to say to the noble Lord that it would not be possible for 27 democracies to resolve upon a common course in respect of the treaty or of the policies that unfold week by week, day by day, unless they were able to exercise those decisions as sovereign democratic states. The collective or pooled sovereignty is what they have resolved upon to try to deal with issues that

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are beyond the will—the determination—of individual states, no matter how big or how strong or how small or how poor. That is the reality that they confront and how they choose to exercise their sovereignty.

Lord Pearson of Rannoch: I am most grateful to the noble Lord for that eloquent exposition of the problem. I must put it to him, in words used by my noble friend Lord Willoughby de Broke in our Maastricht debates, that sovereignty is like virginity: you either have it or you do not. As members of the European Union we do not have it. Our Governments—our Executives—take part in the process which the noble Lord has just extolled. But the people, beyond electing the Governments of the day every five years—this subject has not appeared in general elections for many years—are not involved. The sovereignty of the United Kingdom belongs to the people.

Lord Kinnock: Is the noble Lord saying that he wants to replace determination by the Executive nationally and internationally with a series of regular plebiscites that consults directly with the determining will of the people? If he is, he is proposing a change much more revolutionary than anything contained in all the treaties of the European Union added together and multiplied by 1,000.

Lord Pearson of Rannoch: As a matter of fact, I am grateful to the noble Lord, Lord Kinnock. If he had read the UK Independence Party’s manifesto for the general election before last and for the last general election, and if he cares to read it for the next general election, he will see that that is precisely what we propose. We in the UK Independence Party think that our system of representative parliamentary democracy has broken down, which is why the people of this country are so fed up with the political classes so ably represented by the noble Lord and others on the Benches opposite.

Yes, we want that system; we want it to be revolutionary; and we want out of this project. That is the answer to the noble Lord. There is no doubt about it. I speak for the UK Independence Party and not, of course, for my erstwhile Conservative friends. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Pearson of Rannoch moved Amendment No. 6:

Clause 2, page 1, line 12, after “excluding” insert—

“(i) Article 1, paragraph 6, inserted Article 3b, paragraph 3, on the principle of subsidiarity(ii) ”

The noble Lord said: I think that something has gone wrong with the allocation of duties in the UK Independence Party: I left my notes on this amendment in the Home Room some time ago at dinner, so I shall be brief.

Baroness Ashton of Upholland: Would the noble Lord like us to get them for him?

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Lord Pearson of Rannoch: By the time the noble Baroness comes back I will have finished. This amendment simply would remove the whole bogus concept of subsidiarity from the Treaties of Rome. As Members of the Committee will know, the concept of subsidiarity was introduced at Maastricht when the unfortunate John Major was Prime Minister of this country. Mr Major returned from the Maastricht negotiations saying that he had won “game, set and match”. Included in that triumph, 25 per cent of all the regulations of the European Union were going to be repatriated.

I have another question for the Conservative Party, which was in charge at the time. How many regulations have been repealed under subsidiarity since this great negotiating triumph of Mr Major at Maastricht? I do not want to be told about how many new pieces of legislation might have come into force had it not been for subsidiarity, because it was a good influence on the legislators and they did not go along with it, I want to be told how many pieces of European legislation have actually been cancelled or repatriated. I can tell the noble Lord, Lord Howell, on the Front Bench that the answer is zero, but I would not mind if he said it.

To understand why the principle of subsidiarity in the Treaties of Rome was never really a starter, it is worth putting on the record once again the key paragraph in the concept. It goes as follows:

“In accordance with the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and insofar as the objectives of the intended action cannot be sufficiently achieved by the Member States”—

either at central level or at the regional and local levels—

“but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level”.

As usual I have to apologise for the Eurospeak, but it is worth concentrating on those words. The question that arises from the paragraph is this: who decides what is better dealt with at which local level? The answer to that is the EU.

In the treaty we are discussing at the moment, there is a new protocol on subsidiarity. If anyone wants to read a procedure for not making a decision or for making a decision—

Baroness Ashton of Upholland: I rise just to tell the noble Lord that his notes have arrived.

Lord Pearson of Rannoch: I am extremely grateful to the Government for producing my notes, but I am too far down the gangplank to go back to where I might have started had I remembered them after dinner.

The point is that in the new treaty there is a new protocol on the application of the principles of subsidiarity which results in disastrous decision-making. I have one serious question for the Leader of the House. In Article 4 it states that the Commission shall,

“forward its draft legislative Acts and amended drafts to national Parliaments at the same time as to the Union legislator”.

In case noble Lords have not followed it, I think that the new Union legislator is the Council and the

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Parliament together. My question is this: how does COREPER come into that part of the decision? The permanent representatives committee cannot be found on the European Union website, it does not exist, and yet this is the body of permanent representatives from the nation states who meet in secret to consider proposals made in secret by the unelected Commission. Then, having done all the horse trading and swapped the fishing quotas for other things I do not care to mention, it puts the proposals to the Council of Ministers where unanimity is easily achieved. I ask therefore where COREPER comes into the process. In the end, these decisions are taken by the European Court of Justice. Article 8 of the new protocol makes it quite clear that it is our friend the ECJ, that engine of the Treaties of Rome, which makes the final decisions on whether something is subject to subsidiarity, whether it should be, should not have been, or is objected to by the national parliaments that are brought into this process in a completely meaningless fashion.

The last question is important because the noble Lord, Lord Owen, asked earlier about the limits of the powers of the European Court of Justice in this matter. I think I pointed out in that debate that they are without limit and that there is no appeal against a judgment of the European Court of Justice. In the matter of subsidiarity and poor Mr Major’s negotiation of it at Maastricht, it is worth putting on the record the letter written by Mr Major to Mr Jacques Santer—at the time the lord high executioner, or rather the President of the Commission—after Mr Major had thought at the Maastricht negotiations that the United Kingdom had escaped the protocol on social policy and particularly the 48-hour working week.

9.30 pm

This letter is subsidiarity and the Court of Justice in action and is worth putting on the record. I have it here. It was put in the Library on the day the Statement was made. I got it from the Library and photographed it and it was removed from the Library the next day. But it is a public document and I am not breaching any confidentiality by reading it out. It is dated 12 November 1996 and is from the Prime Minister to Mr Santer. It states:

“Dear Jacques,

Article 118(a) of the treaty establishing the European Community.

My intention in agreeing to the protocol on social policy at Maastricht was to ensure that social legislation which placed unnecessary burdens on businesses and damaged competitiveness could not be imposed on the United Kingdom. The other heads of state and government also agreed that arrangement, without which there would have been no agreement at all at Maastricht”.

Note that.

“However, in its judgment today”—

this is part of the answer to the noble Lord, Lord Owen—

“the European Court of Justice has ruled that the scope of Article 118(a) is much broader than the United Kingdom envisaged when the article was originally agreed as part of the Single European Act. This appears to mean that legislation which the United Kingdom had expected would be dealt with under the protocol can in fact be adopted under Article 118. That is contrary to the clear and express wishes of the United

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Kingdom Government and goes directly counter to the spirit of what we agreed at Maastricht. It is unacceptable and must be remedied.

The United Kingdom will therefore table amendments in the Intergovernmental Conference to restore the position to that which the United Kingdom Government intended following the Maastricht agreement. Those amendments will be aimed at both ensuring that Article 118(a) cannot in future be used in ways contrary to the United Kingdom’s expectation and dealing with the specific problem of the working time directive. I attach the utmost importance to these amendments and I shall insist that they form part of the outcome of the Intergovernmental Conference. I do not see how new agreements can be reached if earlier agreements are being undermined. Meanwhile I urge the Commission to refrain from making proposals under Article 118(a) which properly belong to the other member states’ agreement on social policy. I am sending copies of this letter to the heads of state or government of the European member states”.

So that is the Court of Justice and subsidiarity in action.

Lord Lea of Crondall: Before he continues with his autobiography, does the noble Lord accept that the working time directive was always under the health and safety provisions in the old treaty and was never anything to do with the social chapter? John Major got himself into a difficulty and so that rather disingenuous letter is not worth the paper it is written on. That is the true story of that affair.

Lord Pearson of Rannoch: I was not around at the time. All I can say is that the Prime Minister of the day wrote this letter, which is presumably not unimportant.

Lord Forsyth of Drumlean: I was around at the time and I was sent to the European Social Council meetings to delay implementation. The noble Lord is right to say that it was introduced as a health and safety measure because that required a qualified majority vote, whereas if it was dealt with as an employment measure it required unanimity.

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