European Council, Stockholm

– in the House of Lords at 3:35 pm on 26th March 2001.

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Photo of Baroness Jay of Paddington Baroness Jay of Paddington President of the Council, Privy Council Office 3:35 pm, 26th March 2001

My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Prime Minister. The Statement is as follows:

"With permission, Mr Speaker, I should like to make a Statement about the Special European Council held in Stockholm from 22nd to 24th March.

"At Stockholm there was from all our partners sympathy over the outbreak of foot and mouth disease in Britain and support for the measures we are taking to contain and eradicate the disease. My right honourable friend the Minister of Agriculture, Fisheries and Food will be making a Statement to the House tomorrow on the latest developments.

"The purpose of the council was to take forward the process of economic reform launched at Lisbon last year. This involved setting performance targets for the first time, benchmarking both between the nations of the EU and in respect of our main competitors outside Europe; and a massive programme of liberalisation in opening up our markets.

"As American growth slows, this policy is even more vital for growth and jobs in the future. Since March last year, 2.5 million new jobs have been created in the European Union. In the United Kingdom we have created over 1 million new jobs since 1997.

"The European Union spending on information and communications technology as a proportion of GDP has outstripped the United States for the first time. The proportion of homes with access to the Internet has doubled to 28 per cent. The figure for the United Kingdom is 41 per cent. But we must go further. Prior to the summit, we had agreed already rules for electronic commerce, which mean that a company registered in its home state can operate on the basis of those rules everywhere in the European Union. Rules allowing businesses to operate as a European company were agreed after years of negotiation. A programme has been agreed for the liberalisation of rail freight. We have now taken the final steps in telecoms liberalisation in a way which will bring full consumer choice, cheaper bills and cheaper Internet access.

"At Stockholm we further agreed to liberalise financial services and to stress openness, transparency and consultation with markets and their users. Consumers will benefit from cheaper financial services and businesses will be able to raise capital to start up and grow their own firms across Europe. The City and the CBI have welcomed this breakthrough as good for jobs in the United Kingdom and the rest of the European Union.

"We have made a commitment to open up the electricity and gas markets across the European Union. Most member states support the commission's proposed timetable of full energy liberalisation by 2005, with intermediate targets for commercial liberalisation of electricity by 2003, and 2004 for gas. That proposal goes forward. There is widespread support for it in the Council, and crucially it can be agreed by qualified majority vote. So, while I regret that France's difficulties in particular mean that we could not go further at Stockholm, the prospects for agreement at European level are good. Our aim is for the Council of Ministers to reach agreement before the end of the year.

"We agreed to reform competition policy and eliminate unfair state aids. For example, we expect British consumers will benefit from the changes to the so-called car block exemption in 18 months' time where our aim will be to secure a fall in UK car prices.

"We agreed to finalise this year's plan to deliver a Europe-wide patent. At present it can take nearly four years for a patent to be agreed right across the European Union, twice the time it takes in the USA and at five times the cost.

"Hopefully, we seek to agree in June the single European sky. This is a way of improving air traffic management in Europe, which will improve safety and reduce delays. A 25 per cent reduction in delays would save Europe's air transport industry and the public 2 billion euros a year.

"In addition, the council took further steps on employment, especially for women and the over-fifties; on vocational skills; and on new technologies including third generation mobile communications and biotechnology.

"On trade, we renewed our commitment to work towards a new world trade round later this year, an issue we will be pursuing when President Bush meets EU heads of government in Sweden in June.

"Taken together, these changes are further steps along the way to an efficient and competitive economy.

"President Putin of Russia met members of the European Council in Stockholm and I had a good separate bilateral meeting with him. Discussion focused on economic issues. We expressed our support for continued Russian economic reform and for Russia's bid to join the WTO. We also underlined the importance of further steps by Russia to improve the investment climate.

"President Trajkovski of Macedonia joined us in Stockholm at a critical moment for his country. We offered him our support and condemned the activity of armed Albanian extremists. Macedonia has started to build a multi-ethnic society and it is in all our interests that the country succeeds and does not polarise into separate Slav and Albanian communities.

"The United Kingdom has acted quickly to help to shore up democracy and peace in Macedonia. In Kosovo, NATO has diverted an extra 500 KFOR personnel to the Kosovo/Macedonia border and I can announce today two new steps. First, we are creating a new UK/Scandinavian battle group of some 400 troops from within our existing contingents for deployment by the KFOR commander to help to secure part of the Kosovo/Macedonian border. Secondly, to reinforce KFOR's capacity to control Kosovo's borders, we are sending out a unit of Phoenix unmanned aerial vehicles, with its 120-strong support team, to provide extra aerial reconnaissance and intelligence-gathering assets to KFOR. The unit will be operational next month.

"The EU also reaffirmed strongly our joint commitment to the Nice Treaty and its ratification. Failure to ratify would put at risk the entire enlargement process. While we must, of course, go further in pursuing the policies of economic reform, the fact that this is now the clear economic focus of the EU is itself a huge advance. The agenda for it is being led by the UK. Once again, it shows the advantages of constructive engagement and the folly of a policy of isolation.

"That is the approach which we took in Stockholm. It is a policy which is delivering economic reform in Europe and jobs for this country. It is the policy I propose to pursue with the support of this House and the country".

My Lords, that concludes the Statement.

Photo of Lord Strathclyde Lord Strathclyde Conservative 3:42 pm, 26th March 2001

My Lords, perhaps I may first express to the noble Baroness my deep shock when a couple of hours ago I heard of the sad death of Lord Cocks of Hartcliffe. He played an important role in this House and in another place. I expect that I speak for the whole House when I say that he will be greatly missed.

Noble Lords:

Hear, hear!

Photo of Lord Strathclyde Lord Strathclyde Conservative

My Lords, I thank the noble Baroness the Leader of the House for repeating the Statement and for returning to the practice of making a Statement on the interim summits of EU leaders. There have been occasions in the past when this Government have not made a Statement to Parliament on interim summits. I greatly welcome her intervention and thank her for giving us the opportunity of a short debate.

Perhaps I may also say at the outset that we welcome the sympathy expressed by EU leaders over foot and mouth disease and the strong and swift action taken by some nations in response to the daily, ever more grave situation now facing our farmers. This is a subject to which I shall return in a few moments.

We note that the Council spent much of its time discussing international matters, including with President Putin. While there is no doubt that that has a useful place in such meetings, does the noble Baroness agree that the first priority at such summits should not be searching for a common EU foreign policy, but searching for greater EU prosperity?

Of course we welcome the clear statement of support for Macedonia and for the integrity of its borders. However, will the noble Baroness accept that the problem of violence against the integrity of Macedonia will not be dealt with by EU statements or missions but by robust action by NATO? Does that not reinforce the importance of no EU initiative on defence either competing with or confusing the central position and purpose of NATO?

Can the noble Baroness tell us whether evidence was presented in Stockholm as to whether any of the terrorists responsible for attacks within Macedonia have originated from Kosovo or have used arms supplied from Kosovo? Did President Putin express any concern on this point? What was our response to him?

Was there any discussion of the future status of Kosovo? What is the Government's policy on the future status of Kosovo? Will our judgment on this be affected in any way by the actions of those seeking to promote a greater Albania in the Balkans?

Is not the illusory nature of a common foreign policy shown up by the recent actions of President Chirac in putting out a red carpet for President Mugabe and by French opposition to continuing sanctions in Iraq? Did the Prime Minister have an opportunity to discuss some of those matters with the French? Did he press EU leaders to support sanctions against Saddam Hussein and end financial and political support for the racist and dictatorial Mugabe regime?

The declared purpose of the summit was to enhance the EU's competitiveness. Does the noble Baroness agree that in this light it was a conspicuous disappointment? Is she aware that we welcome those aspects of the summit's conclusions which genuinely move on the Lisbon agenda, including progress made on financial services liberalisation? While acknowledging the welcome statement by member states that they will push for a single market in financial services by the end of 2003, does the noble Baroness believe that that has any implications for current levels of stamp duty imposed by the Chancellor on sales of equity in the London market?

Noting the lengthy appendix to the conclusions on moves towards what is described as,

"further convergence of supervisory practices and regulatory standards", in EU financial markets, can the noble Baroness tell the House of the UK Government's key objectives in these negotiations?

I see that the summit discussed the so-called demographic challenge of an ageing population. It noted the increasing pressure on pensions. Will the noble Baroness say whether any EU leaders expressed support in these discussions for the British Government's policy of forcing pensioners in retirement to buy annuities or for increasing taxation of pension savings by £5 billion a year in order to reduce incomes in old age? Is not that one example of pious words at the summit being completely undermined by misguided action at home?

Will the noble Baroness acknowledge that the high hopes of many in the Government after Lisbon a year ago have largely been dashed? Does she recall promising the House last March that, and I quote the Prime Minister, there had been a "sea change" in European economic thinking,

"away from heavy-handed intervention and regulation, towards a new approach based on enterprise, innovation and competition"?--[Official Report, Commons, 27/3/00; col. 210.]

Does not such rhetoric make the reality since then all the more disappointing? Why has there been so little progress on the liberalisation of energy markets, an issue of vital importance to British business, with all mention of clear deadlines blocked and removed from the communique?

Is it not worrying but predictable, as President Prodi said, that virtually the only movement made since Lisbon has been on what is called "the social agenda", with many key liberalisation measures still subject to delay?

As regards the proposed EU legislation on the application of VAT to e-commerce, described in paragraph 36 of the conclusions, can the noble Baroness assure the House that all elements of that policy will be subject to a national veto? As regards the broader economic scene, is it not striking that with the Japanese economy stalled and the US economy under serious threat, the euro is still receiving no vote of confidence from the markets?

Finally, does the noble Baroness accept that while the principles set out in the Stockholm communique on foot and mouth are the right ones--solidarity with farmers and others in rural communities and determination to contain and ultimately eradicate foot and mouth disease--the best way to meet those objectives in Britain would be to start to implement those measure for which the Opposition and many others have been calling for some weeks?

I look forward to hearing the noble Baroness's answers and I thank her for the confirmation that there will be a further Statement on foot and mouth disease tomorrow.

Photo of Baroness Williams of Crosby Baroness Williams of Crosby Liberal Democrat 3:50 pm, 26th March 2001

My Lords, I also thank the Leader of the House for repeating the Statement made in another place and giving this House an opportunity to ask questions about the outcome of the summit. First, from these Benches I repeat our sorrow at the unexpected and sudden death of Lord Cocks who could be regarded as a monument to freedom of expression. In this House he never spoke without believing deeply in what he said. He was never concerned to be in fashion or simply to repeat conventional opinions. We shall miss his exciting, imaginative and often quite unexpected interventions in our affairs.

I turn to the summit and ask the noble Baroness about foot and mouth disease. Is the Leader of the House able to say anything more about how far we are trying to follow the experience of other European countries which have adopted vaccination rather than slaughter as their major effort to deal with the disease? In particular, how far are we monitoring what Holland is doing, and what the Republic of Ireland plans to do, in this respect?

I turn specifically to the outcome of the Stockholm summit. I congratulate the Government on the steps forward they have taken on employment policy, particularly in relation to discrimination on the grounds of age and disability. We believe that to be a useful contribution to the work of the European Union. We also congratulate the noble Baroness on the liberalisation of financial services. In that context, can she tell the House the extent of progress in resolving the dispute with the European Parliament given that, as I understand it, the Parliament insists upon a securities committee and greater transparency and many European banks are used for money-laundering as a result of organised crime and, in some cases, the deposit of looted state funds from developing world countries? Can the noble Baroness tell us more about the attitude of Her Majesty's Government to the European Parliament's emphasis on transparency in this field?

We on these Benches believe that the proposed unified system of air traffic control is a very useful step forward. However, will safety be considered in addition to the importance of liberalisation of the market, given discussion in this country on changes in air traffic control? Can the noble Baroness also say whether intensive negotiations will start on the issue of Gibraltar airport? As I understand it, that matter is holding up any further move towards integration of air traffic control which, as the Statement says, would clearly be of immense benefit to millions of passengers within Europe.

As to energy markets, there is perhaps some ambivalence in the response of the noble Lord the Leader of the Opposition. Clearly, the differences in energy markets stem from countries which cling to their national vetoes regardless of the greater benefit to the European Union. Perhaps I may suggest politely that one cannot really have it both ways. On the one hand, one cannot insist on the separateness of all the member states with each wielding the veto in every possible situation, and, on the other hand, condemn them because they take such a position. It seems to me that Stockholm shows the independent national positions of member states as clearly as any drive towards integration.

In that context, perhaps I may ask the Leader of the House about discussions with regard to Macedonia. Almost nothing could exemplify more clearly the necessity of the move towards a rapid reaction force and a common foreign policy within the borders of Europe. It beggars description to consider what would happen if there was no European reaction to these events, and I commend the Government on strengthening the border by placing 400 troops within the structures and enhancing our patrols.

The excellent move at the Stockholm summit to induce the legal Albanian authorities in Kosovo to condemn terrorist activity by other Albanians on the Macedonia/Kosovo border is an extremely important step forward. Can the noble Baroness say whether the legal authorities will now try to make representations to those who lead the guerrilla activities to cease them immediately? Such action endangers the whole position of the Kosovo Albanians themselves.

Finally, can the noble Baroness tell us something about the common letter, as I understand it, from Romano Prodi and Commissioner Christopher Patten with regard to consideration by the United States of withdrawing from the commitments of the Kyoto summit? Did the leaders at the Stockholm summit make it plain that they wanted to appeal to the United States to reconsider that extremely far-reaching and very disturbing decision, given the growing evidence about global warming and the extreme dangers of a leading, powerful and influential country deciding to take no further steps to try to deal with that critical position?

Photo of Baroness Jay of Paddington Baroness Jay of Paddington President of the Council, Privy Council Office 3:55 pm, 26th March 2001

My Lords, I am grateful to both the noble Lord and the noble Baroness for their broad welcome of the Statement and the outcome of the Stockholm summit. First, on behalf of my colleagues on these Benches--in this case I believe that I speak also for my colleagues in the other place where Lord Cocks of Hartcliffe had a very distinguished career before he came to this place--we very much value the sympathy that has been expressed and wish the condolences of everybody in this House to be conveyed to Lord Cocks's family. The noble Baroness spoke about Lord Cocks's reputation in this House for freedom of expression, which I am sure we all support. I know from talking to many of those involved in his actions as Government Chief Whip in another place that tightness of discipline was perhaps another characteristic for which he was well known and admired throughout the parliamentary process. We shall all miss him very much.

I turn to the comments of the noble Lord, Lord Strathclyde, and the noble Baroness, Lady Williams, on the outcome of the Stockholm summit. The noble Lord, Lord Strathclyde, referred to his opposition to the formation of a common European foreign policy and the steps that might have been perceived to have been taken to that end at Stockholm. I remind the noble Lord that it was the explicit concern of the Swedish presidency to concentrate on what it described as the "three Es"--employment, enlargement and environment--and this summit was devoted specifically to employment as a very clear follow-up to the Lisbon summit of the previous year. In that respect I should like to put down a marker in case there should ever again be a procedural question about informal summits. It had been said in advance in connection with the Lisbon summit that the work being done on employment in the EU would be responsive to annual assessments by the European Council. This meeting was the first of the assessments, and I believe that another is already planned in Barcelona next spring. I should be amazed if there was not a government Statement forthcoming on that process.

Before I turn to the emphasis of the summit on employment and prosperity, as the Lisbon process had set out, perhaps I may mention briefly the major foreign policy issues which have been raised--Macedonia and Kyoto, to which the noble Baroness, Lady Williams, referred. In reply to the noble Baroness, my briefing on this matter and the conversations that I have had over the weekend and this morning about the outcome of the Stockholm summit did not refer to the Kyoto process, and I am not aware that it was included in the agenda either formally or informally. I suspect that, as the Gothenburg summit in June includes the environment as one of the issues, it might be raised at that time. If I learn any more I shall write to the noble Baroness.

As to Macedonia, I can go little further than the words of the Statement, except that the Government support with extreme urgency the democratic process in that part of the world. That is relevant to the matter raised by the noble Baroness, Lady Williams. The Albanian members of the coalition government in Albania are supportive of the action taken against the Albanian nationals within Macedonian borders. As I understand it, the three main parties in Kosovo are supportive of this, although naturally that perhaps does not go quite as far as condemnation of the activity of Albanian nationals that the noble Baroness suggested. But they are very much in support of what is happening in general in Macedonia in the democratic process.

On the broad issues regarding the main themes of the Lisbon summit--trade, prosperity and employment--the noble Lord, Lord Strathclyde, was perhaps slightly sceptical about whether there had been any precise outcomes. Perhaps I may repeat those outcomes mentioned in the Statement and reinforce some of the others. Since last year, 2.5 million new jobs have been created in the European Union. That is one of the achieved targets of the Lisbon agenda. Internet access has doubled within the year. That again is an achieved Lisbon goal. The spreading in the EU of information and communications technology--another very important part of the underpinning of the drive to improve skills across the European Union--has increased so far that last year for the first time as a proportion of GDP it outstripped that of the US. The agreement on common standards of protection against discrimination in the employment markets on the grounds of race, religion, disability, age and sexual orientation have been agreed. It has now been put into practice.

Therefore, there were specific outcomes. The Lisbon process is being taken forward in a way which is described as open co-ordination. The UK Government are certainly very supportive of that method. The attempts to introduce greater regulation to achieve either the social agenda or the goals on employability and employment and improving the skills base have proceeded much more to our liking through the open co-ordination process. We welcome that in terms of EU processes.

I was asked about the situation on financial services--the so-called Lamfalussi agreement. The Council endorsed the recommendations to achieve a target by 2003 of a single securities market. Progress in the financial services was very much part of our agenda on the broader economic issue. Clearly, if those arrangements are put in place and there is greater and more consistent access to capital markets and it is easier for British firms to raise capital for investment, it is likely that that will lead directly to creating more jobs and better growth as well as better choice and lower costs to consumers. That in turn will be very much part of the Lisbon long-term process.

The noble Baroness asked whether the European Parliament was concerned about the terms for the Lamfalussi deal. The European Parliament believes that these proposals are consistent with the institutional arrangements set out in the treaty. It is prepared to consider the deal within the broad terms of the treaty arrangements because it sees the desire to complete as soon as possible the single market in financial services as a legitimate target.

I confirm that on the "open sky" policy there are issues of safety and reducing the blockages on air traffic lanes and air traffic arrangements within Europe and the reduction in costs to which that will lead. Safety was specifically discussed.

The Prime Minister had a bilateral meeting with Prime Minister Aznar at the summit. Gibraltar and Gibraltar airport were on the agenda. As the noble Baroness and the noble Lord will realise from the Statement, the European Council agreed a position which did not exclude Gibraltar from the single sky policy. That was the concern that we had at the beginning. Indeed, the Prime Minister and Prime Minister Aznar are determined to try to resolve the matter in a bilateral way within the context of the general EU agreement.

On foot and mouth disease, I cannot really improve on the closing remarks of the noble Lord, Lord Strathclyde, when he underlined the fact that the European Union agreed with the position which the UK Government and others are taking to combat this terrible problem. Sympathy was expressed to the farmers in every country. I can confirm that there will be another Statement tomorrow afternoon by my noble friend Lady Hayman, repeating a Statement by my right honourable friend the Minister of Agriculture, Fisheries and Food.

The noble Baroness, Lady Williams, raised the question of the Dutch and vaccinations. It was decided at Stockholm that the EU generally agreed that slaughter was the preferred policy and that vaccination could be contemplated only as a temporary part of containment strategy. The Dutch will be going ahead with vaccinations. They will include animals within a two-kilometre range of any outbreak, although the animals may need to be culled even if they have been vaccinated within two months. The Dutch are going ahead on that basis, but the general agreement was that this was not the best policy to pursue at this stage.

Photo of Lord Shore of Stepney Lord Shore of Stepney Labour 4:05 pm, 26th March 2001

My Lords, I join others in thanking the Minister for that Statement. I also express my own sympathies and regret about the loss of our friend and colleague Lord Cocks.

Perhaps I may ask my noble friend to clarify one point on which there is likely to be some muddle. She referred to the "open sky policy" on one occasion. Can that be the European single sky policy of which we have heard before? Are we in fact welcoming the take-over of the control of British national airspace by a European body which considers there should be not only a Europe without frontiers in land, but a Europe without frontiers also in the sky and in the sea? Does the Minister really believe that that should be welcomed? In a country where people fly not only to and from Europe but to the rest of the world, is it not a matter that should be view with great suspicion?

Photo of Baroness Jay of Paddington Baroness Jay of Paddington President of the Council, Privy Council Office

My Lords, I must apologise to my noble friend Lord Shore if I said "open sky" when I meant "single sky". However, perhaps the optimist--my noble friend may not be one--would suggest that the two could overlap in terms of their ambitions, if not necessarily in terms of their titles.

As I said in repeating the Statement, so far as concerns the single sky proposal, the aim is to try to reduce the tremendous backlog--I am sure that the noble Lord will be aware of this if he travels by air within Europe--and the delays and cancellations which are caused by the system of having to agree slots across the European Union between national air traffic control systems. The proposal seeks to unblock that, but not, as the noble Baroness, Lady Williams, quite rightly pointed out, at any risk to the safety to that arrangement. It is simply very much an issue of trying to unblock the present "sky traffic jams"--if I may call them that--which occur all across Europe, particularly in the summer. The ambition is to try to improve that arrangement.

Photo of Lord Ezra Lord Ezra Liberal Democrat

My Lords, the Minister referred to preparations for a further world trade round. Is it not a fact, however, that at the present time there are a number of trade issues in dispute between the United States and the European Union? Is it not important that those issues be resolved before engaging in a new trade round?

Photo of Baroness Jay of Paddington Baroness Jay of Paddington President of the Council, Privy Council Office

My Lords, the Stockholm summit hopes that these two processes can work together. Indeed, that is the process being undertaken both at the Commission level and between the various governments concerned. There should not be any kind of isolated position with regard to individual examples of a breakdown in trade relations. Perhaps the noble Lord is thinking of the banana dispute. At the same time, that should be pursued in terms of its resolution while, none the less, continuing the preparation for, it is to be hoped, a more successful WTO round later in the year.

Photo of Lord Tebbit Lord Tebbit Conservative

My Lords, first, can the Minister be a little more specific in her reply to her noble friend Lord Shore on the subject of the air traffic control issue? Is the noble Baroness aware that the British air traffic control authorities have jurisdiction and control over the Atlantic airspace out to 30 degrees west? Is it the proposal of either the single or open sky policy that was discussed in Brussels that an authority in Brussels should control air traffic to 30 degrees west across the Atlantic?

Secondly, since it has now become the habit of the Prime Minister to discuss his options for general election dates with the president of the Commission, can she suggest to him that he might discuss those option dates with the British public at large rather than just keeping it secret with fonctionnaires in Brussels?

Photo of Baroness Jay of Paddington Baroness Jay of Paddington President of the Council, Privy Council Office

My Lords, as to the exact terminology of the single sky proposal, I have to defer, not surprisingly in matters of air traffic control, to the professional expertise of the noble Lord, Lord Tebbit, and say to him that I simply do not know whether the single sky would extend to 30 degrees west. I shall of course write to him on that subject if that information is available. It does not appear in the briefing that I have been given, but I shall pursue the matter and reply to the noble Lord.

On the question of the conversations in which the Prime Minister was supposed to engage that were overheard and eavesdropped on by the media, I understand that he was asked by Commissioner Prodi and responded in a polite fashion on the technicalities of when any decisions on a general election could be taken; certainly not on the question of an announced date.

Photo of Lord Clinton-Davis Lord Clinton-Davis Labour

My Lords, first, will my noble friend define for the benefit of the House as a whole what is a "single European sky"? I take a rather different view about Europe from my noble friend Lord Shore and the noble Lord, Lord Tebbit, but all of us are bemused by the expression "single European sky". I fear that my noble friend's statement that she is not responsible for that will not suffice. Secondly, I want to know whether, whatever it means, it was the unanimous view of all participants. Thirdly, what implications does that have for the debate that we are to have on Thursday about air traffic control?

Photo of Baroness Jay of Paddington Baroness Jay of Paddington President of the Council, Privy Council Office

My Lords, I hope that my noble friend will forgive me. I did not say that I was not responsible for the policy. I am obviously not responsible for the policy. What I said was that the detail of the 30 degrees west issue, raised by the noble Lord, Lord Tebbit, in terms of the extension of air traffic control, was not one on which I had specific briefing. As far as I know, it was not specifically raised.

Perhaps I may repeat to my noble friend the exact terms of what was in the Stockholm understanding; namely, that the United Kingdom fully supported this initiative. If my noble friend does not approve of the overall title, I have already apologised to my noble friend Lord Shore for misspeaking when I said "the open skies". If he is concerned about "open" or "single" skies, that may simply be about the title. But I repeat what I said both to my noble friend Lord Shore and to the noble Lord, Lord Tebbit. This is seen as a rather mechanistic device that is crucial for improving the use and management of EU air space. That is why it is called for completion by the year 2004. I repeat my rather lay person's analogy that this is an attempt to remove the log-jam in European air traffic control across Europe, particularly that which develops on a seasonal basis.

Photo of The Bishop of Hereford The Bishop of Hereford Bishop

My Lords, I thank the noble Baroness the Leader of the House for repeating the Statement and associate myself and my colleagues on these Benches with the expressions of great sadness at the sudden death of Lord Cocks of Hartcliffe. His was a notable life in academic and political terms. He was for 17 years Member of Parliament for Bristol South and for 14 years he made notable, distinctive and robustly independent contributions in your Lordships' House.

The noble Baroness mentioned briefly in passing the liberalisation of rail freight. Perhaps I may press her to say a little more about that highly desirable development in European terms and to explain exactly what was decided at the summit.

Photo of Baroness Jay of Paddington Baroness Jay of Paddington President of the Council, Privy Council Office

My Lords, I am grateful to the right reverend Prelate for his expression of sympathy about the death of Lord Cocks. I am sure that his sympathy will be very welcome to the noble Lord's family. On the issue of rail freight, as I understand it, the proposal that has been agreed is simply a continuation of the earlier proposals to liberalise the arrangements for organising rail freight between the member countries, but no new initiatives or plans have been specifically agreed. As part of the post-Lisbon process of liberalising the arrangements for transport across the European Union, the intention is to attempt to speed up the proposals that are already under consideration.

Photo of Viscount Cranborne Viscount Cranborne Conservative

My Lords, does the noble Baroness agree that the Statement seems to be rather long on aspirations that governments should agree to agree at a later date? That seems to apply in particular to the free market in financial services. Can the noble Baroness help the House a little further than perhaps the Statement does? Can she confirm that the principal country holding up the development of such a market is France? If that is so, why does her right honourable friend the Prime Minister think that the French attitude is likely to change from what it is at the moment?

Photo of Baroness Jay of Paddington Baroness Jay of Paddington President of the Council, Privy Council Office

My Lords, the noble Viscount will be even more aware than I am that in European matters these things sometimes take time to unfold. The position of the UK Government on this and many other features of the post-Lisbon process is to take the lead in influencing and persuading colleagues in the European Union to take advantage of the process set up under Lisbon to revisit these matters, as I said to the noble Lord, Lord Strathclyde, on a regular basis so that bench-marks can be agreed, goals can be set and specific terms can be set in relation to a desire to move forward. For example, the agreed key priority on the Lamfalussi--the financial services ambition--is to agree the single securities market by 2003. That seems to be a very specific objective and one that can be bench-marked and checked as time goes on. I do not believe that there is any sense in which the French are specifically dragging their feet on this matter. It is really a question, as the noble Baroness, Lady Williams, said, that might have run foul of some of the concerns of the European Parliament, but even those concerns seem to have been met.

Photo of Lord Wright of Richmond Lord Wright of Richmond Crossbench

My Lords, before raising a point with the noble Baroness, I am sure that all my noble friends on these Benches would want to associate themselves with the shock and regret that have been expressed at the death of Lord Cocks. In the light of press reports today that a European delegation, including Mr Christopher Patten, is to visit North Korea, can the noble Baroness say whether the subject of North Korea and the American decision to suspend negotiations with North Korea were discussed at Stockholm?

Photo of Baroness Jay of Paddington Baroness Jay of Paddington President of the Council, Privy Council Office

My Lords, I am grateful to the noble Lord for his commiserations and sympathy on the death of Lord Cocks. On the question of the visit to the Korean peninsula, the presidency raised the issue of whether or not the Prime Minister of Sweden should undertake a mission to North Korea. The UK Government supported and are supporting such a mission. But in our view and in the view of our European Union colleagues at Stockholm, some conditions or preconditions need to be fulfilled before we can think that such a visit would be useful. Those were set out and have been understood by both the Swedish presidency and the other members of the European Union. They include, for example, that the Democratic Republic of Korea should undertake to have further meetings between itself and the government to the south and that the Swedish Prime Minister, were he to visit North Korea, should raise issues such as human rights and other matters that are relevant and important to the European Union.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch Conservative

My Lords, the Stockholm European Council was obviously just about as big a failure as it was possible to be for the Government and for the Lisbon agenda. Can the noble Baroness the Leader of the House tell us whether the Council did anything to correct the fundamental problems of the EU? For example, did the Council make any progress on reform of the common fisheries and agricultural policies? Did it even discuss transparent mechanisms to stop the colossal fraud and financial incompetence that are the well-known hallmarks of the European Union? If it did not discuss those matters, can the noble Baroness give us any idea when they will next be on the Council's agenda and when we may expect any progress at all in what are matters of real importance to the European Union?

Photo of Baroness Jay of Paddington Baroness Jay of Paddington President of the Council, Privy Council Office

My Lords, I would never wish to be in any sense discourteous to the noble Lord, Lord Pearson, but I suspect that any agreement or understanding on any European summit basis about any issue would in his view always be a fairly considerable failure. Those are standards and bench-marks against which it is almost impossible to succeed. However, at the risk of exhausting the House, I am bound to repeat those matters on which, in terms of the Lisbon process, the Government feel that progress was made at Stockholm.

Most specifically, I turn to the issue of employment. Millions of new jobs have been created as a result of the liberalisation of trade. The block on car manufacturers will be removed, leading to a lowering of prices in this country. The liberalisation and improvements in technology and communications skills will entirely underpin the improvement in employment prospects for people in this country. Indeed, I have to say to the noble Lord that, as regards the review of the Lisbon process, I can see clearly the ways in which the European process--and the Lisbon process in particular--directly help and assist people in this country in their ambitions and their wishes as regards better employment prospects, better skills, better processes and so forth. Furthermore, as Minister for Women, I am only too delighted that specific attention was given to the employment of women as a new ambition of the European summit.

The noble Lord, Lord Pearson, asked whether issues such as the CAP were considered. I hope I made it clear that this summit was directed specifically at employment, thus fulfilling its ambition under the Lisbon process agreement. Specific additional topics were addressed, such as the foot and mouth crisis, the question of Macedonia and the visit of President Putin, which offered an opportunity for matters to be discussed with the Russian Government. However, the primary ambition of this summit was to consider employment and employability.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

My Lords, is my noble friend aware that many noble Lords welcome the progress being made towards stronger co-ordination of European air traffic control? Does she further recognise that, if we want to solve the problem of there being in place 15 or more air traffic control jurisdictions in Europe, and if we want to achieve better co-ordination with Germany, France, Belgium and so on, this has implications for the airspace over the United Kingdom?

Photo of Baroness Jay of Paddington Baroness Jay of Paddington President of the Council, Privy Council Office

My Lords, I am grateful to my noble friend for again raising the issue of air traffic control. He is right to say that this whole process turns on better co-ordination.

Photo of Lord Grenfell Lord Grenfell Other

My Lords, perhaps I may begin by thanking my noble friend for repeating the Statement. Furthermore, perhaps I may associate myself with all that has been said about the late Lord Cocks of Hartcliffe. A loud and infectious laugh is something that no parliamentary chamber should be without and we shall deeply regret that loss, as well as his passing.

I should like to ask my noble friend a further question on the Lamfalussi report. If I heard her correctly, I believe she said that the difficulties being experienced between the Commission and the European Parliament looked as though they might be resolved. If that is the case, does she agree that the report of the summit perhaps should make that point more clearly? In effect, every single press report on the summit has mentioned the fact that the Lamfalussi report is still hostage to the current problems between the Commission and the European Parliament, in particular as regards the right of the European Parliament to decide whether the Commission has overstepped its mandate. I believe that that has not yet been resolved. Can my noble friend tell the House whether she feels that real progress has been made on this? If that is the case, I am not sure that it has been reflected properly in the presidency conclusions.

Photo of Baroness Jay of Paddington Baroness Jay of Paddington President of the Council, Privy Council Office

My Lords, I am grateful to my noble friend. I fear that, although I had no intention to mislead, what I said earlier may have fallen more into the category of what I suspect that the noble Lord, Lord Pearson, would criticise as aspiration rather than anything else. However, it is true to say that, as I understand, there is no question that the Lamfalussi proposals are inconsistent with the institutional arrangements set out in the treaty. For that reason, the European Parliament may not be in a position of such senior prominence in relation to its further progress as perhaps had been thought in the past. As I am sure my noble friend is aware, it is also true to say that the European Parliament shares the wish to complete the European single market in financial services. That goal has been set to be achieved by the year 2003.

I cannot give my noble friend an exact report on the procedures of independent negotiation between the Commission and the European Parliament, but I understand that the picture is perhaps rather more optimistic than he may feel.