European Union Constitutional Treaty

– in the House of Lords at 4:00 pm on 11th May 2004.

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Photo of Baroness Symons of Vernham Dean Baroness Symons of Vernham Dean Minister of State (Middle East), Foreign & Commonwealth Office, Minister of State (Middle East), Deputy Leader of the House of Lords

My Lords, before I update your Lordships on the latest progress in the negotiations on this treaty, I believe that it is important that we try to have some common understanding about the nature of the treaty we are discussing. This House contains some of the finest expertise on Europe and international affairs generally that can be found in any one institution; it is as well that it should be focused on the right target. Sometimes, in the many—and I must say very enjoyable—discussions that we have had in this House over the past months, it has been very clear that opinions on what this treaty seeks to do have been enormously diverse.

This treaty is not a federalist blueprint to alter the fundamental nature of the relationship between member states and the European Union. It does not and it will not. To take just one example, the wording of its Article 5.1 states:

"The Union shall respect the national identities of the Member States, inherent in their fundamental structures, political and constitutional . . . It shall respect their essential State functions".

This provision expands Article 6.3 of the existing treaty on the European Union.

There is only one draft under discussion. There are not a number of alternative and quite different treaties from which we can select. We cannot pull our own "Plan B" treaty from out of our back pocket, as the noble Lord, Lord Howell, has rather oddly suggested. To do so would undermine our own negotiating position. I believe that he knows the nature of negotiations rather better than that.

On the other hand, this draft is not written in stone: it is the subject of negotiation. We have achieved improvements to it already, and we believe that we can secure more. Specifically, we will seek to ensure that it will not remove the national veto on areas of vital national interest: taxation, foreign policy, defence, social security, how the essentials of our common law and criminal justice system work, or treaty change. The Government position on all those issues has been clear throughout.

The treaty is the product of the convention where British parliamentarians played a full part, with the help of the noble Lords, Lord Tomlinson and Lord Maclennan of Rogart, and of course the honourable Members of another place, David Heathcoat-Amory and my honourable friend Gisela Stuart. As we know, our parliamentarians' opinions on the draft have varied and the Opposition have made much of the doubts that Gisela Stuart expressed on the convention. But let us not forget that she has made clear that the IGC offers us the opportunity to tackle specific concerns about the draft treaty. As she said in another place on 10 December last year,

"it is Heads of Government who have democratic legitimacy to make those decisions".

She said later on the same occasion that the treaty,

"simplifies the procedures, whether those involve the new legal instruments or the decision making of the Council. All that is absolutely essential and it will be beneficial for enlargement . . . there would be a great danger if it were lost".—[Hansard, Commons, 10/12/03; cols. 1125–26.]

The resulting draft does, indeed, reflect a great deal of our thinking about how the European Union can be improved: replacing the six-month rotating Presidency with a full-time chairman of the European Council, an important step away from federalism, helping the European Union deliver results; giving national Parliaments the power to object to Commission proposals for legislation—an unprecedented advance in subsidiarity—helping member states to co-operate in crucial areas such as terrorism and cross-border crime; and answering the challenge of enlargement of a Europe of 25 or 27 or 28 nation states.

We have ended the Cold War division of Europe, and expanded the single market to an unprecedented 450 million people—and now we must make the expanded European Union really effective as well as visionary. The veto must be confined to the areas where it is truly necessary, or else decision-making will become gridlocked.

The Government believe that the treaty, successfully negotiated, is, indeed, good news for Britain. It gives us a choice about whether to be strong players in Europe, or limping along on its sidelines. Let me explain how.

The party opposite has admitted that its opposition to the Constitutional Treaty is root-and-branch opposition. Its official position is not to change aspects of the treaty; not to try to improve it; it is against it absolutely. In taking that position, the party opposite has no partners in Europe. No government take that stance, and only in Poland is there an opposition party that espouses such a line. The opposition policy is a policy guaranteed to leave us isolated and on Europe's sidelines. It would also be a fundamental mistake. We want a Constitutional Treaty. We want a rulebook for the EU—a single, simplified one rather than a series of disparate treaties that make up the current rulebook. We want more effective European Union institutions that deliver what citizens want: more co-operation against international crime and a co-ordinated fight against terrorism. We also want member states to work together in the European Union to create a more effective asylum system.

The Government plan to achieve their objectives in the current negotiations on the Constitutional Treaty. If we do, we shall then discuss the treaty in another place and your Lordships will have the opportunity to give it the detailed and scrupulous attention that it deserves, as you have with previous treaties. When that process is complete, the Government will campaign for its acceptance by the British people in a referendum.

As your Lordships will know, I have argued against a referendum. Of course, I did; that is a matter of public record. I have thought about this issue a great deal. I do not believe that a referendum is necessary legally or constitutionally. I certainly do not believe that it is necessary because of the fundamentally different nature of this treaty as compared, for example, to the Single European Act or Maastricht. However, I do believe that a referendum is right for the people of this country—for them to decide for themselves whether they want to be at the heart of Europe, where this Government want to be, or relegated to the sidelines where the party opposite wants them to be. I believe that with a referendum our arguments will be where they should be—not on process but on the real substance of this treaty.

The European Union is not just a set of laws. This is not just a drama played out in the corridors of Westminster and Brussels. It is about a market of 450 million people, the biggest in the world. We export three times as much to that market as we do to the United States. Three million jobs in United Kingdom companies are estimated to depend on the EU. To do that we need to keep its rules. That is what a single market is all about. So we must also be making the rules and influencing the future direction of the Union. We would be doing the people of this country a great disservice if we abandoned our ability really to influence what those rules are.

We need to help the European Union work efficiently and well, helping to deliver jobs, security and prosperity. Those who argue that we can assure that from the sidelines of Europe by rejecting this treaty are simply fooling themselves.

Let me turn to the latest developments. Copies of the latest working document issued by the Presidency, CIG 73/04, are in the Library of both Houses. I am sorry that copies of this reached the Library a little later than I had hoped last week. I stress to your Lordships that this is a working document designed for discussion by officials at their "focal points" meeting which took place on 4 May. It covers only part of the issues that are important to us. Far from being a setback for Britain, as reported in some sections of the press, this document confirms gains we have already made under the Italian Presidency, for example, on energy and the passerelle clause. That is welcome.

The negotiations are continuing. On 17 and 18 May, Foreign Ministers will meet again at the GAERC to discuss the IGC. In advance of that meeting we expect another working document from the Presidency. I shall, of course, ensure that copies are placed in the Library of the House.

Today provides another opportunity for your Lordships to influence the Government's approach to those negotiations. It is not in our gift in this Chamber to decide the approach of the 24 other member states debating this treaty. Negotiation is not done by diktat. We cannot, as the noble Lord, Lord Howell, seemed to propose, put forward an alternative treaty that has no support from any other member state. We and our European partners continue to regard the convention's draft, into which so much effort has already gone, as a good basis for our negotiations. But we do want to be guided by Parliament, as we have been all along, in setting the UK approach and UK priorities.

We have discussed the IGC more than 20 times in the past year on the Floor of both Houses. Ministers have attended 10 Select Committee sessions and three sessions of the IGC Standing Committee. I recall that the noble Lord, Lord Maclennan of Rogart, said on a previous occasion that it would be very difficult for the Government to do more. I hope that our debate this evening will be realistic, well informed and based on the facts of the negotiation. I look forward, as always, to hearing a lively and robust debate on this subject. I beg to move.

Moved, That this House takes note of developments concerning the draft European Union Constitutional Treaty.—(Baroness Symons of Vernham Dean.)

Photo of Lord Howell of Guildford Lord Howell of Guildford Shadow Minister, International Affairs, Shadow Minister (Foreign and Commonwealth Affairs) 4:48 pm, 11th May 2004

My Lords, I thank the Minister for that exposition. My thanks are sincere. Except where she portrayed the position of those of us on this side of the House in a rather negative and, I believe, inaccurate way, the rest was, as usual, extremely clear. As we all recognise in this House, the Minister is immensely skilled at presenting what are basically rather unclear situations in a very clear way. We are all grateful to her for that.

As the Minister reminds us, these negotiations on this constitution, or Constitutional Treaty—I think that it has to be called one of those two things—are now nearing their end. In a few days there will be another document and some progress will be made. The whole thing has to be tied up by 17 June, which is only weeks away. It is right, particularly in this House which sees itself properly as a safeguard and a guarantor of our constitution, that we should at this stage seek some very detailed information about the Government's overall approach—which has differed somewhat from the approach that they put forward in their White Paper last September—and the policies and some of the tactical details, although obviously not all of them.

However, my first question is even more fundamental. We have read in recent days about a whole string of new red lines and extra demands to which the Government now say that they will stick. That lacks clarity, because we were told last December that all the red lines had been agreed in essence, so that it was merely a question of tying up the ends. It now appears that there are a whole lot of new red lines, about which the Minister did not have much to say. We need to know which are the red lines that the Government intend to defend. Are the Government really going to stand firm on those red lines? Do they mean what they say?

For instance, are they really going to get the legal status of the unnecessary charter removed? Are they really going to keep the Union and the European Court of Justice right out of our defence and foreign policy, because that will mean substantial changes to the current draft? Are they really going to halt further integration of social policy? Are they really going to roll back qualified majority voting on asylum issues? Will they halt further extension of EU powers in a whole range of areas and new competences? Will they give Parliament real power to block EU-originated legislation—that means the red card procedure as proposed by Gisela Stuart and many others, which would allow a number of parliaments to block Commission-initiated legislation? Are they going to stop the EU foreign minister from intruding on UK foreign policy and presiding over and initiating policy proposals?

That is what we really want to know: will they really do those things or is this just talk? Are they going to let us down again? The reason that we are entitled to be a little cynical about all those promises is that if even half those undertakings are to be achieved, that will require quite a different treaty from the one in draft and the one being presently prepared by the Irish presidency—which, according to the latest information that I have, is heading in quite the opposite direction: towards more centralisation and away from the sort of undertakings about which the Government are talking.

That raises another question. If the Government are really going to be robust, despite what the Minister has told us, what is required is a very different treaty draft from the present text, pointing in quite different directions. One must ask what thought the Government have given to those different directions. What is the fall-back position? What is plan B? I know that the Minister chided me the other day, as she did again today, about raising the idea of airing alternatives, as though in some way any thinking about alternatives is impermissible. But when we look at the situation in Europe, we see that none of that has stopped other European leaders from announcing clear alternatives; namely—they are repeated almost every day now—that if we, the British, block their constitution and vote no, we shall be marginalised and other countries will go ahead to form a core Europe, presumably on a different treaty basis, we will be isolated, and all the rest.

The Minister asserts that that is what would happen. Indeed, the other day, she and Ministers in the other place were agreeing with that threat about our being, to cite the noble Baroness,

"pushed to the sidelines".—[Hansard, 29/4/04; col. 890.]

when Giscard d'Estaing gave voice to that threat. We are entitled to ask why we allow ourselves to be cowed by the former President, Valéry Giscard d'Estaing, by President Chirac, by Mr Pascal Lamy, by Romano Prodi and by other European leaders. Are we not capable of putting forward our own ideas and vision of how we should go ahead in Europe?

The Minister may say that that is quite unrealistic, but I noticed that only last week the Economist magazine reminded us that Britain is now the richest country in Europe. We have the highest income per head, so we are no longer a poor relation tagging on behind. The Economist reminded us that that the UK continues to grow faster than the euro area and that the gap will widen. We are told that the UK is set to become the biggest economy in Europe—bigger even than the more populous German economy. The Economist states:

"These economic realities should be remembered when considering the latest fashionable notion in Brussels: the idea that the UK might be chucked out of the EU if it refuses to ratify the new Constitution".

What outdated and unmitigated rubbish is the notion about being pushed to the sidelines, let alone chucked out. In no other country, in no other EU member state, are people being fed by their Government with that threatening nonsense about being sidelined if they turn down this constitutional document—as, of course, the voters in several states may well do when they come to hold their referendums, as they will.

As for the proposition that the constitutional draft that we have now somehow clearly defines or limits the powers of the EU institutions, which we would all like to see, unfortunately, that is anything but clear in the text. On the contrary, a new fog of uncertainty about who has powers to do what is created—a fog behind which it is obvious that big new powers or competences are being sought for the central Union institutions.

I urge the Minister when she winds up to clarify what has been said by various authorities that we should respect about whether new powers are being taken to the centre or left with member states. The noble Baroness is fond, as have been the Prime Minister and the Foreign Secretary, of citing the Lords EU Committee report last October, which asserts that under the proposed constitution,

"the balance of power would shift from the Commission to the Member States"—

I think that I have it right that that is what the Minister was citing the other day.

The excellent chairman of the EU Committee, whom I see in his place, the noble Lord, Lord Grenfell, made it absolutely clear on 3 December and again on 10 December that the report was referring to the strengthening of the role of the Council and that it meant:

"The balance of power is shifting to the Council".—[Hansard, 3/12/03; col. 336.]

Are we to believe the Government's view that the Council is the same thing as the member states? The Council is an EU institution. The Council can override member states by majority vote. No one in common parlance would equate the two. Why do Ministers continue to do so? The only people they are deceiving are themselves. It is a separate institution.

If Ministers do not believe the evidence of their own eyes about the question of powers—the long list of new competences in which the EU is to become involved, all of them coming under the jurisdiction of the European Court of Justice—let them read another Lords EU report, an excellent one that we have not yet debated on the future role of the European Court of Justice, which we shall debate in a few days' time. In that report, they will find both evidence and conclusions that under the constitution as proposed,

"the powers of the Union would be increased"; that there will be a new legal order; that the doctrine of the primacy of Community law will be extended; and that the ECJ will have the final say in defining the extent of member states' powers. That is in paragraph 78 of the European Union sub-committee report on the ECJ.

We are left wondering what Ministers really believe and whether they really stick to their view that there is no fundamental change in the powers or relationships between member states and the Union. The reason that we are now doubtful about ministerial statements is because they have now chosen to hold a referendum. Why are they holding a referendum if no fundamental changes are involved? The Minister told us the other day that it was a rotten idea—and she was candid and frank about it. The Minister for Europe was saying that a referendum was,

"only supported by Trotskyists, the National Front and the Rothermere press".

Now we can add, "the Labour Government", I suppose. It is true that the Labour Government may have shot our fox, although, as has been pointed out to me, the shooting of foxes is now politically correct, so it is not now quite the sin it was.

All I can say is, thank God—and, by the way, the Deity is sadly omitted from this constitution—that the British people can now vote down a plan to which the only sensible response, as Sir Samuel Brittan, a learned and wise man, said in the Financial Times the other day, is that centralisation has increased, is increasing and ought to be diminished.

Finally, let me say how sickened some of us are at being accused of being anti-European. The noble Baroness did not make that charge today, but many of her friends have done so. Making that kind of statement is to set in motion what has rightly been called a fraudulent debate. Unlike the Government and, I think, the Liberal Democrats, we on these Benches are perfectly happy to set out the European Union we want to see and the reforms that we believe would really help our country—and an enlarged Europe—to go forward more successfully.

The Union we want to see is a "live and let live" kind of Union; which anchors national parliaments at the heart of EU decision-making; which really does return powers to the nation states, as this treaty definitely does not; which abhors European empire building; which respects the smaller states and rejects a dominating directorate of the big three; which leaves deeper political integration to those countries that truly want it—even though they will find that this is the slow track, not the fast one, to prosperity, as is proving to be the case; and which is simpler, more democratic and more accountable than anything which this rambling 335 page document even begins to offer.

Over the next few weeks the Government will claim that their red lines have been protected, even where they have not been. We are ready for that gambit. But, red lines or no red lines, the Government have allowed themselves to be trapped in a process, the outcome of which the British people do not want, which is not in our national interests and which will embitter and divide Europe, not unite it. Worse still—although the noble Baroness seems to believe that it is a virtue—the Government appear to have no exit strategy or alternative way forward. The saving grace is that when and if a referendum comes the British people will firmly and rightly reject the whole idea and most Europeans will breathe a huge sigh of relief. That will be the real time for an "Ode to joy".

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

My Lords, before the noble Lord sits down, can I ask him whether, as he takes exception to the Minister's phrase "on the sidelines", he would prefer the characterisation that Britain would be "the only one in step"?

Photo of Lord Howell of Guildford Lord Howell of Guildford Shadow Minister, International Affairs, Shadow Minister (Foreign and Commonwealth Affairs)

My Lords, perhaps the noble Lord did not hear what I said. Throughout Europe there are people insisting that they want a Europe that is not top down and not imposed by some top down process—some agenda from the political elite—but want an entirely different, looser and more flexible kind of Europe. Even the Chancellor of the Exchequer has been telling us that he wants a more flexible and competitive kind of Europe and has indicated that there will be no deal on the treaty unless that happens. So we are not alone. The vast majority of modern Europeans understand that they do not wish to be stuck with a hierarchic, out of date, bureaucratic structure that belongs to yesterday.

Photo of Lord Tomlinson Lord Tomlinson Labour

My Lords, it was my pleasure, together with the noble Lord, Lord Maclennan, to be able to represent your Lordships' House during the convention. I should begin by setting on record how grateful I was both to the Select Committee, under the chairmanship of the noble Lord, Lord Grenfell, and the Joint Committee that we had with the House of Commons for their work in scrutinising during the process of the convention. I sometimes wish that it had been done with a little more enthusiasm, particularly in the Joint Committee, due to the number of times that we had to wait to get a quorum and the number of times that we had to adjourn while the quorum disappeared. The hordes were not queuing up to enter the room in order to debate the draft constitution.

This House should be particularly proud of itself, because it had a commentary and proposals on every suggested draft clause of the new treaty in time for it to be taken into account by the convention. We were the only Chamber of any parliament of the 15, or, indeed, of the 25, to manage to do that. It was of great credit to your Lordships' House that so many members of the convention took your Lordships' opinions somewhat more seriously than it would seem that some of your Lordships currently do.

In particular, I turn to some of the words of the noble Lord, Lord Howell, in his introduction, because, unlike him, I do not merely "take note" of the draft Constitutional Treaty, but I actually welcome it. I do so because it does not, as the noble Lord, Lord Howell, suggests, introduce new competences. If he has a list of those new competences, perhaps he will ask his colleague to introduce them in the debate, although I am willing to give way to him now if he wants to tell me what they are. Where are the new competences in the draft constitution? I do not believe that they exist. One only has to look at Article 11 and onwards to see the precise definition of competences in the new draft treaty, where it makes it abundantly clear that the European Union is a union of conferred competences, and competences that are not explicitly transferred to the EU explicitly stay with the member states.

Photo of Lord Howell of Guildford Lord Howell of Guildford Shadow Minister, International Affairs, Shadow Minister (Foreign and Commonwealth Affairs)

My Lords, as the noble Lord has challenged me, I can certainly give him, or later on provide, the detailed areas where there are six new areas of competence which are acquired by, and ascribed to, the central institutions. But, can the noble Lord share with us, if he believes that the matter is all so clear, his view of what is meant by the concept of shared competences? Who lays down the sharing and who takes the larger share—the upper or the lower level?

Photo of Lord Tomlinson Lord Tomlinson Labour

My Lords, again I have given the noble Lord the reference to that and it is most unsatisfactory to answer one question with another. I notice that we still have no demonstration of a new competence and I look forward to hearing them later in the day.

The idea that is presented to this House is that we are a nation that is being cowed by Mr Chirac, by Giscard, by Mr Prodi, and by Mr Lamy. The noble Lord can be frightened of them if he wants to be, but I do not think that they actually have the effect on the population as a whole that the noble Lord attributes to them. If the noble Lord is suggesting that there are reforms that we want that were not considered, perhaps he should have a word with Mr Heathcoat-Amory, who represented the Euro-sceptic point of view from another place so well in the convention and see how far he reached with the proposals that the noble Lord seems to be espousing. He complains about entering into the negotiations without an exit strategy. Perhaps one matter that has been provided, should the noble Lord opposite ever form part of, or be in the supporting cast for, a future government, is that the draft treaty does give the noble Lord an exit strategy—the only one that is available—which is, if at the end of the day one does not like it, get out.

The reason for having a convention has been forgotten in this debate. We had a convention because there was a process of enlargement; it was enlarging a European Community that started at six, grew to nine, then 10, then 12 and then 15. It was about to increase to 25 and we needed a proper constitutional treaty, a proper methodology of work, so that we would not have a European Union that was hamstrung in its procedures. That historic enlargement required change. One of the changes that have had to take place is that in qualified majority voting.

However, let us not have phoney lectures about how that is a fundamental change. In 1986 the Single European Act extended qualified majority voting to 12 new or existing areas of Community activity. In 1992 the Maastricht Treaty not only established a common foreign and security policy and justice and home affairs co-operation but also paved the way for the single currency and for many of the new areas of shared competence. The noble Lord might look at his own government's proposals in that area, because that is from where most of the shared competences came. I am delighted to see the noble Lord, Lord Brittan, agree with me. In that case it extended qualified majority voting to 30 new areas. Then there were the extensions at Amsterdam and Nice, which added a further 16 and 31 areas respectively.

Qualified majority voting cannot of itself be claimed as being such a fundamental change. The extension of qualified majority voting is not the major problem. The major problem is insisting on those so-called red line areas. I merely assert, as clearly as I can, the need to be as clear in pursuing that in the future and not changing our mind as we were about the need not to have a referendum in the early stages of the argument.

There are some areas on which political circumstances may force a government to change their mind; there are some where the change of mind is not acceptable. I regret the change of mind in relation to the referendum; it was unnecessary. I understand the reasons for which it was made; I will never understand the way in which the decision was made. It was shambolic at best—that is from somebody who is trying to be kind to his honourable and right honourable friends in government.

Enlargement needs new mechanisms of decision-making. The treaty does not change the fundamental relationships between the European Union and member states. It does not change the basic principles of the Union. It continues to be a Union based on the conferral of competences. I see no reason why we should have presented to us this spectre of a European Union with all the trappings of a superstate. It is hysteria of the worst kind to pretend that that is anywhere inside this document. As a member of the convention who listened extremely seriously to the advice of your Lordships' House during the passage of the convention, I would have had no part of any draft convention that introduced those trappings of the so-called super state into the deliberations.

The treaty has done many modest things. It has replaced the complex and overlapping set of European Union treaties with a single, more readable document that sets out rights and responsibilities. It establishes clearly the right of member states. In so far as we are criticising the role of the Council of Ministers as a European institution, as the noble Lord, Lord Howell, did, we should put on sackcloth and ashes and criticise ourselves for our incapacity to hold representatives of our Government to account in that process. Those in the Council of Ministers are representatives of member states. In that role they have democratic legitimacy in exactly the same way as we have a duty as representatives of national people to control them.

I say to my noble friend that I welcome the draft treaty. I regret that we are having a referendum. I look forward to participating in the arguments on the referendum, and I am sure that we will find a basis on which there will be strong support from the United Kingdom public for this sensible, pragmatic series of steps to ensure that we have a European Union that works.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch Conservative

My Lords, before the noble Lord sits down, I have had time to look up the answer to his challenge to my noble friend Lord Howell. I hope that he will agree that Article 1-12 adds a huge new area of exclusive competence in the treaties. It expands the EU's exclusive external competence to the conclusion of an international agreement which,

"is necessary to enable it to exercise an internal competence, or affects an internal Union act".

If that is not enough, the area of freedom, security and justice now becomes a shared competence, which means that we can deal with it only when the EU cannot be bothered. Other such areas include energy, common safety concerns in public health matters, and economic, social and territorial cohesion. I could go on, but this is a timed debate. I trust that that will be enough for the moment.

Photo of Lord Tomlinson Lord Tomlinson Labour

My Lords, I merely point out to the noble Lord that I had sat down.

Photo of Lord Waddington Lord Waddington Conservative

My Lords, it is always a pleasure to follow the noble Lord, Lord Tomlinson, but I take a very different view of the significance of the draft treaty.

In her opening speech, the Minister said that she would talk about the nature of the treaty, but she did not go very far down that road. For a start, she did not explain why, like other Ministers, she always talks of a constitutional treaty. It is rather odd, because the booklet that I have is entitled Draft Treaty establishing a Constitution for Europe. Is it that the Government do not want to highlight that that will happen? There can be no doubt whatever that the whole object of the exercise is to establish a constitution; that is why it is on the front cover of the document. There is no use making an airy-fairy speech about what may be here and what may be the effect of that. Let us look at the plain language of the draft treaty.

The constitution having been established as a result of ratification by the member states will then, according to Article 1-1, establish the European Union. As one cannot establish something that already exists, legally the European Union established by the constitution will be a completely new body, a legal entity in its own right, with legal personality. Articles 1 and 6 say so; there is no doubt about that. From then, the authority of the institutions of the European Union will flow not from the member states but from the constitution established as a result of the ratification by the member states of a treaty, which says that it is a treaty establishing a constitution for Europe.

Remarkably, the Government say that nothing has changed. They say that years ago, when we joined the economic community, we accepted the primacy of EU law over the laws of member states. But what has changed is blindingly obvious to anyone who reads the document. Article 10 reads:

"The constitution . . . shall have primacy over the law of the Member States".

It is the constitution not such laws as may be agreed by the Council of Ministers—a constitution to which the European Union, established by the constitution, will owe its being.

The European Court of Justice will interpret the often vague and ambiguous words of the constitution. References to an ever-closer Union have gone from the draft but I invite noble Lords—

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench

My Lords, would the noble Lord be prepared to tell me whether he considers that the Treaty of Rome and the Treaty of Paris, which we ratified in 1972, had primacy over our national law?

Photo of Lord Waddington Lord Waddington Conservative

My Lords, I have no doubt that those treaties established obligations that enabled the Council of Ministers to make laws that were then binding on member states and had primacy over the laws of member states. However, those treaties did not establish a constitution; of that there can be no doubt.

The often vague and ambiguous words of the constitution will, as I say, be interpreted by the Court. References to an ever-closer union have gone from the draft, but the preamble says much the same thing. It says that the people of Europe are determined to be united ever more closely. Can anyone who has followed the findings of the European Court seriously doubt that the Court will do its level best to give meaning to those words?

We were told that Articles II.51 and II.52 greatly limited the power of the Court to enforce the European Charter of Fundamental Rights. It is interesting to consider what the president of the Court has said about that. He has said that he intends to interpret the convoluted language of that article freely and,

"not in terms of the lowest common denominator", whatever that means. When Ireland's judge was asked whether the Court would hold back from ruling on the charter as a result of the provisions, the reply was:

"That would be a foolish assumption".

We are told that Mr Blair is thinking of negotiating changes to the text that would limit the role of the European Court of Justice, but we would be foolish to rely on changes, if any are made. The interpretation will be not in our hands but in those of the Court. Instead, we should recognise the obvious: accepting a constitution at all brings enormous dangers, against which no wording is likely to give us full protection. That is why I and many others are against a constitution.

It is with the same caution and scepticism that we should approach the Prime Minister's repeated assurances that he will not give an inch on his red lines. Mr Blair says that he will fight to keep the rebate. What is he going to do about Article 53, which ends the veto over the modalities relating to the Union's resources? May not the rebate be said to come within those modalities? Nobody has answered that question clearly.

The Prime Minister says that he will retain the British veto on tax matters. What about Article 14.1, which says:

"The Union shall adopt measures to ensure coordination of the economic policies of Member States"?

What about Article 11.3, which says:

"The Union shall have competence to promote and co-ordinate the economic and employment policies of Member States"?

Does not Article III.62, which abolishes the national veto over issues of tax fraud and tax evasion clearly open the door to qualified majority voting on other forms of tax? If the Court gets its teeth into those provisions and into Article 5.2, which, I remind your Lordships, imposes an overall obligation on member states to facilitate the achievement of the Union's tasks, the Prime Minister's red line is likely to be as valueless as John Major's opt-out from the Social Chapter turned out to be, in so far as it was intended to avoid the Working Time Directive.

What about foreign policy? Article III.282 says that the Court of Justice shall not have jurisdiction with respect to the provisions of Chapter 2, but Article 15.2, which is not in Chapter 2 says:

"Member States shall actively and unreservedly support the Union's common foreign and security policy in a spirit of loyalty and mutual solidarity".

It also says:

"They shall refrain from action contrary to the Union's interests or likely to impair its effectiveness".

It is clear, therefore, that those sweeping dictates are not excluded from the Court's jurisdiction. The Government say that it is not an integrationist constitution but a constitution that strengthens the role and authority of national parliaments. How on earth does the extension of majority voting to 36 new areas strengthen our Parliament? We are told that it is all necessary to make an enlarged Community work, but why, in a Union that the constitution says is founded on democracy, is it necessary to give more and more power to unelected bureaucrats? Why is it necessary, just because the Community has new members, to have an EU Foreign Minister and an unelected one at that? I cannot for the life of me see how anybody can argue that that has the remotest connection with the need to make a larger Community work.

We are told that, if we do not go along with the majority, we will be sidelined. The British people are unlikely to be frightened by Mr Pascal Lamy's threat that we might finish up as well off as Switzerland. Instead of heeding such talk, we should listen to the voices of some of the new members of the Union. I wonder whether other noble Lords read a few days ago—I think that it was the weekend before last—the words of the redoubtable new commissioner for Latvia. I think that she is called Miss Sandra Kalniete. She was born in the Siberian slave-labour camp into which her mother was flung in 1941. She said what she thought of Franco-German domineering and their threats to form a hard core of inner states, if they did not get their way in the EU:

"I think it is bluff. If you look at these countries, they are the worst at implementing EU law. Now they're worried because they realise they could be outvoted".

That is what that young lady said. She could see clearly enough that, in a far more diverse Community, the further centralisation of power in Brussels was wholly inappropriate.

Surely, few doubt that, whatever its successes, the EU today suffers from real defects that the constitution does not begin to address. For the ninth year running, the Court of Auditors has been unable to give the organisations' accounts a clean bill of health. The recent report by the National Audit Office shows that the EU remains riddled with fraud. When we joined the EU and, later, signed the Single European Act, we signed up to reducing barriers to competition, not the regulation of every aspect of economic life. We wanted fresh opportunities, not more red tape; more trade, not more meddling in every nook and cranny of national life. Yet, Regulation 2257/94 really does seek to control the curvature of bananas. The accumulation of EU rules and regulations now runs to 97,000 pages.

The draft treaty returns not a single task to national level. My noble friend referred to what Sam Brittan wrote in the Financial Times. I agree entirely. He said:

"A No vote will not destroy the EU but be a signal that over-centralisation has increased, is increasing and ought to be diminished".

For years, the British people have been the victims of what some have called "Euro-creep". The EU has wrapped itself in more and more of the attributes of a state, without the British people getting any chance to express their views on the matter. Now they have an opportunity to say, "Enough is enough". A "no" vote in a referendum will not end our membership of the Union, but it may well open the door to the radical reform that the Prime Minister himself said was needed only a very few years ago. It may mark the emergence of a simpler and more democratic Europe.

Photo of Lord Maclennan of Rogart Lord Maclennan of Rogart Shadow Minister, Foreign & Commonwealth Affairs

My Lords, I shall begin by extending to the noble Lord, Lord Tomlinson, the expression of my complete agreement with every word that he said. He has made it unnecessary for me to say some of the things that I would have said in attempted rebuttal of the increasingly strident opposition to the treaty on the constitution, which is emanating from the Conservative Benches.

In taking a somewhat more detached view, I hope that it will not so much be seen as aloofness from the debate, but as a recognition that many of the arguments have been heard already and have been deployed. I should therefore prefer to focus on the developments since this House last discussed these issues.

There have been three principal developments of great importance: namely, first, the change of government in Spain; secondly, the entry into the Union of the 10 new members; and, thirdly, the Prime Minister's apparent intention to hold a public referendum on the result if the treaty is agreed.

The incoming Spanish Government appear to have incurred no domestic odium as a result of having broadly embraced the outcome of the convention. Indeed, the previous Spanish administration obtained a very good deal for Spain in respect of its budgetary contribution and financial entitlements. The removal, by Mr Zapatero's government, of the Spanish block on the agreed formula for weighting of votes in the Council was an act of justice to the larger states, particularly to the Federal Republic. It is a most welcome development.

The enlargement of the Union should remind our fellow countrymen of the eagerness of the new members to join. It should also put paid to the argument that we have already heard twice today, deployed from the Conservative Benches, that the draft treaty intends to create or would have the effect of creating a European state.

All the new member countries participated in the preparation of the draft treaty. In particular, those that had emerged from the thralldom of the Soviet Union made it clear throughout that they would not be willing to subject their citizens to another hegemonic power, nor to have cast away their new-found liberties.

The draft treaty, far from diminishing our citizens' freedoms, would enhance their protection by empowering the Union to act together effectively in the face of the real external threats to which we are all subject and vulnerable if we stand alone. In the world in which we live today, those threats are economic and environmental, and from terrorism. In each of those spheres, the defences of the member countries of the Union would be strengthened by agreed policies and actions taken in common.

The decision to hold a referendum appears to have caught even the Prime Minister's closest supporters off balance. It appears to have been motivated more by the short-term desire to wrong foot his political adversaries than by any sense that the adoption of the proposed draft treaty marks a momentous departure for the British people.

There has been general agreement among the British participants in the process of European integration—I am glad to see a number of them are present today for the debate—that the present draft treaty is of far less significance than were the Single European Act and the Maastricht Treaty. It does not propose a significant transfer of authority to the Union from the member states. The noble Lord, Lord Tomlinson, effectively made that point in his attempt, which I think succeeded, to demonstrate the difficulties that the Opposition Front Bench have in enumerating any such transfer of authority.

However, it is certainly true that by deciding to hold a referendum, the Prime Minister is elevating the importance of the British debate on the future of the Union and Britain's relationship with it. The grand illusion of which we must all be rid is that the rest of the Union will come to a halt if Britain says "no". The experience of the past decade, to go no further back in the history of the Union, is that if Britain excludes itself from the operation of the Union, it is Britain that stands still, not the policy from which we have opted out.

We may have boycotted the Schengen agreement on internal frontiers, but the process went ahead. Latterly, we have had to run hard to catch up. We have stood apart from the single currency, but it goes ahead from strength to strength without us. The British experience is, surely, that we do better from within the councils of the Union than from without. Hanging back, as in the case of our original entry into the Community, results in decisions being taken, such as the common fisheries policy, which leave our interests out of account.

The basic fallacy that has tainted the British debate about Europe has been to regard our relationship with the Union as essentially adversarial. In proclaiming with such emphasis and headline treatment the so-called red lines of the Government, the Government are running some risk of suggesting to the British public that that is a continuing relationship; that the hordes have to be kept at bay; and that Britain, alone of the 25 member states, would succeed where everyone else would fail. That is a travesty of the true "community way".

The true community way, in aspiration and most often in actuality, is to find accommodations with which all the members can comfortably live. It is and will remain a diverse Union whose purpose in unity is to protect that essential cultural diversity. It is a Union wherein common interests can be defended in common and where unthreatening differences can be enjoyed and even celebrated.

Photo of Lord Grenfell Lord Grenfell Principal Deputy Chairman of Committees

My Lords, I am, of course, very pleased that the Government have tabled this Motion so that we have an opportunity to debate the draft Constitutional Treaty as the IGC enters a very crucial phase. As usual, I speak—sometimes with frustration—as chairman of the European Union Committee. Therefore, I shall confine most of my remarks to recalling some of the key issues and conclusions that are set out in the wide-ranging report, which was published last October, on the draft articles that the committee urged the Government to look at very carefully in the course of their negotiations in the IGC. I believe that they have done that.

During the Italian presidency, we were anticipating that there might be a rush to judgment and agreement last December. Fortunately—indeed, as we recommended in our report—there was no such rush. Instead, the IGC decided to work towards what is bound to be a better outcome, giving itself a longer period for reflection and negotiation. That is why I welcome the debate today.

I should add that your Lordships will have a further opportunity next Friday, 21 May, as, indeed, the noble Lord, Lord Howell, observed, to debate the recent report from our committee on the role of the European Court of Justice. I commend that report to noble Lords. While it may be that some of your Lordships will touch on that matter—one has already done so during the course of today's debate—I strongly urge the House not to overlook that forthcoming opportunity for a specific and therefore more detailed debate on that particular question in a couple of weeks' time.

Turning to substantive matters, I remind the House of the first overall conclusion contained in my committee's report on the draft treaty, which is that, with enlargement, it is now necessary to agree a new treaty, as it is generally agreed that the present institutional structure would not function satisfactorily in a union of 25 and eventually more members. I am sure—in fact, there is already evidence of it—that during this debate there will be some hard hitting arguments both for and against the draft Constitutional Treaty. However, I urge the House to recognise that the existing arrangements need to change and that that need lies at the heart of the whole treaty exercise. In my committee's opinion, the draft treaty currently under negotiation sets out many sensible proposals for the institutional changes that are most likely to meet the requirements of enlargement. It is simply not good enough to say that the European Union can stumble on indefinitely on the basis of the arrangements agreed under the Nice Treaty.

My second substantive point concerns the need for the Government to explain more clearly what the draft Constitutional Treaty is and what it is not. In that regard, we have made some progress today. I was pleased to note the Written Answer from my right honourable friend the Prime Minister in another place on 4 May, which indicates that the Government,

"will publish a range of material to accompany the Constitutional Treaty, including a laypersons' guide and a comprehensive analysis and comparison of the existing Treaties and the new Constitutional Treaty".—[Hansard, Commons; 4/5/04; col. 1456W.]

Parliament and indeed the country need to know which provisions in this treaty are new and which are not. Only with that information clearly and factually set out can we tackle the politically more interesting questions that currently form the focus of the debate.

In the light of the Prime Minister's commitment that I have just outlined, which I welcome, can the Minister clarify whether it is the Government's intention to publish this material before the June European Council, or as soon as possible after it, if that is when political agreement is reached, or towards the end of the year, when it is expected that the legal experts group will have completed its work on the detailed wording of the draft treaty?

Of course, we cannot expect too much detail to be made public while the final phase of negotiation is continuing. I am, however, grateful for the fact that last week the Minister arranged for the IGC document to be placed in the Library; and we much look forward to the next one. The current document has been drawn to the attention of all our sub-committees, and the Minister can look forward—or perhaps not—to correspondence within the next few weeks on any points that arise. There are a few changes that seem to be quite substantial and a few that would not necessarily be totally welcomed.

Once political agreement is reached, the Government should move swiftly to make a full range of explanatory material available to Parliament. If, in addition, further perhaps more detailed and more technical material is required once the legal experts have done their work, so be it. But the public, and I am sure this House and another place, will not understand if, having learnt that political agreement has been reached, they are not clear on what text such agreement was in fact arrived at. The agreed text must be deposited in Parliament for scrutiny by all concerned. On that, I am quite encouraged by what the Minister has just told us.

On a different subject, I ask the Minister what the Government's European Union Strategy Committee has been doing. It seems to have disappeared from our radar screens. My committee recommended that that committee should take a wider remit in informing the public about the EU in general—a recommendation to which the Government gave a positive response. Can the Minister tell us how that and other Cabinet committees are being structured and resourced to take forward the public debate?

I turn to the draft protocol on subsidiarity, which has already been mentioned by a number of noble Lords. During the course of its deliberations on the convention's work, my committee changed its mind about the yellow card and the red card. Having originally supported a red card, by which the Commission would be obliged to withdraw a proposal to which a substantial number of national parliaments objected, my committee in the end came down in favour of a yellow card alone, on the grounds that having a red card would weaken the impact of the yellow card but, being such a nuclear option, would not itself be a useable tool. Therefore, the committee's final position was that it supported the yellow card and believed that, subject to certain safeguards, it could be made effective.

Do the Government share our view that, as a matter of practical politics, it would be very difficult for the Council of Ministers to press ahead in adopting a Commission proposal to which a third or more of national parliaments had registered an objection on the grounds of subsidiarity? Does the Minister not agree that that is perhaps the answer to those who feel that, as it stands, the yellow card mechanism somehow lacks teeth? Can the Minister also confirm that the Government will press to have the yellow card mechanism extended to matters of proportionality, that it will apply to all Commission legislative proposals and that the Commission has a clear duty to respond promptly and in thorough detail to objections made by national parliaments?

Many detailed points in the draft Constitutional Treaty were covered by the committee during the course of its work. I have time to deal with no more than a few of them. I am sure that others will pick them up as we go along. First, my committee concluded that the effect of the draft Constitutional Treaty will be that the balance of power will shift measurably from the Commission to the member states. That recommendation has been much discussed in your Lordships' House and in another place. It has also been raised again in today's debate, notably by the noble Lord, Lord Howell, my frequent and always amiable sparring partner on this particular issue.

I feel that it is necessary to repeat to the House, as the Minister has very effectively done recently, that the mechanism by which the member states will operate in the European Union will, of course, remain the European Council and the Council of Ministers—hence my committee's conclusion, as is clear from a detailed reading of its report, firmly stands; namely, that the draft Constitutional Treaty has the effect of transferring power from the Commission to the member states meeting in the persons of their representative Ministers in Council. I hope that that clarification will once and for all lay to rest some of the attempts to interpret small chunks of our report when quoted out of context.

Secondly, the noble Lord, Lord Owen, recently drew my attention to a possible interpretation of Article 21(3), by which the President of the European Council, being precluded from holding a national mandate, might nevertheless not be precluded from also being President of the Commission, as that would be a European, rather than a national, mandate. The Minister for Europe has told my committee that any such provision allowing the President of the Commission also to be the President of the Council would be "completely unacceptable" and that the language in the draft treaty rules it out. The Netherlands appears to disagree. If she can give it, we would welcome further assurance from the Minister in that regard today.

An outstanding area of general concern is the proposal for a European public prosecutor. While the committee was reassured by the fact that the treaty allows for such development to come in only by way of unanimity, we remain fundamentally opposed to the idea in principle and look to the Government to maintain their continuing opposition.

In our report, we queried whether CFSP was effectively excluded from the flexibility clause under Article 1–17. We queried whether CFSP was indeed outside the provision of Article 1–10 concerning the primacy of European law. We expressed concern that QMV might come into CFSP. We nevertheless supported a passerelle in Article 1–39(8). I am sure that the Minister will want to take the opportunity, if not today, to spell out precisely how the Government interpret the conjunctive effect of those various provisions as amended by the IGC's latest proposals.

In conclusion, in a relatively short speech one cannot do justice to all the recommendations in my committee's 41st;report on the treaty. I humbly urge the House to read that document again and to examine the Government's response, published in the seventh report of this Session, which contains outstanding government responses from the previous Session. It is in the detail of the treaty articles and, if I may dare say so, in the detail of my own committee's recommendations on them, and in the Government's responses to those recommendations, that Members of the House will find much by way of explanation and elucidation on what is in the treaty and, just as importantly, what is not.

Photo of Lord Harrison Lord Harrison Labour

My Lords, the benefits of the proposed EU constitution and treaty, especially now that Britain's red lines have been secured, have been well aired this afternoon. My contribution will concentrate on the forthcoming referendum, ostensibly to ratify the treaty but which in reality replays the 1975 referendum determining whether Britain should be in or out of the European Union and whether it should be as a full-blooded member.

I am helped in this exercise by the useful pamphlet produced by the noble Lord, Lord Blackwell, entitled What if we say no? to the EU Constitution. I look forward to his exposition of the pamphlet later in the debate, and I hope that he will forgive me for some of the things that I am about to say.

While disagreeing profoundly with the conclusions, I share with the noble Lord an enthusiasm for the single European market and its pivotal position in the shaping of the European Union. I do so not least because I believe that it is the prime source of Britain's and Europe's future prosperity, representing as it does the competitive forcing-house from which Britain and Europe's goods and services are to be sold in local European and global markets. But markets require rules and regulations. If Britain chooses to be part of the European market, which we have, then Britain has to acknowledge a wider jurisdiction. That is life.

I return to the pamphlet. The noble Lord, Lord Blackwell, suggests that if Britain says no in the constitutional referendum, we should renegotiate Britain's obligations in the single market. That will solidify the impression abroad that Britain is a semi-detached member of Europe and of its single market, a fact made evident by our absence from Schengen and the single currency, each of whose major purpose is to strengthen the single market. Incidentally, our absence from the euro and Schengen are cited by Jacques Chirac this week in Le Figaro as the motive for rejecting Chris Patten as a possible successor to Romano Prodi. That is another straw in the wind of British diffidence weakening our influence and sway in Brussels.

Refreshingly, the pamphlet lays bare some of the risks to Britain were we to renegotiate our membership of the world's biggest market, comprising some 470 million European citizens. It is conceded that there is a danger that Britain would have to conform to EU market standards without having had a hand in shaping, monitoring or enforcing the rules. There is the danger that rules of origin tariffs might be imposed on manufactured goods assembled in Britain, thereby hurting British firms. The pamphlet freely confesses that there is too the danger that the free movement of workers, one of the market's four fundamental freedoms, might be compromised by any such renegotiation.

It is further suggested that Britain might join Switzerland and Norway outside the market, but remain enslaved to its rules and regulations. How sad that would be for a mighty European power like Britain, how impractical and how full of red tape for a nation of 60 million traders thus to become the tail wagged by the single market dog.

One final suggestion made in the pamphlet is the invitation to join NAFTA. Whether such an invitation to join has been issued, I do not know, but doubtless we would celebrate with a Mexican wave our transatlantic and Pacific neighbours.

Other EU initiatives which reinforce the flexibility and attractiveness of the single market are also called into question by the pamphlet. Those include the EU environment policy, regional and cohesion grants, the competitiveness agenda and even Europol and the development of police and Customs and Excise co-operation across the borders of the burgeoning market. Apparently it would be acceptable to frustrate British business while leaving unmolested organised crime to range across the single market. This pick-and-mix, à-la-carte Europe will simply not happen for Britain. In the wake of a "no" result in a referendum, our colleagues will tire of our further opt-outs and prevarications.

Finally, the pamphlet suggests radical changes to the European Union institutions which make, govern and develop the single market. Top of the list is the overthrow of the European Parliament where democratically elected British MEPs of all political persuasions work assiduously to defend and promote British trading and commercial interests. The European Commission is to be split into an inner ring dealing with the full-time marketeers and a second commission for those beyond the fringe: that would be Britain. Lastly, the European Court of Justice, whose central task is applying single market rules, is likewise to be double-yoked with an inner court, still the ECJ, for those inside the market and a newly created European treaties court for those semi-detached—another astute move in reducing Brussels bureaucracy.

The pamphlet has done us a great service. It sets out plan B—stay in the market—and plan C—get out and renegotiate—along with several other hopes, aspirations and plans of those who will canvass for a "no" vote in the forthcoming referendum.

For all its imperfections, the existing single market in the European Union is all we have got. To shun the new treaty now is to introduce chaos in the face of this most welcome expansion to 25 members and to imperil Britain's business, commercial, trading and financial interests which supply the wealth, the jobs and the opportunities that do indeed keep Britain in Europe and the wider world "Great".

Photo of Lord Brittan of Spennithorne Lord Brittan of Spennithorne Conservative 5:57 pm, 11th May 2004

My Lords, I should like to start with two domestic political points before saying something about the substance of the constitution. This debate is timely. The constitution, or the Constitutional Treaty according to preference, is not yet fully agreed, but there is among all the member states a strong determination to secure agreement next month. I have to say to my noble friend Lord Howell that major change is really completely unrealistic. It is not at all conceivable that substantial changes to the character of the treaty can be put forward, even if they have merit at this stage. On the other hand, the particular points raised by your Lordships' committee and referred to by the noble Lord, Lord Grenfell, are ones which can be raised by Her Majesty's Government and stand a real chance of being incorporated in the final draft. So, whether we like it or not, we have to consider the merits or otherwise of this treaty and this constitution broadly as they now stand.

The tactics of the Government are clear and frankly not much more credible than those, I regret to say, of my own party. The Government seek to proclaim as loudly as possible their absolute determination to achieve the red lines and then to proclaim huge success in so doing, telling everyone that it is now safe to vote for the constitution. The truth is that in the earlier negotiations, in particular under the Italian presidency, no substantial objections were made to the red lines. What we are talking about now is simply a question of spelling them out with even greater clarity than has been the case up to now. Good luck to the Government if they achieve that because it is a worthy objective, but achieving it would not be a negotiating triumph. Failing to do so would be the result of negotiating cack-handedness.

We have all been familiar with the art of managing expectations. Nobody in this House who has experience of these matters should be shocked at the tactical approach being adopted, so long as nobody is actually taken in by it.

Secondly, a word about the proposed referendum. I have never been a friend of referendums. I regard them as an alien, bonapartist device, inconsistent with representative parliamentary democracy. I find it strange that those who hold themselves out as great defenders of the British tradition should be so enthusiastic about resorting to such a device. Resort to it has certainly grown in frequency in recent years but not in desirability. It remains a populist device, usually chosen by a government for purely opportunistic reasons, to get themselves out of a political hole. This is no exception. Whether it will get the Government out of the hole is very much more doubtful.

Turning to the substance of the constitution, I am glad to say that I am able to speak in less critical and curmudgeonly terms. I have observed at close quarters the creation of previous constitutional treaties, and it is clear to me that what we have here is not a development that is fundamentally novel in character, nor a great step forward towards the creation of an integrated European state. That is why the treaty, frankly, is regarded as a deep disappointment by the genuine federalists. It would be helpful if people in this country heard what those who want what they fear think about the treaty.

Valéry Giscard d'Estaing said:

"I think it is absolutely impossible to have a federal state for 25 to 27 countries because it won't work. We have too many specificities, too many languages, and too big a difference in size between Germany, the largest state, and Malta, the smallest".

That is a statement from somebody who might be regarded as wanting movement in that direction but regrets that enlargement actually makes it impossible.

It is easy and understandable to be amused by the fact, about which my noble friend Lord Waddington made great play, that what is being proposed has the word "constitution" on the front page and is called a constitution. None the less, in spite of that, I do not believe that it is in character different from previous treaties. Indeed, many of the characteristics of a constitution, as defined by constitutional lawyers and people who write about these matters, existed in the previous treaties. The decision to call this one a constitution and not the others is a political decision and not a profound juristic one.

What the constitution does is make changes to the institutions. It does not create a new political entity. It is expressly said that the member states create powers in the European Union, not vice versa. That is the fundamental difference between the new political order, founded, for example, in the United States 200 years ago, and what is proposed for Europe today.

It is interesting that when the general statements in the constitution are elaborated on in more detail, the draft treaty actually says:

"Under the principle of conferral, the Union shall act within the limits of the competences conferred upon it by the member states in the Constitution to attain the objectives set out in the Constitution. Competences not conferred upon the Union in the Constitution remain with the member states".

So the constitution is not an overarching new legal order, enabling the newly created body to grab and seize more and more powers.

A good test in looking at the general direction in which the constitution moves is to ask, as has been said by the committee considering the matter, which institution loses out. Naturally, having been a member of the European Commission for nearly 11 years, I was quite interested to see that. There is no doubt that the institution that loses out in these proposals is the one which is the hallmark of the integrationist approach—the Commission. I do not object to that, but I think I am in a position to notice it.

Much focus has been put in the discussions on the new President of the Council—whether we should have him for two and a half years and whether we should not have him—and on the title of Foreign Minister. However, the reality is that the powers and instruments of the Commission in the area of foreign affairs will be largely handed over to somebody who will basically be an agent of the member states, and the member states are represented by their governments which, in a democratic society, is the only way in which they can be represented.

The genuine merits and deficiencies of the constitution can be stated quite simply. It makes changes in the institutions that are necessary to prevent enlargement leading to decision-making paralysis. That is a limited but hugely important objective, which is warmly to be welcomed.

Achieving enlargement was a formidable and noble task—all the parties in this country were right at the forefront of the fight to bring it about. I can assure your Lordships that it was not an easy fight to win—many people on the Continent did not want us to go in that direction precisely because they thought that enlargement would make a highly integrated union more difficult to achieve. We fought for it and we won it, and it would be an irony but a tragedy if we in this country were now to prevent the changes in the institutions that are necessary to enable the newly enlarged European Union to take the decisions that are needed to gain the full benefit of that historic act of enlargement.

Of course the constitution is imperfect. It did not start from scratch—it did not try to create ideal institutions. It is, in large part, a work of consolidation. You cannot have it both ways: it does not involve the creation of a new legal order for that reason, and, for that reason, it is also not the simple, elegant, short document that the United States constitution is. It did not seek to reform the policies of the European Union, as opposed to the method of working with the European Union. For example, it does not deal with the reform of the common agricultural policy. But it did make the changes in the running of the European Union that are necessary for enlargement to work effectively and not to prove a Pyrrhic victory.

What if we fail to ratify the constitution and others ratify it? I do not believe it will force us to leave the European Union. I think that is an exaggerated statement, and the difficulties of forcing us to leave the European Union are very considerable. But I have no doubt that it would certainly marginalise us in it.

Frankly, although we rightly and inevitably look at these things from a somewhat insular viewpoint, what is much more important than whether it marginalises us is what impact it would have on the European Union as a whole if we were to vote against the ratification of the treaty. Exactly what the impact would be would depend on how many other member states, if any, rejected it and on what grounds. There would certainly be a major crisis in the European Union, not something that could be sorted out by a little tinkering here or there. The effort made to achieve this constitution shows very clearly that its rejection would be a major and damaging act. The European Union would be bogged down, totally preoccupied with handling the situation, and it would be impossible to make significant advances elsewhere.

We would suffer from the further and ultimate irony: many of those who want to reject the European Union believe strongly that what the European Union really needs most of all is further reform along the lines of the Lisbon programme to make it competitive. They are right—that is the kind of thing that I tried to fight for when I was in the European Commission. But the political paralysis that will follow the rejection of this treaty would be wonderful news for those who fear and oppose reform. It would impede, delay and slow down the very reforms that those who oppose the constitution profess to prefer in its place.

For all these reasons, I fervently hope that the constitution will be agreed with our partners and approved by our people.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench

My Lords, it is always a pleasure to follow the noble Lord, Lord Brittan of Spennithorne. The lucidity which he brought to bear on the conduct of business in the European Union has not deserted him now that he has joined your Lordships' House.

Today's debate on the Constitutional Treaty is taking place in a completely different context from that of our earlier debates on the convention and on last year's intergovernmental conference, and that is because the member states have decided to make a serious effort to reach agreement when they next meet in June—and they are quite likely this time to succeed, the adverse consequences of further deadlock having now sunk in. Even more, the context is different because the Government have recently decided that any text agreed will be submitted in this country to a referendum.

That latter decision, I deplore and regret. I have always believed that the heart of our unwritten constitution is that we are a representative parliamentary democracy and that the crucial decisions in this country should be taken by Parliament. I do not accept that the referendum is in some way more democratic than a vote by Parliament, particularly when it is almost certain that a smaller proportion of the electorate will vote in this matter than will vote in a general election, and when it is as sure as day follows night that, the day after a referendum, many of those who do vote will complain that they were inadequately informed about the complexities of the issues at stake. Add to that the bias against the treaty of the largest part of the press, which is beginning to live up to the label attached to it in a different context many years ago by a former leader of the main party opposite when he described it as "exercising power without responsibility", and one has a number of well founded and principled reasons for leaving the decision to Parliament.

It is a sad but inescapable fact that on each occasion when a referendum on European matters has been embraced by one or other or both of the main parties in this country, it has been so for reasons of short-term domestic political expediency. It was so in 1975 and in 1997, and it is so today. It was not because of any principled view on how those things should be done. Indeed, the party opposite resisted vigorously any recourse to a referendum when ratifying much more far-reaching European treaties—the Single European Act of 1986 and the Maastricht Treaty of 1992—than the one currently under consideration. It was right to do so.

However, the die is now cast and this House clearly needs to address the issues raised by the Constitutional Treaty in the new context. That means getting away from all the hyperbole and myth-making that has characterised the debate so far. It means getting down to the kind of cool-headed analysis of the provisions of the treaty that—dare I say it?—your Lordships' Select Committee has begun to provide, so that the people of this country, who are being asked to vote on the matter, can begin to acquire the means to form a considered and balanced judgment on it. It means that unsubstantiated assertions such as "this means a massive concentration of power in Brussels" or "it will be the end of Britain as a nation state" will no longer suffice as a serious contribution to the debate. Above all, it means addressing the key alternatives—there are only two in fact—which we will face if the treaty is agreed in June. Do we accept that the new treaty provides, on balance, a viable basis for our continued membership of the European Union? Or do we prefer that basis to be the accumulation of previous treaty texts that we have ratified, with the Treaty of Nice providing the final word on how the new, enlarged union should be run? As a number of other Members have said, failure by this country, or by any other member state for that matter, to ratify is likely in the longer term to have even wider implications than that. However, that is the basic choice that we face and I will concentrate my further remarks on it.

First, a substantial proportion of the new treaty is simply the repetition or re-ordering of treaty texts which are already in existence and which are binding on this country. I assume—I hope correctly—that that material will raise no problems with anyone who does not wish to tear up our obligations and head for the exit. It would, however, be extremely useful if the Government could rapidly provide a compendium of the material that falls into that category, with clear cross-references to earlier texts.

Secondly, there is the matter of "tidying-up". That phrase has fallen into disrepute because of the ill advised attempt by the Leader of another place to argue that that was all the new treaty was doing. It clearly goes well beyond just tidying-up, but that does not mean that tidying-up is not a worthwhile and valuable exercise. The impenetrability and complexity of the existing, overlapping texts have been rightly criticised. The new treaty is a substantial improvement on that situation. Again, it would be helpful if the Government would indicate each part of the treaty that falls into that "tidying-up" category.

Thirdly, we come to the substantive changes. The jury is obviously still out on the changes from unanimity to qualified majority voting. The changes are not all that numerous when one compares the treaty with the original treaty to which we agreed when we joined, which had plenty of provisions for qualified majority voting, and with the changes agreed by previous governments, most notably in the Single European Act and the Maastricht Treaty. In that field, I support the Government's red lines and I assume that they will be achieved.

The other changes are positively beneficial to this country. Agreement on effective EU policies on asylum and immigration, which is urgently needed and for which we now understand better than we did previously that national action is no adequate substitute, is stymied by the requirement for unanimity. We really must get away from the belief that any change from unanimity to qualified majority voting is a surrender of sovereignty, automatically damaging to this country. Those who assert that could perhaps begin by explaining how we would be better off without the single market, which would certainly not have been achieved without the switch from unanimity to qualified majority voting.

I turn to the innovations in the new treaty. I shall mention just three. First, one can argue endlessly whether the text in the new treaty on subsidiarity and the role of national parliaments is sufficiently strong and whether it will prove an effective safeguard against excessive centralising tendencies. But one thing is surely pretty clear: it is better than having nothing at all. That is the situation in which we shall be if we reject the treaty and have to rest on the Treaty of Nice.

Secondly, do we seriously believe that the task of building up a common foreign and security policy will be easier to achieve under the existing provisions than if we move away from the ever more discredited and inadequate system of rotating presidencies? Do we want to stick with a system that will bring the presidency to this country once every 13 or 14 years, rather than one that will provide scope for the main players in the Union to work together effectively?

Thirdly, do we want to leave the balance between the Commission and the European Council as it is or do we want, through the appointment of a full-time chairman of the European Council, to ensure that the heads of state and government gain more direct, hands-on control over the strategic direction of the Union? Those are far from being all the alternatives that we face, but they are some of the more significant and we now need to focus on them.

I turn to the issue on which last December's Council was shipwrecked—the attribution of votes for qualified majority voting and the system for reaching majority decisions. I have found no practitioner who believes that the difference between the two systems on offer—the Nice provisions or those in the new treaty for a double majority—would make a real difference in more than an infinitesimal number of cases. It is pretty clear that the double majority system is a great deal more transparent and comprehensible to ordinary people—surely a real advantage—and that it gives somewhat greater weight to the larger member states, of which this country is one. The Nice provisions are not only incredibly complex and hard to understand, but also inequitable. Therefore, while I have a lot of sympathy with Poland and Spain, which feel, with some justice, that they have been misled, I suggest that they need now to swallow their objections and to address any complaints to the President of France, who was ultimately responsible for the unsatisfactory compromise reached at Nice and, by the way, for its subsequent abandonment.

I conclude with a plea that the debate on which we are now embarking—in this House, more widely in Parliament and in the country—should be conducted on a rational and civil basis. That there are wide differences of opinion is not in doubt, nor is it in doubt that strong views are honestly held on either side. However, as one who spent most of his professional career watching British domestic politics play havoc with the furtherance of our real interests in what was first the European Community and then the European Union, I have concerns that the current debate, if it gets out of hand and is dominated by caricatures, stereotypes and rhetorical cavalry charges, will do precisely that once again.

Photo of Lord Biffen Lord Biffen Conservative

My Lords, it has been an experience of this debate to hear the speeches of the noble Lords, Lord Tomlinson and Lord Maclennan. I use this opportunity to give my own recognition for the work that they did on the convention, although I was not much in line with their views. They must have some regret that their work has resulted in the production of a draft constitution that is giving rise to a good deal of anxiety, held in good faith by people in all corners of the political spectrum. It has given rise to a great deal of disappointment for those who hoped that the opportunity of enlargement would mean a redrafting of the broad rules, taking account of the greater diversity that the Union would have hitherto, along with the necessity for rules that were effective, if limited.

Those who hoped that that would emerge, dreamed of it in terms of a great production of a horse, while what we have is decidedly camel-like. To those who object and say, "But look, it's not a horse! It's a camel!", what is the riposte? The riposte is, "There is no alternative". That is what we hear, in strident terms, from the noble Baroness, Lady Symons. I must say that it is only a matter of time before she arrives at the Front Bench with a mink-lined handbag.

I agree with those who are anxious that this debate will proceed to the referendum in a fairly unhealthy intellectual state. I would not put it in quite the patronising terms used by the noble Lord, Lord Hannay, but I think that that is a danger for us all. That is why I am not overwhelmed by the prospect of a constitution. We are rushing into a constitution far too soon after the actual working experience of the enlarged community. Therefore, I have an alternative programme—and yes, I am sorry, it is an alternative. It is not to have the constitution awhile.

Instead, let us look at a policy of reform that might help to relieve the situation and lead to further developments, which may be broadly more acceptable. I refer to a reform of the single market. The noble Lord, Lord Harrison, is a great supporter of and enthusiast about the single market, and I acknowledge that. However, it is not the most star-studded element of the European Union. Originally, it was fairly liberal in its free trade aspect relating to external trade. As we move to the internal market, however, we are being increasingly caught up in the intrusive element of community affairs, and not one with a corresponding advantageous economic consequence.

Indeed, when I consider the present state of the single market, I believe that it needs reform so that it concentrates on the commanding heights—if I may use an old Labour slogan—and deals in headlines not in footnotes. That is important because unavoidably related to it is that its enforcement is connected with national bureaucracy. That is not a good partnership for the actual existing working of the European Union and the public support and sentiment that the Union should generate.

But how much more is it a challenge for the applicant countries, whose economies are growing and showing great versatility? The acquis that they have to inherit is, in my view, an incubus. Their whole desire to move towards a more free-market solution for their domestic economies, which is broadly perceptible, is more likely to be damaged than encouraged by the present scope of the single market. I do not comment on their ability through the national bureaucracies to be as effective in enforcing the rules as, say, countries such as Denmark or the United Kingdom.

I turn finally to the consideration of not only the present problems of the Union and those that will emerge with enlargement but the wider ambitions. They are crucial to be assessed, not as we meet them headlong but as we meet them in anticipation. I say that in the light of the recent speech by Romano Prodi at Dublin, when he said:

"The goal is to create a ring of friends . . . In a sense this is another concept of enlargement—an enlargement without institutions".

That sounds like childbirth without pain, and I do not believe that the matter can rest there. In the Times, Anthony Browne wrote about the Commission comments in the context of the Prodi speech. He said:

"Under the wider Europe policy countries such as Egypt, Algeria, Libya, Ukraine and Russia would become full members of the single market"— that single market which we now see, with its bureaucracy, inclusiveness and its unsatisfactory division between policy and enforcement. He went on to say:

"with open borders for trade and investment and their citizens given the full right to live and work in the European Union".

Finally, he said:

"The policy has been agreed in principle by the national governments of the European Union".

I would be much happier to hear about that from the Treasury Bench than to read about it in the Murdoch press. That is a warning to us, as we stumble forward towards another great ambition, that until we can resolve some of the real working difficulties of the existing European Union we are falling victim to the principle of over-ambition in government. The phrase from Browning says:

"Ah, but a man's reach should exceed his grasp".

That might be a good one-liner for a Victorian poet, but it is no basis for a European policy.

Photo of Lord Williamson of Horton Lord Williamson of Horton Crossbench

My Lords, I welcome this debate on the draft European Union Constitutional Treaty. As a member of your Lordships' Select Committee on the European Union, I thought that I should make a cool contribution to the debate. The committee has produced important reports, and it is important that it should not be left aside in a debate that will continue for some time.

It was inevitable that the debate would show considerable disagreement. That was certain before we started. I make just one comment—that, having worked at close quarters with the noble Lord, Lord Brittan of Spennithorne, and seen what he achieved for the European Union in vital areas for Britain, especially in international trade and competition, we should give a great deal of attention to what he said today. I make that point particularly because I happen to agree with him, too, but also because of what he has achieved for Europe in his career.

From recent reactions in the UK, we seem to be in the presence of three scenarios. First, there are obviously those who, if asked to vote for or against the draft treaty, would vote for, "none of the above", because they have a quite different agenda. There are many people who take that position, who would like some matters to be removed from European Union action, would like changes in the Commission's power of proposal, and want no common policy on asylum and immigration, despite recent sustained criticism of national policies, and so on.

All those and similar issues could have been dealt with in the convention of the people's representatives from national parliaments and governments that began a long time ago—in February 2002. But those representatives did not put forward that sort of scenario. They put forward relatively modest changes in the role of the European Union in the context of its much valued enlargement. That is what we have before us. The treaty is broadly what is now on the table and it is likely to be broadly similar if and when it is agreed unanimously by the 25 heads of state and government.

In my view the second scenario is the real one, namely, that we have to decide whether the draft Constitutional Treaty, which will probably emerge on 17 June, is better for Britain within the European Union or worse than the current situation. Those who would reject the treaty believe that the changes would represent some kind of threat to our sovereignty or to our role in the European Union. Rejection of the draft treaty would certainly mean—because negotiating fatigue would set in—that for some time at least we would continue on the basis laid down in the Treaty of Rome, as amended by the Single European Act and the Treaties of Maastricht, Amsterdam and Nice, even though some of us believe that some of the provisions of the Nice Treaty are not good, and certainly not good enough for an enlarged Union.

Thirdly, of course, there are those who believe that the treaty changes put forward by the representatives of the national parliaments and governments, if accepted—perhaps with some amendments—by the heads of state and government, would have some advantage and could be approved by the British Parliament and people. The question is: what are the changes? That is the vital element; that is what the argument is about; that is on what the judgment should be based and not on general assertions in favour of or against the European Union. The first change, evidently, is that the existing Treaties of Rome, Maastricht, Amsterdam and Nice and the Single European Act, which many found difficult to follow, are to go on the bonfire. Their provisions are being consolidated more clearly within a single new treaty. Part 3 of the new draft treaty is very largely—not wholly—that consolidated text.

I believe that we should concentrate on Part 1 which is the core of the constitutional element of the draft treaty. Although much of the substance exists already in the European Union, in some respects it is quite a new text. We also need to look at the status of the Charter of Fundamental Rights and at the consequences of the decision to change in some ways the treatment of foreign and security policy and justice and judicial co-operation which are currently within the so-called pillars 2 and 3.

Part 1 of the treaty, which is in about 40 small pages of very widely spaced text, covers all the key elements of the European Union: the definition and the objectives of the Union; the rights of citizens of the Union; the Union's competences and responsibilities and the exercise of those competences; its institutions; its finances; its members; and the specific provisions for the common foreign and security policy.

When I spoke in the House in September last year I emphasised how very clear and readable that text is. On Saturday I read the text through again. I started at 4.5 p.m. and I finished in good time before "Final Score" at 4.30 p.m. I believe that we have a much better text from the point of view of the citizen. The text is much clearer and to the point.

Part 1 opens with the values and objectives of the Union, including the promotion of peace and offering its citizens an area of freedom, security and justice without internal frontiers and a single market where competition is free and undistorted. Those are very wide phrases, but Articles 1 to 5 capture the appeal of the Union which has seen so many millions of people seeking and now achieving the membership of 25 countries and by 2007 about 480 million people. Those articles, as the Minister has pointed out, reiterate the requirement that the Union shall respect the national identities of the member states and the essential state functions of those states.

The competences and responsibilities and the exercise of the competences were formerly scattered about in the treaties. They are now brought together in Articles 9 to 17 and in Articles 32 to 38. That text makes it explicit that the competences not conferred on the Union in the Constitutional Treaty remain with the member states. That point has been mentioned in the debate. It is an important point which needs to be stressed. The competences of the Union are, for the first time, simply listed. They existed, but they are now simply listed: the existing exclusive competences such as monetary policy for those member states that have adopted the euro, areas of shared competence such as environment and transport and areas where the Union may take supporting, co-ordinating or complementary action, for example on industry.

The treaty also classifies legislation in a slightly different way. It classifies it into European laws or European framework laws, which are broadly what were directives—they leave member states free to choose the means—and European regulations which are broadly similar to our own subsidiary legislation. I am glad to see that it is now proposed in the treaty that the substantive law could require that the delegated legislation may enter into force only if there is no objection from the European Parliament or the Council of Ministers within a fixed period. I hope that that power, if adopted, will be widely used.

Part 1 also contains the articles about the European institutions. That is a response to enlargement. Looking at the articles it is difficult to be against them; they appear to be relatively straightforward. Instead of the presidency of the European Council changing every six months, the president will be in office for two and a half years, renewable once. From 1 November 2009, which is a long time ahead, the Commission will consist of a president, a vice-president and 13 members with some non-voting members and the Union minister of foreign affairs—however he is finally described—will combine the current role of the special representative and the Commission vice-president. The Council of Ministers will meet in public when legislating. That appears to be a fairly evident package to meet changes in the nature and size of the Union. I know that academics and politicians are extremely interested in institutions. They are important, although at times I doubt whether these useful and necessary changes will cause a great deal of interest or concern to the public.

All decisions affecting the military or defence will be taken unanimously; decisions relating to foreign policy will become common policy only when adopted unanimously, although some implementing decisions can be taken by qualified majority voting. I hope—this is a new point—that the Minister will be good enough to look at the very latest text that has come round from the Irish presidency, which deals with this point. Speaking from memory, I believe it is Article 201. In any event, in this area the policy of the European Union is tightly constrained.

Finally, I emphasise that finance is covered by this part also, where the EU resources remain capped and can be changed only by unanimity—in our case by the British Parliament. In practice, the total European expenditure has been well below the limit and represents just over 2 per cent of public expenditure in the Union.

It is true that some of us did not expect to see the Charter of Fundamental Rights in the treaty, but I have noted very carefully the wording which says that the area of application of Union law is not extended beyond the powers of the Union or any new power or task of the Union established. We have to think carefully about how much we rely on that. I have tried to deal with many important points in rather a short time, but my conclusion is that this matter justifies a request to Parliament and to the British people to approve the draft treaty if it is agreed by the heads of state and government.

Photo of Baroness Noakes Baroness Noakes Shadow Minister, Economic Affairs

My Lords, I rise with some trepidation to speak on European matters and on the draft constitution. I am deeply conscious that I am surrounded by many noble Lords who know much more about them than I do. I apologise in advance if I reveal some ignorance of the way in which Europe or the draft constitution work.

I intend to cover my more natural territory, which is taxation and economic policy. One could see those as a narrow set of areas in relation to the draft constitution which would be true because of the vastly complex issues that arise in relation to it. But taxation and economic policy are not narrow areas for our country, our citizens and our businesses. So I make no apology for trying to deal with those issues today. The Government have often asserted that taxation is a red line area. For example, the Prime Minister said:

"Issues to do with taxation . . . will remain the prerogative of our national Government and Parliament".—[Hansard, Commons, 25/6/03; col. 707.]

But such statements, like so many that relate to the draft constitution are at best harmless spin and at worst positively misleading.

Article 93 of the Treaty on European Union deals explicitly with harmonisation of indirect taxation and that requires unanimity. To date, we have managed to keep several of our very important derogations, despite a number of attempts by the Commission to take them away from us. We have our veto and it is clearly important that it is retained. But there is no specific reference to direct taxation in Article 93 or elsewhere in the treaty, so there is no explicit veto at present. When the Prime Minister said a few weeks ago that:

"The national veto must remain in areas such as taxation".—[Hansard, Commons, 20/4/04; col. 155.]

he could not have been referring to direct taxation since no veto exists. He was perhaps using "veto" in a colloquial sense but that is, in my view, misleading.

It is generally argued in relation to direct taxation that the fact that there is no reference in the EU treaty means that there is no competence for the EU and there being no competence there is no need for a veto. That is very nice theory but it is not the position in practice, which is why accepting the draft constitution does not achieve the strong defence of the UK's position in relation to direct taxation that the Government would have us believe. The commission has long had ambitions to get its hands on direct taxation. It has tried several times since the 1970s to introduce directives to harmonise various aspects of income tax and corporation tax. Fortunately, it has failed to date but it has not given up. One example is its formal opinion on the draft constitution last year, which made clear its ambitions for a more precise demarcation of the Union's authority in relation to taxation. For "more precise demarcation" we have to read "more power to the commission".

It is against this backdrop that the UK Government's apparent defence of their taxation powers needs to be examined. The most important current threat to our taxation autonomy is the European Court of Justice. The lack of reference to direct taxation in the EU treaty would reasonably lead to the conclusion that the ECJ has no role. But the ECJ has embarked on a stealthy extension of its jurisdiction, under the cover of enforcing fundamental freedoms in EU law. In particular, Article 43, which deals with the freedom of establishment, has been used as a Trojan horse to attack national tax laws. The ECJ has only really got going on this in the past 10 years and there have been several cases where UK tax law has been found to be in breach of EU law, forcing a change in our law. It started with a case brought by ICI and, for the sake of form, I declare an interest as a director of that company. It was a case on consortium relief that cost British taxpayers quite a lot of money. Recently, the Chancellor had to devote a great chunk of this year's Finance Bill to introducing a raft of bureaucratic and costly intra-UK transfer pricing rules following the German case of Lankhorst Hohorst. Most professional advisers think that a lot more UK tax law will need to change in the wake of that decision and there are many other cases in the pipeline.

Against that background, the lack of formal competence of the EU in direct taxation matters looks like a side show. If the Government are serious about taxation remaining a prerogative of the government and Parliament it is not a question of defending existing EU treaty provisions. It actually requires a change to the treaty to ensure that the ECJ cannot interfere through the back door in matters for which they have no entry rights through the front door.

The draft constitution does not appear to tackle tax directly and that is what the Government appear to be pledging to uphold. But there is one area of the draft constitution that holds massive dangers both to our fiscal freedoms and to our economic freedoms. Article 14 deals with the co-ordination of the economic policies of member states—my noble friend Lord Waddington has already referred to this. This is another Trojan horse. Economic policy cannot be separated from taxation policy. It would, I assume, cover the overall level of taxation and quite possibly some detailed provisions. The very lack of definition of what is meant by "co-ordination of economic policy" should be a cause for major concern.

Article 14 is not merely for those who want to join the euro-zone. That club already has economic rules, as we know. With the growth and stability pact they are observed in the breach as much as in the observance. Euro-zone countries should already be on notice that they are on the slippery path to tax harmonisation. Former commissioner Solbez is reported to have said that member states within the euro-zone cannot be allowed to pursue whatever tax and spending policies they want after joining the euro. The danger in Article 14 is that the rest of Europe, and in particular the UK, will be sucked into that abyss.

I apologise for taking so much of your Lordships' time on the apparently abstruse subject of taxation. The Government's talk of red lines in taxation is misleading. Our country is already in danger of losing taxation powers through existing treaty rules and will be further at risk if Article 14 is allowed to remain in the final constitution. What we actually need is a robust and unequivocal statement of the commission's lack of competence in relation to national taxation matters, coupled with the ECJ being firmly removed from this territory. Anything less than that will show that the Government's red line on taxation is no more than a figment of their imagination.

Photo of Baroness Park of Monmouth Baroness Park of Monmouth Conservative

My Lords, we should be more than ever concerned about the three provisions in the draft treaty which threaten our right of national independent decision in the field of defence and foreign affairs. Article III-195.3 says that,

"The Union shall conduct the common foreign and security policy by . . . adopting European decisions on . . . [the] implementation of actions and positions".

The passerelle clause, Article 39.8, which our committee has urged the Government to resist, and I am sure that they will do so, gives the Council of Ministers power to decide unanimously to act by QMV. Finally Article III-201.2 says that:

"The Council of Ministers shall act by qualified majority . . . when adopting any European decision implementing a Union action or position.

This last article presents a real problem and a real threat to our power to dispose of our Armed Forces and to pursue our own national defence policy. Under Mr Solana, the EU Council of Ministers has adopted several common strategies, on Russia, for instance, and very recently on terrorism. These express general principles that are, not unnaturally, unanimously approved. It is not much good, however, to have a veto on defence and foreign affairs if that veto can be nullified by the simple formula that implementation of any common strategy will be by QMV.

I raise this issue in particular because of the implications for our defence resources and capabilities and for the management of relations with other states in the field of secret intelligence. Of the common strategy on terrorism, which was promulgated late last year, we were originally told that the Solana security doctrine would not be part of the treaty. It provides for robust intervention in countries where it is deemed necessary to stabilise a situation. Now this doctrine is recognised and presented as a common strategy, and therefore decisions on it will be by QMV. It provides generally, if we are to take Africa as an example, for an open-ended commitment of troops. And whose troops will form the largest contingent? Ours. Incidentally, the solidarity clause in the draft treaty Article 42 could oblige us to act anyway.

Mr Solana has secured approval for the apparent appointment of a counter-terrorism co-ordinator, working within the secretariat. New committee structures are to be put in place. There will be,

"an intelligence capacity on all aspects of the terrorist threat with a view to informing EU policy".

The further development of the relationship between Europe and the intelligence services is to be taken forward. Europol can usefully co-ordinate and use criminal intelligence, but any effort to require the product of the secret intelligence services—in our case SIS and MI5—to be made available to Europol, whose security procedures have been deeply flawed in the past, would be unacceptable. Bilateral exchanges work well. A requirement to produce sensitive intelligence on a dangerous target to a new EU entity could only produce a lowest common denominator result. The Council secretariat, which was reported earlier this year, I do not know with what truth, to have been bugged—the Russians and the Israelis were named as possible suspects by the press—would present equal difficulties as regards the protection of information. I may say that what is necessary for carrying out the Petersberg tasks is already provided by access to NATO information.

I am concerned that any facet of the terrorism strategy that leaves the power with the Council to make decisions by QMV because they are implementing a strategy, and which affect the disposal of our troops or intelligence, needs to be identified and resisted. Terror is an important issue, but it is likely to distort the workings of the enlarged Union. The strategy calls for new committee structures, for peer evaluation of national arrangements and, in discussing co-operation with third countries, advocates

"addressing counter-terrorism concerns into all relevant external assistance programmes".

The recent allocation of some generous EDF funding to the African Union to enable it to set up an African force capable of entering and stabilising destabilised countries—and the commitment made by the EU to provide, as well as per diem pay, logistical and communications help and transport, presumably air lift—is consonant with the new all-embracing terrorism doctrine.

It leads me, however, to a further concern. Mr Solana and a proposed foreign minister are to have yet more enormous power, and a portfolio which can only lead to the building of a very large empire. They will be responsible, not only for implementing decisions taken by unanimity in the field of foreign affairs and defence, but, wearing their terrorism hats, they will be free to act under QMV on terrorism. That will necessarily immensely extend their reach to include the use of national assets such as troops for robust intervention, and development aid money to enable the African Union to carry out peacekeeping operations, and also to respond to and work with the UN globally. I do not challenge any of those individual aims. I simply say that it is an awful lot for two men.

That, in turn, will affect our national external relations with the countries concerned and our political dialogue at all levels. Third countries will find all this fairly confusing, especially since not only the EU External Action Service but also individual member states speaking through their embassies—that is if we have any left—and no doubt also the UN, will be beating the same drum.

Most important, however, is the great juggernaut of committees and the largely uncontrolled power which we shall be ceding to Mr Solana and his foreign/defence/development aid/intelligence co-ordinator Minister, and now his terrorism co-ordinator. What will all this cost, and where are we all to find the skilled people necessary to fill those committees?

Meanwhile, a programme to help Russia dispose of her vast quantities of WMD—notably 40 tonnes of chemical weapons—has been generously funded for at least eight years with almost no result, except for some nice new roads in Russia.

I recognise that terrorism is an important issue that must concern us all. There must be value in, for instance, co-ordinated police work through Europol. But the common strategy on terror is likely to prove a very expensive juggernaut. I urge the Government to establish clearly that action on terrorism involving the use of scarce national resources, particularly military and intelligence resources, at the level of the high representative and/or the foreign defence Minister, can be taken by unanimity only. I am, in any case, uneasy about the immense power these two men will have in areas of vital national concern. Foreign affairs and defence are quite enough: to add action on terrorism and the important area of development aid is simply impossible.

I have another concern for the future which affects the treaty. There are now 25 member states, and we are told the treaty is essential if it is all to work. But that is not the end. We are looking at the preparation for accession, through European partnerships, of six countries in the western Balkans. All are being prepared to apply the infinitely complex acquis, with the eventual object of becoming members of the EU. There are also Turkey, Bulgaria and Romania to come, and it seems that the Ukraine, Moldova, Armenia and other former members of the Soviet Union will also eventually be considered as candidates for entry. Should we not pause for at least ten years, meanwhile giving these countries the same close and useful economic relationship as members of the Barcelona process enjoy? It is unrealistic to suppose that Albania, for instance, has the people and the skills to create a sophisticated, uniform justice system comparable with any member of the Union.

I would hope to see a period of quiet consolidation within the EU of Poland, Hungary and the other new entrants, so that they can begin to make their own valuable contribution to Europe, to which they have returned thanks to the steadfast presence of NATO and to the eventual collapse of the Soviet system. These countries have been for many years the victims of an over-centralised, inefficient but pervasive bureaucracy, as well as a ruthless dictatorship. They ought now to be given time to make their own particular mark in the EU, before the system gets indigestion from having to take in any more countries. Moreover, they are entitled to a view on that, and a veto, as we are, and may need it more. We should not necessarily regard QMV as the best way to govern. It is simply the most convenient for the bureaucrats.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch Conservative

My Lords, over the past few years there has been quite a lot of national debate as to whether or not we should join the European single currency and now the proposed new constitution is swimming into public consciousness. But there has been very little discussion about our present relationship with the European Union, which most people in this country do not really understand at all, although they rightly do not like what they do understand.

Yet the Government's main line of argument in support of the constitution—and we heard it this afternoon from the Minister—goes roughly as follows: "This is nothing new. The Conservatives gave away much more of our sovereignty when they signed up in 1972 to what has become the EU, and when they later passed the Single European Act and the Maastricht and Amsterdam Treaties. So the proposed constitution is really only a tidying-up exercise, and we cannot see what the fuss is about".

One cannot really judge the truth of this statement unless one understands what has already been given away, and set that against the proposed constitution. So I thought I would put the briefest of summaries on the record in your Lordships' House this evening. It is some years since that has been done.

Before I do so, I really must expose the fallacy of the Government and Europhile claim that because some aspects—indeed, many aspects—of the proposed constitution are not new, since they are already in the existing treaties, that means we do not have to worry about them: they must be acceptable to the British people. This argument does not wash, because hardly any aspect of our present relationship has been explained to the people. As the debate on the constitution proceeds, they are therefore free to say "We do not care if some theft of our sovereignty is already in the treaties. We still do not like it, and we want it back".

I very much hope that this growing awareness on the part of the people will extend to a knowledge of just how far their sovereignty has indeed already been betrayed by their political masters over the past 32 years. I say this because there are at least two fundamental principles which underpin our constitution, our sovereignty, our democracy. The first is the hard-won right of the British people to elect and dismiss those who make their laws. The second is that the people have given Parliament the power to make all their laws for them, but they have not given Parliament the permission to give that power away.

I submit that both those principles, for which over the centuries millions have willingly given up their lives, already stand deeply betrayed by our present membership of the European Union. It is essential to remember that the people's pact is with Parliament; it is not with the executive or government of the day. The people elect and dismiss Members of Parliament once every four or five years, and our government are, of course, formed out of a majority of elected MPs. But only some 60 per cent of the electorate now bother to vote in general elections, and modern governments are supported by only some 40 per cent of those who vote, or 24 per cent of the electorate. I submit, therefore, that these temporary governments, always empowered by a minority of the people, do not have the right to break the great pacts upon which our sovereignty rests. Yet that is just what they have been doing for the past 32 years.

So just how bad is the present situation? To what extent could the proposed constitution be fairly described as a "tidying-up exercise"? The detailed process of how huge areas of our national life have already been gradually handed over to control from Brussels in the various treaty amendments, and for which this Parliament has already become a rubber stamp, is to be found in Written Answers in your Lordships' Hansard for 10 July 2003, at cols. 50–51, and for 26 April 2004, at cols. 72–73. Put very broadly, these areas include all of our commerce and industry; all our social and labour policy; our environment, including our agriculture and fish; and our foreign aid.

By "control from Brussels" I mean of course the system whereby our Government, with 11.5 per cent of the votes, can be outvoted in the Council of Ministers. If they agree or are outvoted on a new law in all those areas, then we in this Parliament must put it into British law on pain of unlimited fines in the Luxembourg so-called Court. That is what is described in Euro-speak as the "democratic deficit", and that is why I say we have become a rubber stamp.

Our foreign trade relations are in an even worse category because the Commission itself negotiates those on our behalf. So in this area the EU could already be said to have its own legal personality, to which I shall return. In addition, laws affecting our justice and home affairs and our foreign and security policy, if they are agreed by the executive in Brussels, must also be rubber-stamped by Parliament here. If we do not enact new laws in these areas, such as the recent and infamous EU arrest warrant, we would not be subject to unlimited fines, but we would be in breach of our treaty obligations. This, of course, is a far more horrifying prospect than a fine to our political classes in their diplomatic cocktail parties and so on; a fine, after all, is paid by the people. It is not surprising that no law agreed or passed in Brussels has ever been successfully overturned by Parliament. Indeed, the 1972 Act made it clear that that was to be the case.

So that is a very brief summary of where we are without the proposed constitution. I suppose that you can call it a "tidying-up exercise" if you admit that it sweeps the rest of our sovereignty under the Brussels carpet, which of course it does.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Shadow Minister, Foreign & Commonwealth Affairs

My Lords, did I follow the noble Lord in his suggestion that the 1972 Act clearly established the primacy of Community law?

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch Conservative

Absolutely, my Lords, yes. If the noble Lord cares to read our debate on 27 June 2003 he will see that I read out the treaty clauses so that they should be on the record in your Lordships' House. They said precisely that. However, I would remind the noble Lord that the Prime Minister of the day, Mr Edward Heath, said that no essential sovereignty was being given away, and the subsequent Prime Minister, Mr Harold Wilson, held a referendum in which he assured us that we were merely talking about staying in a Common Market.

Other noble Lords have dealt with various features of this constitution. I would single out two which seem to me the most important. First, as other noble Lords have said, it grants the EU its own legal personality superior to that of the member states. There is no longer even the bogus pretence that the EU is an arrangement between sovereign states. Once the constitution is agreed, the EU and qualified majority voting in the Council of Ministers become sovereign. The EU flag, which at the moment is flown as pure advertising, becomes the flag of a new megastate. The EU anthem becomes its official anthem. Alas, poor Beethoven.

The other feature that has limitless scope for judicial activism by the Luxembourg Court is the inclusion of the Charter of Fundamental Rights in the treaty. I remind your Lordships that Mr Vaz, the then Europe Minister, said that that would have no more status than the Beano. That remains to be seen.

Those two features alone will ensure that the Prime Minister's famous red lines will soon be dissipated. Indeed, his red line on tax is already breached, as my noble friend Lady Noakes has so expertly revealed, as any noble Lord who cares to read our Unstarred Question on 25 February 2004 will readily appreciate. Briefly, that is because although the tax provisions, being Clauses 90 to 93 of the TEC, still give us the veto over indirect taxation, the treaties appear to be silent on direct taxation, as my noble friend Lady Noakes has said. That is, until you examine the single market provisions.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench

My Lords, I thank the noble Lord for giving way. He and the noble Baroness, Lady Noakes, seem to be propagating a new doctrine—perhaps he will elucidate it—that areas that are not covered in the treaty are axiomatically covered in the treaty.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch Conservative

My Lords, I do not think I was saying that. I was merely saying that direct taxation is not explicitly mentioned in the treaty and that the Court is free to decide that the European Union is free to legislate in the area to which I was about to come. If the noble Lord will bear with me a second, I will explain. I think that my noble friend has already explained how this is happening for corporation tax. My contention is that, potentially, that is open to all direct tax.

If you examine the single market provisions, you will see that they forbid discrimination among member states and giving "aids"—that is the word in the treaties—to one's own nationals and corporations. Articles 43 and 44 of the TEC repay study to get the full flavour of how our direct tax policy has already been surreptitiously put within the reach of the corrupt octopus in Brussels. I do not say that it has happened yet, but it is there in the treaty. When the Commission wishes to propose and the court wishes to decide, our existing direct tax policy is at stake.

I conclude by thanking the Government for conceding a referendum on this great matter. That decision has saved some of us quite a lot of work. We Euro-realists now look forward to winning that referendum and rejecting whatever constitution eventually emerges from the secret conclaves of the Eurocrats. I trust that, in the process, the British people will finally come to appreciate the mortal danger in which their democracy already stands and decide to save it for those who come after. I dare to hope, too, that the Conservative Party will then come to its senses and, as a sinner that repenteth, lead our nation back to freedom. Yes, indeed, my Lords, I am always the optimist.

Photo of Lord Monson Lord Monson Crossbench

My Lords, it is always a pleasure to follow the noble Lord. If I may, I shall preface my comments on the draft constitution by saying how interesting it has been to observe the shift in informed opinion, as distinct from mass opinion, concerning the EU in recent years—the gradual disillusionment of formerly uncritical and wholehearted Euro-enthusiasts. Gisela Stuart is a case in point. The Euro-enthusiasts must be foaming at the mouth that they cannot realistically accuse her of being a little Englander; eine kleine Bayerin does not have quite the same resonance.

Publications such as the Financial Times and the Economist also have considerably changed their tunes, as the noble Lord, Lord Howell, indicated. Indeed, only the other day the Economist described the EU's policy of subsidising sugar producers as both economically stupid and morally indefensible. That is just one example. One suspects that it is not only many of the EU's actual policies but the disgraceful chronic tolerance of widespread fraud and fiddling, coupled with shameful attempts to intimidate and suppress whistle-blowers, that have generated this disillusionment.

I turn now to the draft constitution. There is not time to enumerate every field in which it has gone wrong, nor the one or two fields where the proposals are not unreasonable and, indeed, possibly advantageous. I can see that there are one or two. Suffice it to say that quite the worst aspect of the constitution is the extension of QMV to 40 new areas. I never supported either the Single European Act or the Maastricht Treaty so I cannot be accused of inconsistency here. This extension threatens among other things our right to set our own rates of indirect taxation and company taxation—I am neutral on direct taxation; other noble Lords may well be right on that one—and our VAT exemptions, as the noble Lord, Lord Waddington, pointed out, and, even more important, our existing criminal and civil justice system, in consequence of the obligation to "approximate", which I interpret as meaning "broadly harmonise", laws and procedures.

It may not be realised that under the Irish presidency the draft on harmonisation, or broad harmonisation, of criminal and civil justice has been considerably tightened up. I wonder whether all noble Lords have taken that on board. The new bland-sounding competences over energy could be a Trojan horse threatening our North Sea oil, although the noble Baroness, Lady Symons, in her opening speech revealed that some safeguards have recently been secured in that area. Of course, we are very pleased indeed to hear that.

However, I should like to concentrate my brief speech upon what the noble Lord, Lord Hurd of Westwell, termed interference in the nooks and crannies of our everyday lives. That must have been quoted at least 200 times in speeches in your Lordships' House and elsewhere, but no matter. It is as valid now as it ever was, and probably more valid. Most of this unjustified interference, which has nothing whatever to do with the free movement of goods, services and people, which is what the EC was originally all about, is already embodied in the allegedly sacrosanct acquis communautaire. It is a disgrace that no effort was made in earlier negotiations by this or any other government to repatriate some of the powers to the nation states, but one has to concede that it would be unrealistic to hope for any action at this late stage, if the treaty is to go through.

However, some relief from interference of that sort might be expected in respect of future legislation in the form of genuine subsidiarity. Of course, the whole concept of subsidiarity is insulting to any proud, ancient nation state in that it implies that the centre—in this case, Brussels—is the fount of all legitimate power, a small part of which it may graciously deign to devolve. All the same, it is better than nothing at all. But the so-called subsidiarity concessions in the draft treaty are derisory, indeed, laughable. Parliaments of one-third of the member states can object to a proposal, yes, but the Commission can then toss those objections into the dustbin.

Reverting to his normal Euro enthusiast mode, Quentin Peel, writing in the Financial Times of 6 May, asserted that,

"the draft constitution leaves the ultimate power in the hands of the member states, not any centralised institution".

How very wrong he is where subsidiarity is concerned.

I have two questions for the noble Baroness when she replies to the debate. In the short term can she give an assurance that the Government will insist upon teeth being put into the subsidiarity clauses to provide that where one-third or, better still if it is possible to achieve a quarter or a fifth, of national parliaments object to a proposal, the Commission will be obliged to bow to those objections and cannot toss them aside as the present draft treaty provides? In other words, I am calling for an additional red line. I was delighted to hear that the noble Lord, Lord Grenfell, also feels that the subsidiarity proposals ought to be toughened up somewhat.

In the longer term, will the noble Baroness urge her right honourable friends to press and press again for competences to be returned to the nation states where purely internal matters are concerned—a partial repeal of the acquis communautaire in other words, so that the proud nation states of Europe can have as much control of their internal affairs as do Delaware or North Dakota?

Photo of Lord Blackwell Lord Blackwell Conservative

My Lords, I am delighted that I am able to make my contribution to this debate without having to spend most of it making the argument for a referendum. Instead, like other noble Lords, I can move on to the substance regarding the consequences of the UK saying yes or no to what is proposed.

I predict that when the Prime Minister comes out of the IGC in June he will make two arguments regarding why he believes that the UK should say yes. First, he will say that it is safe to do so because he has succeeded in getting our red lines protected. Secondly, he will say that if we say no, it will be a disaster because, as the noble Baroness already said this afternoon, we shall be thrown to the sidelines of Europe. I believe that both of those arguments are wrong and are misstatements of the circumstances that we face. I shall discuss each of them in turn.

First, the argument about red lines is almost irrelevant to this debate because, not surprisingly as a tactical politician, the Prime Minister has drawn his red lines around the edge of what is largely agreed. To me and, I suspect, to others in this House it is not what is beyond those red lines that concerns me but what is already inside them in the current draft, which I believe constitute the final brick in moving the European Union from being a single European market to becoming a single European state. When you read through this constitution it is transparent that the structures are there to create the single European state: a single EU legal identity; a Commission as executive which is answerable under this constitution to the European Parliament not to the Council, and where the European Parliament is clearly identified as the direct democratic representation of the citizens of Europe; and where the nations are reduced to a position of voting by majority in what is effectively a senate, but where the Parliament and not the Council has the responsibility and authority to dismiss the Commission and appoint a new one.

So the structures of a single European state are there, and so, too, as many noble Lords have made clear, are the powers. There is a significant extension of shared competences under this proposed constitution, and competences which can be exercised through qualified majority voting under an EU legal structure which makes those laws pass directly into UK law. It is not only a question of the structures and the powers—as others have said, many of the symbols of an EU state are already there in this constitution to back up the state as it emerges.

It is only in the UK that the Government attempt to deny that what this constitution is about is creating the final stage of political union in Europe. It is only in this country that that is even an issue of argument. In every other country that is the starting point for these debates. I am very happy in this Chamber and elsewhere to debate the pros and cons of whether we want to be part of that political union, but I think we should start by accepting the reality that this is what this constitution is about whatever some noble Lords may wish to believe.

The second argument that the Prime Minister makes is that, whatever opponents of the constitution say, it would be a disaster if we were not part of what Europe as a whole is to sign up to. That is also a nonsense. We are not currently part of what is proposed by the constitution. The big decision would be to sign up to it. The big decision is not whether to veto it and maintain the status quo; the argument has been made for this country, as for every other country, as to why we should want to sign up to it. I do not accept the argument that we need to transfer more sovereignty to Europe because of enlargement. That is a chicken-and-egg argument. We only need to make it easier for Europe to take more decisions in more areas if we want to give it the kind of powers proposed in the constitution. If we wanted to maintain Europe's status as an economic and trading area with plenty of intergovernmental co-operation, there is no need to transfer more powers to Europe so that it can make more decisions more quickly, because we do not want it to take those decisions in the first place. It is a chicken-and-egg argument that does not make the case.

In reality, if we say "no" to this treaty, either in negotiations or in the subsequent referendum, we will first keep the status quo and then create the opportunity to negotiate a new relationship with Europe—not from a point of weakness, but from maximum strength, because it is clear that several other states in Europe do want to proceed with political union. Good luck to them, but they need our permission to do so. Therefore, we would have maximum negotiating strength to agree the kind of European Union that suits us, rather than to have to take the suit of clothes that others have designed for their own purposes. We should seize that as a great opportunity for this country finally to achieve the kind of relationship within Europe that we want.

The disaster would be if we went into this constitution, not if we stayed out. It would be a disaster because, among other reasons, it is a blueprint to move the European Union from a free trade area to a centrally managed, high cost, social market economy. That is at the heart of the treaty. The objective is set out in Article 3, which the noble Lord, Lord Williamson, quoted with approbation. I am more focused on the fact that it makes clear that the union is working for "a social market economy". I am not sure that I or the population signed up to be a social market economy, which will be,

"aiming at . . . social progress . . . combat social exclusion and discrimination . . . promote social justice and protection", and,

"solidarity between generations", and so on. This is a European Union constitution embedded in Article 3, which contains a set of objectives which, if interpreted by a European Court, would allow all kinds of decisions to be forced on this country that come from a particular political perspective and not one that this country has ever signed up to or that this Government have the power to say that this country should always be signed up to.

Against that objective one must recognise the significance of the clauses quoted in Article 14 that expand the scope for economic co-ordination and indeed the requirement for countries, whether or not in the euro, to be part of economic co-ordination. We should add to that the Charter of Fundamental Rights, which, as opposed to being a charter that sets out individual rights, is largely a charter about setting out collectivist rights of EU-approved institutions that are part of the social market. Therefore, there is a set of clauses under the title of "Solidarity", which refer to,

"workers' rights . . . collective bargaining and action . . . the right to limitation of maximum working hours . . . entitlement to social security benefits and social services", and even state that,

"the Union recognises and respects the right to social and housing assistance so as to ensure a decent existence for all those who lack sufficient resources".

We are opening up a panacea for all those who believe in creating a social state—to use the words of the constitution, to strike down any action that any government might take that comes from an ideology based on free markets and individual responsibility and to challenge that as being incompatible with a constitution which we have signed up to. That is not only not wanted by the people of this country, but it would be a disaster for this country, because it would lock us into, against our will, a high cost, protectionist model of how to run the economy—a model that has already been disastrous on much of the Continent. It is the failure of many European countries to move from the old industries into new services at the speed that the UK did, which has led to their static productivity and low growth. That has led them to try to protect their uncompetitive economic position, to create inflexible labour markets, to try to protect the position of those currently employed and to hold back the tides of global competition. It is that mind set which will ultimately threaten the bankruptcy of the euro system under the strains that will be imposed on it, if courts interpret these articles as unlimited rights to give benefits to all kinds of people without ever asking where the wealth will come from to pay for those costs.

The last thing that the UK wants is to be locked into a constitution that forces us into that grim future where our economic policy and our social policy is dictated by a political model to which we do not, I hope, subscribe. Even membership of the single market should be open to question, as the noble Lord, Lord Harrison, mentioned. Yes, there are risks to being outside the single market, but we must recognise that it is an issue that should now be genuinely debated, because tariffs across the world have now come down considerably—we no longer have to be in the single market to enjoy such low tariffs. Tariffs across the GATT area are now less than 4 per cent; but, the single market has become the engine, not of free trade, but of regulation. It is that regulation, empowered by the desire to protect European industry, which is putting up our costs and destroying our competitiveness. We need a serious debate about the pros and cons of being in the single market, although there are benefits to being inside a trading area, which does need to be the same as the single market.

So there are alternatives. We have to consider them, because the prospects of signing up to the constitution are so disastrous. I shall not spend time going through all of those as the noble Lord, Lord Harrison, did an excellent job of summarising some of the institutional arrangements that we might adopt and they sounded extremely attractive as he listed them.

In summary, this is an opportunity for us to achieve the kind of relationship that we want—no longer to be forced into a Europe of two speeds, where we are dragged along behind, but, instead, to create a Europe of two destinations, where those who want to proceed into a single European state and those who, like us, want to remain independent states within a Europe of nation states, do so. I have no doubt that we should stay in the latter group and the sooner that we make that clear to our EU neighbours and negotiate an EU that suits us, on our terms, the better.

Photo of Lord Vinson Lord Vinson Conservative

My Lords, it is always a great privilege to follow the noble Lord, Lord Blackwell. I would like to return briefly to the subject raised by the noble Lord, Lord Pearson—the question of the democratic deficit. Whatever the wider intent of the new EU constitution, few would argue that it will not remove, over many areas, our competence, as a nation, to govern ourselves.

I, like many, believe that that process has already gone too far and what we should be talking about is making subsidiarity a reality, not just a promise. I am indeed heartened to see that the Conservative Party has made that broad concept part of its manifesto. I am equally not surprised to see that the Liberal Democrat Party continues to wish to give away the governance of this country. Manifestly, the Liberal Democrats would be so hopeless in government that they are only too delighted to see other politicians take our decisions for us.

Leaving aside political banter, I should like to reflect for a moment on what makes democracy work. Why democracy works is hard to define. It is complex and, in reality, as our own electoral system shows, it is not just government by those who have achieved most votes but government by the consent of all. However bad our least-worst system of democracy is, it acts as a safety valve and, above all, allows the electorate to remove from power those who have either taxed or regulated them, they believe, unreasonably.

Ever-closer union with Europe works in the opposite direction. Increasingly, we have taxation without representation and its twin, regulation without rectification. That is the window through which the general public see the European Union. To them it is bureaucratic, pedantic and unnecessary law making. The majestic concept of a new European order, sacrificing national ambition for a wider European good, cuts increasingly little ice with our disillusioned electorate, as every poll shows. They do not like what they see.

What is more, one glance at football crowds shows that nationalism is far from dead. "Circuses" may be the popular outlets in times of prosperity, but in adversity the electorate would look for the ability to control those who govern, tax and regulate them. The football crowds will want their interests put first; they do not want to be governed by strangers. They could turn ugly when bread comes before circuses.

Our existing form of democracy may be imperfect, but it has given us social and political stability, the essential foundations of economic prosperity. To predicate future political stability on the past would be foolish. Our existing democratic framework will be stretched representationally from one MP to 65,000 voters to one Euro MP to approximately three-quarters of a million voters.

The democratic elastic will snap, because the new arrangements carry no sensible framework for the rectification of bad taxes, bad laws and bad regulations. For that reason, if we want even the existing EU framework to hold, we should be talking about real subsidiarity and the substantial repatriation of powers at national level—genuine reform, as expressed and advocated so well by the noble Lord, Lord Biffen.

It is deeply important to recognise that the democratic deficit is even more inherent in this new EU constitution with its wider powers. As framed it is not responsive to the wishes of our electorate and the democratic processes that we are used to. The conventional political safety valves are being sealed up by a rotten, and often corrupt and self-seeking, European elite. This so-called constitutional reform will make matters worse.

In conclusion, I shall quote from the profound work on the subject by Professor Larry Sidenthorpe, of Oxford University. He argues that the rule of law is reliable and durable only when it is rooted in popular habits and attitudes. That is the problem facing federal Europe. He argues that law making is very different from the problem facing economists, bankers and industrialists:

"The creation of new wants may be the key to economic growth but by contrast creating a culture of consent is a far more precarious undertaking for such things depend on the degree of self-control a society is able to generate and sustain".

He further states:

"The danger of premature federalism in Europe, the rush for political integration which turns federalism into little more than a mask for a unitary superstate, is that it could put at risk the complex texture of European societies. It is far from clear that they could long tolerate subordination under a central rule making agency which pitched its actions at the level of a common denominator".

Wise words, my Lords.

In our country we have an unwritten constitution, which, when it is changed slowly, has enabled us as a nation state to adapt and to grow without serious civil unrest. If the new EU constitution is ratified in anywhere near its present form, it will finally destroy our historic framework of self-government and the inherent democratic deficit in its structure will sadly sow the seeds of its own inevitable decline, bringing an end to the dream of a Europe at peace with itself. That is why this new constitution must be resisted and substituted by the only thing that will save Europe: genuine subsidiarity and the repatriation, not further surrender, of national powers. I hope that this debate will further that process.

Photo of Lord Willoughby de Broke Lord Willoughby de Broke Conservative

My Lords, I am grateful for the opportunity to debate this issue tonight, particularly as the Irish presidency has been giving the kiss of life to what at least some of us hoped was the moribund corpse of the constitution.

The unwelcome news of the kiss of life was given to us last Wednesday by the Minister, in response to a Starred Question by the noble Lord, Lord Grenfell. She stated then that,

"we are placing in the Library of the House copies of the presidency's proposals that were issued last week".—[Hansard, 5/5/04; col. 1105.]

As ever in the EU, what you see is not necessarily what you get. It now turns out that what the noble Baroness thought were presidency proposals and what she told us were presidency proposals were not presidency proposals at all. They were, apparently, as the Government's spinmeisters have now been telling us, purely "working documents" and,

"not in any way a fresh overall presidency proposal".

I can agree that it was not a fresh overall, but I am afraid that it looks like a presidency proposal, and a very unpalatable one at that. The non-presidency proposal contains 50 proposals on 130 pages. I was amazed and astonished, as I am sure other noble Lords were, to find that all those proposals moved powers from national parliaments to the Commission, and that every single proposal would increase the power of the Eurosalariat at the expense of national parliaments. How very surprising.

In foreign affairs, for example, under the non-proposals it is suggested that when deciding on a proposal from the Union Minister for Foreign Affairs, whoever that grandee may be, the Council shall act by QMV. That is provided in Article III-201 of annex 25, on page 68 of the non-proposals. It says that qualified majority voting must be used,

"when adopting, on a proposal from the Union Minister for Foreign Affairs, a European decision defining a Union action or position".

I have bad news on taxation for my noble friend Lady Noakes. Again the non-proposals propose that, although the Council appears to be required to act unanimously, as soon as it finds—that is the word in the document—that the measures it wishes to legislate against,

"do not affect the fiscal regimes of the Member States", it can act by QMV. Bang goes another red line.

I think that noble Lords will have got the message. In whatever area—justice, home affairs, foreign policy, economic policy or employment—the traffic is all one-way: to the unelected Eurocracy and away from the member states and their elected parliaments.

The repeated assertions by our Europhile friends that the constitution will give more power to national parliaments is what Touchstone in "As You Like It" called the "Lie Circumstantial" or even the "Lie Direct". I was surprised to hear the Minister and the noble Baroness, Lady Williams, last Wednesday engaging in a double act, agreeing that,

"there will be more power coming to national parliaments".—[Hansard, 5/5/04; col. 1107.]

The noble Lord, Lord Grenfell, made a valiant attempt to explain his committee's support for the yellow card system. However, the reality is clear: the current constitution says that if one-third of member parliaments object to a Commission proposal, the Commission must "review" its proposal; when it has reviewed the proposal, it is at perfect liberty to say, "Thank you very much for those interesting comments. Unfortunately, they seem to have found their way into the Commission wastepaper basket. By the way, don't slam the door on the way out".

I shall borrow the Prime Minister's brand of would-be cool rhetoric. It is kind of dumb to pretend that the draft constitution returns any power to member states. I am happy to give way to any noble Lord or noble Baroness who can give me an example of such a return of powers or competences to national parliaments. There are none, so I have not been interrupted. It is kind of dumb to pretend that we need the constitution to make the EU more efficient. How many Members of your Lordships' House believe that the weakness of the EU lies in its inability to enact regulations? The acquis runs to 97,000 pages. Over 100,000 regulations have been imported into UK law, yet we are asked to swallow the idea that we should allow the EU to pass even more laws in even more areas. The EU already contains the most highly taxed and highly regulated economies; now, the Eurocrats want the power to make things worse. Give me a break.

It is kind of dumb to pretend that the draft constitution does not give away more powers to the centre. The constitution will abolish the national veto in over 30 areas of policy. What is that, if it is not a surrender of power? The proposal for shared competences, of which the noble Lord, Lord Tomlinson, made such play, is a sham. The EU will have the absolute right, under the shared competences article, to legislate where and when it chooses. Member states can only pick up the crumbs. Under Article 17, the EU may, in order to attain its objectives, add to its powers over member states' elected governments by agreement with the Council of Ministers and the European Parliament. I underline the fact that, in doing that and extending its powers, the EU will not have to consult or refer to national parliaments; it can all be done under Article 17 in Brussels, between drinks and dinner—how very convenient. So much for returning powers to national parliaments.

Above all, it is kind of dumb, even for someone who thinks that he saw Jackie Milburn play football for Newcastle, to pretend that, if we say "No" to the constitution, we will be cast into economic and social darkness. Britain has the fourth largest economy in the world; it has the best trained and largest army in the European Union; and it gives £11 billion a year to the European Union budget. We run a huge annual trade deficit with the European Union. In whose interests would it be to start a tariff war?

No, my Lords, I believe that the British people will see the scare stories for what they are—kind of dumb—and will vote against the constitution when they get the chance.

Photo of Lord Stoddart of Swindon Lord Stoddart of Swindon Independent Labour

My Lords, it is always a great pleasure to follow the noble Lord, Lord Willoughby de Broke. Like him, I am grateful to the noble Baroness and the Government for allowing us a further debate on the constitution. I would be even more grateful to her, the Government and anybody else, if I believed that they would listen to anything that we said. Certainly, they did not listen to what we said in the Standing Committee—I attended every sitting, asked questions and spoke—and, when finished, the constitution was exactly the same as it was when we started. We had no effect, regardless of the effort that we put in in the Standing Committee.

There have been changes in the Government's attitude, not only in the past few weeks but over the years since the constitution was first mooted at Nice. First, there was total opposition—Vaz and his "Beano" comment, for example. Then, we had total acceptance. We were told that the constitution was only a tidying-up operation, and we were derided by the noble Baroness—she admits it—for wanting a referendum on the constitution. Then, in a complete volte-face, a referendum was conceded. Those are the changes of policy that we have seen during the whole saga. I am coming to understand that we cannot believe anything that the Government say. Certainly, we can have no confidence in the Government's competence when they behave in that fashion.

No sooner had the Government conceded a referendum on the existing constitution than the Irish Government came along with another big draft. The noble Lord, Lord Willoughby de Broke, has just referred to it and gave us some details. Having conceded that we will have a referendum, the Government must now examine a new draft from the Irish Government that, without any doubt, will increase the competences of the European Union at our expense. Yesterday's Guardian said:

"Brown to demand 25 EU treaty changes".

Could we know what they are, if that story is true? Will the noble Baroness tell us what changes Mr Brown would like to see made to the constitution before we agree to it? Will she give a guarantee that the so-called red lines will be maintained? They have not been in the past, and I hope that they will be on this occasion. In no circumstances should they be relaxed. Will the Government go even further to get powers returned and, as other noble Lords have asked, to get rid of the acquis communautaire and the 97,000 pages of legislation?

Like the noble Lord, Lord Willoughby de Broke, and others, I was startled by the claim that Britain would be marginalised and sidelined if we did not sign up to the constitution. What sort of talk is that, from people who are supposed to lead the country? Why have they so little confidence in the ability of this country to succeed in the world without belonging to some regional bloc? We have done it for hundreds of years in the past. Why have our present leaders no confidence in the British people to stand their ground, not in a regional backwater but in the wide, wide world. After all, we are, geographically speaking, just about the centre of the world. As the noble Lord, Lord Willoughby de Broke, said, we are the fourth largest economy in the world. We have the Commonwealth. If we had only developed that, instead of stopping in the morass of Europe's back yard, this country would thrive.

Then, of course, there is the other claim—the frightener—that, if we left the EU, 3 million jobs would be at stake. What nonsense that is. In the first place, we trade with the EU on a deficit of £5,000 million a year. EU countries would lose more jobs than we would, if they decided to put embargoes or restrictions on trade. They are not stupid; they will not do that, will they? In any event, they could not do so under international trade law. All that is a frightener. The Europhiles are always using it. They used in 1975, and they still think that they will frighten the people of this country.

In any event, if it is all about trade, why do we need a European government, two presidents, a parliament, a bureaucracy, a currency, an army, a legal personality, a foreign minister, a supreme court, a public prosecutor, a flag, an anthem and a Europe day? Why do we need all of that to trade with them? We manage to trade with 172 other countries without all that paraphernalia. Indeed, all those other countries trade with Europe without all that paraphernalia. So it is nonsense, is it not? It is complete and utter nonsense that 3 million jobs are at stake. We have lost a lot of jobs in various industries. Our manufacturing industry has been hurt by our being members of the European Union. So I wish that the Government, and everyone else, would stop that.

I do not know whether the BBC gets any grants from the European Commission, but its attitude to the European Union suggests that it does. Perhaps the noble Baroness can tell us whether it receives grants. At the weekend, the BBC wheeled out its resident Europhile—the noble Lord, Lord Heseltine, who I do not see in his place today to debate this matter. As usual, the BBC gave him twice as much coverage as it did to Mr Davidson who was putting the other point of view.

Of course, last Friday, the noble Lord, Lord Heseltine, was also on "Question Time". As usual, there were three Europhiles and only one person from UKIP. That is the attitude of the BBC all along. It simply does not understand that there is a large body of opinion in this country that is not only opposed to this constitution, but would also like to withdraw from the European Union altogether. It really is about time that the BBC woke up to what the public want and to do its duty as a public corporation. It should give fair weather and fair coverage to all aspects of the argument.

I hope that the BBC will do that as the referendum approaches, so that everyone will have a fair hearing. There should be no more breakfasts with the Europhiles, as in the 1975 referendum, so that it could sort out what lies it would tell during a particular day. Everyone knows my view of the European Union. We should never have got in. It is about time that we got out. I agree especially with the noble Lord, Lord Blackwell, when he said that to sign up to this constitution would be a disaster for this country. That is what we all want to avoid.

Photo of The Earl of Dundee The Earl of Dundee Conservative

My Lords, most of us may welcome the increased publicity and interest on this subject and the questions that these put. What is the purpose of a European Union of any size at any time? How should its larger affiliation be structured? I shall refer to three separate yet related forms of security and argue that their consistent interaction is what planning theory and practice should seek to achieve.

First, there is defence security and the maintenance of peace in Europe, and thus also assistance to world peace. Secondly, there is political and economic delivery towards and within the European Union's nation states. Thirdly—not least—there is the competence and well-being of families and communities throughout European Union member states.

No doubt the common factor among those three securities is economic stability. Certainly, for more than 50 years, it has proved to be the key to a successful European defence policy. The 1949 NATO Alliance could not have been formed had it not been preceded by the economic disbursement of Marshall aid in 1948. The Cold War would not have ended as it did in the 1980s had the arms race not come to exert an unacceptable level of pressure on the economies of the Soviet Union and Warsaw Pact states. What guidance therefore can be offered by the performance of NATO in Europe from 1949 until now?

The two different periods to be looked at should be the Cold War until 1989 and the conflict within the former Yugoslavia between 1991 and 1999. NATO's strategy during the Cold War may have been both unusual and successful in three respects. First, unlike the League of Nations between the world wars, it demonstrated how human rights could be backed up by force, and thus how within an effective defence policy idealism and pragmatism can be conjoined. Secondly, unlike most other powers throughout history, it involved the building up of arms for peace and containment rather than for war and aggression. And, thirdly, as indicated, it involved the agenda or philosophy shared by NATO member states that democracy and human rights are best preserved and advanced through economic stability.

NATO's mistakes during the conflict within the former Yugoslavia—in particular at the outset when it could have been controlled—are sometimes agreed, ironically enough, to have been a product of successful management during the Cold War. For 40 years, the focus had been on the containment of the Soviet Union and the Warsaw Pact states that formed its satellites. The control of regional instability had therefore not been a priority or even a necessity. As a result, NATO states distributed over the European Union, including the United States, were unused to confronting regional instability in the 1990s and were divided over and unsure of the best way to do so with regard to the former Yugoslavia.

Does the Minister agree that the prescription for NATO and Europe may be fairly clear now? Any new systems for EU defence and foreign policy should not undermine or duplicate the role of NATO where NATO states are also members of the EU. Yet, if an EU foreign policy is to be any worth, and at the same time NATO is not to be undermined, how is that balance to be adequately guaranteed within a single treaty?

My second theme is the desired aim of consistent political and economic delivery within the larger EU. No doubt a useful background to that is offered by the notion of subsidiarity. If that concept emphasises what national parliaments and executives together should deal with on their own, so that the EU in other respects can provide added value, it also implies a corollary. That is that through EU membership national parliaments should also aim to increase their influence over their own executives. Thus, in terms of subsidiarity, the wider EU ought to facilitate two beneficial and complementary impacts: the provision of added value without reducing national sovereignty and within nation states themselves the increase of parliamentary influence over executives.

No doubt such aspirations are already matched by some of the draft proposals. These include a new role for national parliaments within the wider EU and encouragement to them to scrutinise proposed European Union legislation. However, as the noble Lords, Lord Grenfell and Lord Monson, have implied, those expedients may only produce much frustration if procedures between national parliaments, the Commission and the Council are not now further clarified in the first place. Does the Minister agree with this caveat? If so, what clear-cut practices for voting will the Government advocate to protect the role of national parliaments and to handle disagreements between them and the Commission?

The third theme is confidence and well-being affecting families and communities throughout European member states. There is always a risk that within the new wider European Union, political and economic delivery will improve while the confidence of families and communities may not do so commensurately. Yet, this inconsistency, if it should obtain, might not so much reveal an obsession with material resources. Rather more, perhaps, it would reflect an ineptitude in handling them.

Certainly, the stronger a central bureaucracy, the more likely it is that funds will be prescribed and allocated for spending in an inflexible way. Nevertheless, improved practice and benefit will often more assuredly derive from flexible initiatives and partnerships at local and national levels. Not least does the challenge to all Europe's communities come from the problem of young people and from those of them who, as a result of drugs, difficulties at home and with school learning, require to be deterred, guided and inspired into constructive purpose and away from crime.

There is also the connection between well-being, cultural heritage and religion and the relevance of that connection to the wider Europe and its direction. Does the Minister agree that within current drafts this focus should be much more emphasised than it may have been hitherto? Does she also support the view, urged in a previous debate, that the preamble to the Convention should contain a general reference to God, as does the Polish constitution? It states,

"both to those who believe in God as a source of truth, justice, goodness and beauty, as well as to those not sharing such faith but respecting those universal values".

As today's debate has made plain, many of us have reservations about the current draft proposals. That apart, we should rejoice in what is now the reality of a wider Union and its triumph for peace, history and humanity.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Shadow Minister, Foreign & Commonwealth Affairs

My Lords, we have had two parallel debates in the past three hours, one on the proposed revisions to the treaty and one on the myths of Europe as a threat to England, in which the monsters of the German, now the Franco-German, threat are conjured up and in which honest Englishmen are consistently in danger of being outwitted by wily continentals.

The first debate is much more constructive and rational. It deals with practice and detail, and we need to take that further today and on later occasions. Sadly, however, it is necessary, as always, to wade through the second debate before we get there. Here there are horrors on our path and, as the noble Lord, Lord Pearson of Rannoch, put it, mortal threats to our democracy, from which the noble Lord would like, like a white knight, to "lead our nation back to freedom". We have to recognise that the nationalist tone of that narrative is a depiction of a lost world, an unchanging England, free Anglo-Saxons "girt by a silver sea". I recall that the Leader of the Official Opposition, Michael Howard, described the draft Constitutional Treaty as, "the greatest threat to the British constitution since the 17th century"—a wonderful overstatement, given that there was no British constitution until the end of the 17th century.

All constitutions are imperfect. Much comparison has been made with the United States' constitution in this exercise and how wonderful it is, with its Bill of Rights, but no one quite mentions that, when written, the US constitution also entrenched slavery within the United States—not an entirely perfect document.

We are asked to believe that the British constitution is desperately under threat. I would not go to the stake to defend the current British constitution. I certainly would not go to the stake over that aspect of the current British constitution that is the second Chamber, the form of which, after all, was initiated by a Liberal government in 1911 and, with luck, may possibly be completed by 2011. I would not want to go to the stake to defend the current House of Commons, either in its behaviour or its unrepresentative quality. We have to recognise the growth of popular disillusionment with the British constitution in this country.

We have the most over-centralised system of government in the developed world. The noble Lord, Lord Howell, attacked the centralisers of Brussels. However, he was, of course, a member of the government who did much to impose that degree of centralisation on Britain. The Constitutional Treaty is an imperfect product of an imperfect, even if disappointing, convention. It is not unacceptable. It is a necessary compromise among member governments. I agree with the noble Lord, Lord Biffen, that it is not a horse, it is a camel. If I were walking a long distance and were offered a lift but discovered that it was to be a lift on a camel rather than a horse, I think I would get off.

The character of international politics is, after all, one in which we have to work through multinational negotiation in a system of international organisations and international law. The depiction that the noble Lord, Lord Howell, gave us of a Britain being cowed by other governments—of us versus them and of foreigners conspiring against England—is not reflected in the way in which any British government have operated since the end of the Second World War. I recall with pleasure reading a number of articles over the years that the noble Lord, Lord Howell, has written about interdependence and globalisation. The Laeken declaration, which started off this convention, referred to,

"the need effectively to deal with the challenges that globalisation and interdependence create"— more open borders, global economic integration, the communications revolution, the world population explosion with its consequence in international migration and cross-border crime, all of which require a higher degree of co-operation, shared rules, even integration, among governments who are affected.

In Europe we live in a highly concentrated region. The whole of the European Union would fit into an area less than the United States east of the Mississippi, and that has consequences for the way in which we need to order our affairs. We no longer have a closed national economy and we no longer have an empire, even though I note that to the noble Lord, Lord Stoddart, that is a matter of great regret. We have achieved enlargement from—

Photo of Lord Stoddart of Swindon Lord Stoddart of Swindon Independent Labour

My Lords, I really do not know what grounds the noble Lord has for saying that. I referred to the fact that we had the Commonwealth, which is quite a different body from an empire.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Shadow Minister, Foreign & Commonwealth Affairs

My Lords, I stand corrected. I am sure that the noble Lord gets on very well with Mr Mugabe.

We have achieved the unification of the Continent, which is a massive achievement—25 member states, with some more to come, which gives us open borders and a free and united Europe, but that has certain consequences to which this treaty addresses itself. We have already transformed the European Union of 15. As I listened to some of today's speeches, I recalled having breakfast with a French official I have known for many years, who said, rather bitterly, that he felt that the old European community had now disappeared, that the Anglo-Saxons had taken over and were insisting on making sure that everything that was agreed was implemented throughout the European Union, and that he was not convinced that it was a good idea, and so forth. That is a very long way from the picture that is being presented to us.

As I listened to some members of the Conservative Party, I was thinking about an article that I read last week in the Herald Tribune about what is happening to liberal republicans within the American Republican Party. Some are fading away while others find themselves sliding towards the populist and nationalist right. After all, American nationalism, which the new right in the Republican Party so clearly represents, is resistant to international law as such, to international courts in principle, and to all external and multilateral constraints. It insists that America is right and that everyone else is wrong, and holds particular anger against the French.

English nationalism is directed at the European Union instead of the United Nations. I note from several speeches, including to my surprise that of the noble Lord, Lord Howell, that the European Court of Justice takes the place of the International Criminal Court and others as a particular threat to Englishness. I was even more puzzled to hear the noble Lord, Lord Howell, suggest in populist tones that political élites have led us to this. As a man of the people, a Texan Congressman may get away with attacking political élites in Washington more easily than Eton and Oxbridge scholars.

The proposals in the treaty require some detailed discussion. Qualified majority voting is one of the great symbolic issues of this entire exercise. But we all know that very few votes are taken in Councils of Ministers. Most decisions are taken by consensus. I do not know how often the British Government have been outvoted over the past five years, but I understand that it has happened on very few occasions, and never on a major issue. Nevertheless, this is seen to be a great symbolic issue.

I agree strongly with the noble Lord, Lord Hannay, on the lack of difference between the two different proposals for qualified majority voting on the table, but for the Spanish and for the Poles these are great symbolic issues of their standing within the European Union. Mrs Thatcher was persuaded by, among others, the noble Lord, Lord Williamson, to vote for the single European Act and thus a substantial extension of qualified majority voting because she recognised that as the European Community grew in numbers, so one did not want one awkward member state holding up the business that everyone else wanted to get on with. We have had that for a long time with France on the common agricultural policy. It was the behaviour of Greece during its first few years in the Community which was said to have most affected Mrs Thatcher. We have Malta, and we have Cyprus coming in. There are occasions when we want to move on by consensus rather than by absolute unanimity.

The question of the yellow card and national parliaments is important. I am half persuaded by the argument of the noble Lord, Lord Grenfell, that it may be that the yellow card is sufficient and that we do not need the red card. That is one of the most important areas as we move towards a final treaty. However, let us recognise that this has implications for the way in which the British Parliament organises itself. I think that this Chamber has handled European scrutiny better than the other place, and that one matter that this Parliament as a whole needs to discuss is how we can improve our joint scrutiny to ensure that, whether it is a yellow card or a red card, it is operated effectively.

The issue of subsidiarity also needs to be explored further. We need to think about the powers that are returned from the centre to national governments. Within the European convention there was an element, particularly some Members of the European Parliament, who still believe that the more that power is transferred from national governments to Brussels, the better things are. None of us here believes that and it is therefore very important to establish that powers can be returned from the centre to national governments.

Photo of Lord Willoughby de Broke Lord Willoughby de Broke Conservative

My Lords, I am sorry to interrupt the noble Lord. Can he give an example or make a suggestion, within any of the discussions on the draft treaty, or the meetings on the draft constitution, or even the Irish proposals, of a single power being returned to national parliaments?

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Shadow Minister, Foreign & Commonwealth Affairs

My Lords, I myself suggested during the Second Reading debate on the education Bill that we should ask in the treaty for a reversal of the decision of the European Court of Justice on the charging of university fees within the European Union. That seems to be a remarkable anomaly, not least because in the United States it is dealt with at state level.

We need further to discuss the issue of the foreign Minister, which is a compromise, while recognising that how the new post of foreign Minister develops will depend a great deal on the personality of the individual chosen and on how he or she works with national governments. The same applies to the new proposal for a president of the Council, although I agree strongly with those who say that a rotating six-monthly presidency in a European Union of 25 nations—and in particular a representative of the presidency who sees it as his or her task to go around from capital to capital consulting with each national government on how best to build a consensus at the next European Council—has now gone beyond the capability of any active member of any national government.

I am not entirely happy with what is being proposed about the future of the Commission. I am persuaded that we need an effective Commission, which means 15 or fewer commissioners. It is simply not manageable at present because each of the new member states thinks that it wants its own national commissioner. The myth of an all-powerful, malevolent Commission is one that we have to reject. In reality the Commission is weak and desperately in need of reform.

The noble Lord, Lord Blackwell, was extremely clear about Article 3.3 because it is one of the underlying issues. Do we want a Europe with a market economy which has a social dimension, or do we prefer the American free market model? Many of those who have spoken in this debate against the treaty strongly prefer the American free market model. I simply remind them that 25 per cent of the American population do not have health insurance; child mortality is higher in the United States than in any country in Europe; life expectancy is lower than in Britain; and they have unsustainable economic development. I am not sure that the British people would actually prefer that model.

Photo of Lord Blackwell Lord Blackwell Conservative

My Lords, does the noble Lord accept that the question is not simply whether we prefer it but whether the British people should have the right to choose which economy they prefer at this time and at a point in the future rather than having it bound into a constitution?

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Shadow Minister, Foreign & Commonwealth Affairs

My Lords, that will very likely become one of the issues around which the referendum campaign will revolve.

We will continue to debate this in the future; I must not detain your Lordships any longer. I simply say that this is not a perfect constitution, but it is an acceptable constitution. There is still room for negotiation. I hope that the Government will push for further clarification of where we are on subsidiarity but, in principle, I think that this is an acceptable approach.

Photo of Baroness Rawlings Baroness Rawlings Shadow Minister, International Affairs

My Lords, I, too, am grateful to the noble Baroness, Lady Symons of Vernham Dean, for introducing this very important debate today so clearly. It is always a privilege to contribute to these impressive debates and to follow the noble Lord, Lord Wallace of Saltaire. I feel very humble replying from our side after such a long list of well informed, distinguished speakers, with understandably strong feelings and strongly held opinions.

Today the European Union is undergoing still more important changes, as we have heard in the debate today. The central change, of course, is enlargement, which is very welcome and something for which we have always striven—indeed, it is very close to my own heart. It is an aim, as we heard from my noble friend Lord Howell of Guildford, in his eloquent opening speech, to which we attached great importance.

Enlargement, however, carries with it a need to reform, as was pointed out by the noble Lord, Lord Williamson of Horton, and a need to change the way the European Union works if it is to function effectively in the 21st century and to compete energetically with other successful economies such as in the United States of America, Asia and, now, China.

The exciting challenge of enlargement aside, the EU faces many ongoing problems to which several noble Lords referred: high social costs on business; over-regulation; limited economic growth; and strains on the budget. Reforms in these areas, everyone recognises, are needed if the European Union is to succeed, prosper and reconnect with its peoples.

A main objective, too, of the exercise was to shorten and simplify the treaties to make the EU more comprehensible and to bring it closer to the people. This fact was recognised at Laeken, from which all these proposals flowed. My noble friend Lord Brittan reminded us that with each enlargement, there has been more centralisation. It was interesting to hear from him how worried people were at the time of this enlargement that this would occur again.

The debate in which we are engaged is of fundamental importance to the future of this country and to the direction of the European Union. I hope that the momentous nature of the changes going on in Europe will serve to focus voters' minds on the issue and that they will turn out and use their vote in the European parliamentary elections on 10 June. I am sure that the Minister, too, would encourage this.

Let me turn briefly to the challenge from the noble Lord, Lord Tomlinson, to my noble friend Lord Howell of Guildford concerning new competences in the treaty. Page 18 of the report of the committee chaired by the noble Lord, Lord Grenfell, refers to many more than six competences. I shall not read them out at this late hour—they are all there for anyone to read. The report refers to new and extended competences.

Several noble Lords pointed out that the response to the challenge posed at Laeken has been to produce a document, something which many noble Lords have made clear they believe to be unsuited to the real needs of an enlarged Europe, the needs of Europe as it stands or its citizens. My noble friend Lord Monson said that it fails to address the key issues.

The noble Lords, Lord Tomlinson and Lord Maclennan, argued that the Constitutional Treaty is meant to be an agreement between nation states on how the European Union will be run. It confirms that the European Union is a union of nation states, each with their own elected government. And it confirms that the European Union is not a single state but an organisation of states that have decided to pool their sovereignty for shared benefits. We on these Benches welcome the Prime Minister's belated recognition that the Constitutional Treaty, when it is no longer in draft form, will be of such significance that the British people should decide on it. That is something for which the Conservative Party has long argued. Unfortunately, we fear that it was a U-turn not down to principle, but rather to an ad hoc political lurch.

Many noble Lords have recognised that further change is needed to make the EU more flexible and more responsive with a simpler structure. However, as my noble friend Lord Blackwell reiterated, what the European Union does not need is a binding constitution which does far too little to simplify the treaties and which effectively creates a single legal personality for the European Union, representing a huge step change in our relationship and moving towards a more centralised Europe and a less competitive one as a result, and one we should not sign up to.

My noble friend Lady Noakes raised the issue of taxation, which she is right to highlight so that it remains an area for member states to control. I am not sure that I can agree with my noble friend Lord Biffen who said in his stirring speech that the Single European Act should be reformed. It was always considered a Conservative success and one of Mrs Thatcher's, no less.

Many noble Lords are worried about the increasing judicial control over domestic affairs via the charter of fundamental rights and a European foreign Minister, all of which the constitution seems to feel are desirable. While we believe in working together in areas such as defence and immigration, where there is voluntary acceptance of the need to do so and of the benefits of doing so, to make this compulsory and straitjacketed by bureaucracy would be counterproductive.

We are all grateful to the noble Lord, Lord Grenfell, chairman of the European Union Committee, for the knowledge and expertise that he brings to this House. It was interesting to hear him stress how the Constitutional Treaty shifts considerable powers from the Commission to the Council of Ministers. That was reinforced by my noble friend Lord Brittan and the noble Lord, Lord Williamson of Horton. I remember the debate on the balance of power between these two bodies. It has been on the table for years. Several noble Lords were worried that, in essence, while we accept that Europe needs to change—

Photo of Lord Grenfell Lord Grenfell Principal Deputy Chairman of Committees

My Lords, I am grateful to the noble Baroness for giving way. I did not use the word "considerable". I said "measurable". There is a slight difference.

Photo of Baroness Rawlings Baroness Rawlings Shadow Minister, International Affairs

My Lords, I thank the noble Lord. Several noble Lords were worried that, in essence, while we accept that Europe needs to change, the constitution as it stands is not the answer, offering, as it does, outdated, bloc mentality-driven solutions to problems.

In his forceful speech, my noble friend Lord Howell of Guildford pointed out that 25 diverse European nations can function effectively as a grouping only within a looser framework than is envisaged here. My noble friends Lord Willoughby de Broke and Lord Vinson and the noble Lord, Lord Stoddart, felt that freedom, stability and prosperity are what the people of Europe want from the European Union, not ever-greater centralisation.

In the context of a referendum, as mentioned by my noble friend Lord Pearson of Rannoch, does the Minister not agree that it is vital that an informed debate takes place? Better to inform that debate, do the Government have any plans to provide detailed information on the articles of the final treaty and on their legal implications in an easily accessible format? In essence, will they produce a simple, fair guide with all substantive changes to the treaties that the constitution will bring about, as mentioned by the noble Lord, Lord Hannay?

We look forward to the Minister's replies and are sure that all noble Lords would agree that it is vitally important to have the clearest information and the most open—

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench

My Lords, I am most grateful to the noble Baroness for giving way. Can she confirm that the thrust of her remarks is that those on the Benches opposite will wait until they have seen it to make up their mind on the constitution, or will she associate herself with those many speakers who have already incited us to vote "no" before they have even seen the treaty?

Photo of Baroness Rawlings Baroness Rawlings Shadow Minister, International Affairs

My Lords, I thank the noble Lord for that. I believe that we need to wait to see what the treaty says. I am sure that some people will feel that whatever it says will not be correct, but some people need to see a document and then they will decide.

Noble Lords will agree that it is vitally important to have the clearest information and the most open debate on this most important of all subjects, which will affect all our futures.

Photo of Lord Tomlinson Lord Tomlinson Labour

My Lords, the noble Baroness was kind enough to refer me not to anything in the draft convention but to page 18 of the report of the noble Lord, Lord Grenfell. I have had the opportunity to look at it. Will she accept from me that, far from being an answer to the question, it is another example of evasion? Perhaps she might choose to read through some of the articles that are listed, such as that on combating tax fraud and evasion or that on capital movements and combating organised crime, which are the first two on the list. Those are matters that the United Kingdom totally supports. They do not represent increases in competence but are now categorised as shared competences.

Photo of Baroness Rawlings Baroness Rawlings Shadow Minister, International Affairs

My Lords, I was simply quoting from what is in front of me—some are shared and some are new competences, and some of the new competences are shared.

Photo of Lord Stoddart of Swindon Lord Stoddart of Swindon Independent Labour

My Lords, I am most obliged to the noble Baroness. She was interrupted by the noble Lord, Lord Hannay, who was I believe complaining that we were discussing something that we had not seen and that, in fact, we should wait until we saw the constitution. However, I point out to the noble Baroness that she is absolutely correct. We are not debating a future constitution; we have been debating a draft European constitution, which is all that we can talk about. Noble Lords and the noble Baroness have been perfectly in order in our discussions this afternoon.

Photo of Baroness Symons of Vernham Dean Baroness Symons of Vernham Dean Minister of State (Middle East), Foreign & Commonwealth Office, Minister of State (Middle East), Deputy Leader of the House of Lords

My Lords, I thank all noble Lords who have taken part in this debate this evening. Debates in your Lordships' House on the European Union and, more particularly, on the British place in the European Union, are always robust and always interesting. Today's has been no exception. Views as widely differing as those of the noble Lords, Lord Pearson of Rannoch and Lord Stoddart of Swindon, on the one hand, and the noble Lord, Lord Maclennan of Rogart, and my noble friend Lord Tomlinson on the other, illustrate that point very clearly.

Unsurprisingly, I find myself certain that this country's place is at the heart of Europe and at the heart of the debate about the future of Europe. At the same time, I feel ever watchful about how that relationship develops, ever concerned about what powers belong here in this Parliament and what powers may properly be placed in the European Union.

The noble Baroness, Lady Rawlings, was quite right: our starting point has been enlargement, and I know how firmly she has supported that enterprise. She is right, too, that the European Union's way of working should be clarified if a Union of 25 is to work well. Again unsurprisingly, I found myself more attuned to the well-honed arguments of the noble Lord, Lord Brittan of Spennithorne, who was right to remind us of the clarity of the constitution as it is spelt out in the draft treaty. He was right to remind us of the nature of the treaty, which he did with admirable clarity. He was right, too, to emphasise to us that although the failure to ratify the treaty would not mean leaving the European Union, it would be a very grave decision. I hope that we shall hear from the noble Lord more frequently in our forthcoming debates and that his party has the wisdom to listen to him.

As the noble Lord, Lord Maclennan, said, much of the argument against the treaty rests on the claim that Europe is becoming a superstate—an argument espoused by the noble Lord, Lord Pearson of Rannoch. I emphatically disagree with that point of view. I would argue, as did the noble Lord, Lord Maclennan of Rogart, that the treaty provides more protection against a superstate than we have at present. It spells out that the EU is a union of nation states, and that it has only those powers that the member state governments have chosen to confer upon it, as the noble Lord, Lord Brittan, made clear. It proposes a new position for a full-time president of the European Council, which will mean greater accountability to national governments. I would argue that it strengthens the role of national parliaments in the Union by reinforcing the mechanism of subsidiarity. National parliaments will be able to examine legislative proposals from the very start of the legislative process.

Some noble Lords have claimed that simply because the treaty is a constitutional treaty it must be rejected. There was a flavour of that argument in the contribution from the noble Lord, Lord Waddington. The treaty is neither a tidying up exercise, as some have described it, nor an end to our nationhood, as others would have us believe. It is neither negligible in its importance, nor is it the most important European treaty negotiated.

The honour for the most significant shift in power from this country to Europe belongs to the party opposite. As the noble Lord, Lord Heseltine, has said, the Single European Act was far and away more significant in the surrender of British sovereignty than anything involved in the proposed constitution. As he pointed out, it never occurred to Mrs Thatcher, the then Prime Minister, to have a referendum. The noble Baroness, Lady Rawlings, has described it as a Conservative triumph, but it was not a triumph that the Conservative Party wanted to take to the country. That is an example of "Don't do what we did in government; do as we tell you now".

I turn to the issue of a referendum. My noble friend Lord Tomlinson, and the noble Lord, Lord Hannay of Chiswick, disagreed with the Government's decision to go to a referendum on this issue, and I understand their concerns. I remind your Lordships that we shall have an opportunity for the cool-headed analysis for which the noble Lord, Lord Hannay, asked. Parliament's views will be debated fully and scrupulously. Perhaps I may quote the Leader of the Opposition on this point in an argument that he made on 21 May 1997. He said that the electorate,

"should be asked for their opinion when all our questions have been answered, when all the details are known, when the legislation has been finally tempered and scrutinised in the House and when Parliament has debated and decided".—[Hansard, Commons, 21 May 1997; col. 735.]

Hear, hear—I agree. I want to make one matter clear to the noble Baroness, Lady Rawlings. It is not the legal or the constitutional argument that has persuaded me and others that a referendum is the right course, nor is it an argument that this treaty is more important constitutionally than the Single European Act or indeed the Maastricht Treaty. It is because the people of this country will have the opportunity to decide where they want Britain to stand in relation to Europe: at the heart of Europe where we have seen it for the past seven years, or with a considerable loss of influence as described by her noble friend Lord Brittan.

Now our argument, at last, will be about the treaty itself; not about the process of taking that decision. I thank the noble Lord, Lord Blackwell, for recognising that important point. I agree with my noble friend Lord Tomlinson that some of the favourite arguments about the draft treaty have surfaced again today. The noble Lord, Lord Wallace of Saltaire, said that we have had two parallel debates, although the horse/camel analogy of the noble Lord, Lord Biffen, set me wondering which animal goes further when circumstances are difficult.

Many of the objections raised are not about the proposals in the draft treaty at all, but about today's status quo, a point made clearly by my noble friend Lord Tomlinson and by the noble Lord, Lord Williamson of Horton. They include the common foreign and security policy in the 1992 Treaty of Maastricht; the primacy of the European Court in the 1957 Treaty of Rome; and the European citizenship also in the Treaty of Maastricht.

The same point was agreed in essence by the noble Lord, Lord Pearson, who was, as always, crystal clear. He dislikes this treaty. But more than that the noble Lord dislikes the current position, which he described as the betrayal of sovereignty over the past 32 years. Although less explicit on the point, the position of the noble Lord, Lord Blackwell, was similar, as was that of the noble Lord, Lord Vinson, and the noble Lord, Lord Willoughby de Broke. Theirs was a different argument from the main charge that came from the Conservative Benches, which was that the draft treaty is unprecedented in the powers that it cedes to Brussels. My argument is rather more on the side of my noble friend Lord Tomlinson.

Let us think about the Single European Act. Among the articles it made subject to QMV was the free movement of workers, freedom of third-country nationals established in the community to provide services, guidelines and conditions for establishing the internal market, mutual recognition of national measures in areas affecting the internal market that had not been harmonised, and health and safety of workers.

Let us turn to Maastricht, on which the then government refused to have a referendum. It created the European Union and declared that we were all citizens of that Union. It was Maastricht that created the common foreign and security policy, Maastricht that transferred 30 policy areas from unanimity to majority voting, including education, public health, consumer protection, development co-operation, transport, safety and many other areas. That treaty gave the EU new powers in justice and home affairs issues for the first time and it was that treaty that established a single European currency. So the description given by the noble Lord, Lord Pearson of Rannoch, of what happened before 1997 is not so wide of the mark in terms of the competencies of the EU. But, as always, our approach to the extension of QMV and—

Photo of Lord Stoddart of Swindon Lord Stoddart of Swindon Independent Labour

My Lords, I want to help the Minister on this. She has talked about the Single European Act. She will, of course, recall that the Labour Party, then in opposition, opposed it. Indeed, I stood at the Dispatch Box on the other side of the House, together with my noble friend Lord Bruce of Donington, opposing it as well. The difference is that the Labour Party and the noble Baroness have changed their minds; my position remain exactly as it was then.

Photo of Baroness Symons of Vernham Dean Baroness Symons of Vernham Dean Minister of State (Middle East), Foreign & Commonwealth Office, Minister of State (Middle East), Deputy Leader of the House of Lords

My Lords, the noble Lord will recall that it was the Labour Party that had the referendum in 1975. My point was that it is the party opposite that has made these extraordinary changes in the relationship between this country and the European Union, and that was where I agreed with the noble Lord, Lord Pearson of Rannoch.

As always, our approach to the extension of QMV and co-decision will be to agree where it is in Britain's interest but not to do so in areas where our vital national interest dictates otherwise. The noble Lord, Lord Wallace of Saltaire, was quite right. We are rarely outvoted on QMV: twice in 2001 and once in 2002. Without it, we could not have constructed the single market or made progress on reform of the common agricultural policy. We therefore welcome the use of QMV as the general rule for legislative proposals.

Of course, the noble Lord, Lord Pearson of Rannoch, differed from his noble friend Lord Waddington, who thought that there were some unprecedented parts in this draft treaty. He cited the primacy of EU law, but that primacy is well-established, at least since 1964 when the European Court of Justice ruled in the case of Costa v Enel.

Photo of Lord Waddington Lord Waddington Conservative

My Lords, the Minister has misunderstood me. I made the point that the primacy of the law was indeed established way back in 1972. My point was that this is a unique beast, a constitution. That is the point I was making.

Photo of Baroness Symons of Vernham Dean Baroness Symons of Vernham Dean Minister of State (Middle East), Foreign & Commonwealth Office, Minister of State (Middle East), Deputy Leader of the House of Lords

My Lords, I would contend that the point that the noble Lord made was indeed about the primacy of law, but he seemed to distinguish in his mind between the primacy of law and the constitutional impact of the primacy of law. I do not believe that that is a tenable distinction. Let me quote to the noble Lord from that judgment:

"The transfer by the States from their domestic legal systems to the Community legal system of the rights and obligations arising under the Treaty carries with it a permanent limitation of their sovereign rights, against which a subsequent unilateral act incompatible with the concept of the Community cannot prevail".

That is a constitutional point. I understood the point that the noble Lord, Lord Waddington, put but what I am saying to him is that I do not understand how he can distinguish between the primacy of the law and that not impacting on the constitutional position. Maybe that is a point that we can debate later.

Photo of Lord Howell of Guildford Lord Howell of Guildford Shadow Minister, International Affairs, Shadow Minister (Foreign and Commonwealth Affairs)

My Lords, I am sorry to intervene but we must get these matters accurate and on the record. I am afraid that both my noble friend and the Minister are wrong. The German Federal Constitutional Court ruled in 1993 that competence resided with it and not with the European Court of Justice. That was the position and remains the position until we have this new constitution which will remove the power to question the matter and set a constitutional seal on all the law-making powers of the ECJ. That is the change. The Minister must understand that.

Photo of Baroness Symons of Vernham Dean Baroness Symons of Vernham Dean Minister of State (Middle East), Foreign & Commonwealth Office, Minister of State (Middle East), Deputy Leader of the House of Lords

My Lords, we are no doubt going to discuss this further. The noble Lord, Lord Howell of Guilford, is now arguing both with the noble Lord, Lord Waddington, on his side and myself on this side. There is already a constitutional limitation in the way that the ECJ operates. That is upheld by the European Court of Justice ruling to which I have already referred your Lordships, and by the way Lord Denning declared on this matter in his judgment in the case of Bulmer v Bollinger, which goes back to 1974. I suggest this is a subject for further discussion between your Lordships, because time is limited and we do not want to spend all our time on that point.

If member states could pick and choose which EU regulations they enforced, they would ignore those that threatened protectionist measures and give specialist privileges to their industries, which would impact on the single market. We would not have a level playing field for thousands of British businesses, on which hundreds of thousands of British jobs depend—that was illustrated very well by my noble friend Lord Harrison. The estimate of 3 million which I quoted earlier was from the South Bank University.

Photo of Baroness Symons of Vernham Dean Baroness Symons of Vernham Dean Minister of State (Middle East), Foreign & Commonwealth Office, Minister of State (Middle East), Deputy Leader of the House of Lords

My Lords, I am not going to give way because we have already got late into the evening. The noble Lord, Lord Pearson, has had his chance. I am now trying to reply to the debate. If the noble Lord would be good enough to allow me to finish my points, I am sure he will have the opportunity of raising his points with me on many future occasions. Otherwise our debate will just degenerate into a exchange across the Floor of the House.

I turn to the views on legal personality held passionately by the noble Lord, Lord Waddington. We have debated this point before in your Lordships' House. The European Community and EURATOM already have legal personality, and transferring this to the EU is a consequence of simplifying the Union's structures. We think it will make the EU easier to deal with and understand, both from the point of view of third countries and that of EU citizens. Noble Lords will recall our debates on these points when we have dealt with them at Question Time.

I turn to the points of the noble Lord, Lord Howell of Guilford, and the noble Baroness, Lady Noakes, on taxation and security issues. The Government believe that the right of member states to determine their own tax policies is fundamental. Tax matters are a key component of national sovereignty, and vital to the social and economic well-being of the country. It is for this reason that the Government made a manifesto commitment to maintain the UK's tax veto, and this is why the Government will insist that tax matters continue to be decided upon by unanimity in the IGC. Tax is fundamental to the relationship between a government and their citizens. It cannot be subject to QMV.

The noble Baroness, Lady Noakes, thought that we would have an uphill struggle on this point. So I hope that if we are successful, she will not be joining the noble Lord, Lord Brittan, in suggesting that all this was already agreed and something of a pushover in the first place. The ECJ has always been the guardian of the treaties. It makes sure that they are implemented properly, and without this we would have legal chaos. When the treaties have provisions on fiscal matters, the European Court of Justice makes sure that they are complied with. Currently, it ensures that the Commission does not bring forward decisions on tax for decisions by QMV. Decisions on tax must be made on unanimity, and the ECJ watches to see that that is implemented.

Photo of Baroness Noakes Baroness Noakes Shadow Minister, Economic Affairs

My Lords, I thank the Minister for giving way. Will she not accept that the European Court of Justice has taken unto itself jurisdiction to judge the effect of national tax laws, forcing states such as the UK to change their own? It is a question not of whether there is qualified majority voting but of whether the European Court of Justice can decide whether a nation's tax laws are acceptable.

Photo of Baroness Symons of Vernham Dean Baroness Symons of Vernham Dean Minister of State (Middle East), Foreign & Commonwealth Office, Minister of State (Middle East), Deputy Leader of the House of Lords

My Lords, that is rather a different point from that which the Government have made about unanimity in any change to tax. The noble Baroness, Lady Noakes, may well be right about her point, but she said that the Government were being disingenuous in relation to it. This is not so, because the European Court of Justice would rule out the taking of a vote on such a matter. That is the point at issue and where our red lines lie.

I turn to the charter, a point raised by the noble Lords, Lord Howell, Lord Blackwell and Lord Williamson of Horton. Our citizens need to be clear that the EU will respect fundamental liberties wherever it acts. The rights are too important to be left in the air. During the Convention on the Future of Europe and the following IGC, the United Kingdom made it clear that we would not agree to the incorporation of the EU Charter of Fundamental Rights until it was fit for purpose. The charter has been drawn up as a political declaration and not as treaty law. The changes we were helping to push through put the whole package into much better legal shape, and the United Kingdom will make a final decision on the incorporation of the charter in the light of the overall final proposals for a constitution for the European Union.

I turn to the questions on CFSP raised by the noble Baroness, Lady Park, the noble Earl, Lord Dundee, and the noble Lord, Lord Howell. The noble Lord, Lord Howell, specifically asked for clarity on this issue. We have long made it clear that we believe that unanimity must remain the general rule for common foreign and security policy. The only additional use of QMV proposed by the draft Constitutional Treaty relates to the adoption of a decision on a Union action or position on a proposal from the European Foreign Minister. We believe that this use of QMV should apply only where the European Council, voting by unanimity, has made a specific request to the European Foreign Minister to make such a proposal. That is an important safeguard. So in practice we would retain the veto. We believe that unanimity must remain the general rule. I assure the noble Baroness, Lady Park, whose contribution was as always very well argued, that unanimity exceptions do not apply to a decision that has a military or defence implication.

The noble Lord, Lord Waddington, came back to this point. I say to him that our foreign policy will remain in the hands of member states just as it has done since the common foreign policy was set up 10 years ago by the Maastricht Treaty. He quoted from the solidarity clause. I refer him to another quote:

"The Member States shall support the Union's external and security policy actively and unreservedly in a spirit of loyalty and mutual solidarity".

That is from not the draft Constitutional Treaty but the Treaty of Maastricht—Article 11.2—a treaty supported by his government when they were in office.

Photo of Baroness Symons of Vernham Dean Baroness Symons of Vernham Dean Minister of State (Middle East), Foreign & Commonwealth Office, Minister of State (Middle East), Deputy Leader of the House of Lords

No, my Lords; I am not going to give way any more. I have given way quite sufficiently for noble Lords opposite to have made the points that they can have.

The noble Lord, Lord Williamson, gave us a masterly analysis of the treaty in its current form. He posed some specific questions about defence. In particular, he raised questions about Article 201. I should be grateful if he would be happy to accept a letter from me on that point.

At the December European Council a package of measures was on the table to take forward ESDP and those included proposals on the structure of co-operation, focusing on creating rapid reaction battle groups, a defence capability development agency, a solidarity clause and an updating of the Petersberg tasks. We hope that the defence aspects of the draft constitution will not be reopened when the IGC resumes as we believe they commanded consensus as they were tabled at the December meeting.

I want to be absolutely clear with the noble Baroness, Lady Park, because I thought that her contribution, as always, was clear and to the point. We oppose the introduction of common defence either at 25 or through enhanced co-operation. We think it is divisive and a duplication of NATO. To answer the point raised by the noble Earl, Lord Dundee, we oppose anything such as the creation of standing inner groups or an inner core on ESDP as we believe that that would undermine the inclusive, flexible model of ESDP that the EU and NATO have been at such pains to agree. So let me be clear. Collective or territorial defence is for NATO. The European Council agreed that at Nice. It is not politically or militarily credible for the EU to have the role of territorial defence.

The issue of subsidiarity was raised by the noble Lords, Lord Grenfell and Lord Hannay. Perhaps I can remind the noble Lord, Lord Monson, that the treaty will for the first time give this Parliament a power at EU level to monitor and enforce subsidiarity. Along with other national Parliaments, it will be able to force the Commission to reconsider any measure that it considers does not meet the fundamental principle that decisions should be taken as close as possible to Europe's citizens. It is a great step forward in enhancing the role of this House in the European Union's affairs.

I say to the noble Lord, to the noble Lords, Lord Vinson and Lord Blackwell, and to the noble Baroness, Lady Noakes, that Title III, Article 9, of the draft constitution states:

"Under the principle of conferral, the Union shall act within the limits of the competences conferred upon it by the Member States in the Constitution to attain the objectives set out in the Constitution. Competences not conferred upon the Union in the Constitution remain with the Member States".

I turn to the point about the European public prosecutor. Under the treaty a European public prosecutor could be created by unanimity, meaning with our consent. We see no reason to create that post. The noble Lord, Lord Biffen, asked about the Times article claiming that the Ukraine and Russia were about to join the European Union. I assure him that the Ukraine and Russia are not candidates for EU membership.

Many of your Lordships asked what material would be published before the June European Council. We will make available to Parliament such papers as are given to member states by the presidency as a basis for discussion at Councils and what are called "focal point" discussions. The presidency may also publish a full revised text. These documents are generally made available also on the presidency website, which I recommend to your Lordships. A formal redraft of the treaty will be prepared after the end of the negotiations and then examined by legal translation experts. When a text is available for signature, we will publish it as a command paper. I assure the noble Baroness, Lady Rawlings, that we will also provide a plain man's guide to the treaty and a comparison of its text with previous treaties, as she asked.

This Government's commitment to parliamentary scrutiny of this treaty is clear from what we have already done. Our debate this evening has exemplified the Government's commitment on that point again. The innovation of a Standing Committee on the convention and to debate the convention's draft text and inform the IGC negotiation speaks for itself. Very few of your Lordships turned up to discuss the detail of that treaty; if I may say so, there were very few Conservative Front Bench Members of either House with, I am happy to say, the honourable exception of the noble Lord, Lord Howell of Guildford, who was certainly there.

I come back to the point made by the noble Lord, Lord Maclennan of Rogart, who asked whether it was not almost unprecedented to have repeated sittings of Joint Committees of both Houses during IGCs. Yes, it is. He went on to say that the Government introduced that novel procedure, which is welcome. Alas, it is not being adequately supported by Members of either House. The noble Lord said that it would be very difficult for a government to do more in those circumstances.

The noble Lord, Lord Blackwell, thought that it would be a disaster to accept the treaty. The noble Lord, Lord Vinson, thought that the treaty would make things worse. The noble Lord, Lord Willoughby de Broke, thought that it would be something he called, "kind of dumb". The noble Lord, Lord Stoddart, was customarily robust and customarily hostile not just about this treaty but about the whole concept of our position in Europe, and he was honest enough to admit it—he wants us out. The plain fact is, I disagree with him.

We have fully encouraged every level of parliamentary attention because we believe that Parliament should influence the negotiations taking place, just as we published the White Paper on Europe on Tuesday in order to allow Parliament to influence decision-making by national governments at the European level at an early stage before EU policies are set in stone. We believe in Parliament. We believe in the parliamentary process. I look forward to our continuing exchanges on this great and important matter.

On Question, Motion agreed to.