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European Union Enlargement

Volume 621: debated on Wednesday 7 February 2001

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6.8 p.m.

rose to call attention to the Nice Treaty and the case for European Union enlargement; and to move for Papers.

The noble Lord said: The Nice Intergovernmental Conference was not a unique or special process. There had been three previous intergovernmental conferences, each of which led to significant treaty changes. First, there was the Single European Act. Since I am speaking in this House, I must acknowledge the leading role of the noble Baroness, Lady Thatcher, in the production of that legislation.

Secondly, there was the Treaty on European Union, the so-called Maastricht Treaty, for which the noble Lord, Lord Lamont, and Mr. Francis Maude deserve high praise. I praise them even though the noble Lord has shown reluctance to have his responsibility laid against him for posterity. That is made clear in his book, In Office, in which he wrote:
"After our morning prayers meeting I was talking to Francis Maude, the Financial Secretary, and said, 'I just wish I didn't have to go over to Holland and sign the Maastricht Treaty. I can't bear the thought that my signature will forever be on that Treaty. 'Francis replied, 'Really? I am very happy to go if you want".
It was stunning prose, so good that it makes the Treaty of Nice seem an exciting read. But Francis Maude did go and Francis Maude did sign.

It is important to reflect on what, among other things, he signed on our behalf. He signed a treaty which at Article J.4.1 states:
"The Common Foreign and Security policy shall include all questions relating to security of the Union, including the eventual framing of a common defence policy, which might in time lead to a common defence".
So in the discussions post-Nice, let us, perhaps, hear no more cant from any Conservative spokesman about European defence co-operation.

Finally, there was the third of the treaties, the Amsterdam Treaty, for which I must give due praise to my right honourable friend the Prime Minister because I believe that he deserves substantial credit in that regard.

Such intergovernmental conferences or, rather, the subsequent treaty changes that emerge from them should, I believe, be seen as Treaty of Rome amendment Acts, bringing that treaty, the treaty which we, the British people ratified by referendum, up to date in the changing circumstances which include enlarged membership.

In anticipation of the Nice summit, the European Union Select Committee produced what I believe was an extremely useful report on the Nice intergovernmental conference in advance of that conference taking place. The report of the Select Committee pointed with abundant clarity to the organic link that existed between the next enlargement involving those current applicants who qualify and the necessary institutional changes to the European Union itself which had to be addressed but which had not been resolved at Amsterdam, the so-called Amsterdam left-overs.

Obligations, therefore, existed on both sides—on the side of the applicant countries and on the side of the European Union. Applicants had been told back in 1993, at the Copenhagen European summit that they had to satisfy the so-called Copenhagen criteria and those criteria are quite specific. I remind your Lordships what they were. The summit conclusions stated:
"Membership requires that the candidate countries has achieved stability of institutions, guaranteeing democracy, the rule of law. human rights and respect for and protection of minorities, the existence of a functioning market economy as well as the capacity to cope with competitive pressure and market forces within the Union. Membership presupposes the candidate's ability to take on the obligations of membership, including adherence to the aims of political, economic and monetary union".
That was what we expected of applicant countries. All we had to do was to do at Nice that which we had singularly failed to do at Amsterdam; namely, to effect the institutional change.

The European Union obligation was quite specifically post-Amsterdam, attached to the Amsterdam Treaty as a protocol, a protocol on the institutions with the prospect of enlargement of the European Union. That protocol set out our agenda—the need to deal with both the size and composition of the Commission, and the reweighting of votes in the Council. To that agenda was added subsequently, by declaration, the consideration of a significant extension of recourse to qualified majority voting.

So the link of the outcome of Nice to enlargement was clear. The Treaty of Nice dealt fully with the Amsterdam left-overs and brings into effect the three main institutional reforms which need to be implemented as a precondition of enlargement.

The first is qualified majority voting. It serves our interests, as much as anybody else's, to see the extension of qualified majority voting into areas such as trade liberalisation and improved financial controls. That was done while safeguarding what were perceived as essential British interests in relation to the need for unanimity on treaty changes, border controls, defence, social security, taxation and own resources.

The second issue was the reweighting of votes in Council. In that regard, the increase, the first since Britain joined the European Union, in the strength of our votes in Council is to be welcomed. It was brought about by a Treaty of Nice which reweighted the votes of all member states to give greater weight to the proportional size of each member.

Thirdly, there was the Commission's size, which could in part be seen as a quid pro quo for the reweighting of votes in Council where we, together with the other larger countries which had two Commissioners, agreed that by 2005 we should give up our second Commissioner, that decision limiting the increase in the size of the Commission after enlargement.

Some people, not necessarily in your Lordships' House, have suggested that the extension of qualified majority voting is somehow wrong in principle. But I have referred to the earlier treaty changes and in those two treaty changes—those with which the noble Baroness, Lady Thatcher, and the noble Lord, Lord Lamont, were heavily involved—there were no fewer than 42 extensions of qualified majority voting, 12 of them in the Single European Act of the noble Baroness, Lady Thatcher and 30 in the Treaty of Maastricht. So in principle there is nothing sacrosanct about changes in qualified majority voting.

As I say, Nice was necessary to create the balanced equation. Nice fulfils the institutional reforms needed for enlargement while serving our essential interests; and the Copenhagen criteria outlined the obligations of the applicants in the enlargement negotiations.

I know that the Treaty of Nice covered other matters besides the Amsterdam left-overs—the charter of fundamental rights, enhanced co-operation, European defence, a subsequent IGC in 2004. All those issues are important, necessary and deserving of agreement but I shall not deal with them today as they are not directly linked to enlargement.

So we turn to the central question: why is the enlargement, which required so much preparation in the Nice summit, such an important goal and why is it worth so much effort? I say with absolute confidence that the peace, stability and security enjoyed by the overwhelming majority of the states who have been members of the European Union for over 50 years must now be extended to the countries of central and eastern Europe.

Enlargement, at the same time, brings a reduction in barriers to trade and business. The single market, on which the noble Baroness, Lady Thatcher, spent so much of her time, is a single market which will now grow with enlargement by up to 40 per cent to a market of 500 million consumers.

Enlargement increases our international competitiveness, with consequential benefits of both employment and consumer benefits. It also increases the rate of our economic growth. The whole process of enlargement reduces pressures which have been of great concern in your Lordships' House and in another place—the pressures for economic migration which currently exist in the countries of central and eastern Europe.

Additionally, the process of enlargement, by bringing applicants into the European Union and by bringing their police and border controls into line with our common standards, plays a significant role in aiding the fight against international crime. That boosts pan-European environmental standards. Also enlargement brings about great benefits in terms of culture, tourism and sport.

Finally, when we look at some of the benefits of the process of enlargement, more than anything the process entrenches democracy and underpins respect for human rights. However, we should not see enlargement as an act of altruism towards our neighbours. Enlargement is a process that serves our interests and our needs every bit as much as theirs.

In what I hope was a relatively rash moment—

My Lords, before the noble Lord sits down, I agree with the thrust of his argument in relation to enlargement. However, when he talks about the benefits to trade, does he believe that it is extraordinary that a country like Estonia on joining the EU will have to increase tariffs, re-introduce subsidies on agriculture and raise taxes? Is that not a rather odd thing to have to do?

My Lords, that does not quite fit in with the thrust of what I was saying. It is a pity that the noble Lord did not have the foresight to put his name down on the speakers' list in order to give us directly his wisdom, so much of which rests on his experience of treaty enlargement negotiations—the Maastricht Treaty.

As I was saying, in what I hope was merely a rash moment of opposition politics Mr William Hague threatened to campaign against ratification of the Nice Treaty. I say, as seriously as I can, that I believe that such an act would not only be a betrayal of the hopes that successive governments in this country have encouraged in the applicant countries, but it would also be a betrayal of our self-interest.

This Government have done well by Europe in the Nice Treaty; they have done well by our national interests. But they have also served us well in honouring our commitments to the countries that are seeking to consolidate their futures in the democratic community through membership of the European Union. I believe that this Government deserve our support in that. They will certainly have mine. My Lords, I beg to move for Papers.

6.23 p.m.

My Lords, I am sure that all noble Lords feel indebted to the noble Lord, Lord Tomlinson, for having initiated this debate and for the elegant way in which he has done so.

Enlargement is a worthy aim and Nice was billed as the summit to prepare for it. It is sad to note that, in the event, no firm target date was set for the accession of a single country. There is no doubt at all that Mr Blair signed up to a whole raft of measures that will not hasten enlargement by one day. Indeed, much of what was agreed had nothing whatever to do with enlargement; some of what was agreed was calculated to make enlargement more difficult; and the really important obstacles to enlargement were not addressed at all.

The Times rightly suggested that the heads of government may have come out of the last meeting reciting the general confession from the Book of Common Prayer,
"We have left undone those things which we ought to have done; And we have done those things which we ought not to have done".
With their record it is a bit rich to argue, as some have, that those who say that the Nice Treaty should not be ratified while it includes matters that are completely irrelevant to and obstructive of enlargement are irresponsibly thwarting the ambitions of the applicant countries.

Of course, institutional change was necessary. The weighting of votes, the size of the Commission and the size of the Parliament are all matters to be addressed. It is hard to argue that the outcome was satisfactory. A Commission of up to 27 in number, when there are already more Commissioners than jobs to be done, and an even larger Parliament would look pretty absurd, but at least the heads of governments addressed the right problems. What on earth has the European Charter of Fundamental Rights to do with enlargement? The same can be said of the Rapid Reaction Force. With only seven minutes for my speech I cannot speak on that, much as I would like to do so.

Perhaps I can say a word about qualified majority voting. Some of the decisions, such as those regarding appointments and rules of procedure, seem sensible enough, but others certainly cannot be justified on the basis that without them an enlarged Union could not operate effectively. Those changes are calculated to increase the flood of unnecessary and damaging regulations, giving more and more power to the centre, when member states should have been trying to redeem some of the promises made at Maastricht and Amsterdam and make a reality of subsidiarity.

I make my point by referring to a few of the decisions on qualified majority voting. Article 191 enables regulations to be made governing political parties and, to the alarm of some, not only in regard to funding. More importantly, Article 13 deals with action to combat discrimination. That certainly has nothing to do with enlargement. Article 137 deals, among other things, with worker consultation and conditions of employment for third-country nationals. That does not contribute to enlargement. Article 144 involves the setting up of a committee to promote co-operation on social protection matters. Article 65 deals with judicial co-operation in civil matters. Article 159 deals with social and economic cohesion outside the structural funds. There is also the extension of EU competence in several home affairs matters.

Surely all those steps have in common the fact that they are all part of the remorseless move towards central government, the steady leaching of power from national governments to the centre. They will not make it easier for new members to join or for the EU to accept new members. It is demonstrably absurd to argue, as some have, that greater integration is necessary to make enlargement possible. One does not make it easier for new members to join a club by increasing the number of rules that they have to obey if they join. Instead of putting even more obstacles in the path of those wanting to be members and continuing to add to the acquis communautaire burden, it would have been more sensible for existing rules to be relaxed for new members. That would enable countries like Poland to join once they had agreed to abide by the EU's free market provisions, but without them having to conform to EU social policy. That would have been a much more constructive and sensible approach.

Then one comes to the biggest absurdity of all. Few would doubt that the most formidable barriers to enlargement are reform of the CAP and the budget, but neither was on the Nice agenda. Of course, it is true that the reform of the CAP did not require a treaty change, but plenty of matters were discussed that did not require a treaty change or an IGC. The other day, Mr Cook said that the reform of the CAP could not really be discussed and made a condition of enlargement because France would block the whole process. That is all very well, but how can enlargement work without reform? If the CAP were applied to Poland, where almost a quarter of the population live on small inefficient farms, the whole system would be at risk of collapse. That must be so, even after the changes agreed at the Berlin European Council. Perhaps the Minister will comment on that in reply.

What of the budget? If dramatic changes are not made to the structural, social and cohesion funds, will not the admission of the first-wave applicants mean a tripling of the budget? Is that correct? If it is, how on earth can that be sustainable? Surely it is a problem that needs to be solved before enlargement can take place.

I have almost reached the end of my time. I sincerely hope that those difficulties, great as they are, will be overcome and that, in spite of those difficulties, we shall soon be welcoming as members the countries of eastern Europe in particular, when we shall have a truly European community.

6.30 p.m.

My Lords, it is a pleasure to follow my noble friend Lord Tomlinson in speaking in this debate from this side of the House.

I have, as always, listened to the noble Lord, Lord Waddington, with interest, affection and some nostalgia. With respect, he is in the position of somebody who, seeing a brick wall, has an irresistible urge to bang his head against it. I know of nothing that would have been more supportive of a complete stop to the negotiating process than a major discussion of the CAP at Nice. It seems to me that that would be the way to bring it to a halt. Perhaps the noble Lord does want to bring it to a halt. I give him credit at least for not wanting to. In my modest life on the fringes of international diplomacy, it has always seemed to me very unwise to take an unanswerable issue and run your head against it, only to find that the whole of the negotiations come crashing down around your head when you fail. It does not make sense.

The issue about the Treaty of Nice can be put in the form of one question; namely, was that treaty successful in making enlargement easier and more practical? Put the other way round, if the agreements had not been reached at Nice, would enlargement be more or less difficult? I believe that the answer to those two questions is clear.

Since we are in the seven minute rush in this debate, I fear that I shall not be able to make many of the points that I should have liked to advance, but I want to consider two issues. If enlargement had not been resolved at Nice, I do not think that it would have been as feasible as it is. The first issue concerns the size of the Commission; the second concerns qualified majority voting.

A Commission organised as it now is would clearly be unworkable even in a Union consisting of as many as 20-odd countries. One Commissioner per country is probably the best answer for the time being. I accept that. But I do not think that it will be a permanent measure. At some stage the issue of rotation will have to be considered. That is another issue which, had it been raised directly at Nice, would no doubt have made the negotiations much more difficult. Perhaps the noble Lord, Lord Waddington, would have liked it to be raised for that reason.

Some countries would not, in the long term, be able to have a Commissioner for the whole term of the Commission. The question would then arise which commissioners would leave, for how long, and what effect their absence would have. It has been suggested that consideration may be given to the model of the Security Council of the United Nations, comprising a core of permanent members and a number of non-permanent members who serve on the Security Council for two years and then retire. It would be difficult to translate that model into the European context. In the European Union one is dealing with a greater national pride and a greater sense of national identity than exists at the United Nations in New York.

There is also a danger that a country with no Commissioner may prove to be much more difficult in the Council. If a country had not raised issues in the Commission and those issues came before the Council, there might be a tendency for that country to say, "We had nothing to do with it in the Commission. We shall not have very much to do with it in the Council either". I have no solution to this problem. However, the point that I want to make is that the arrangements will not necessarily be permanent. The chances are that they will have to be revisited.

I turn briefly to the second issue about which I want to say a few words—qualified majority voting. If a community of six cannot effectively and efficiently operate without extensive majority voting, clearly a European Union of 12 or 15 or more cannot. Experience has shown that the unanimity requirement entrenches national blocking positions, even when they are not necessarily in the long term interest of the member states concerned. The failure to make progress towards a single market in the first 30 years of the European Union's existence very clearly illustrates that point.

The scope for using qualified majority voting often brings about a willingness to reach an agreement acceptable to all concerned, taking account of their positions. It is an impasse towards consensus. One should not underestimate, first, the importance of achieving a consensus in a group of institutions such as the European Union and, secondly, the pressure on individual countries to do precisely that.

I sometimes wonder why Britain is so scared of qualified majority voting. The figures are very interesting. Britain has on occasions found itself in a minority, and thus been voted down. But far more often it has been in a majority. In the period 1998 to 1999 there were 85 contested qualified majority votes. In that period Britain abstained or was in a minority on only five of those occasions. On the other 80, we found ourselves in a position of agreement with the majority that emerged. Important British interest can be furthered only if there is majority voting, not only for the completion of a single market but for moves to a liberal world trading system in goods and services and for reform of the common agricultural policy.

I want to say a brief word about sovereignty. I do not understand—I have tried to understand it and I shall persist in trying to understand it, but it defeats me—the passion with which eurosceptics hang on to the notion of sovereignty and hang on to what I perceive to be outdated political ideology and, in many cases, outdated political institutions. A very interesting article by Dominique Moisi was published in the Financial Times in January about Nice, about sovereignty and about what is happening in Europe. It states:
"On the final day of the Nice summit, the lead story on the evening news on France's public television network was not EU diplomacy but the latest scare over food safety. What they eat is more important to ordinary Europeans than the relative weighting of national representatives who speak for them.
"Similarly. for companies engaged in the competitive world of mergers and acquisitions. nationality matters less and less. In its place, the notion of culture prevails. A perverse logic is at work: the less sovereignty means in our modern, interdependent world, the more desperately we stick to it".
I believe that that principle is right. I hope that those who contemplate voting against the ratification of this treaty will take note of it.

6.38 p.m.

My Lords, I welcome this debate, initiated by the noble Lord, Lord Tomlinson. It gives us an opportunity to examine at least three important matters, now that we have been able to reflect a little on the results of the intergovernmental conference at Nice now that we have the final text; I received it today. In politics we receive a lot of instant reaction. Perhaps this House can make its contribution in the form of a more considered judgment.

The first question to be considered is whether there is genuine coherence and continuity in the sequence of intergovernmental conferences that have in recent years been held, and to some degree suffered, at least in terms of public perception of the European Union. In short, do we know where we are going? Intergovernmental conferences are extremely important. In some senses, they are constitutional conferences, intended to change either the division of responsibilities between the Union and the member states or the operation of the Union's powers and responsibilities. They are the exercise of the sovereignty of the member states which rule the European Union.

A recent reading of the Old Testament tempts me to express the situation as follows: Maastricht begat Amsterdam; Amsterdam begat Nice; and Nice is expected to beget another child in 2004. But are they planned babies—at least that in 2004? We shall see.

Secondly, we are now able to express a considered judgment on the main points which were decided at Nice. I should like to do that.

Thirdly, the completion of the Nice agenda makes it possible to set out more clearly the major priorities for action and politics in the EU in the coming years and how best to achieve them.

First among those is enlargement, which the noble Lord, Lord Tomlinson, so rightly stressed. In response to the wish of many countries and more than 100 million people to share in the success of the EU, we are approaching a major change. I believe that, among the priorities, the public in this country deserve to be told what are the current and future objectives of the Union and not be fed from a diet of yesterday's European leftovers. Perhaps the Government can estimate the date of the arrival of the first new member states. I know that negotiations are still in progress.

I turn to the continuity of the policy from Maastricht to Amsterdam, to Nice, and apparently to Brussels in 2004. The grandfather of those children, Maastricht, had as its principal objective the treaty underpinning economic and monetary union and the single currency. However, in this age of mass communication, it is instructive to remind ourselves how, on the one hand, the leaders of Europe underestimated the hesitations of the public and how, on the other, commentators, particularly in the United Kingdom, underestimated the drive of those leaders to achieve economic and monetary union and the single currency. Economic assessment should always be very cautious. That applies to me today and in the perspective of enlargement. But some of the negative comments on the birth of economic and monetary union already appear somewhat bizarre. The actual picture of the euro-zone seems to be very positive. There is a good growth rate; there is very low inflation; there is steadily falling unemployment; there is rising confidence in the perspectives for the economy, particularly in France, and there is a remarkable moderation in wage settlements. The euro-zone will probably have a budget surplus this year—I must say that I would never have forecast that—because budget discipline has been maintained, including in Italy, France and Greece.

Furthermore, there is a continuity of policy in the economic and monetary field. Perhaps before long we shall be able to say that the policy is like the internal market, at cruising speed, and begin to think about the application of economic and monetary union in the acceding countries of central and eastern Europe.

The actions which made inevitable Amsterdam and Nice were not in the economic field but in the so-called "political" changes in the treaty, because some of the Maastricht results were either demonstrably weak or difficult to operate. In addition, the treaty contained specific requirements to look again at the common foreign and security policy and defence. Thus there is again a continuous line from Amsterdam to the St Malo Declaration, the Cologne and Helsinki summits, and the decision to establish the EU capability of up to 60,000 troops for humanitarian and rescue tasks through to crisis management, including peacekeeping. We have discussed that in this House often enough.

I have travelled hopefully and I have now arrived at Nice. There, a new factor was enlargement. I believe that at that point the EU had woken up to enlargement. It had been around for quite some time, but the EU had by then woken up to it. In fact, Amsterdam did a lot for enlargement but it did not deal with the institutional issues. Those had to come to Nice, How then do we judge Nice? First, it achieved the political perception that potential barriers and difficulties for enlargement of the Union are now removed. It achieved that widely in Europe, perhaps with the sole exception of the noble Lord, Lord Waddington, and it is widely felt throughout Europe. That perception has not been dented in the period since Nice. It is worth a lot; it is a starting gun for enlargement about which I am pleased.

For the rest, the treaty changes will be examined carefully and will probably give rise to controversy. I can hear it already. I consider that for the most part they represent good housekeeping. The changes on voting weights are more favourable to the United Kingdom than is the present system, but they make it slightly harder to reach a QMV decision. The greater powers of the Commission President are a modest change. The number of Commissioners will be potentially restrained but we are not sure how. Qualified majority voting has been extended in relatively limited fields.

That sounds little more than faint praise. Overall, I take the view that what we have, or should have, for the Minister is loud applause for the expected impetus that the treaty will give to enlargement, and the "Good Housekeeping seal of approval" for much of the rest. However, I believe that in addition to potential benefits, there are risks from the rendezvous in 2004 and we shall need careful preplanning for that.

Finally, I hope that having passed this hurdle we shall make an effort to stress to the public what are the principal new priorities of the European Union now. They are enlargement to a more diverse Union; the success of economic and monetary union and the single currency, whether or not we are in; the Rapid Reaction Force; and new co-operation in the areas of immigration, asylum and the fight against drugs and crime. I have no hesitation in commending that programme to my fellow citizens.

6.47 p.m.

My Lords, like other speakers in the debate, I begin by congratulating the noble Lord, Lord Tomlinson, on introducing it. When before Christmas I compulsively turned on my television set, trying to discover from news bulletins the progress and outcome of the Nice Summit, I felt much as I do on election night. I knew that in reality a step-change in our political history was taking place.

Like election day, the outcome is not a success for a series of distinct policies; rather it is a triumph for a particular package of policies. In the run-up to the IGC, politicians and the media debated the merits, or lack of them, of this policy, that policy and the other policy. But once the IGC concludes, we move, as it were, from the a la carte menu to the plat du jour. We in Britain, and those in other member states, are now given an old-fashioned Hobson's choice; a choice of take it or leave it. The changes must be taken as a whole or not at all. While I favour some and not others, we no longer have the pleasure and luxury of picking fastidiously between them.

I happen to believe that there is no evidence to support the wilder claims of those who argue that this agreement presages a Dark Age of European centralisation. It is my view that, taken overall. Europe is constitutionally much the same as it was before, which is no doubt why the extreme euro-centralisers, the upholders of the true faith of the Monnet doctrine, are accusing the heads of state of betraying the pure doctrine of Europeanism. Indeed, I suspect that one of the main messages from the Nice process is that there is no unanimity at all about where we go from here.

It is true that defence policy is on the move. But I suspect that given the way the world is changing that is inevitable. I believe that the issue is not change in itself but rather ensuring that change is compatible with, subordinate to and at ease with NATO. It is remarkable how little these far-ranging political changes require constitutional change.

As has been said, it is true that the political framework of the Union was left at Amsterdam lo be adjusted at a subsequent IGC to provide an adequate framework for enlargement, which I believe to be the overriding political imperative of the day. It has been done—just—but the outcome is not a glorious one; it shifts the structure just sufficiently.

While the outcome of this IGC is a necessary pre-condition of enlargement, it is not by itself a sufficient precondition, but the world of political reality is the one step that we must now take to bring that about. Other changes need to be made before enlargement can occur, but essentially they are policy and not constitutional changes. For example, as my noble friend Lord Waddington pointed out, there must be CAP reform before enlargement. However, it is a little unfair to criticise Nice for not addressing that issue because at no point was it ever intended that it should. After events in Germany over the past few weeks, I begin to believe that it may be mad cows rather than mad policies that are the catalyst for that long-awaited and very desirable change.

From my work in the European Parliament I sense a concern throughout the European institutions, which I share, that at European level we cannot go on in a state of permanent constitutional revolution. After all, there is agreement for another IGC in 2004, which in practice means that preparations must start now. Somehow or other we must find a constitutional settlement which simplifies the rules of European governance and makes them as understandable and user-friendly as possible. That settlement must set up a more stable relationship between the work of individual members in their own countries and their collective efforts across the Union. We must put in place arrangements which serve our fellow citizens, not merely the political elite, advance democratic principles and the rule of law, protect diversity while preserving coherence and find a way to ensure that subsidiarity not only works but is seen and, therefore, believed to work.

In many ways, Nice was inglorious. Its outcome was a modest compromise brokered by a politically divided presidency, but in part its significance is that it helped to pave the way for enlargement. However, it may be that, with the benefit of hindsight, in the more medium term its very modesty will clearly show the importance of achieving a settlement in European affairs and bringing to an end the helter-skelter of ad hoc European political evolution. I believe that that is a very real challenge which is almost certainly more difficult than the issues under consideration at Nice itself.

As a nation we must now get to grips with the post-Nice agenda without nostalgia for the 1950s—an era that has long since vanished—and our inheritance of classic diplomatic intergovernmentalism. In short, I suspect that perhaps the greatest importance of Nice is that it triggered the post-Nice agenda. That agenda is a very big challenge both for those countries like our own which are now members and for those which want to join and have moved one small step closer to doing so as a result of the Nice treaty.

6.53 p.m.

My Lords, I too thank and congratulate my noble friend Lord Tomlinson for giving us this opportunity to debate Nice and enlargement after a period of reflection. Make no mistake: enlargement is a very big step and will have a major impact on all of us. My noble friend Lord Tomlinson reminded us that enlargement would make a major contribution to stability and security in Europe. I agree that it will encourage peace and democracy. There are implications for asylum and immigration. I refer not only to the movement of unskilled people but the luring away of educated people from new members. There are also implications for crime and drugs and the environment. Clearly, double standards over environmental policy would be unacceptable. However, I believe that, on balance, peace, democracy and stability and the co-operation that results will help to resolve the issues and that the effort will be worth while.

What about the economy? Certainly, companies will benefit by having access to a larger single market, especially one that demands greater investment in infrastructure and more consumer goods. But there will also be more price and wage competition. More outsourcing to eastern Europe will mean the loss of more manufacturing jobs in western Europe. However, globalisation is now unstoppable with or without enlargement. Enlargement will bring globalisation to eastern Europe in a more orderly manner, in much the same way that the United States ordered its relationship with Mexico. Therefore, I believe that business will welcome enlargement, because in the end consumers will benefit both within the Union as it is today and in an enlarged Europe.

What about agriculture? Obviously, the CAP must be renegotiated before enlargement can take place. As my noble friend Lord Richard said, it must be at the right time. But is that a bad thing? I do not believe that it is. Renegotiation of the CAP is long overdue. Enlargement will not be easy, but on balance I believe it is right that it should go forward. With that in mind, how should we look back at Nice? Frankly, with mixed feelings. I agree with the noble Lord, Lord Williamson, that Nice signalled that enlargement would happen and the British negotiators achieved their immediate objectives. We increased our voting power. My noble friend Lord Tomlinson reminded us that we preserved our veto on tax, social security, defence, border controls and treaty changes. We also secured QMV where it was in our interests so to do. But the manner in which that was done left a nasty taste. The spectacle of all 15 members scrambling for position was, frankly, embarrassing. There was very little intergovernmental co-operation but just self-interested bargaining between individual member states. Alliances were based on need and usually lasted just for a single issue. There was little demonstration that countries took a broader view of their common interests.

The noble Lord, Lord Waddington, may have a point that bargaining over voting power has the effect of adding further complications to the passing of new laws. The noble Lord is concerned that Europe is becoming a superstate. These are not the actions of a superstate.

Where do we go from here? A decision in principle has been made about enlargement but it is not a coherent one. Therefore, we need a clear sense of direction from the Government and a perception that enlargement is proceeding. There must first be moves towards intergovernmental co-operation. That has already begun with this week's announcement of co-operation on external frontiers and fighting drugs and crime. I believe that the British public will view action on those issues as a welcome demonstration of intergovernmental co-operation.

Agriculture: obviously, there must be a long and difficult transitional period and, therefore, we need to start talking soon.

Business and industry require some kind of road map for enlargement. Business will require a much clearer time frame if it is to plan its investment and development in a larger economic zone. Business will also ask for clarification of the division of power between the regions, national governments and the EU so that it knows with whom it must work on business projects. However, I believe that the most important way to give direction to the perception that enlargement is proceeding is to ensure the fair treatment of applicant countries. One reason why Nice left an unpleasant taste in my mouth was the way that the present members tried to allocate fewer votes to future members than their populations merited. I believe that that exploited power in an unwarranted way.

I hope that the Government will make clear that at the next constitutional conference in 2004 candidates for membership will be invited to attend and participate, not merely as observers, irrespective of the state of the negotiations. If applicants are to go through all the hoops to become members it is only right that they should be consulted on the rules of the organisation that they are to join. Perhaps if General de Gaulle had taken that attitude there would today be a much smaller hard core of anti-Europeans in this country. After Nice one thing is clear: we cannot choose to ignore enlargement; we can only choose not to act, and that would be a mistake.

7 p.m.

My Lords, this Motion, for which we are grateful to the noble Lord, Lord Tomlinson, invites us to consider two matters which, as the noble Lord, Lord Waddington, pointed out, are only partly interrelated—the Nice Treaty and the case for EU enlargement. Because the English translation of the final draft of the treaty has only just reached your Lordships' House, it is difficult to tackle the first issue effectively. No doubt that is why so many noble Lords one might have expected to be here today did not put down their names to speak. Even with the sketchy amount of small print which was not available to us until just the other day, it seems clear that the treaty is not nearly as innocuous as was claimed a few weeks ago.

There are many worrying aspects, including the sinister proposed Article 7. I should like the Minister to comment on one aspect in particular when she comes to reply; that is the proposal to regulate—in other words to fetter—EU-wide political parties. Is that not likely to lead to an eventual ban on parties which press for the retention or restoration of national sovereignty and which resist further integration? Of course the Government's hands will be largely tied, since they foolishly, in my view, agreed to abandon the veto in this area, as well as 38 others, with few real benefits being received in return.

Perhaps I may now turn to the second part of the Motion—the case for EU enlargement. I am a pro-European in the true sense of the word. First, for the obvious reasons that we have always been culturally and, for the most part, ethnically European; and, secondly, as a result of experience. I was first taken to continental Europe at the age of five; I started to go myself at the age of 15; and have gone innumerable times since. With five exceptions—Iceland, Poland, alas, Lithuania, Romania and Bulgaria—I have visited every country in Europe and can claim to know seven or eight reasonably well, including Turkey.

I like the people of the Continent, although not always their governments, in the same proportion broadly as I like the people of this country; in other words, very much more often than not. If the ordinary people of the Continent had been given the chance to decide by referendum whether British greengrocers should be allowed to go on selling apples and potatoes in imperial measurements, I have no doubt that 90 per cent, or possibly 95 per cent of them, would have said yes. But, of course, the decision was not in their hands but in the hands of an unrepresentative bossy elite.

It follows that I wish the people of the Continent well, particularly those of the applicant countries. It would be sad if they embarked on a course which might appear attractive now but which they might later come to regret. I do not think they would regret things if they entered into a fair and balanced—with the accent on fair—free trade agreement with the EU, or if they joined NATO. That is a step which would greatly reassure those applicant countries which fear a still heavily-armed Russian federation, Libya, or any other potential military threat. But I am far from sure that it would be to their net benefit to join an EU where, as the noble Lord, Lord Inglewood intimated, subsidiarity is a sick joke; where the CAP remains unreformed; and where the voracious expansion of the acquis communautaire ensures that the EU and its agencies continue to poke their noses into the nooks and crannies of people's everyday lives instead of merely ensuring that the single market functions smoothly. Indeed, that very point was made by an EU Commissioner, Frits Bolkestein, only two days ago.

When I was in Malta in December—a country I have known for 35 years—a great row was brewing because the EU had ordered the country as a condition of entry to alter its waste disposal arrangements at great cost. It is not as if Malta were dumping its rubbish in the Mediterranean only to wash up on the shores of Sicily. In such an event the EU would have every right to interfere. No, it was a purely internal matter and accordingly no business of the Greeks, the Swedes, the Belgians, or, for that matter, the British. No wonder opinion polls now show only 50 per cent of the Maltese want to join the EU, with 40 per cent opposed.

It is no wonder, too, that 46 per cent of Estonians are now opposed to joining the EU. Not only do they and other applicants now realise that they will not be in line for the largesse which so much benefited the Greeks, the Spanish, the Portuguese and the Republic of Ireland, but they stand to be treated as second class citizens if they join. Estonia has 1.42 million inhabitants, yet, as a consequence of backroom deals done at Nice, it has been allocated no more seats in the European Parliament and no more votes in the Council of Ministers than Luxembourg, which has only 30 per cent of the population of Estonia. To a lesser degree, the Czech Republic, Hungary, Bulgaria and Romania are also unfairly treated, even if, for some reason, Lithuania fares quite well.

As for those in the applicant countries who remain keen on joining, in my estimation a good proportion comprise well-educated young people who are less concerned with the long-term good of their country than with their own career prospects. That is perhaps understandable. They want to be able to seek work in London, Paris, Milan or Frankfurt without the hassle of visas or work permits. However, they have probably not yet realised that the Germans and the Austrians want to keep them out of the EU by demanding a seven-year moratorium, post accession, on labour mobility. So much for the spirit of European brotherhood which the EU claims to foster!

7.6 p.m.

My Lords, I begin by thanking my noble friend Lord Tomlinson for initiating the debate.

The agreements reached at Nice removed the last institutional barriers to enlargement—the Amsterdam leftovers—which is a cause for much satisfaction. The sighs of relief in the applicant countries have been audible. But there still remain formidable obstacles on the path to accession, as the candidate countries, to their intense frustration, are only too aware. When we speak, as we do, of enlargement as inevitable, that inevitability removes the word "if", but it still fails to answer the question "When?".

We should constantly bear in mind that public enthusiasm for accession in the applicant countries may still be wide, but in many counties it is not deep. That is true of Poland and the Czech Republic among others. Some countries have been preparing for membership for a decade now. They have done so with a conscientiousness not always complemented by an equivalent degree of commitment among some interlocutors within the Union. Protestations of support for enlargement among the existing members have sometimes been longer on rhetoric than they are on action.

I ask why the Prime Ministers of the United Kingdom and Sweden in a joint article published in the Financial Times on 21st November 2000, stated that,
"the European Union should consider setting an early target date for the first accessions".
I ask why because I fear that this is another example of the hopes of the applicant countries being raised, only to be frustrated by subsequent shifts in policy. The Swedish presidency is to be praised for making enlargement its overriding priority, but it appears to have no plans to set during its presidency target dates for the conclusion of negotiations with any of the applicants. That is obviously a serious disappointment for the leading candidates and little encouragement for those who follow them. Will the Belgian presidency prove equally hesitant?

That said, I certainly take off my hat to Sweden's Foreign Minister, Anna Lindh, for her declared preparedness to move ahead of the indicative programme agreed at Nice and to bring forward, if possible, the launch of negotiations on some of the toughest issues, such as agriculture, regional policy, and justice and home affairs. That of course will depend critically on the applicant countries making available in time the information needed to let the negotiations proceed. That should not be beyond their capabilities, but the setting of target dates for completion and then entry would surely provide an extra incentive, not just to the applicants but to their EU interlocutors as well. It would certainly do wonders for public opinion in the applicant countries.

If the European Union governments are sincere in their wish to see the first wave of new entrants become members in time to participate in the European Parliament's elections in 2004, the new entrants will need, in view of the ratification process, to complete negotiations some time in 2003. If that is the intention, the Swedish presidency would do well not to let its presidency slip past without setting out a realistic timetable and seeking the European Union's and the candidate's commitment to stick to it. Some argue that target dates take the pressure off. I profoundly disagree. Let us not forget that the setting of, and strict adherence to, a precise timetable for the launch of European and monetary union contributed greatly to the ultimate keeping of the rendezvous with the single currency. I urge Her Majesty's Government, therefore, to encourage Sweden and all others to set out a calendar that is realistic and stringent.

In a seven-minute intervention one can touch only lightly on even the most important issues. Perhaps I may therefore list my further concerns about the enlargement process in the form of brief questions, not all of which I expect my noble friend the Minister to answer, because at present not all of them can be answered.

First, will the member governments of the Union do more to counter the spreading of unfounded fears that enlargement to the east will result in massive migration to western Europe and catastrophic loss of jobs? There is no credible evidence to sustain that prediction.

Secondly, will countries such as Germany take fully into account the difficulties faced by some applicant countries over the requirement to establish rigid frontiers with neighbouring countries with which they have currently very open relations? I am thinking in particular of Poland and Ukraine, the Czech Republic and Slovakia, assuming that the first is the earlier entrant, and Hungary, with its Hungarian ethnic minority, and Romania.

Thirdly, will Her Majesty's Government be vigilant in ensuring that applicant countries are party to any discussions on further EU reform that may follow the foreseen agreement at Laaken under the Belgian presidency in December 2001 where the content, calendar and working methods of such reform discussions will be decided? It goes without saying that they must be parties to the 2004 IGC.

Fourthly, will governments bear in mind, as the Swedish presidency has, that Spain has already warned that it will find it hard to broker a deal on the share-out of regional funds—a very sensitive issue for Spain—if that is still on the negotiating agenda when Spain takes over the presidency after Belgium in January 2002?

Fifthly, and most importantly, will Her Majesty's Government please not accept as inevitable that at France's demand there can be no opening of discussion on the reform of the CAP until after France's 2002 presidential elections? The costs of the BSE crisis in Europe risk blowing the CAP apart anyway, so why not bite the bullet and get down to the reform without further political prevarication?

Those are but a few of my concerns. They are all problems that will not easily be solved. But they can be, and must be. The objectives of enlargement demand that. But we are not just talking about peace and security on the continent of Europe. In that context, I quote President Kwasniewski of Poland, writing in a recent edition of European Voice. He wrote:
"At the end of the 20th century, another obstacle to unification disappeared: the threat of East-West confrontation. Integration became something more than just a remedy for the evil which Europe had imposed on itself. It became a means by which to pursue joint interests, an expression of the common identity of the Europeans".
Later in the article he wrote:
"The time has come to say that the Union will not threaten the existence of the nation-state. It is instead a projection of nations in a wider geopolitical space. The success of the European Union depends on a synergy of all that individual nations contribute".
We must not delay in opening the door to those now free, democratic nations which have so much to contribute.

7.13 p.m.

My Lords, I want to discuss a part of the Treaty of Nice which I believe will certainly be seen by the applicant countries as a factor linked to enlargement. I refer to the part on security and defence policy.

I have a preliminary problem in discussing this subject. My problem is finding a name for the organisation that is proposed. It started by being referred to as a European army. That was banned as being unsuitable. It then became a European rapid reaction force. The Secretary of State for Defence has made it perfectly clear that he does not like that either. I asked the Ministry of Defence what it is called. The answer was "a pool of capabilities". That does not seem to have exactly the ring required for an organisation of this kind. So, in order that we may discuss the matter with greater ease, I ask the noble Baroness who is to reply whether she has a name for it; and if she does not, will she ask the Ministry of Defence whether it can produce one, preferably a name with some tone to it?

The leading document on the subject is the presidency conclusions. Those reached us very recently—slightly before the treaty itself. The French version reached us late in January; the English version, only late last week. What is the status of the presidency conclusions? I have never been able to discover that. Were they agreed by the conference itself? Have they been written by the French Government since the conference? Have they been agreed between the European Union members? Do their proposals constitute something for discussion with NATO? They are extremely relevant to NATO. If so, are they subject to alteration?

I am in favour of Europe playing a bigger role in its own defence and I have taken that view all working life. But I believe that this particular project has serious defects. In my recollection, it was first given strong support at St Malo, when the Prime Minister met President Chirac. In making the proposal, the Prime Minister reversed the line he had taken far the previous two years. The central problem with the proposal seems to be that France and the United Kingdom see in different ways what for convenience I shall call the rapid reaction force. France wants something distinctly separate from NATO. That is consistent with its long-standing desire to reduce the influence of the United States in Europe. The United Kingdom, I believe correctly, wants to see the organisation as close as possible to NATO, perhaps even within NATO. That creates a tension which is clear in reading the presidency conclusions. This issue is at the centre of United States concerns. We should have no doubt that the Americans are concerned.

Mr Rumsfeld, in Munich last weekend, said that he was "a little worried" by the proposals for the rapid reaction force. He went on to say:
"Actions that could reduce NATO's effectiveness by confusing duplication or perturbing the transatlantic link would not be positive".
Coming from the United States Secretary of Defense, those are fairly strong words.

General Colin Powell, whom the Secretary of State for Foreign Affairs saw yesterday, putting his best face on it, said, as reported in The Times today:
"I think if we approach the European Strategic Defence Initiative [ESDI] with an understanding that it's firmly embedded in Nato, there's no reason to see this as destabilising".
He went on to say that the all-European force must not duplicate NATO planning structures and must augment the overall military capacity of both NATO and the European Union.

I believe that the present proposal fails both the tests put forward by General Powell. The presidency conclusions lay great emphasis on the autonomy of the European Union. They propose two separate military organisations—one from the European Union and one from NATO—running all the way down the line. That is clumsy, costly and unnecessary.

As I see it, the Americans are concerned for three reasons. First, they believe that the proposed structure will produce bureaucratic confusion. Secondly, it will cost more and will therefore impose an extra burden on the defence budgets of the European Union countries, which are greatly inadequate anyway, as I believe many of us agree. Thirdly, the Americans are concerned about the possibility of the development of a European organisation parallel to NATO which could mean at some stage a European group putting up a united front in opposition to the United States. Those are legitimate concerns and I believe that the proposal should be radically re-examined.

7.20 p.m.

My Lords, I am grateful to my noble friend Lord Tomlinson for making this debate possible. Around 18 months ago, I was fortunate enough to be able to attend a conference organised by the British Council in Prague. Its theme was European enlargement. I should like to remark on the contrast between the aspirations for enlargement felt by the many people from eastern European countries attending the conference and the rather more detached and somewhat remote attitude demonstrated by those attending from western Europe. For the people of the eastern countries, enlargement of the EU and the ability of their countries to join the Union was the most overwhelmingly important item on their countries' respective political agendas. I was left with the feeling that enlargement was important not only for them, but also for the European Union as a whole and, more specifically, for this country.

As a consequence, I helped to establish an all-party European Union accession group which covers those who are keen on matters European and those who are a little more sceptical but nevertheless agree about the benefits of enlargement. I am grateful for the help given to the group by the ambassadors of a number of candidate countries. I hope that it is in order to mention them. I am delighted that the ambassadors from the Czech Republic, Hungary, Poland and Slovakia have found the time to attend our debate this evening.

In the short time available, it will not be possible to deal with the specific issues of Cyprus, Malta and perhaps even Turkey, so I shall confine my remarks to the eastern European candidate countries. I believe that enlargement will bring enormous benefits to this country and to the European Union as a whole. The EU will then become the world's largest market. Enlargement will help to build the co-operation needed to tackle organised crime and drug trafficking and will help to improve environmental standards, so sadly neglected by the communist regimes of eastern Europe but now costly for the accession countries to remedy. High economic growth will result for the EU. British companies will benefit from access to a larger market. They will also benefit from increased competitiveness, which will be necessary through the enlarged market. I shall be interested to hear the Minister's response to this point, but I believe that we shall see reduced migration pressures, while democracy and human rights will become more firmly entrenched.

The timetable for all these developments is crucial. I look for a date to be set enabling the first wave of countries to join and take part in the European elections in 2004. That will set the standard by which various dates can be measured. It means that 1st January 2003 will probably become the latest date for acceptance, with ratification being completed soon afterwards, provided that parliaments throughout the EU work quickly. The June 2001 summit in Gothenburg will therefore represent an important benchmark in the process. It is important to bear in mind these dates, otherwise we shall see slippage.

It is worth noting that some of the countries included in the first wave—I refer in particular to Poland, the Czech Republic and Hungary—already increase their import and export trade with the European Union year on year. Slovakia, which started a little later, has also made rapid progress in moving towards increased trade and meeting the accession criteria.

I appreciate that agriculture presents a difficulty. While I was a Minister in Northern Ireland with responsibility for agriculture, I was able to attend some of the discussions held by the Agriculture Council in Brussels, in particular when Agenda 2000 was being debated. I have to say that if the negotiating position of the British Government—as it was put forward by my right honourable friend Nick Brown—had been accepted in full, we would have moved much further along the way to dealing with the difficult problems posed by the CAP. He pushed that issue very hard indeed. I believe that the forthcoming World Trade Organisation negotiations will also be helpful in this respect. I see CAP reform as a process on which we have already embarked and which we must continue to pursue. It will need to be developed further after the accession countries have joined.

Poland has the largest agricultural element among the first wave of accession countries. At present, it has to compete with EU-subsidised agriculture, which does not help it in its agricultural restructuring programme. Britain has a responsibility to offer legal advice and help, especially as regards trade and commerce—also matters which are costly for the accession countries. Indeed, it is worth remarking that Poland, the Czech Republic and Hungary have already established links with western Europe through their membership of NATO.

Perhaps I may conclude by saying this. The EU must also concern itself with values: human rights, democracy and the upholding of certain standards we accept as normal but which were denied to the eastern European countries through the years under communism. The accession countries want to embrace these values and are moving rapidly towards achieving them. After the long, bleak years of communism, the accession countries want to rejoin a democratic Europe in its fullest sense. I believe that we have a responsibility—a moral obligation—to welcome them into the European Union as friends and allies. In turn, the accession countries will gain in political and economic stability. Membership of the European Union will help them in the important but difficult process of modernisation.

I know that the Government are supportive of this development, but I should like them to demonstrate their enthusiastic support. I hope that this debate will help to reinforce the Government's position; namely, that we need to move forward as soon as possible.

7.26 p.m.

My Lords, I welcome this short debate and I hope that the House will continue to follow the issues as we move from this conference on to the next intergovernmental conference in 2004. I should like to make three main points in my short contribution.

First, there are clear limitations to the intergovernmental haggling approach which we witnessed in all its gory detail at Nice. Afterwards, the British Prime Minister's remark to the effect that, "We cannot go on like this", is one that needs to be repeated. The European Union needs to have a more effective and efficient institutional structure. It is a major issue and one which we shall have to keep on debating from now until 2004.

Secondly, the IGC was marked by a clear change of atmosphere on the subject of enlargement. A number of member governments were still in denial that enlargement was going to take place until shortly before the Nice Summit. It now appears that enlargement is going to take place. From now on, we are considering an institution which, within three or four years, will have more than 20 members.

Thirdly, clear commitments were made to hold another intergovernmental conference in 2004 and to continue with an active debate on what the noble Lord, Lord Inglewood, described as the "post-Nice agenda". That debate should be conducted as openly and widely as possible. It should involve national parliaments, the public and it should engage the candidate states.

The German Chancellor, reporting in detail on the Nice Treaty to the Bundestag on 19th January, stated that:
"We thus made it clear that we intend to continue to reflect on Europe. … I would just like to mention the demarcation of competences between the national and European level, the division of powers between institutions in Brussels, the future status of the Charter of Fundamental Rights, the reorganizing of the treaties and the role of national parliaments".
As we all know, the first "stocktaking" of progress on this debate is due to take place in December of this year at the Laaken European Council. Various reports stated that the British Government were unhappy about holding the debate in public and had exerted extreme pressure on Joschka Fischer, the German Foreign Minister, not to raise difficult questions during his visit to Britain a few weeks ago. I thought that that was extremely unfortunate. I hope, at the very least, that after the forthcoming general election—whenever it is held—that the British Government will overcome their fear of the media and launch a more active debate. Perhaps we could even look forward to a White Paper from the Foreign Office on this issue. It would help to move the debate forward.

I welcome the progress on enlargement. From now on, we are operating on the basis that we shall have a Community which, within four or five years, will embrace more than 20 members. Within six or seven years, the membership will have moved on to 25 or even 27 and beyond. I should like to emphasise that we are now engaged in a long-term process.

A minor decision taken at the Nice European Council which will have long-term implications concerned the expansion of the European Conference to include not only Turkey, but also Iceland and Norway, the countries of the western Balkans and perhaps, in time, the Ukraine. The stability pact for south-eastern Europe clearly implies that in time—and that means 15 or 20 years ahead—Albania, Macedonia and the other states will eventually become members of the European community. That long-term commitment will cost a lot of money and we need to make sure that we all understand its long-term implications.

I praise the Commission for pressing forward with negotiations even when member governments have not been entirely happy with the speed at which they have been progressing, and for its clear commitment that these negotiations will conclude by the end of 2002. I very much hope that Her Majesty's Government will give the Commission every support in making sure that that progress is maintained.

However, I should like to flag that there are some problems ahead. Her Majesty's Government and others have not been giving sufficient importance to the delicacy of the position of Turkey. There is a real danger that the member governments will pretend to negotiate with Turkey and the Turkish Government will pretend to be moving towards accepting the Copenhagen conditions. We now need to give relations with Turkey as much importance almost as we are giving to relations with Poland if we are to prevent the Turkish question becoming a major problem within the next two or three years.

The post-Nice agenda clearly needs to start with a review of where we have now got to with the successes and the failures of the Nice Treaty. As the noble Lords, Lord Waddington and Lord Richard, said, the Commission as a college is clearly still too large. It will be absurdly large if we move towards a European Union with 25, 27, perhaps eventually 30 plus members.

The first step, however, has now been taken. The idea that there will not necessarily be one commissioner for every state has been accepted in principle. I hope that the British Government will now agree with the French that an efficient commission needs to be much smaller. The way forward has to be to strengthen the role of the permanent representatives in Brussels as the representatives of their states in the European policy process, and to move towards a small college of nine or 11, as the French and others have proposed.

I regret that, in the haggling, the French presidency allowed the European Parliament to become oversized. I hope that the Government will attempt to pull that back. I note that Her Majesty's Government, among others, are proposing that the role of national parliaments should be strengthened in various ways, and I welcome the current inquiry of your Lordships' European Union Committee.

Perhaps I may suggest to the Government that they should take on board and push the question of the seats of the institutions. At four o'clock in the morning on the last day of the Nice Treaty hagglings, the Belgians got a concession—which they may well live to regret—that, of the European Councils, two will in future be held in Brussels and eventually all four will be held in Brussels. It seems to me that there is a lot of haggling one could do the next time round about perhaps transferring the European Councils to Strasbourg. This would allow the European Parliament to meet in Brussels in future—which would be rather more efficient—and stop the absurd trek of the European Parliament's offices between Luxembourg, Strasbourg and Brussels. We need efficient and effective European institutions.

I note that there has been some further development in justice and home affairs. I have seen almost no press comment that Articles 29 to 31 of the Nice Treaty establish a European judicial co-operation unit, the so-called "Eurojust". I hope that one of the sub-committees of your Lordships' European Union Committee will look at the implications of that.

I noticed also that there was some further progress on European security and defence policy, although I regret that—as it was reported in a number of other national newspapers—at the request of the British Government, this was underplayed because they did not wish to embarrass the British media.

I also strongly regret that qualified majority voting on structural funds failed because of Spanish opposition. I hope that Her Majesty's Government will attempt to reverse that decision well before enlargement.

We are heading towards a constitutional framework, and that is what we have to discuss in the post-Nice agenda. That ought not to frighten us. I recall that the noble Lord, Lord Hurd, when he was Foreign Secretary, once said—when he thought that there were no reporters present—that we should now regard the Treaty of Rome as part of the British constitution. That is the state we have got to and, therefore, we need to make sure that Europe, as well as the United Kingdom, has a properly organised constitutional structure.

That would require Her Majesty's Government to take an active role in leading public debate on the implications of enlargement and on the structure of the institutions needed both at home and abroad. That means not only prime ministerial speeches in Warsaw but prime ministerial speeches also, please, in London, Manchester and Edinburgh—and, as the Spanish need to be alerted to the concessions they will have to make, they need to be made in Madrid. Her Majesty's Government need to maintain pressure on other governments for completion of enlargement negotiations.

What does this require of the Conservatives? We have to hope that after the election they will accept that Britain is in Europe, not half-way across the Atlantic; that the European region requires efficient and effective multilateral institutions; and that they will overcome their hysteria over any suggestion that the sharing of power among different levels of government, either within the United Kingdom or within the European region, unavoidably has some federal characteristics—particularly when they are so enthusiastic about drawing Britain much closer instead to the United States, which is a strong federation, and to Canada, which is a loose federation.

7.36 p.m.

My Lords, we are all very grateful to the noble Lord, Lord Tomlinson, for introducing the debate. We are grateful, too, that the treaty, in English, arrived in time for us to study it before the debate. The last time we debated a treaty—the Amsterdam Treaty—there was a document before us which set out in great detail the effect that all the amendments in the new treaty had on the existing treaty's structure. Before we debate this matter again—and I trust that we shall debate it many times before a Bill comes before the House, if and when a Bill comes before the House—I hope that we will have such a document. It makes it much easier to know which way we are going.

One would not expect it, but this debate is taking place against a background of a raging debate throughout the whole of Europe—in both the applicant state area and the existing EU—about the future structure of the European Union. The noble Lord, Lord Wallace of Saltaire, quite rightly referred to this, but it does not seem to be prominent in the Government's thinking or their publicity. The battle is between the integrationists, who think that the old model of more and more central power is the right way forward, and the inter-governmentalists, who are putting the brakes on. They may have been in favour of qualified majority voting in the past, but they are saying enough is enough, which is a reasonable comment to make. It is not only the British who are saying that.

I, personally, think that both models are out of date and that it will emerge in due course that the true path to European unity lies along lines which have not come into government discussion or perception—although, as I shall explain in a moment, one or two forward thinking research institutes, including those supported by the Government, are beginning to understand what is driving European unity, and it is not an endless series of treaty making and treaty structures.

There should be no doubt that we on this side of the House believe very strongly in enlargement. We think that the Europe of the future needs the nations of central Europe just as much as the nations of central Europe want to be part of the Union, as the noble Lord, Lord Dubs, so eloquently said. We note the proposition before us in the debate that the Nice Treaty, the various protocols and the presidential conclusions removed the obstacles to enlargement. I wonder whether confidence of that kind is wise. It may be enthusiastic, but is it wise to hold that view with such simplistic zeal? As the noble Lord, Lord Grenfell, reminded us, there is a long way to go. As any discussions in London with any of the ambassadors of these countries—let alone any visits to their capitals—will reveal, the path still looks extremely long and the obstacles substantial.

Of course, the biggest obstacle—we should not pretend otherwise—is the whole agriculture support question, the common agricultural policy. Poland has more farmers than the United Kingdom, France and Germany put together. This is a huge task ahead of us. Now, on top of that, comes BSE, smashing the whole structure of the agricultural budget. This is an obstacle that towers above anything that may have been resolved by the odd protocol coming out of Nice about institutional reform. Although those matters are important, this is 10 times more so. The budget is still 44 billion euros. Although that is less than it was, it is still enormous. One has even heard suggestions from Belgium and other countries that, in order to meet the extra costs, a new tax on the citizens of Europe must be required. These are frightening prospects, and ones that have not yet been addressed.

In addition, as my noble friend Lord Waddington said with great eloquence and clarity, it is not only a question of reforming the CAP. The arithmetic of the budget must be addressed. It simply does not add up without changes to the structural and cohesion funds which, again, have not been addressed. If we are really interested in obstacles and in the path to enlargement, that is where we should focus our attention.

When we are asked to accept that Nice was the magic curtain raiser to enlargement, we have to point out that it also added new obstacles along the path. Everyone knows that the acquis communautaire is an enormous meal for the applicant countries to digest— and they may not all succeed. The Nice treaty made it substantially larger in adding to the acquis communautaire.

It is no more than common sense, as my noble friends pointed out, that the more decisions are organised centrally in the European context, the more difficult it will be to accommodate the enormous diversity of an enlarged Europe. Enlargement will bring in all kinds of new cultures, methods and patterns. It will bring in new labour standards and a vast range of matters in relation to which uniformity and standardisation will be the impossible enemy. So we should not merely accept the proposition that Nice equals the magic route to enlargement. It clearly does not. There are other major problems. It is unwise not to focus on those but merely to satisfy oneself with the lesser idea that Nice solves the whole matter.

The Nice treaty also paved the way for the European Commission to have a role in the controversial area of defence matters. That is another worrying development. Again, the applicant countries want to join a security structure based in NATO and in the Atlantic Alliance. Many people, particularly in Poland, are horrified that, just as they are arriving, they are finding the NATO structure thrown into question and, as my noble friend Lord Blaker said, full of new ambiguities.

Quite where we stand, I do not know. The Foreign Secretary, who is extremely agile in these matters, appeared to be telling the story in Washington yesterday (as quoted in The Times) to General Colin Powell that the new plan is firmly anchored in NATO. Tell that to the Turks, or to the Norwegians! They will not believe it. They have found that, although key members of NATO, they are not attached to a firm anchor. We must be clear as to what was really being proposed. Was it the St Malo formula; or have we retreated to something different? Before judging the virtues of the Nice summit, we must get that straight.

As the noble Lord, Lord Wallace, and other speakers mentioned, the Nice summit pointed the way to the forthcoming intergovernmental conference, which is billed as a kind of constitutional conference. There are those among the Europe-builders who want to see the European Charter of Fundamental Rights made mandatory, on top of the European Convention on Human Rights. This is something that we need to watch carefully in the interests of the applicant countries, which, again, are finding difficulties in meeting all these standards and which now see another great layer of standards placed before them that they must achieve.

I strongly share the view that the applicant states should be brought into the process now—not, as the treaty says, "in ways to be defined". That is too vague. They should be involved now in a structure that will be their lives and their European Union as well as ours. I have no difficulty in seeing the treaties as a kind of constitution. That is indeed what they are for Europe. Nor do I have difficulty with the idea, although it may be hard to achieve, that we are to have to simplified treaties.

Commissioner Bolkestein, who talks a great deal of sense, said yesterday that there is still,
"a danger of a creeping process of more and more things becoming the subject of legislation in Brussels".
He is absolutely right. He went on to say:
"Federalism is something we should forget about".
Perhaps the federalism scare is going away. It has certainly been there. The people of Europe have long since rejected the idea. The truth is that the federal model is failing.

We have been polite about Nice in this debate. Nevertheless, we know that the comments outside are that the Nice summit was badly botched and that there was little unanimity. I quote my noble friend Lord Inglewood. There are still all kinds of divisive issues at work which undermine the feeling of those of us who have always worked for a stronger Europe but who feel that some of the ideals are now being ground to dust under the present model and the present patterns of officialdom.

For me, the unlocking insight into what will happen next in Europe—this may help those who are in a "mental maze" as regards the European construction—is that we are not going to get a completed Europe; there is not a final destination, as Commissioner Barnier has been quoted as saying. That kind of Cartesian logic does not operate. The Europe that we shall see will possibly be one of several structures. The Economic and Social Research Council has conducted some fascinating studies in which it argues that,
"On a collective basis, in both in the European Union and other European institutions, novel forms of policy-making are being attempted".
The council goes on to question the whole doctrine of the acquis communautaire. The year 2004 will be an opportunity for new thinking for a diverse kind of Europe, not one in which one size fits all—a Europe in which nation states will be more important than ever as the bedrock of stability and identity.

In conclusion, you cannot bind people together by forcing people together. The apologists for Nice seem not to have learnt that; however, I believe that the rest of the people of Europe have.

7.47 p.m.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office
(Baroness Scotland of Asthal)

My Lords, I thank the noble Lord, Lord Tomlinson, for introducing the debate, and for his spirited canter through the history that brought us to Nice and the vision for the future. I find myself echoing much of what the noble Lord said.

I should say straightaway that the noble Lord, Lord Inglewood, was right to remind the House that the CAP was never meant to be part of the Nice agenda. I say to the noble Lord, Lord Waddington, that the Government are fully committed to EU enlargement and to CAP reform. Further CAP reform is clearly desirable, but it is not necessary for enlargement to take place. I agree with the noble Lord, Lord Richard, that making CAP reform a pre-condition for enlargement would have delayed accession.

The Nice Treaty is good news for Britain. I say that particularly to the noble Lord, Lord Howell, who I think, in his heart, may share that view. It is good news for the EU and good news for Europe as a whole. Nice will deliver a stronger Britain in a wider Europe.

We went to Nice with six objectives: to increase Britain's voting weight in the Council; to reform and streamline the Commission; to secure more qualified majority voting where this is in the UK's interest; to protect our veto where UK interests are best served by unanimity; to establish more flexible forms of EU co-operation; and to open the door for enlargement. I am glad to say that we have achieved all six of our objectives.

The deal on vote reweighting boosts the UK vote from 10 to 29. That enhances our influence relative to the medium and small countries. It ensures that the three largest member states (including the UK) will still be able to block decisions up to and including a European Union of 27; and it maintains our parity with Germany, even though Germany has 20 million more people. That is the first time since we joined the EU that we have increased our voting weight. We are proud to be the Government who secured this. I say to the noble Lord, Lord Haskel, and others who raised the issue, that this increase will benefit the smaller states. Her Majesty's Government have been a vigorous supporter of the smaller states and of enlargement. That will not change. Our voice will, it is hoped, be heard more effectively and more clearly.

We secured a smaller and better Commission. The next Commission will consist of one Commissioner per member state. I agree with the noble Lord, Lord Wallace of Saltaire, and a number of other noble Lords who emphasised the issue of institutional change and that the need for effective and efficient instruments with which to deliver that is of the utmost importance. Once we reach 27 member states, the Commission will be capped at a level below 27 with equal rotation for all member states.

We secured other reforms which will make for a more efficient Commission; for example, the right of the President of the Commission to decide on the Commission's internal organisation and to sack a Commission member if circumstances warrant. We secured more qualified majority voting where this was in the UK's interests. I was surprised and disappointed that the noble Lord, Lord Waddington, did not see the benefits for democracy and human rights which have been achieved by the changes which he highlighted and which have been proposed but which he questioned. However, I was comforted by the balance and sense of the noble Lord, Lord Richard, who spoke immediately after.

Qualified majority voting has helped us in a number of ways, for instance, in the ECJ's procedures, where this will make for more efficient justice; in trade in services and industrial policy, where UK business will benefit; and on appointments, where we are now more likely to get the right person for the job. We preserved our veto exactly where we said we would on tax, social security, defence, own resources, border controls and treaty change. We secured a more flexible EU. The new enhanced co-operation arrangements mean that groups of member states can now more easily move forward together in a given area. The UK and others will have the freedom to opt in but do not have to take part. We have secured language that ensures there will be no threat to the single market, and no hard-core or second-class members.

If I may respectfully say so, the noble Lord, Lord Richard, asked the correct questions as regards assessing Nice. We opened the door for enlargement. Nice agreed that these institutional changes complete those necessary for the accession of new member states and confirmed that the EU will be ready to welcome them from the end of 2002.

We also secured a good outcome on what happens after Nice. We agreed that there will be another intergovernmental conference—as many noble Lords have already mentioned—in 2004. That IGC will consider, first, how best to deliver the competences of the EU; secondly, how best to simplify the treaties to make them easier to understand; thirdly, the role of national parliaments in the EU; and, fourthly, the future status of the charter of rights. We ensured that the next IGC will not be an obstacle to enlargement—in fact, the new member states and applicants will play a full and active role in that IGC—and that the review of the charter of rights in 2004 will be without prejudice as to the outcome.

Moreover, Nice also agreed on the need for a deeper and wider debate on the future of Europe, and that before the next IGC there should be far-reaching consultations involving the people of Europe, civil society, national parliaments and others with an interest. A number of noble Lords have rightly highlighted that issue. This is not a superstate agenda; it is a British agenda as laid out by the Prime Minister in Warsaw last October. It is a people's Europe agenda and we welcome it.

This is why we welcome the Nice Treaty; why, as my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs has said, we aim to bring the treaty forward for ratification as soon as possible; and why we regret Her Majesty's Loyal Opposition's commitment to oppose a treaty which is manifestly in Britain's interests.

I cannot agree with the noble Lord, Lord Waddington, that Nice will not hasten enlargement. That is not a view taken by the applicant countries themselves. I was glad to hear that the view I have expressed was shared by a number of noble Lords. I refer to the noble Lords, Lord Williamson of Horton, Lord Inglewood, Lord Grenfell and Lord Dubs, and virtually all noble Lords who followed. I reassure the noble Lord, Lord Howell, that neither the applicant countries nor Her Majesty's Government take a simplistic view in relation to this matter. They and we understand the complexities and believe that the confidence and satisfaction we feel about the result achieved at Nice is well founded.

Nice opened the door for enlargement and the re-union of Europe. If I may, I remind the House why this Government, and successive governments before us, have supported that goal. Enlargement will enhance stability and security in Europe. It will help to entrench democracy and human rights. It will bring down barriers to trade and business, giving UK companies access to a single market of half a billion people. It will increase the prosperity of UK companies. The accession of the central and eastern European applicants will boost UK GDP by, on independent estimates, £1.75 billion per annum. It will help the fight against international crime. It will strengthen Europe's, and so Britain's, voice in the world.

I wish at this stage to answer a number of the questions posed by the noble Lord, Lord Williamson of Horton, and the noble Lords, Lord Grenfell and Lord Dubs, about the progress made so far. Where are we? The Luxembourg six—Cyprus, the Czech Republic, Estonia, Hungary, Poland and Slovenia—have opened all but two chapters in negotiations; that is, 29 out of the 31 chapters of the acquis, including the main difficult areas and have provisionally closed chapters 12 to 17. Accession negotiations with the Helsinki six—Bulgaria, Latvia, Lithuania, Malta, Romania and Slovakia-launched on 15th February 2000, are well under way. They have each opened between nine and 16 chapters and have provisionally closed six to 12. Target dates have galvanised previous negotiations. It is Her Majesty's Government's view that there is a strong case for setting a target date at the Gothenburg European Council in June 2001. The noble Lord, Lord Dubs, was right to highlight that as an important date.

The Commission's strategy envisages completion of negotiations with the best prepared countries by June 2002. That gives real credibility to my right honourable friend the Prime Minister's call for new member states to participate in the European parliamentary elections in 2004. With efforts on both sides there is no reason why that should not be achieved.

I hope that I shall be forgiven for mentioning once more the fact that over 50 per cent of our trade in goods and services is with the EU, that up to 3.5 million jobs depend on membership of the single market, and the fact that we attract inward investment because of our place in the EU. The UK gets 23 per cent of all investment into the EU, 40 per cent of all Japanese and US, and 50 per cent of Korean. As the chairman of Mitsubishi UK said last year:
"We locate in Britain because one of Britain's important strengths is its ability to act as a gateway to Europe".
The reforms which we agreed at Nice have strengthened further Her Majesty's Government's deeply held belief that the right policy, and the only realistic policy, for Britain is one of constructive engagement and partnership within the EU. We shall maintain that policy.

I turn to some of the specific questions that I was asked. First, I turn to the question asked by the noble Lord, Lord Monson, about the statute for European political parties. I believe that the noble Lord referred to the revised Article 119 which provides a legal base for the regulation of the funding of European political parties. European political parties already exist. They were first recognised in the Maastricht Treaty. This revision is to allow transparency in their funding and is a recommendation of the European Court of Auditors. We want a statute quickly. Qualified majority voting will help us to deliver that. The statute will apply to all European political parties regardless of their views and it will not, of course, apply to national political parties.

I turn next to the plethora of questions—if I may respectfully say so—fired by the noble Lord. Lord Grenfell, in his normal dynamic style. I agree that the fears of mass migration westward following enlargement are unfounded. We should make every effort to underline that fact. Her Majesty's Government's commitment to that is clear. The nature and efficacy of border controls are part of the accession discussions so there will be an opportunity for those matters to be dealt with. We are absolutely committed to involving applicant countries in the consultation process leading to the next IGC as well as in the IGC itself. The noble Lord also raised the issue of the common agricultural policy which I covered earlier.

I turn next to the issues raised by the noble Lord, Lord Blaker, and touched on gently by the noble Lord, Lord Howell, in relation to the name to be given to the European defence initiative; and the status of the European Council conclusions. I fear that the Ministry of Defence may have given the only possible answer to the noble Lord. The European strategic defence initiative creates only a capacity to act, not a standing force to do so. It may not be a catchy name; but the "European army" is simply misleading. I think that in this House, if in no other place, we appreciate accuracy. The conclusions of the European Council were agreed by the heads of government at Nice and are politically binding.

Having only 20 minutes allocated, I had thought that I should be racing through my speech. I can now speak more slowly.

My Lords, perhaps the noble Baroness has a moment to clarify her remarks about party political funding. She spoke about more transparency but is it not a question of more money? Taxpayers' money is to be handed from the European institutions to parties which satisfy the criterion of being European. Is that right?

My Lords, the real question is the effect. The need is to ensure transparency in the nature of the funding. The noble Lord knows well that the funding of European parties has been a matter of concern. How are they funded? From where does the money come? How do they account? There is unanimity of view that it is important that that transparency be maintained. These procedures will deliver that.

We have had a good debate. One of the interesting and warming aspects is that virtually without exception—there may have been two noble Lords who disagreed—there has been agreement that enlargement is a thoroughly good thing. Nice has brought about institutional changes which enable enlargement to take place more smoothly and effectively, although there may have been slight disagreements between ourselves as to how much further matters should have gone. Many different views are always expressed on Europe. A healthy debate is an important debate—and we have had a very healthy debate.

Nice has proved that developments in the European Union are going in the way that Her Majesty's Government and Britain would want. We have achieved the progress I mentioned because our partners know that we are committed to making a success of our EU partnership. It is essential that we remain part of it, influencing and driving the process where necessary. Our aim is the successful promotion and protection of British interests and the enhancement of peace and harmony in Europe generally.

8.4 p.m.

My Lords, it has been an excellent short debate. I thank all noble Lords who participated. I am particularly grateful to the Minister for the scope of her response. It has been an entirely satisfactory occasion on a subject to which undoubtedly noble Lords will have to return on other occasions. I beg leave to withdraw my Motion for Papers.

Motion for Papers, by leave, withdrawn.