asked Her Majesty's Government:

What undertakings they gave on United Kingdom contributions to the global environment facility or to biodiversity funds at the United Nations General Assembly special session held from 23rd to 27th June.

My Lords, in his address to the United Nations General Assembly special session, the Prime Minister confirmed United Kingdom support for the replenishment of the global environment facility. He also stressed the importance of combating the loss of biodiversity and proposed enhanced co-operation with key developing countries in significant environmental areas, including forests. The text agreed by the special session calls for a satisfactory replenishment of the global environment facility.

My Lords, I am grateful to the noble Baroness for her reply which, one hopes, bodes well for the future. But, as the special session was intended to review progress since the Rio Conference in 1992, are the British Government disappointed that, despite the good intentions of five years ago, world emissions of carbon dioxide have increased, large areas of forest have disappeared and many developing countries, whose co-operation is essential, seem disenchanted?

My Lords, at the United Nations General Assembly special session the Prime Minister reasserted the basic message from Rio that tackling poverty and protecting the environment are inextricably linked. Eliminating poverty is essential to caring for the planet and is a bridge which unites both the North and the South. Her Majesty's Government believe that improving the conditions of the poorest peoples helps look after the environment. I can assure the noble Lord that Her Majesty's Government will do what they can to go on persuading other nations, which may seem a little less enthusiastic than Her Majesty's Government, of the wisdom of that course of action.

My Lords, will the noble Baroness indicate the response to the Prime Minister's declaration that the United Kingdom would aim to reduce carbon dioxide emissions by 20 per cent. by the year 2010? Were any other countries ready to follow us in that ambitious target?

My Lords, I shall have to write to the noble Lord with a list of countries which are following the United Kingdom's lead in that respect. I assure the House that the United Kingdom will continue fully to support the global environment facility and that we are committed to its further substantial replenishment later this year. I shall write with the details of other countries' commitment on that front.

My Lords, in view of the very interesting observations of my noble friend about the relationship between poverty and environmental policy, does she agree that if third world countries are to play an effective part they will have a very heavy economic burden placed upon them and that consequently environmental policy should be central to our development policy under the new Department for International Development? When it arrives, will the White Paper deal with the environmental dimensions of development?

My Lords, I can assure the House that it will. Her Majesty's Government recognise the very considerable strains put on a number of emerging countries' economies in doing what needs to be done to support environmental issues. Her Majesty's Government believe that they have taken a lead on this matter and are encouraging other countries—both wealthy countries and those less economically advantaged than ourselves—to support the targets.

My Lords, is the Minister aware that concern about the lack of clear policy in the global environment facility in this country was first expressed publicly in this House in the debate conducted on the report of the Select Committee on Science and Technology on systematic biology research? Is she further aware that since then the Department for International Development has been in regular contact with the noble Earl, Lord Selborne, and myself, and the department's representative on the global environment facility council has ensured that very considerable improvements have been achieved through his actions? Will she ensure that the Department for International Development will maintain the pressure which I am quite sure is necessary if the money is to be well used?

My Lords, I can assure the House of the continuing pressure by the Department for International Development. The House may wish to note that the United Kingdom is the fifth largest contributor to the GEF and has met all its commitments in full. To date we have contributed £130 million. Thirty five per cent. of the bilateral projects of the Department for International Development are aimed primarily or partly at protecting the environment. The commitments add up to some £285 million.

My Lords, the Minister will be aware that there is to be another conference at Kyoto towards the end of the year. Can she say what extra environmental undertakings the United Kingdom may be giving at that conference?

My Lords, it is a little early for us to be able to make any specific undertakings. I wish that I could. However, Her Majesty's Government will continue placing considerable emphasis on, for example, the importance of the world's forests at that time.

My Lords, given the stress that the Prime Minister rightly placed on a satisfactory replenishment of the global environment facility in New York, can the Minister tell us exactly what figure the Government have in mind and therefore what contribution the Government are anticipating the United Kingdom can make? Can the Minister also tell the House when the final text of the special session will be available? That would greatly help this House and another place in answering these sorts of questions.

My Lords, I am unable to tell the noble Earl exactly when the special session record will be available. I shall arrange for it to be placed in the Library of the House when it is available. The extent of the replenishment is still a matter of negotiation. The negotiations began on 2nd May and the aim is to complete them by the end of the year. I am afraid that I cannot comment on the likely outcome at present, but I can assure the House that we are prepared to play a full part in reaching a satisfactory replenishment and to make a substantial contribution. We shall be encouraging other nations to do likewise.

asked Her Majesty's Government:

How many houses or flats were owned by departments of central government; how many were vacant; and how many were derelict, at the most recent date for which figures are available; and what measures are in hand to let those properties.

My Lords, the total number of homes owned by central government departments at 1st April 1997 was 6,833. Of those, 1,009 were vacant, 28 of which were specifically identified as being derelict. As the House will be aware, MoD properties are owned by Annington Homes and are therefore not included in those figures. Guidance on securing better use of government empty homes encourages departments to let empty properties. We intend to look again at existing guidance to see what further action may be required to tackle government empty homes.

My Lords, I thank the noble Baroness for her helpful reply. Can she say how central government expect local authorities and housing associations to manage their properties efficiently unless a clear lead is given by the departments of central government?

My Lords, I accept the point made by the noble Lord. It is important that government departments reduce the number of empty homes that they own, not only for themselves but in order to set an example to private, local authority and housing association landlords. That is why Nick Raynsford, the Parliamentary Under-Secretary of State for the Department of the Environment, Transport and the Regions, and myself have arranged a meeting with the Empty Homes Agency to discuss the issue and, I hope, take it further.

My Lords, is the Minister aware that traditionally government departments have a worse record of keeping empty properties than the local authorities, which were so badly berated by Members opposite when they were in government? Is it possible, now that funds are to become increasingly available to local authorities, for them or the housing associations, where they wish to do so, to enter into negotiations quickly to bring such empty properties into the mainstream for letting where they are so badly needed?

My Lords, my noble friend is absolutely right. It is incumbent upon the Government to put their own house in order—if I may use that phrase in this context—before lecturing local authorities, which have a better record than the Government in this area. We are exploring ways in which we can make better use of empty properties in the social housing sector. For example, if local authorities felt that, by applying their share of the additional resources released under the capital receipts initiative, they could use government empty properties to help meet priority housing needs in their area and it represented the best value for money, it would be possible to use the money in that way.

My Lords, can the Minister indicate what effective action is being taken to ensure that unoccupied premises are now occupied? We shall not then have to face the ironic situation in which many people are short of housing and yet a lot of vacant houses are going spare.

My Lords, it is policy, whenever a home is empty—particularly if it is awaiting disposal—that it should be let if at all possible. As I said earlier, the record has not been as good as it should have been and we are trying to improve upon it.

My Lords, bearing in mind that there is a shortfall of 350,000 houses or flats suitable for people who use wheelchairs, will the Government make certain that as many as possible of the units of accommodation that become available are adapted for wheelchair users before they are put on the market?

My Lords, I am grateful to the noble Lord for that suggestion. Bearing in mind that the capital receipts initiative may be used for upgrading and improving property, I shall make sure his point is transferred on.

My Lords, will my noble friend examine the report bearing my name, the Ewing Report on Housing for Wheelchaired Disabled, and follow the point that was made by the noble Lord, Lord Swinfen, about adapting a number of these houses for the use of people in wheelchairs? Does my noble friend accept that this problem has not arisen since 1st May? May I congratulate her on the action she is taking to make sure that these empty houses are fully occupied as soon as possible?

My Lords, I am grateful to my noble friend for both those points. I shall certainly look at his report. It is true that the situation we inherited 10 weeks ago is not one of which anyone would be proud. We wish to make progress, but it will take time to put right some of the things that have gone wrong in this area for many years.

My Lords, the noble Baroness indicated that a relatively small number of derelict houses were in the ownership of departments. Nonetheless, does the guidance given to departments include a recommendation that they keep all the houses and flats they own in good condition?

My Lords, we intend looking again at the guidance that is given to cover precisely those kinds of areas. It is important that we do not define as derelict properties that are habitable but simply need improvements.

My Lords, will the Minister return to the question of local authorities? Will she pursue with great vigour the local authorities that have the greatest number of empty properties? Those were vacancies which existed at 1st May and many of them accumulated in authorities under the control of the Labour Party. Perhaps I may give one example. In 1996, 4 per cent. of the Islington stock was vacant. The seven local authorities with the greatest number of vacancies are all Labour controlled. The number of local authority vacancies greatly exceeds the total number of government department empty properties. Does she agree that if the houses under local authority control were brought into use, that would be financially more cost-effective than releasing capital receipts, which would increase public borrowing?

My Lords, it might take some time to de-construct all the elements of that question. It is inevitable that any list of local authorities will have a predominance of Labour authorities, given the inability of the party opposite to gain power in local government. It is important to recognise that in percentage terms local authorities have done far better in this area than national government. However, it is true that local authorities are greater owners of property and therefore overall numbers are higher in local authorities. Any home that is unnecessarily empty is a wasted resource and one that could provide a home for someone who needs it. Some authorities already have effective strategies for bringing empty homes quickly into use. We want to see the poorer performers brought up to the standard of the best. The noble Lord should not be so swift to rubbish the capital receipts initiative which will help in bringing substandard property in the local authority sector up to standard.

asked Her Majesty's Government:

How they will ensure that it will be clear to all those visiting the projected millennium dome that it was built to commemorate the anniversary of the birth of Jesus Christ.

My Lords, we recognise that the millennium is both a Christian anniversary and an important landmark for everyone who measures time by the Gregorian calendar. The Secretary of State for National Heritage has emphasised spiritual and physical renewal as central to the New Millennium Experience at Greenwich. We are willing to work closely with the Christian Churches, and with those of other faiths and none, to achieve this.

My Lords, does the noble Lord realise what comfort there is in his Answer for those who were guided merely by the statement of the Government's position in the press release issued by the Minister without Portfolio 11 days ago which described the event as simply a chance for Britain to make a big statement about itself and to the rest of the world? Would not the omission of any reference to the central event we are celebrating, either in the dome or in the national programme, therein described as a "reaffirmation of faith in the nation's future", be an omission of the solid rock on which that faith ought to be built and which should be revisited?

My Lords, I am slightly puzzled by that question. The commitment to the emphasis on spiritual and physical renewal was made right from the very beginning and has never been abandoned. If it is not repeated on every single occasion, I think that is excusable.

My Lords, is the Minister aware of how much I and other Church leaders appreciate the Government's public welcome of the Churches' desire, together with other faith communities, to be involved at every level of the nation's response to the millennium? Can he confirm that this also crucially applies to the planning of what is to take place within the dome?

My Lords, I confirm not only what the most reverend Primate says but pay tribute also to his domestic chaplain who is the chairman of the Lambeth Group, which is the Churches' and other Faiths sub-group of the Millennium co-ordinating group. It is working closely with the Department of National Heritage in the planning for the millennium and for the dome. I can confirm that the group, composed not only of the Christian Churches but of other faiths, is playing an active part in the planning to which he refers.

My Lords, does the House agree that we begin our proceedings every day with Christian prayer? Does the noble Lord therefore agree that this is a Christian country and that the millennium should be approached in that spirit?

My Lords, I thought I had made our position clear. The emphasis of the millennium will be towards spiritual and physical renewal. That includes the emphasis on Christian prayer to which my noble friend refers. But, as will be recognised, that is not the only concern of the millennium celebrations.

My Lords, while I fully support the wise words of the most reverend Primate, will the noble Lord let the House know what exactly is going to be inside this so-called dome? Is it not in danger of becoming the best kept secret since the contents of Joanna Southcott's box? Will he further confirm that it is not a dome at all, which is a well-known architectural form supported from the inside and found at St. Paul's, St. Peter's and Santa Sophia, but is better described, supported from the outside, as a marquee, a tent or a wigwam?

My Lords, without accepting the pejorative implications of the noble Lord's description, I have to say that he is architecturally correct in his distinction between the millennium dome and a strict definition dome. As to what is going to be inside, and if I may concentrate on the emphasis of the original Question, it is for the Millennium company to decide what should be within the dome. I understand that consideration is being given not only to a place for quiet reflection but to the possibility of a chapel.

My Lords, is it not somewhat inconsistent for Christian celebrations of this kind to be financed by the proceeds of gambling? Would it not be more in keeping with our Christian faith if the large sums of money which are to be expended on this exercise were to be distributed to people in need and suffering in our community?

My Lords, I respect the views of my noble friend and of many noble Lords who, I know, will agree with him. However, I think he should remember that the National Lottery, whether one is for it or against it, has already collected £3.6 billion for good causes in this country, much of it for the relief of poverty and injustice. That should be taken into the balance.

My Lords, does the Minister gain the same impression as myself that, in view of the support given to the millennium dome, the Church of England is changing its mind about gambling, once a tenet of the Christian Church'?

My Lords, I am the last person who would seek to speak for the Church of England. I simply observe that the Lambeth Group of all Churches appears to be content with the lottery funding of the millennium.

My Lords, can the Minister confirm that the themes of physical and spiritual renewal which will run through the millennium celebrations are those which were identified by my right honourable friend the previous Secretary of State? Is the Minister aware of the considerable doubt about whether the millennium exhibition is actually going to take place? Can he reiterate my understanding that it definitely will take place? Will he also tell the House that it is going to be the best millennium celebration of its type anywhere on earth and that it will be a great success?

My Lords, I am not sure whether the noble Lord seeks to trap me in his last remarks by quoting from members of my own party. As regards the earlier part of the question, I hope that I made clear that the theme of spiritual and physical renewal has been part of the intention of the millennium since the very beginning and that that was the view of the previous government.

My Lords, given that the emphasis of the noble Lord's Answer has been so satisfactory as regards the Church and the future, may I remind him—

Question!

It is a question I am asking, if I may. If your Lordships say that I may not, then I shall ask the Minister whether he is already aware, as he should be, that the future does not begin today because, for us, it began 2,000 years ago?

My Lords, I respect the noble Lord's faith and his views.

My Lords, can my noble friend tell the House how the millennium is to be celebrated in Wales and Scotland?

My Lords, that is rather wide of the Question. It is true to say that four-fifths of the expenditure on the millennium will be incurred outside the Greenwich dome. It will be used in all parts of the country and that will include Wales and Scotland.

asked Her Majesty's Government:

How they intend to ensure that asylum seekers enjoy visible means of support pending a decision on their claims.

My Lords, we have made clear our concerns about the arrangements for asylum seekers made by the previous Government. Following a significant court ruling last October, support for destitute adult asylum seekers now rests with local authorities, in addition to responsibilities they already had under the Children Act. We will be working across Government to review the whole asylum seeker issue.

My Lords, I thank the noble Baroness for that Answer, especially for the last sentence. Does she agree that while the present arrangement under the National Assistance Act is a small mercy for which we must be thankful, it is nevertheless ineffective in the relief of hardship, unfair in its incidence on local authorities and of an administrative coherence it would be generous to describe as makeshift? Does she agree that it is urgent to come up with a rather better system?

My Lords, like the noble Earl, I too believe that no one should be left destitute in this country in ways that they cannot remedy by any act of their own. Therefore, I was personally delighted when I learnt what the previous Government apparently did not comprehend at the time that, as a result of the National Assistance Act 1948 and the court ruling of last October, no one in this country need be left destitute when they cannot remedy their plight. But I agree with the noble Earl that the present situation of churning responsibility onto other bodies and the effectiveness of these arrangements needs to be reviewed. It is for that purpose that the Home Office is leading a cross-government review of all the departments affected by asylum seekers, including the Home Office, the Department of the Environment, the DSS and the Department of Health. The DSS is already preparing its preliminary work for that purpose.

My Lords, can the Minister give an indication of the size of the problem as regards the number of asylum seekers and economic migrants coming into this country? What percentage is proving to be genuine or otherwise?

My Lords, we know the raw statistics of admissions and refusals for the past few years. We know that last year (1996) about 28,000 people came into this country seeking asylum. Of that number 6 per cent. were granted refugee status; 13 per cent. were granted exceptional leave to remain and 81 per cent. were refused. But when the previous administration introduced their social security changes last year, they saw fit neither to conduct research before implementing their policy nor to set in place research to monitor its effects. Therefore my noble friend will understand why I cannot answer him as fully as I would wish.

My Lords, is the Minister aware of the great difficulty that some local authorities are in? Although the responsibility has now fallen on them, they are not being given any special funding to meet the situation. From previous debates in which I have participated, the Minister will be aware that the asylum seeker and refugee problem varies very much, but is largely concentrated in London with particular boroughs being affected at different times. In those circumstances, what provision have the Government in mind to help financially the local authorities who are shouldering this great additional burden at the present time?

My Lords, so far the Department of Health has been reimbursing local authorities to the extent of a maximum of £140 per adult asylum seeker, or £280 a week for a couple, together with additional funds for children. That should represent a grant of £85 million for this year—a Department of Health reimbursement to local authority expenditure of some £85 million. In addition, local authorities may expect to spend in the course of a year anything between £5 million and £25 million. Therefore, of the original estimated savings of the department by the previous government, which were calculated at £175 million gross or thereabouts, nearly £100 million of that may have to go back to pick up the bill at local level.

My Lords, I can promise the House that I shall be shorter than many of the noble Baroness's answers today. Does the Minister recall a debate which took place in this House on 30th January 1996 when, in describing the regulations which govern asylum seekers and benefits, she described them as "shocking, chilling and indefensible"? Therefore, can the Minister tell us why she is now waiting for a review to tell her what she told us she knew then and how to deal with the problem?

My Lords, with pleasure. I am so pleased that the noble Baroness, Lady Anelay, saw fit to ask that question. The reason is that at the time the government introduced those regulations they were knowingly and deliberately— although they had obviously not consulted their lawyers—refusing any means of support to adult asylum seekers without dependent children. The courts subsequently saw fit to rectify that government decision by explaining to them that the National Assistance Act 1948 applied to individuals in this country who should not remain destitute through no fault of their own. That is why we are now able to take the situation forward and not look back to where the government of the noble Baroness left us.

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

moved Amendment No. 1:

Page 2, line 21, leave out ("may") and insert ("shall").

I note the careful way in which the noble Lord has introduced this amendment. Both I and the Committee will note his own expertise and antecedent interests in this area of policy. As the noble Lord has pointed out, I have added my name to this amendment. I have also tabled an amendment in my name on this matter. I believe that the two must be closely linked together. Both amendments are acceptable to the Government on the understanding that they stand or fall together. I am glad to see that the noble Lord affirms that that is the position.

On Second Reading I said that I had carefully reflected on the question whether the Secretary of State should be required to have regard to the matters in Clause 2 when setting licence fees. It was the noble Lord, Lord Derwent, who made that suggestion in the debate. I am grateful to him for having done so because it has enabled me to reflect further on the matter. I am also grateful to the noble Lord, Lord Mottistone, for tabling his own amendment.

The intention of the Government is that spectrum pricing must be driven by spectrum management. I have said that on numerous occasions, and I believe that it has been accepted by your Lordships. I do not propose to argue that case in any detail. We believe that the noble Lord is right in principle. For that reason I have added my name to his amendment, subject to the addition of some words in the second of the two amendments. The drafting of Clause 2 is a matter of considerable legal complexity. That has been indicated by the representations that have been made on behalf of the industry to my department about these issues. Simply to replace the word "may" with "shall" has a very serious negative effect; namely, that the list of matters set out in Clause 2(2) will become closed. In the particular circumstances of this industry I believe it is undesirable that that should be the case.

In those circumstances, the Secretary of State would be required to have regard to the matters listed and would be foreclosed from making any allowance for changes in the market or technology. That situation is bound to occur from time to time. If that were to be the case, it might well be desirable to take other spectrum management considerations into account. Such changes are by their very nature unpredictable but also inevitable given the dynamic nature of the business that we are talking about here and the diversity of the services that are brought into question. Moreover, the replacement of "may" with "shall" would make the situation mandatory and prevent the Secretary of State from allowing fee concessions for deserving cases, for example safety of life charities, as such concessions are granted for broad social or policy reasons that strictly speaking are not directly connected with spectrum management. That situation was welcomed by the noble Lord, Lord McNally, on Second Reading. I believe that your Lordships would wish that that should continue to be offered under the Bill. I believe that most of all in this industry inflexibility and rigidity would be inadvisable.

It is for that reason that I have tabled a complementary amendment that adds the words "in particular". That would foreclose the problems about which I have been speaking. While emphasising the matters listed as those to which the Secretary of State should have regard, nonetheless this will provide an element of necessary flexibility which will enable the Secretary of State to respond to unpredictable changes in the circumstances that may prevail and allow for concessionary fees. I believe that both amendments will be acceptable to your Lordships but both stand or fall together.

I hope that the noble Lord will regard that as a helpful reply. Things can only get worse later this afternoon, but at least we start on a very helpful basis.

I declare an interest as a director of Orange PLC, which is directly affected by this Bill. In speaking to this and other amendments, I shall also be reflecting the reviews of all four mobile telephone operators and the Federation of Communication Services, which is their trade body.

My chief purpose in rising to speak on this amendment is to thank the Minister for the courteous way in which he listened to my suggestions at Second Reading. We believe that his Amendment No. 2 is an improvement and we enthusiastically accept the second amendment as well as the first.

Perhaps I may enter into the spirit of the afternoon by saying that what has been proposed sounds eminently sensible. However, I should like to refer to one matter arising from the Minister's remarks. At Second Reading on 5th June, he gave an assurance relating to the emergency services when he said (col. 717):

"We are committed to ensuring the continued availability of spectrum to essential public sector users: the Armed Forces, emergency services, police, fire",

and so on. I should be grateful if the Minister could amplify that statement and make it clear whether that assurance relates also to providers of essential services, such as electricity, gas, water and sewerage, which are not only vital to modern life but which also have major safety implications. I shall, of course, fully understand if the Minister does not want to make a precise response now.

I thank the noble Lord for introducing the question of the emergency services. However, I should prefer to deal with that in its proper sequence. We shall come to that matter later. I believe that the noble Lord will get a pretty affirmative reply then.

I am grateful to the Minister for his encouraging response to my amendment. I fully agree that his amendment, Amendment No. 2, is totally complementary to it. In fact, it both strengthens and makes possible my amendment achieving what was intended in the first place. Therefore, I hope that other noble Lords will agree that that amendment should be accepted also. I commend Amendment No. 1 to the Committee.

moved Amendment No. 2:

Page 2, line 21, after ("regard") insert ("in particular").

moved Amendment No. 3:

Page 2, line 24, at end insert ("but he shall not prescribe sums which are greater than are in his opinion necessary to promote the optimal use of the electro-magnetic spectrum").

I thank the noble Lord for tabling this amendment which helps me to clarify the situation and to underline the points that he has already stressed which have been set out by my right honourable friend the President of the Board of Trade and myself on numerous occasions. The noble Lord is right to express the concerns that he has. However, I submit, with respect, that the amendment is unnecessary. Perhaps I may explain why. It is not a question of simply making assurances, although I hope that appropriate credence will be given to the assurances that have been given in this regard.

There are provisions in this Bill and elsewhere which safeguard the situation that the noble Lord is seeking to achieve. The commitment that we have given over and over again that the use of the new powers will be driven by spectrum management considerations is beyond doubt. I believe that the industry has noted that. The Government would be extremely imprudent if they were to go back on their word and, as far as I am concerned, there is no question of that happening.

Clause 2, as amended, sets out the matters to which the Secretary of State shall have regard in particular in setting fees under the clause. The factors listed, the demand for and availability of spectrum, spectrum efficiency, innovation and competition are all related to spectrum management. The amendments that have been made to Clause 2 underpin my assurances that spectrum management considerations will be at the heart of administrative pricing.

There is an additional safeguard in European law in the shape of the licensing directive, which also constrains the power to set licence fees above cost in relation to telecommunications services. That is a very important provision. If fees were raised to a level higher than could be justified under Clause 2 or in contravention of the directive, the Secretary of State— the President—could be open to challenge in the courts. It is, therefore, wholly superfluous to state explicitly in statute that the Secretary of State should not act in a way that would conflict with the law. As a matter of law, the Secretary of State cannot legally exceed her powers.

I readily appreciate the concerns that the noble Lord has expressed on behalf of the industry. The further amendments that have been tabled to Clause 2 should, I hope, be sufficient to meet those concerns. If reinforcement is necessary, there is the licensing directive. That is why I do not believe that further belts and braces are necessary. In those circumstances, I hope that the noble Lord will feel able to withdraw his amendment. I repeat that I readily understand why he tabled it.

I am grateful for the Minister's remarks about spectrum management considerations being paramount in this context and for his confirming the link between pricing and administrative efficiency. It was helpful that he drew attention to the European licensing directive, to which, as he pointed out, it is not necessary in law to refer specifically in this context, but it is important at the same time to draw it to the attention of the wider public because some anxiety has been expressed outside the Chamber on that point.

I thank the Minister for his remarks. I should like to study particularly what he said about European law, on which I confess that I am not fully briefed. It would be churlish not to accept what the Minister has said by way of assurance, and at this stage I beg leave to withdraw the amendment.

moved Amendment No. 4:

Page 2, line 32, after ("of") insert ("the part of").

It is right that the noble Lord should ventilate this point, although I hope that when he has listened to my explanation he will feel it appropriate not to press the issue. The amendment as drafted would not have quite the effect that the noble Lord postulates because it would remove the possibility of cross-subsidies from the factors to which the Secretary of State is required to have regard in setting fees, but it would not prevent her from taking that course.

In any case, all licence fee income has to be paid into the Consolidated Fund. The level of fees will be determined under Clause 2. The payment of financial assistance under Clause 5 is quite separate from that. That would be decided independently of those previous considerations. It would be done on the merits of the case for the additional expenditure contemplated. There is no necessary relationship between the two procedures, as I stated on Second Reading in these memorable words:

"There can be no question of direct hypothecation of spectrum pricing revenues".—[Official Report, 5/6/97; col. 721.]

In view of that explanation, I hope that the noble Lord, who has, as I say, appropriately put down the amendment because it is useful to have the amendment and the discussion on the record, will feel able to withdraw it.

I thank the Minister for that reply. I suspected that there might be what I would call accounting difficulties because the funds obviously belong to the Consolidated Fund. If the Minister could give me some comfort that when considering these various charges he will be regarding each part of the spectrum, as it were, by itself and that we need not fear as a matter of policy that the Government would seek to cross-subsidise, that would give me considerable reassurance.

I cannot go beyond saying what the Secretary of State is required to do. That is already set out. I do not want to say anything which would in any way depart from that state of affairs. The situation is clear. I hope therefore that the noble Lord will not pursue the matter.

I thank the Minister. It is useful to have this short debate on the record. I beg leave to withdraw the amendment.

moved Amendment No. 6:

Page 2, line 37, leave out ("services which use wireless telegraphy") and insert ("telecommunication services").

moved Amendment No. 7:

Page 2, line 38, at end insert?—

("() the interests of consumers, purchasers and other users in respect of the prices charged for, and the quality and variety of, services provided by means of wireless telegraphy or apparatus supplied in connection with such services.").

The noble Lord has put a powerful argument in favour of the amendment. I shall deal with it in a rather longer way than the noble Lord sought to deploy. The amendment raises some important issues. Among those important issues are consumer issues. They need to be taken clearly into account when setting fees. I argue that the amendment is unnecessary, and I cannot support it for reasons that I shall give.

The amendment is unnecessary because Oftel and the Secretary of State have a duty under the Telecommunications Act 1984 to promote the interests of consumers, purchasers and other users in relation to telecommunications services which cover the important business radio services. In fact, the proposed amendment is based on wording from that Act, as the noble Lord will recognise. After all, if he does not recognise it, who will?

The Act concerns the regulation of telecommunication services and networks. It is the appropriate place therefore for the duty and the powers to enforce it. The Wireless Telegraphy Act 1949, on the other hand, concerns the management of the radio spectrum. Adding a similar duty to that Act could lead to duplication and there would then be a risk of confusing the roles of the agency and Oftel. My officials have consulted Oftel, which does not support the amendment. We consulted also the NCC, and it has no comments on it. I am not seeking to snub the noble Lord. He knows that well. However I think it right to point that out because concerns were not expressed by those organisations.

The amendment is not appropriate in the context of spectrum pricing which is concerned with the pricing of the raw material to provide a wide range of services. Some of those are self-provided—for example, private business radio—and others, such as mobile telephony, are provided for end customers.

Whether licence fee increases or reductions are passed on to radio users' customers, and how that is done, should surely be a matter for their own commercial judgment. For example, a mobile telephony operator may decide to absorb fee changes or to pass them on in the form of call charges or rental. The effect on subscribers will be different in each case. It would be difficult for the Secretary of State to predict and have regard to the interest of consumers, purchasers and other users in the degree of detail required by the amendment.

Consumers' and users' interests are already catered for in the context of spectrum pricing by Clause 2(2). For example, economic benefit in paragraph (c)(ii) includes the benefits to both consumers and users. Work carried out for the Radio Communications Agency on the economic impact of radio contains broad estimates of the quantity known as "consumer surplus" which measures the benefits for consumers and the efficiency gains accruing to users which could be taken into account.

In addition, consumer interests will be promoted by virtue of the duty to have regard to the development of competition which is a potent force working to consumers' advantage. The Government are fully committed to consumer protection and consumer interests within the Bill and under the existing provisions of the Telecommunications Act. The amendment is therefore unnecessary. It is not altogether appropriate, and I hope that the noble Lord will feel able to withdraw it.

I am grateful to the Minister for his full response to the points inherent in the amendment. If I have in any way misled the Committee or the Minister I apologise. I made my remarks upon the basis of information that I had, which I understood to be correct. Having heard all the Minister has said about the point, I shall agree with the advice that he gave me and beg leave to withdraw the amendment.

moved Amendments Nos. 8 and 9:

Page 2, line 39, leave out ("subsection (1)") and insert ("this section").

Page 2, line 40, at end insert—

(""telecommunication service" means a service falling within paragraph (a) of the definition of such a service in section 4(3) of the Telecommunications Act 1984").

I wish to make a short, important drafting point. It occurred to me only while listening to the interesting discussions in Committee. The noble Lord, Lord Clinton-Davis, rightly described Clause 2 as giving rise to complexity. It certainly does when read in connection with Clause 1, where we find that there is power to make regulations. In the first line of Clause 2, we find that:

"In exercising his powers under section 1 to prescribe sums payable in respect of wireless telegraphy licences… the Secretary of State may have regard to the matters specified in subsection (2)".

However, it is important to note that Clause 1(3) refers to regulations which must be made and which affect the application of Clause 2.

I turn to my main point of difficulty. Clause 2(3), as amended by Amendment No. 8, now reads:

"In this section 'prescribe' means prescribe by regulations or determined in accordance with regulations".

It may be that I am speaking from ignorance, but I do not believe that I am. I do not recollect a phrase such as:

"prescribe by regulations or determine in accordance with regulations".

Whoever must determine the outcome may from time to time vary in opinion or from the opinion of other people who have to determine. The use of the expression "or determine in accordance with regulations" when used as an alternative to "prescribe by regulations" could give rise to uncertainty of legal effect. I do not ask for an answer now. I ask Members on the Government Front Bench carefully to consider between now and the Report stage the effect of lines 39 and 40 as now drafted.

I wish to make a further suggestion, which I hope is helpful. Clearly, the regulations mentioned in line 39 must be regulations under Clause 1(3) and not a fresh set of regulations made under Clause 2. Therefore, in order to remove the uncertainty, I suggest that after the word "regulations" in line 39 the words "made under Clause 1(3)" should be inserted. Those are my two specific suggestions. Of course, there may be better ways of dealing with the matter, but as it stands it may result in confusion.

I always pay close attention to the arguments of the noble Lord, who I know is assiduous in such matters. I frequently agreed with him when I was on that side of the House. I do not know whether on those occasions he wanted me to do so, but I frequently did.

I am not sure that the noble Lord has a good point, but of course I shall reflect on the matter. The regulations set out in Clause 1 specifically refer to "regulations under this section". Clause 2(3) states:

"'prescribe' means prescribe by regulations or determine in accordance with regulations".

That is an all encompassing situation. However, it is right that we should clear up any ambiguity that might exist. I am not convinced that the noble Lord is right, but, as he anticipated, it would be wrong of me to make up my mind on the spur of the moment. Consequently, I shall probably write to him before the Report stage, otherwise he has his remedy at that stage.

moved Amendment No. 10:

Page 4, line 8, at end insert ("except that regulations made under this section shall not apply in relation to any application for the renewal of any wireless telegraphy licence which is in force immediately before the passing of this Act").

Once again, I find it possible to express sympathy with what underlies the noble Lord's argument, but I am afraid that I must withhold my support. I hope that my reasons for that will be satisfactory to him.

I have given undertakings, which I am happy to repeat, that we do not intend to require existing licensees to enter an auction for the right to continue to provide current services within their existing spectrum allocation. The noble Lord, Lord Inglewood, was also concerned about that point.

As the noble Lord sought to underline, we need stability and certainty, especially when one is thinking of large investments in networks and systems, which is frequently the case. A technical and important issue arises from the reference in the amendment to the "renewal" of licences. The mobile telecommunications operators' wireless telegraphy licences will continue in force, so long as the appropriate fee is paid annually, until revoked or surrendered. The amendment could not apply to such licences because, technically, they are not renewed but continue in force from year to year.

I do not wish to quibble about the drafting of the amendment. That is not what we are about in a discussion of this kind. However, I mention the matter as an alternative way of meeting the noble Lord's concern that existing licensees might find themselves having to bid for the spectrum which they occupy in order to continue to provide their current service. To hold an auction, it will be necessary first to revoke the existing licence. Security against that may be conferred under Clause 4, as indeed it is under Section 3A of the Wireless Telegraphy Act which Clause 4 replaces.

The mobile telecommunications operators have been given certain assurances about the circumstances in which revocation or variation will be enforced without the consent of the licensees. I am happy to provide an undertaking that the operators will be given exactly the same security under Clause 4 which they currently enjoy. That will protect them effectively against having to undergo an auction in the circumstances which the noble Lord's amendment seeks to identify.

I hope that that will be sufficient to satisfy the noble Lord. I hope that the further undertaking which I have given will also buttress the position that he has sought to address. In those circumstances, I ask the noble Lord to withdraw the amendment.

Before the noble Lord sits down, and before my noble friend Lord Derwent withdraws the amendment, I must say that having listened to the Minister carefully I was hoping that he would give an assurance that the application of Clause 3 would not be retrospective in any way. The amendment would prevent it from being retrospective and that is its virtue. Will the Minister give an assurance that there will be no question of retrospection of effect?

The noble Lord has more experience than I of this Chamber. However, we are in Committee and it is not necessary for the noble Lord to say, "Before the noble Lord sits down" while we are still on the amendment. There is no intention here to be retrospective. I thought that I had said that, although perhaps not in quite the precise terms which the noble Lord wanted. But I think I am able to satisfy him now.

I am grateful to the Minister for his response. I am grateful too to my noble friend for raising the matter. It seems to us that the issue we are discussing is of very considerable, practical importance. I am grateful to the Minister for what he said about that and for the undertaking that he gave to the Committee in relation to it.

Perhaps I may raise one consequential point. Were the position to appear unsatisfactory as regards possible security of tenure, if I can express it that way, of those holding licences, it seems to me that one would then logically have to consider what, if any, question of compensation there may be for what one might describe as the loss of legitimate expectations. I am sure that everyone would agree that the right way to proceed, if we can, is by not entering a world where one needs to consider that matter. That can be achieved by ensuring that everyone is clear, satisfied and happy with the legal and, if I may so describe it in a non-legal sense, the equitable position we are in.

The question of compensation is a very broad area. I believe that we should be opening a can of worms if we were to inject the subject of compensation here. There is no question that others would then seek compensation and there would be real problems, as I believe the noble Lord appreciates. I repeat that we have had intensive discussions. The noble Lords, Lord Derwent and Lord Mottistone, are very well aware of that. The industry's anxieties were put to rest as a result of those discussions.

I am grateful to the Minister for the repetition of his assurances. However, I am very conscious also that, quite correctly, he has chosen his words extremely carefully in answering the amendment. I hope that he will not take it amiss when I say that, of course, I shall withdraw the amendment at this stage but I should like to study carefully in Hansard what he has said in case it seems wise to return to the matter on Report.

Before the noble Lord withdraws the amendment, perhaps I may say that I never take it amiss when someone says that he will consider what I have said.

I beg leave to withdraw the amendment.

had given notice of his intention to move Amendment No. 11:

It may be for the convenience of the Committee if I were to move the amendments instead of the noble Lord, Lord Mottistone. I may not be able to describe the amendment with the exactness and precision of my noble friend but the Minister would have an opportunity to respond and let us know what he would have said in response to the amendment.

Does anyone intend to speak to the amendment because I should like to make some comments on it?

I have some understanding of the argument behind the amendment. I understand that there has been concern about the lack of transparency in the current licensing process, in particular as regards major users who self manage spectrum. While fees are known via the published fees order, it is impossible to assess the efficiency of spectrum use without additional technical information. For historical reasons, such information is currently classified as confidential, although if an organisation is prepared to invest the time and money it can be readily gathered using modern scanners and survey equipment.

I understand that for several years it has been the stated intention of the agency to facilitate access to fixed link and base station details by external spectrum management organisations in line with what happens in Australia. If that information is provided, then, along with publication of the fees for systems in different regions, the industry will have full visibility of fees being charged for a spectrum used, and, given the efficiency of spectrum utilisation that is achieved, will be able to identify opportunities for frequency sharing. It is believed that the change as proposed by the amendment would, on balance, be beneficial.

I understand the general sentiment behind the amendment with which we are not unsympathetic. However, we feel that the wording of the amendment may be too broad. The mobile telephone operators have some concern, both from a practical point of view and also because of commercial confidentiality. In particular, the companies would not welcome detailed information about each of our mast sites and what frequencies they radiate being made available so readily both to our competitors and, indeed, to possible protestors who may have objections to a mast for environmental or other reasons.

If the Minister is minded to accept something along the lines of the amendment, with which, as I say, we are in broad sympathy, we would welcome the opportunity between now and Report stage further to discuss, both with his officials and also with my noble friend Lord Mottistone, the possibility of a slightly more restrictive wording.

We have had an interesting debate. The last thing in the world that any of us would want is to see the noble Lord, Lord Mottistone, in the Tower, or anywhere else quite as draconian, for offending against the rules of this place. I do not know the nature of the relevant sanctions, but I am sure that they would have been extremely draconian. Indeed, for one moment I thought that the noble Lord, Lord Inglewood, was going to find himself in a similar position when he singularly identified himself with the noble Lord, Lord Mottistone, by suggesting that he should move the amendment for him. As a result, he too would have ended up in the Tower. The debate has been made possible by the ingenuity of the noble Lord, Lord Inglewood, and of the noble Lord, Lord Derwent.

I am not unfamiliar with the arguments involved with this amendment because they have been postulated to my officials and, therefore, so far as concerns any further discussions which may take place, I think it would be better if I were to read into the record the position that the Government take on such matters. We can then forget the slight embarrassment suffered by the noble Lord, Lord Mottistone. I must say that I sympathise with the noble Lord because the rules of this Chamber can sometimes be very arcane and he is obviously completely unfamiliar with them.

It is helpful that the amendment has been tabled, although I am not sure whether the noble Lord is even permitted to table it in the circumstances. However, it has at least been spoken to and that is good enough. It enables me to set out how the Radiocommunications Agency manages the radio spectrum in a transparent way. Transparency in the spectrum management process is a desirable objective. On Second Reading, I stressed our commitment to consultation on spectrum management matters. That would include the use to be made of the new charging powers that the Bill would confer. So far as concerns consultation, that is a matter which we can address later in our discussions in relation to other amendments. However, it is relevant to the question of transparency, which goes to the heart of the amendment.

The agency already undertakes extensive consultation via a network of standing consultative committees and ad hoc consultation exercises; and, indeed, such an exercise is currently under way in relation to the implementation of spectrum pricing. Each year the agency publishes and consults on a comprehensive survey of the use of the radio spectrum combined with its strategic plans for managing that spectrum. It has invested heavily in advanced mobile equipment to monitor the use being made of the airwaves and also makes available detailed reports of the results of its monitoring, which has concentrated in particular on congested areas in major cities—a point that I made during the previous debate. All those documents are available free of charge, whereas the amendment contemplates charging as the cost is covered by licence fees.

However, the agency is already able under common law to recover the costs it incurs in providing information if it is appropriate so to do. All that consultation necessarily involves making available a considerable amount of information about the current use of the spectrum and the agency's future plans. I reaffirm the commitment to consultation, openness and transparency. I believe that that is what the noble Lord, Lord Derwent, was seeking.

In future, the agency aims to make even more information available about the use of frequencies at specific sites. However, there are practical constraints on the speed with which this can be accomplished. It would be necessary to hold the data in a format that is useful and easily accessible. The agency could not easily do that at present. It is in the process of implementing major developments in its information technology systems, but there is some way to go before the work will be completed.

I turn now to the amendment. The first specific comment that I should like to make is that, as drafted, it would do absolutely nothing to enhance transparency as it states only that the Secretary of State "may" make information available. The agency already has the power to disclose information from its databases, subject to overriding considerations of national security, law enforcement, commercial confidentiality—a point rightly made by the noble Lord, Lord Derwent— competition and the provisions of the Code of Practice on Access to Government Information and the Data Protection Act. Therefore, it already makes copious amounts of material available and it intends to do even more in the future in that direction.

Secondly, the amendment does not allow for the legitimate expectations of licensees regarding commercial confidentiality and security. That is a most important point and one which has been underlined to us many times in our discussions. Indeed, the noble Lord, Lord Derwent, made the same point here this afternoon.

The question of greater access to the agency's database of assignments was one of the issues which arose in a wide-ranging consultation carried out under our predecessors back in 1994. The responses showed significant concern, not just about national security— and provision is made in the amendment for that—but also commercial confidentiality. It would be possible for a competitor to gain information from the database about frequencies used and the disposition of transmitters and hence the extent and nature of licensees' businesses. I believe that that could lead to very damaging commercial revelations. Regrettably, the amendment makes no allowance for it.

I do not wish to be unduly critical of drafting because I suffered from the same fate when speaking from the other side of the Chamber. However, I hope that the noble Lords who have addressed the matter will realise that this is a significant point; indeed, it could be very damaging if we were to ignore it. Moreover, the amendment does not provide for those licensees, such as security companies, which have a very good reason not to disclose details of their assignments in case the information could assist criminals. Many other users could have legitimate concerns if the agency made more information freely available, and it would not be right to proceed without full consultation to ensure that necessary safeguards can be provided. I am sure that the industry would wish me to make that point, and I do so readily. There are difficulties and complexities in legislating on this topic. However, I believe that what we have here is a careful balance between what can be achieved and the difficulties and the concerns that the industry has expressed about revealing too much.

I do not want my department—or, indeed, myself—to be unduly secretive when requests for information about spectrum assignments or use are made; quite the contrary. However, all requests for information about licensed radio systems, as for any government information, must be dealt with in accordance with the Code of Practice on Access to Government Information. Under the code of practice, information must be provided unless withholding it can be justified in terms of the exemptions in the code.

I have one further point to mention; namely, that we shall be considering a freedom of information Act in the relatively near future. The arrangements in the code in terms of openness are to be strengthened and placed on a statutory footing when that legislation is enacted. I hope that the noble Lord will accept that the agency does operate within the spirit of the amendment. I also hope that no one, although I am not sure who, will decide to press the amendment further today.

I am most grateful to the Minister. I for one shall read his remarks with great care. I beg leave to withdraw the amendment.

moved Amendment No. 12:

Page 4, line 36, at end insert—

("() The Secretary of State shall, with the consent of the Treasury, consider making a grant to licensees whenever a licence is revoked or varied under subsection (5)(b) in a frequency hand where equipment has been installed within five years previous to the revocation or variation, and warning of the revocation or variation has not been given to the licensee prior to installation of the equipment.").

I congratulate the noble Lord, Lord Inglewood, on the erudite way in which he proposed this amendment, particularly as he had only about 10 minutes' notice.

We understand the thinking behind the amendment and the concern that the speed of change in the radio industry may require speeding up the rate at which radio frequency bands have to be converted from one radio application to another, necessitating the clearance of existing users from those bands. However, Clause 5(2) already provides for the payment of financial assistance with the consent of the Treasury where the grant is likely to promote the efficient use or management of the radio spectrum. This power might on particular facts extend to circumstances in which it became necessary to clear a band to give effect to an international obligation or Community requirement. In the normal course of events the agency would hope to be able to give maximum notice of the change because such developments normally unfold over a period of years and involve full consultation and discussion with those affected.

Any application made to the Secretary of State would have to receive careful consideration as a matter of good administrative practice. Surely there is no need to oblige the Secretary of State to consider applications. Moreover, Clause 1(3)(c) would provide for licence fees to be refunded where this was appropriate. On a matter of detail I query the rationale for the cut-off of five years in the amendment. Differentiating in this way seems slightly arbitrary and risks creating anomalies. There is the further point that the amendment does not distinguish between equipment that has been installed for some time and is already depreciated, if not obsolete, and equipment that was installed just before the variation and revocation. Five years is a long time in a fast-moving industry such as telecommunications.

I appreciate that the amendment would not require the Secretary of State to make a grant in the circumstances postulated, but, nonetheless, it does seem excessively prescriptive. I hope the noble Lord will feel able to withdraw his amendment and consider my explanation.

I beg leave to withdraw the amendment.

moved Amendment No. 13:

Page 4, line 45, at end insert ("and to provide for the training and education of radio engineers in efficient spectrum management techniques").

The amendment as proposed narrows the scope of Clause 5(2). I am not sure how the noble Lord can doubt our commitment to training. That was the centrepiece of the Chancellor's Budget only last week. Clause 5 of the Bill provides the Secretary of State with power to make grants to persons where, in her opinion this is likely to promote the efficient use or management of the radio spectrum. This is a broad enabling power and there are a number of ways in which we envisage that it might be used. For example, it might, in certain circumstances, be used to provide assistance to businesses to enable them to adopt more spectrum efficient technologies. It might also be used to make payments to businesses which are required to relinquish spectrum where the Radiocommunications Agency, for whatever reason, is not able to provide the period of notice which it normally aims to provide in such circumstances. The power might also be used, as was explained during our Second Reading debate, to enable the agency to support courses provided by universities for the training of radio engineers in spectrally efficient techniques.

The amendment tabled by the noble Lord is therefore fully in line with the way in which we envisage that the power may be used. However, his amendment covers only one possible form of assistance among the many which might be envisaged. Things change. There are also no doubt possible uses of the power which will emerge in the future which no one has yet thought of. For these reasons, therefore, I consider that it would be better not to seek to define narrowly the way in which the power is to be used. I therefore invite the noble Lord to withdraw his amendment.

At the risk of being sent to the Tower I wish to thank my noble friend Lord Inglewood for moving these three amendments standing in my name, and indeed the Government for giving such a full answer to all three.

I hope the noble Lord will forgive me but I understood that he was under an obligation not to take part in debates on these matters because of his consultancy arrangements.

In the circumstances I hope that it will have been in the best interests of the Chamber for the matters discussed in response to my amendments to have been considered by the Committee. I beg leave to withdraw the amendment.

moved Amendment No. 14:

Page 5, line 4, at end insert—

("(1A) Before making regulations under any provision of this Act, the Secretary of State shall—

(a) publish in the London, Edinburgh and Belfast Gazettes a noticex2014;

(i) stating that he proposes to make regulations under that provision,

(ii) setting out the general effect of the proposed regulations,

(iii) specifying an address from which copies of the proposed regulations may be obtained, and

(iv) specifying a time (not being less than 28 days from the date of publication of the notice) within which representations with respect to the proposed regulations may be made to him, and

(b) consider any representations which are made to him within that time.

(1B) Subsection (1A) does not apply in respect of any regulations if it appears to the Secretary of State that by reason of the urgency of the matter it is inexpedient to publish a notice under that subsection.").

I should like to take the opportunity of expressing the industry's gratitude to the Minister for this firm commitment for consultation over pricing. The amendment meets all the matters for which I asked at Second Reading, and we are most grateful.

I am even more grateful for the undertakings in the Minister's remarks about the wider consultation. Clearly we should not be limited to statutory consultation. The kinds of issues on which we should like to continue to consult are spectrum allocation, spectrum management and international aspects.

I wish to mention one aspect as regards the international scene. We should avoid a situation where UK operators have their access to spectrum unnecessarily restricted by the reservation of spectrum in international treaties to satellite operators based outside the United Kingdom. Such operators would pay no UK spectrum fees and no UK taxes. That kind of issue does not arise out of regulations under this or any other Bill. However, we might suddenly find ourselves limited by other negotiations outside the United Kingdom on which we would welcome the continuing consultation which we have enjoyed with the department.

I wish to join with the remarks made by my noble friend Lord Derwent about the steps ' that the Government have taken to ensure wide consultation in this regard.

Perhaps I may take this opportunity to ask whether the Government have any further thoughts about the possibility of the proposed spectrum management advisory group, an idea put to them, I understand, by the industry.

On the international matters to which the noble Lord, Lord Derwent, alluded, this Government have no wish to see our own industry impeded or embarrassed. Indeed, we wish to ensure its success. The very matters to which he has referred should be issues which are discussed openly in the consultation to which I have alluded.

The agency issue to which the noble Lord, Lord Inglewood, referred, is still under discussion. Perhaps I may bring the noble Lord up-to-date on the matter by correspondence. That may be the most appropriate way to deal with the issue.

moved Amendment No. 15:

Page 5, line 5, after ("Act") insert—("(a) in the case of regulations under section 1,").

The noble Lord is right to be concerned about the issues raised in the amendments, in particular the introduction of spectrum auctions, in view of their possible impact on telecommunications services and the amounts that might be raised.

As I have frequently said, we are committed to full consultation before regulations are made under Clause 3 of the Bill. In addition, the government amendment to which I have referred will add a statutory duty to publish a notice of those regulations, including those under Clause 3, and we are under a duty to take those representations fully into account.

There will also continue to be extensive non-statutory consultation, as I have already said, and a consultative document on the introduction of advanced digital mobile telecommunications services—known as "third generation mobile" or the "universal mobile telephone system"—is to be issued which will put forward for comment options for spectrum auctions.

There should thus be ample opportunity for those who may be affected by auction regulations to be alerted in advance and to draw the attention of noble Lords to any aspects of concern. It would then be open to noble Lords to pray against the regulations if those concerns are not met.

I believe that this process of consultation, the statutory duty I have described and the negative resolution procedure should provide a sufficient and appropriate degree of parliamentary scrutiny of the use of the powers in Clause 3. I believe that that view is right because the delegated powers in the Bill were scrutinised by your Lordships' Select Committee on Delegated Powers and Deregulation. In its first report, ordered to be printed on 9th June, the committee reported that:

"There is nothing in the Bill to which we draw the House's attention".

The committee clearly agreed with the memorandum which we submitted to the effect that the negative resolution procedure was appropriate for regulations made under Clause 3.

I hope that the noble Lord will feel that the way in which the committee dealt with the matter gives emphasis to my points and that the negative resolution procedure is suitable for auction regulations. I hope therefore he will withdraw his amendment.

I do not doubt for a moment that there is adequate provision both for consultation with the industry and for the industry to make its views known. But that all lies in the future; it may even be some years ahead. We are not sure of the full ramifications of the regulations that will be made. In view of the very large sums of money that might be involved, it is important to ensure that there is a possibility of debate in Parliament as well as consultation within the industry. It is in a way paradoxical that I should be saying that it is not enough to consult with us but that this is a question of wide political interest. Will the Minister explain why he would object to the affirmative resolution procedure for these important points of principle under Clause 3?

I thought I had explained why that is the case; I have obviously not satisfied the noble Lord. My experience indicates that if, in the course of following the consultation procedures which I have explained at considerable length, the industry comes to the conclusion that something has gone amiss to which Parliament's attention should be directed, it is rare that industry is slow to advise Members of your Lordships' House or honourable members in another place, with a view to their raising the matter. The fact that we are not arguing for the affirmative resolution procedure does not mean that we are against scrutiny; but it seems to me that it will be inappropriate, particularly where these are complex matters which will undoubtedly be the subject of full consultation with the industry, to deploy the affirmative resolution procedure in the circumstances.

I should like to study in Hansard exactly what the Minister said and the spirit in which he said it. In the meantime, I beg leave to withdraw the amendment.

I believe I owe an apology to the noble Lord, Lord Inglewood. I had said that we would come to the question of the position of utilities. I am sure that it has some relevance to this which escapes me. Perhaps I may say, in case I am right about that, that it is not our intention that the introduction of spectrum pricing should affect the access of utilities to the radio spectrum that they require. That, I think, was the point that the noble Lord adverted to earlier.

I am most grateful to the noble Lord, Lord Clinton-Davis. I was congratulating myself on having got my point in. I thought he had more or less addressed it when we previously touched on the matter.

rose to move, That the draft regulations laid before the House on 18th June be approved [4th Report from the Joint Committee].

The noble Lord said: My Lords, these regulations have been laid before your Lordships' House under Section 2(2) of the European Communities Act 1972. The purpose of the regulations is to implement a judgment of the European Court of Justice concerning the UK's implementation of Articles 2(1), 2(2) and 3(2) of the 1989 EC Broadcasting Directive, perhaps better known as the television without frontiers directive.

The court found that the United Kingdom had failed to fulfil its obligations under the directive, first, by misinterpreting the basis on which satellite broadcasters fell within UK jurisdiction; secondly, by applying different licensing regimes to domestic and non-domestic satellite services; and, finally, by exercising control over broadcasts transmitted by broadcasters falling within the jurisdiction of other member states of the European Community.

The Broadcasting Directive is a single market instrument which governs transfrontier television broadcasting within the European Community. For it to work effectively it is essential that certain elements are implemented in a common manner by all member states. One such element is the determination of which country should have jurisdiction over a broadcaster.

In the United Kingdom the Independent Television Commission licences and regulates all broadcasters which come under UK jurisdiction, with the exception of the BBC and S4C. From the European Community perspective, the crucial factor is that each broadcaster should come under the jurisdiction of one—and only one—member state. In order to achieve that, it is clearly essential that a single system of determining jurisdiction is in operation throughout the Community. This is where a problem arose. The wording of the 1989 directive was ambiguous. When member states came to implement the directive at national level, differing interpretations of the provisions on jurisdiction were exposed.

In implementing the directive, the UK chose to use satellite uplink as the basis of jurisdiction. That was the criterion used in the Council of Europe's Convention on Transfrontier Television, which predated the directive and was to some extent a model for European broadcasting regulation. However, other member states used the broadcaster's place of establishment.

Establishment and uplink are fairly complex issues, but, in simple terms, a broadcaster's place of establishment is generally held to be the place in which it has its head office and where decisions about programming content are made. Uplink is the technical process whereby programmes are broadcast from a specific transmitter on the earth to a satellite, from where they are subsequently downlinked back to satellite receptors on earth.

The situation did not cause too many practical problems for the UK because the vast majority of services uplinked from the UK are by broadcasters also established in the UK. In 1992, however, the European Commission initiated legal action against the UK on the grounds that, by using uplink as the basis of jurisdiction, the UK had misinterpreted the Broadcasting Directive. That process culminated in the European Court of Justice's judgment last September which recognised that the existing directive was ambiguous but found that establishment was the correct basis for determining jurisdiction. We need now to implement that judgment and these regulations do so by changing the basis of jurisdiction from uplink to establishment.

We now also have the benefit of the revisions to the 1989 directive, including Article 2, where the ambiguity to which I referred is removed. The revised directive, which was adopted by both the Council of Ministers and the European Parliament earlier this month, states clearly that establishment shall be the basis of jurisdiction, and sets out a hierarchy of criteria for defining the place of establishment of broadcasters. These regulations can now be read alongside this detailed guidance in the revised directive.

I would emphasise that the practical effect of the change is minimal. According to the Independent Television Commission, of the 150 or more broadcasters currently holding satellite broadcasting licences, fewer than half a dozen will be affected.

In the second part of its judgment, the European Court of Justice found that the UK had unlawfully established two licensing regimes for satellite broadcasting. The 1990 Broadcasting Act established two different licensing regimes. Domestic satellite services were defined as those which used UK frequencies and were designed for general reception in the UK. Non-domestic satellite services were those which did not use UK frequencies and were intended for general reception in the UK and elsewhere. The domestic regime required broadcasters to ensure that at least 25 per cent. of transmission time was allocated to independent productions, whereas non-domestic satellite licensees were only bound by the provisions of the broadcasting directive, which requires at least 10 per cent. of independent productions, where practicable. The court's judgment found that the distinction between these two regimes was discriminatory and that the UK was favouring its own viewers by imposing a more rigorous content regime on domestic satellite service licensees.

That had not, in fact, been either the intention or the effect of the UK's distinction between the two regimes. The large majority of the 150 or more licensed non-domestic satellite services use non-UK frequencies but in fact broadcast wholly or mainly to UK audiences. The different domestic satellite regime merely applies to UK satellite frequencies the kind of procedure applied for commercial UK terrestrial broadcasting frequencies; bids for the use of the spectrum and controls on content reflecting the scarcity of the resource.

Nevertheless, under the revised directive the UK clearly must license all satellite broadcasters established in the UK on the same basis. These regulations accordingly remove the distinction between the two types of satellite service. The domestic satellite service will be abolished and the non-domestic satellite service will be known as satellite television service licences.

Here again, the real effect of this change on existing licensees is minimal. There are at present no domestic satellite service licence holders, and there never have been. The new integrated regime may encourage more services to emerge. In particular, the duration of domestic satellite service licences, which requires broadcasters to plan and broadcast for 15 years as opposed to 10 years for non-domestic services, may have acted as a deterrent to broadcasters from using UK allocated frequencies. It is in the UK's interest to retain those frequencies and the Government hope that the reduction in the duration of licences will encourage future applications for this resource.

The Government are fully committed to complying with their international obligations. The making of these regulations will enable the United Kingdom to do so in respect of the EC Broadcasting Directive. They will not however have any material effect on the thriving UK satellite broadcasting industry. I commend the regulations to the House. I beg to move.

Moved, That the draft regulations laid before the House on 18th June be approved [4th Report from the Joint Committee].—(Lord McIntosh of Haringey.)

My Lords, I am sure the whole House will be grateful to the noble Lord, Lord McIntosh of Haringey, for his full explanation of the background to the making of these regulations. When I had the honour and privilege of being the Parliamentary Under-Secretary of State at the Department of National Heritage in the last administration, I considered these matters and it was I who set the process in motion which led to tabling these regulations and our discussion of them this afternoon. I confirm that the noble Lord's description of what was involved was extremely clear, full and thorough. In the meantime, the Government have changed, the Conservative Party has changed and I am not quite the man that I was then. At least, my view has not changed. We on these Benches support the regulations.

I was grateful that the noble Lord referred to the television without frontiers directive. I believe that its recent revision has been a triumph for United Kingdom policy and represents the culmination of much hard and skilful work by officials of the Department of National Heritage and our officials in Brussels. It is right and proper that they should be given credit for what was a major achievement for the United Kingdom. It shows, if these matters are carried forward skilfully, how it is possible to end negotiations in the European forum with very considerable success. We support the regulations.

My Lords, I consider it helpful that my noble friend made reference early in his remarks to the Council of Europe's model outline. Those of us who are delegates to that body spent many long hours in Luxembourg considering the detail and the difficulties of European implementation of the Council of Europe model. It is worth placing on the record, as my noble friend has done, that the Government see the Council of Europe model as a role which they are now supporting.

My Lords, I am grateful to both noble Lords for their welcome for the regulations. I acknowledge the parentage—perhaps it is the god-parentage—of the noble Lord, Lord Inglewood, and his colleagues in the preparation of the regulations in response to the judgment of the European Court of Justice. I am delighted to hear from him that the Conservative Party is changing. I hope that that process continues for a very long time.

My noble friend Lord Kirkhill referred to the Council of Europe trans-frontier television directive. I acknowledge the work of the Council of Europe and the noble Lord's part in it in the origins of television without frontiers. But I have to tell him that the judgment of the Council of Europe that the basis of the regulations should be uplink rather than establishment has in fact been overturned by the European Court of Justice. It is the Council of Europe which is now out of step with the European Community.

With those words, I commend the regulations to your Lordships.

My Lords, before my noble friend sits down, perhaps I may say that he should make a distinction, which he has not properly made, between the Council of Europe and the European Union. The Council of Europe and the Union are often out of step but the Council of Europe's convention remains.

My Lords, I thought I had recognised that fact. The Council of Europe has a very much wider membership and its convention still applies to those members of the Council of Europe who are not members of the European Union. But members of the European Union have to abide by the EC directive, as revised, and by the European Court of Justice.

rose to move, That the draft order laid before the House on 11th June be approved.

The noble Lord said: My Lords, the draft order before us today authorises expenditure of £3,632 million for Northern Ireland departments in the current financial year. That is in addition to the sum of £2,941 million voted on account in March and brings total estimates provision for Northern Ireland departments to £6,573 million, an increase of 4.2 per cent. on 1996–97. The order also authorises the use of additional receipts to meet an excess vote in 1995–96.

I would remind your Lordships that the order does not cover the estimates for the Northern Ireland Office on law and order services. As it is a Whitehall department, the estimates for the Northern Ireland Office are dealt with separately. However, the public expenditure decisions underlying the estimates for the Northern Ireland departments and the Northern Ireland Office form part of the Northern Ireland block allocation. The Secretary of State has flexibility to reallocate resources within the block in the light of emerging pressures and easements and, as your Lordships will recall, the block benefited from the so-called peace dividend following the ceasefires of 1994. I regret that it may be the ordinary people of Northern Ireland who will suffer as a result of the need to meet the additional policing and compensation costs following the mindless violence of the past few days.

Your Lordships will appreciate that the draft order which we have before us today reflects the spending allocations of the previous government, although I was pleased that it was possible to find an additional £4 million for schools this year and that is reflected in the estimates.

Although our manifesto stated that departments will be expected to work within the 1997–98 and 1998–99 spending ceilings announced by the previous government, we will be reviewing allocations within those limits in the light of our own priorities. That is why the Government have launched a comprehensive spending review which will focus on the medium term. My right honourable friend the Secretary of State for Northern Ireland will be conducting a comprehensive review of programmes in Northern Ireland. The review will be a root and branch examination of every area of spending and will provide an opportunity for extensive consultation on public expenditure priorities.

I know that your Lordships continue to take a close interest in the prospects for economic development in Northern Ireland, and I should like to say a few words about the local economic situation before turning to the contents of the estimates. The latest official statistics show that the Northern Ireland economy is in good health and generally economic conditions remain favourable. All the main economic indicators have once again shown very positive results for the Province.

The output of manufacturing and production industries continues to rise at a rate well above that achieved nationally. Over the past five years, Northern Ireland's manufacturing sector has increased its output by over 18 per cent.—almost twice the rate of growth achieved nationally. Over a similar timescale there has been a significant improvement in the Province's gross domestic product relative to the United Kingdom, with GDP per head rising from 78.2 per cent. of the national average in 1990 to 83 per cent. by 1995. Indeed, of particular note is the fact that over the year to 1995 Northern Ireland's GDP per capita increased relative to the UK's, while that of both Scotland and Wales decreased.

International investment in Northern Ireland's tourism industry remains strong. In addition, the Northern Ireland Tourist Board believes that the new marketing initiative announced in November 1996 to market tourism to Ireland as a whole could generate a potential £27 million of additional revenue and 720 new jobs in the Province over the next three years. Despite being down on record 1995 levels, visitor numbers are still above pre-ceasefire levels, at 11 per cent. up on 1994.

At March 1997 the number of employees in employment in the Province stood at 580,500, the highest March figure on record. That is coupled with a rate of seasonally adjusted unemployment of 8.4 per cent. of the workforce, its lowest level for almost 17 years.

Allied to that are the survey results from the local business community. Despite a number of recent surveys reporting falling optimism among Northern Ireland business leaders, overall economic conditions are reported as favourable. Northern Ireland firms have experienced growth rates in output and exports and order books which have outpaced United Kingdom averages. Economic growth is set to continue in the future and further reductions in unemployment are anticipated.

All of that clearly demonstrates the impressive achievements of the Northern Ireland economy and I am confident that that performance will continue to be sustained. However, a brighter economic future will without doubt be put at risk if violence were to continue.

I now turn to the main items of expenditure covered by the order as detailed in the estimates booklet; all the figures are of course in pounds sterling. I shall start with the Department of Agriculture. The net provision in the two agriculture votes amounts to some £172 million. In Vote 1 net provision of some £30 million is to fund EU and national agriculture support measures. The net provision covers the pre-funded market support measures under the common agricultural policy which total £146 million. The vote includes some £4 million for various capital, environmental and other grants to assist structural improvements. Some £26 million is for the Hill Livestock Compensatory Allowance Scheme to provide support for farming in special areas.

Vote 2 includes £142 million for regional services and support measures. That includes £60 million for the development of the agriculture and agricultural products industries and for scientific and veterinary services; some £30 million is for farm support, enhancement of the countryside and fisheries and forestry services; £24 million is for central administration, including information technology and specialised accommodation services; and some £5 million is for the rural development programme; £18 million is for the Rivers Agency and some £5 million is in respect of processing and marketing and fishing projects which are wholly funded by the European Union. That vote also contains net provision of £9 million in respect of the EU peace and reconciliation programme which incorporates agricultural, rural and water based projects.

In the Department of Economic Development's Vote 1, some £153 million is for the Industrial Development Board. That will enable the board to continue to attract and support industrial development in Northern Ireland, primarily through the provision of selective financial assistance to both new and existing companies. In 1996–97 the board supported some 35 inward investment projects offering 4,641 jobs.

In Vote 2, some £31 million is for the Local Enterprise Development Unit, Northern Ireland's Small Business Agency. That will allow the agency to maintain its excellent track record in developing, strengthening and improving the competitiveness of the important small firms sector in Northern Ireland. Finally, in this vote some £14 million is for the Northern Ireland Tourist Board to support the tourist industry in Northern Ireland.

In Vote 3, £196 million is for the Training and Employment Agency. That includes some £65 million to fund 14,700 training places under the jobskills training programme; £42 million is for the Action for Community Employment, Community Work Programme and Enterprise Ulster, which will provide some 7,400 places for long-term unemployed adults in projects of community benefit. Some £24 million is to assist companies improve their competitiveness by developing the skills of their workforce.

I now turn to the estimates for the Department of the Environment. In Vote 1, £177 million is for roads, transport and ports. That includes some £145 million for the development and operation of Northern Ireland's public road system as well as maintenance of the road system, which remains a priority.

Vote 2 covers the important area of housing. Some £220 million will provide assistance mainly to the Northern Ireland Housing Executive and to the Voluntary Housing Movement. When net borrowing and the Housing Executive's rents and capital receipts are taken into account, the total resources available for housing will be some £610 million. That will enable the Housing Executive to start some 800 new houses while housing associations will start some 1,050 new dwellings.

In Vote 3 gross expenditure on water and sewerage services is estimated at £184 million. Some £79 million is for capital expenditure and some £105 million is for operational and maintenance purposes, as well as for administration costs.

In Vote 4, some £183 million is for environmental and other services. That includes provision for the Environment and Heritage Service, Planning Service, the Public Record Office of Northern Ireland, Construction Service and Land Registers of Northern Ireland. Some £32 million is for urban regeneration measures targeted at areas of social, economic and environmental need. Those measures provide a catalyst for higher overall investment through partnerships with the private sector. Some £37 million will also be made available under the EU Peace and Reconciliation Programme, of which some £28 million will be funded from EU receipts.

The estimates for the Department of Education seek a net total of £1,408 million, a decrease of 1.8 per cent. on last year's provision. However, when account is taken of Northern Ireland's share of receipts from the national sale of the student loan debt, expenditure will increase by 1.8 per cent. Provision is included for the additional £4 million which the Government have made available to assist schools.

Vote 1 includes £887 million for recurrent expenditure by education and library boards, an increase of £8 million over 1996–97. This includes £843 million for schools and colleges of further education: £44 million is also included for libraries, youth, administration and other services. Vote 1 also provides some £34 million for boards' capital projects, some £42 million is for capital projects in voluntary and grant maintained integrated schools and £140 million is for recurrent expenditure by voluntary and integrated schools. These amounts include £31 million for grant maintained integrated schools, an increase of £8 million over 1996–97.

Vote I also includes £113 million for local universities, £133 million for mandatory student support, £17 million for arts and museums and £4 million for community relations. Some £19 million has also been made available under the EU Peace and Reconciliation Programme, some £14.6 million of which is being funded from EU receipts.

In the Department of Health and Social Services Vote 1, £1,518 million is for expenditure on hospital, community health, personal social services, health and social services trusts, family health services and certain other services. This is an increase of 2.4 per cent. on last year.

In Vote 3, £27 million is for expenditure on grants to voluntary bodies, research, training, bursaries and further education and certain other services. The provision sought is 1.5 per cent. higher than last year's final net provision.

In Vote 4, £142 million is for the department's administration and other miscellaneous costs. This includes £93 million for the Social Security Agency, some £8 million for the Northern Ireland Child Support Agency, some £10 million for the Health and Social Services Executive and £4 million for the Health Estates Agency.

In Vote 5, £1,724 million is for social security benefit expenditure administered by the Social Security Agency. This represents an increase of 8.3 per cent. on last year. In Vote 6, £362 million is to cover expenditure on the independent living funds, housing benefits, the Social Fund and payments into the Northern Ireland National Insurance Fund.

Finally, I turn to the Department of Finance and Personnel where, in Vote 3, some £5.8 million is sought for the community relations programme. In addition, some £1.7 million has also been made available through funding from EU receipts under the EU peace and reconciliation programme.

I hope that this short summary of the main components of the estimates is helpful. I commend the order to your Lordships. I beg to move.

Moved, That the draft order laid before the House on 11th June be approved.—(Lord Dubs.)

My Lords, I congratulate the Minister on the way he has presented the order and on his mastery of the figures, particularly those concerning my former department, the Department of Agriculture. Your Lordships will see sitting beside me some of my colleagues who know a great deal about Northern Ireland. Indeed, it seems that every second another of my colleagues appears. My former Secretary of State is here, who gave me a great deal of advice.

All noble Lords will admit that it has not been the best or the easiest time for Northern Ireland in recent days, let alone for the press, both in written and electronic form, which has been showing Northern Ireland's face—one of the faces of Northern Ireland— around the world. Indeed, I am reminded—I think my noble friend Lord Gowrie may be able to assist me—of the education he and I received more than 40 years ago and of the Roman poet Ovid, who said:

"Video meliora proboque, Deteriora sequor".

In other words, I do see what I ought to be doing—the good things. Never mind, out of compulsion I have to follow the worst aspect.

With all the good things that the Minister has presented to us I am reminded that 100 human beings have been hospitalised over the past four days. Two hundred and twenty vehicles have been hijacked, including a mail van in, of all places, Dunmurry, which I know well. My noble friend Lord Prior will certainly know it. All noble Lords will be appalled by these incidents. There have been 550 attacks on the security forces. I read in today's paper that masked and armed men were seen in the lovely city of Downpatrick. There have also been 700 petrol bombings. One wonders what kind of face can be presented by various people in Northern Ireland. Indeed, I am taken back to a pale blue report which I have in my hand—the Cameron Report of 1969. What happened then seems to be happening today.

I hope the Minister will be able to convey my personal and heartfelt congratulations to the Secretary of State on all that she is trying to do with all her enormous humour, honesty and persistence. I hope that she, the noble Lord and the entire Northern Ireland ministerial team will be able to present the face of Northern Ireland that I, the noble Lords, Lord Glentoran and Lord Prior, the noble Earl, Lord Gowrie, and all the other noble Lords who are to speak today, know to be the real face of Northern Ireland.

I have looked at the order before us. I was delighted that the Minister mentioned the Department of Agriculture. On page 4, schedule 1, I am delighted to see that the Government are continuing to assist production and market development in the agriculture industry. On page 5, paragraph 2, the Government are continuing to ensure the pre-eminence of the Department of Agriculture in both scientific and veterinary research areas and indeed, in my old stamping ground, the Veterinary Research Laboratory in Stoney Road, which is just a few paces from the Minister's office in Dundonald House. I hope that the financial efforts the noble Lord has been pointing out will be pushed forward in this area of Northern Ireland's industry. I am also delighted to see that animal health and forestry are occupying a high priority in the activities of the department. They were singled out by the Minister. I am delighted that he is continuing to do that and I hope that he will be able to push on with it.

On page 5, paragraph 2 of the Department of Economic Development's Vote, your Lordships will see reference to expenditure to promote the development of tourism. Perhaps the Minister and indeed the entire ministerial department in Northern Ireland may feel something of the nature of the great classical figure Sisyphus in trying to push this vast burden up the hill. The noble Lord and others who know and love Northern Ireland will admit that some of the images we have seen over the past day or two have not exactly promoted tourism in that lovely part of the world.

I conclude with a plea to the Minister and to the department. The Department of Agriculture has an unbeatable record in promoting agriculture, science and the production of every aspect of food and drink. However, earlier last month the Minister seemed somewhat unaware of the passage of the years. I wish to stress to him that in the odd years—1997, 1999 and 2001—the world's largest food and trade fair will be held in Cologne. It goes by the happy acronym ANUGA. I shall not try to weary your Lordships by explaining the acronym, but it is a very large fair. I know that it helps to promote the proper face of Northern Ireland. I had the luck to go to that exhibition twice and I went to two other exhibitions in Paris. I was able in some small way to persuade the buyers and those who are interested in the food, drink and hospitality industry that the face of Northern Ireland that we and the world have been seeing is only one face and that there is another face—the one presented by the department. I hope that the Secretary of State will insist that the noble Lord is at the exhibition and that he will use his enormous talents to promote the Department of Agriculture.

I commend him for his enormous fortitude in presenting the report today. I hope he will pass on my good wishes to the Secretary of State and her ministerial team.

My Lords, when the Minister was reporting on the strength of the Northern Ireland economy, the drop in unemployment and many other very desirable developments there, I am sure that many of us had in mind that period when the noble Lord, Lord Prior, was Secretary of State for Northern Ireland. In a very real sense he laid the foundations for what we have been enjoying over the past year. He seemed to be extremely successful in persuading the Treasury to part with money at times when it had other ideas. I do not know whether it was peaceful persuasion, but it brought results. Many of those who now find themselves in permanent jobs, those who run businesses and the leaders of industry are grateful to him for what he did during those years.

Noble Lords will remember the exchanges in your Lordships' House yesterday as regards the weight limits on heavy lorries. The United Kingdom derogation expires on 31st December 1998. Is the Minister satisfied that haulage firms in Northern Ireland are sharing in the consultation initiated by the previous government, particularly in regard to the classifications existing in certain European countries which apply distinctions between what they term "international traffic" and "national traffic", which presumably means internal traffic? These definitions might be difficult to relate to Northern Ireland for obvious reasons, one of them being that we have one land frontier of the United Kingdom with another European state.

There follows the possibility of some confusion over the current bridge strengthening programmes. Are the standards and specifications based on the requirements of what I might call the post-derogation period? If so, how was it possible to decide on bridge strengthening standards so far in advance of the outcome and the result of the consultations, which are even now nowhere near completion?

In your Lordships' House yesterday it was pointed out that the very expensive bridge strengthening programme had been made necessary by European Union requirements. Will Her Majesty's Government press vigorously for European structural funding to meet the cost of what is, after all, their directive? As the European Union is not noted for speedy decision-making, I draw attention to the fact that here in Great Britain the Ministry of Transport meets the cost of all upgrading by local authorities. As the noble Lord, Lord Prior, and other noble Lords will recognise and remember, the relevant road authority in Northern Ireland is the Road Agency and the Department of the Environment, Northern Ireland. I wonder whether the Minister for Transport can provide the necessary funds in the short term until the European Union has subvention funds on stream, thus ensuring that the Treasury allocation for Northern Ireland is not eroded by these expensive demands of an external and, if I may say so, undemocratic body known as the European Union.

Finally, I draw the Minister's attention to a perceived unfairness in planning. There is some evidence to suggest that in the interests of the preservation of planning guidelines, domestic individual planning applications are often rejected, sometimes for very good reasons. But different standards appear to apply to powerful developers who proceed to breach the planning laws even before their applications are launched. Objections follow in a ritual way to the planning authorities, but unfortunately these are simply disregarded. Development continues and effective enforcement of the law is nil. That is the perception. Will the Minister consider amending the law to remove this truly glaring inequality?

My Lords, perhaps I may intervene for just a minute. I did not put my name down to speak, but the kind references made to me by the two earlier speakers have stimulated me into saying a few words. I start by telling an anecdote. When I was Secretary of State it was not very often that the noble Baroness, Lady Thatcher, came to Northern Ireland as Prime Minister, but I would not like to say whether that had anything to do with the fact that she sent me there. When she came she nearly always travelled by helicopter. On one unfortunate occasion it was too foggy to travel by that means and she had to come with me in the car. As we were going along one of the new roads and seeing all the new housing, she turned to me and said, "Jim, you know, we are spending too much money here". I mention this because we are dealing with the consolidated fund. My view—and I believe it was hers also—was that we were spending a great deal of taxpayers' money in Northern Ireland. It was an honourable and right thing to do and it remains as such.

I have always been extremely proud of the fact that, given the difficulties of the Northern Ireland situation, British governments of both political parties have always done their best to act in the interests of all the people of Northern Ireland and will continue to do so.

I go one step further and say that I have felt very deeply for the Secretary of State in the past few days because nearly every Secretary of State has experienced some of the very difficult situations in which the present Secretary of State finds herself. It has been made more difficult by what I consider to be the quite scurrilous use of a leaked letter or memo, which was several days old. If anyone knows the Civil Service, it could only have been a position paper indicating that something might happen under certain circumstances. To produce that as a vital document and to show it to people who, for one reason or another, were bound to react in the way that they did, seems to me to be thoroughly bad journalism and does no good to the people of Northern Ireland whether of the Nationalist or Unionist persuasion.

I say to the noble Lord, Lord Dubs, that we appreciate the present Government's difficulties. We are glad that we are in a position to support Northern Ireland as generously as reasonably possible. We wish the Government the success that I hope will be coming to them and give them the knowledge that they will receive as much support from these Benches as they will receive from their own.

My Lords, it has been a pleasure to listen to the noble Lord, Lord Prior, speaking and commenting on his time in Northern Ireland. He came in at a critical time—although all times are critical—in the development of industry in Northern Ireland. I know that the steps he took have helped towards achieving a situation whereby the Minister has been able to give a positive report tonight on the economy which it has been a pleasure to hear. As someone who is engaged in industry in Northern Ireland, that was not an exaggeration.

The noble Lord, Lord Molyneaux, has commented on it, but it is a pleasure to see tonight not only the noble Lord, Lord Prior, but two former Ministers, the noble Lords, Lord Lyell, Lord Gowrie, and the noble Baroness, Lady Denton—the most recent Minister— who was responsible particularly for the Department of Economic Development. They made a very large contribution to the state of the economy as it now is.

I fear that there is one cloud on the horizon with regard to the economy. I refer to the strength of the pound. Several important firms in Northern Ireland export all of their products and their effective return has decreased by about 15 per cent. in the past year. That must be borne in mind because one or two of those firms could have serious problems due to the strength of the pound, and there is some indication that it may strengthen yet further.

Perhaps I may now ask a few questions relating to the Appropriation Fund. I refer first to the Vote for the Department of Agriculture. Generally speaking, agriculture in Northern Ireland is prospering, but not in financial terms. The milk, beef and cereal sectors are considerably disadvantaged at present—again, due to the strength of sterling. That has meant that the green pound has been devalued and that farmers' support from the CAP has suffered considerably. There is an EU compensation fund which is intended to correct some of those deficiencies. I ask the Minister why the Government have not made use of the EU compensation fund which is available to meet devaluations of the green pound. Other countries in Europe have availed themselves of the fund, including the Republic of Ireland. I understand that if the compensation fund was drawn down, it would be worth £56 million to the agricultural industry in Northern Ireland.

Agriculture in Northern Ireland has suffered also because of the BSE-caused embargo on the export of beef. It will be helpful to know whether the Government have submitted a response to the EU's report on the proposed UK export certified herds scheme. If the Government have responded, it would be helpful to know what that response has proposed.

I move on now to the Department of Economic Development. The Minister may not yet have had an opportunity in his short time in office to learn of the very high costs of electricity in Northern Ireland. It is a considerable handicap to industry and is a burden on consumers which they should not have to bear. I am surprised to note that Vote 2 of the Department of Economic Development refers to,

"assistance to the gas and electricity industries"—

I cannot think what assistance they need; they are doing very well—

"(including residual costs in connection with the privatisation of the electricity industry in Northern Ireland)".

The generating companies were privatised in 1992, so I should like to know why there are any residual costs now.

Vote 3 of the Department of Economic Development is for training grants and "training in skills". There was recently a much regretted cut in the training grant. As everyone knows, it is most important that young people's skills are improved and that they are introduced to new skills. Can the Minister say how soon that former support will be renewed and even improved upon?

I turn now to the Vote for the Department of Health and Social Services. Everyone in Northern Ireland knows that there is an enormous administrative overhead in the health service. There are two tiers in the system before one reaches the hospital trusts. I refer to the Management Executive and to the four area boards. They are so large and so cumbersome that it is almost impossible for the trusts to get a reply to any application that they may make. It has been estimated that the administrative overhead costs are in the region of £80 million a year. It is not difficult to see how it might be reduced to between £10 million and £20 million a year. Can the Minister assure the House that that will be considered in the review that is about to be undertaken? I hope that impartial outside consultants will be brought in so that we can ascertain how that enormous overhead can be reduced so that the savings can be passed on and used to provide additional patient care. I commend the order to the House.

My Lords, this is a somewhat distressing time to be speaking of and attending to the affairs of Northern Ireland. As we consider matters of funding for Northern Ireland, the amount of money that has been wasted in the past two or three days alone can scarcely have passed our awareness. One particular company, Translink, which is responsible for public transport in Northern Ireland, has, I understand, over a period of two or three days lost in excess of £10 million-worth of stock at replacement value in terms of train carriages and buses. Speaking of those losses, however, says nothing about the damage that has been done to the tourist industry, to which reference has been made, and to the general economy. Although extremely valuable work has been done, particularly by the previous administration and the noble Baroness, Lady Denton of Wakefield—as the noble Lord, Lord Molyneaux of Killead, mentioned, that work can be traced right back to the days of the noble Lord, Lord Prior, if not before—all of that is again put in jeopardy because of the violence of recent times.

Although I accept much of what the Minister said, I do not think that the violence should be regarded simply as mindless violence. Certainly, I accept that some of the behaviour and some of the decisions—the decision to exercise the right to march, for example— were not very mindful of what was wise and were even extremely ill advised, but some of the violence on both sides of the community was orchestrated with anything but mindlessness. It was considered violence. It was intended to cause destruction and damage. It was intended to destabilise the community. It is unwise to dismiss it as mindless and thoughtless. Knowing one's enemy, one should not dismiss them because if one does so, one ends up looking foolish. We are talking about considered stuff which is highly dangerous. I very much hope that we are not standing on the edge of a serious abyss in Northern Ireland. We have had very difficult times in the past few days and there is real danger in the days ahead.

However, the business of government must go on and all that is possible must be done to contain the situation and to retain a degree of normality in difficult times. I shall detain your Lordships for only a few moments when commenting on and asking questions about a number of matters in the Appropriation Order. In respect of the Department of Agriculture, I would find it helpful to know the Government's position in response to the European Commission's report. The noble Lord, Lord Cooke of Islandreagh, alluded to that. It is clear that in respect of BSE, Europe is prepared to consider Northern Ireland as a special region because of our island base and because we have a good system of tracing cattle and a good history of animal health. As it is clear from the report that Europe is prepared to consider those factors, I should like to know whether the Government are prepared to consider that matter or whether it is to be held up again and again to the detriment not only of the industry but of government expenditure until the rest of the United Kingdom is ready to participate.

I know that the environment is dear to the Minister's heart, so perhaps I may pass on to him my thanks for, and the congratulations of many people in Northern Ireland on, the decision that was taken on the Magheramorne quarry. That may not have been an easy decision, but I believe that it was a wise one. It is a decision that has enormous support not only in that locality but in Northern Ireland generally. I welcome the decision of the Minister in regard to that.

I ask that the Minister continues his wise decisions. When the previous administration raised the question of water privatisation in Northern Ireland, they indicated that, because of the strength of public opinion in Northern Ireland, they would perforce put any decision on that matter beyond the next election. That election has come and gone and we now have a new Parliament. Can the Minister ensure that, particularly in the light of the opposition of all the parties in Northern Ireland and of his own party when in opposition to water privatisation, water privatisation, which was stopped in Northern Ireland, will not be continued under the administration of which he is a part?

I also lend my support to the planning matter raised by the noble Lord, Lord Molyneaux of Killead. He is right. There is a suspicion—sometimes more than a suspicion—in Northern Ireland that large commercial enterprises are dealt with differently from ordinary individual planning applications. When the Select Committee of another place visited Northern Ireland and looked at this matter, it was profoundly disturbed by a number of aspects of the planning service. I support the noble Lord, Lord Molyneaux, in his call for the conduct of the Department of the Environment in planning matters to be looked at.

I was encouraged by the recent comments of the Chancellor of the Exchequer in regard to health, education and welfare to work and the funding that was likely to be made available. However, I remained unclear as to whether Northern Ireland would benefit in health, education and welfare to work in the same way as the rest of the United Kingdom. I would welcome clarification from the Minister on that matter given that a little time has elapsed since the Budget and, it is hoped, the matter has now been fully discussed.

I conclude by thanking the Minister and his colleagues for all their work in difficult and tiresome times. I wish the Minister well in the next few weeks. Both he and his colleagues will find them strenuous and difficult times. All of Northern Ireland is fearful of what may emerge in the next few days. It is important that the Minister and his colleagues are aware that they have our support in trying to do what is wise and good. My goodness, in Northern Ireland it is not always easy to know what it is best to do for wisdom and for the good.

My Lords, it would be wrong to stand at the Dispatch Box this evening and fail to express disappointment that the efforts of the Government and those of good will came to nothing over the past weekend and to express sympathy with the police and security forces; husbands and wives and, fathers and mothers who would have been at home had violence not been threatened. One saw how little that counted with the callous murder of two of their number in Lurgan. I believe that the greatest sympathy must go to the Secretary of State who yesterday, following tremendous efforts to find a compromise—which unfortunately is still all too often a dirty word in Northern Ireland—found herself facing the problems of a leak.

I hear the criticisms of my noble friend Lord Prior of the media in using this leak. However, I believe that that was only what could be expected. From where did this leak come? I am sure that that also concerns the Minister. This comes as no surprise to me. I was leaked against, to quote one of the radio journalists, "by the world and its mother". Officials then failed to follow the code of conditions of service in subsequent inquiries. They now choose to leak against Dr. Mowlam. I hope that this time any inquiry will follow the rules.

But whither now following the weekend and with difficult days ahead? The cost of this is appalling, not just in pounds but in its effect on tourism and inward investment. I had the pleasure of fronting a "make it back home" campaign to attract those who had left the Province to return with their skills and their children. Grandparents were saying that their grandchildren could return to Northern Ireland safely. Who will say that now? How many of the very bright children undergoing education will stay? If we lose that talent, will we also lose the companies that that talent attracted?

I take this opportunity to praise the group of 7, composed of businessmen and trade unionists, who have been brave enough to put their heads above the parapet to point out to people the cost of this terrible violence. This phenomenon has arisen in recent years and it is sad that even their voices are not heard. I praise the IDB. It was good to hear the Minister review our success over the past years. I am glad to hear that it continues but it is a difficult uphill task. Against all odds, tourism has continued its curve, which, with the exception of the ceasefire year, has moved in the right direction. But what now?

What follows the events of the past weekend is in the hands of the people. Anger, like forgiveness, runs to personal timetables not government ones. But I suggest that the Government should not allow politics to overtake normal life in Northern Ireland. On a good day it cannot be bettered. I believe that the Government have a duty to facilitate economic growth as smoothly as possible. There are tough economic times ahead. Other noble Lords have referred to the problem of BSE. One matter about which we can be certain is that the ban on entry to European markets will not disappear overnight. The noble Lord, Lord Cooke, referred to the problems of the strong pound, particularly in Northern Ireland where business has been built locally on exports. With a population of 1.5 million there can be no other way.

Inward investment has been attracted to Northern Ireland as a gateway to Europe. One hears inward investors say how difficult it is to be based in the UK to service the European market. I hope that that is something that the noble Lord and his colleagues will also hear. I believe that there will be continuing hard competition from the south, where people living in a peaceful environment express views on the current situation that are not helpful. Ultimately, there will be an end to the peace and reconciliation moneys that the European Commission has so generously provided. I hope that when they do come to an end we will be able to say that this is what has been achieved with the £230 million.

The noble Lord, Lord Alderdice, referred to the announcements of the Chancellor on health, education and welfare to work and their relationship to Northern Ireland. One makes the assumption, which one hopes is not misplaced, that that will extend totally to Northern Ireland. However, one wonders what the extension of the welfare to work programme implies for the ACE schemes and Enterprise Ulster. It is right that the Government should carry out a spending review. Obviously, they must know the facts on which to base future policy.

However, in relation to health matters, why is it necessary to review in great depth the decision on the rationalisation of the Belfast hospitals? Review the political decision maybe, but I do not believe that the thorough work that has been done for three years by the people involved in the hospitals and the experts from other fields justifies a review. I warn the Minister that in Northern Ireland there is a habit of putting reports in drawers, which brings no benefit.

I should also like to know whether the Budget covers future childcare policies of the Government. This is essential, as women play such an important part in the economy. I also hope that education changes will include opportunities for women returners, for which there is a great need.

On the economic front, I join with other noble Lords in arguing that, if the Government could be persuaded to go to the European Commission so that Northern Ireland farmers could take their product back to the market, that would be economically sound. It would take the pressure off other markets in Great Britain and we would all see the benefit. The important thing is to get the boat afloat, not that everyone should be in it to start with. I hope that the Minister will be able to persuade his colleagues that it is important for the fishermen of Northern Ireland that the problem of quota hoppers be resolved.

One of the problems which has not yet stopped inward investment into Northern Ireland but could at any time is the cost of energy. Will the Minister update us on the Scottish interconnector which would make a difference to the cost of energy? Will he explain why it has taken 18 months to review the £45 million which the Government hold and which should be returned to the public?

I always seem to disagree with at least one point made by the noble Lord, Lord Alderdice. One issue is expenditure on the infrastructure for the water industry. I wonder how the noble Lord thinks that the money, especially after this weekend, can be made available from government funds. Would it not be wiser to privatise the industry so that the capital will flow in to make the improvements that the infrastructure needs?

What is the position with regard to the funding necessary to keep open the Omagh Veterinary Centre? Last year's budget left no space for it. It was agreed to keep it open on the basis that farmers would pay fees for the services that they receive, as they have for many years in the rest of Great Britain.

The investment scene has been good. It has been greatly praised by those attracted to it. The Minister talked about the current situation which offers over 4,000 jobs. I wonder whether he can tell the House how many of those jobs are in place and whether they could disappear. There are, as we read, many companies in difficulties. What will the cost of them be to the budget? There are enormous difficulties in that area as a result of the current images being sent around the world.

Perhaps the Minister will agree to look at the Arthur Andersen case. The only thing that may overtake the acceleration of DeLorean are the costs of the American lawyers' fees in the Government's case against Arthur Andersen. That problem may well need time spent on it.

Is it possible to examine why Northern Ireland needs to put every directive separately into legislation? Agriculture visibly suffers through not having a voice at Brussels. We have none of the benefits of being able to negotiate separately but we have the cost of legislating separately for every directive. I wonder what those costs are. Could they not be saved?

One of the problems brought home this weekend is that the Targeting Social Need programme has obviously not got through to the people, who believe they are not getting their fair rights and support. If noble Lords were aware of the amount of inward investment into West Belfast, they would wonder how people could so easily set light to vehicles in front of the factories. If there is no inward investment, how can social need be targeted?

It will not surprise the Minister that I join with other noble Lords who say that there is considerable criticism of the planning process. I look at it from a commercial point of view. It is estimated that there is some £100 million of potential investment waiting to go to Northern Ireland which is held up by the planning process. It is important to speed it up. Although it may cause this Government some difficulty, they should look at the speed at which development corporations dealt with planning matters. They should be copied.

The infrastructure is important. It has been looked at in isolation in the past. There is a great need for departments to work more closely together. If, as is hoped, the economy continues to grow, it will be difficult to get any goods out of Belfast harbour because it will be difficult to get them there. The PFI is needed in Northern Ireland almost more than anywhere else.

I have a colleague who used to describe the appropriation debate as a "bogweed" debate. I disagree because it gives noble Lords the opportunity to consider how Northern Ireland is run, who runs it and to whom they answer. We hear that health trust meetings in Great Britain are to be opened up. Will that happen in Northern Ireland? Will quango board meetings be open except when they are discussing commercially confidential matters? Will the Government's policy of sharing the operation of the economy with the electorate be spread to Northern Ireland? Will the recruitment changes planned for Great Britain be the same for Northern Ireland? Why does Northern Ireland have different arrangements with Peach on appointments for each department?

Northern Ireland is not the size of Greater Manchester, but each department has its own IT department and some of the budget was required for these. Will the Government continue to have a separate IT department for each area? Would it not be worth considering having just one department? One of the things I suffered was the fact that all the departments could not talk to one another through IT. At the moment the political ones can but the economic ones do not.

That highlights an important point which comes from the debate—political solutions in Northern Ireland will take a long time. The economic scene is and can continue to be one of growth. It is important that that continues.

I appreciate that I have asked the Minister a great many questions. I should be happy if he would write to me with the answers. This order covers homes, jobs, schools and hospitals—the concerns of everyone living in Northern Ireland. I ask that those matters are not considered to be secondary to the politics. For the people of Northern Ireland they are crucial.

My Lords, I thank all Members of the House for their helpful and positive contributions to the debate. I have been asked many questions. I shall do my best to answer them. If any noble Lord feels that his questions have not been answered, perhaps I may give the answers in writing.

I thank noble Lords for the many contributions expressing support for the Secretary of State in her recent endeavours to deal with the difficult situation of the marches. I shall ensure that those words of support are passed to her. I also thank Members of the House for the support expressed for other Ministers working in Northern Ireland. We are grateful for those expressions of support. There are difficult times ahead of us. If common sense prevails, those difficulties will be overcome. We can only hope that the Secretary of State's efforts, plus common sense, will prevail over the difficulties that lie ahead.

I shall deal now with the questions that were asked. The noble Lord, Lord Lyell, urged me to give support to agriculture. That is something I shall go on doing. He expressed concern about the future of tourism in the light of the recent images. That is a concern I share. If the difficulties through which Northern Ireland is going can be overcome quickly, their effect on tourism will, I hope, be a small one. I realise that the television coverage and the newspapers are not helpful in presenting a positive image of Northern Ireland. That is a very sad comment that I have to make.

As regards the suggestion that I should travel to various food fairs, no doubt my officials will advise me on whether I should make so many journeys. I thank the noble Lord for the suggestion in so far as I share his motive to do everything I can in support of agriculture, which is the most important industry in Northern Ireland. I shall do so in any way that is appropriate and open to me.

The noble Lord, Lord Molyneaux, raised a number of questions, most of which related to the weights of vehicles and whether the roads and bridges of Northern Ireland are sufficient to sustain them. The haulage industry, through the trade organisation, has been and will continue to be consulted by the Department of the Environment in order that we can be certain of the industry's views as regards the changes to which the noble Lord referred. The bridge strengthening programme, which is currently underway in Northern Ireland, is being carried out in preparation for the EC requirement to permit 40 tonne vehicles to operate generally with effect from 1st January 1999. In other words, we are anticipating the likely changes and we hope to have them in place before the operational date.

An application for EC structural funds has been made and that is presently being considered in Brussels. We can only hope that the outcome will be positive. The noble Lord asked whether in the meantime grants would be made available to carry out improvements. Responsibility for bridge strengthening programmes in Northern Ireland fall to the Road Services Agency, which has allocated additional funding to facilitate the acceleration of the programme. I hope that that extra money will show itself in improved bridges capable of taking the extra weight of vehicles.

The noble Lord, Lord Molyneaux, and others referred to the planning process in Northern Ireland and some words of criticism were uttered about it. I am looking again at aspects of the process, but it might be helpful if noble Lords can provide me with specific examples of criticisms so that I can use them in assessing how the planning system operates or, perhaps in their view, does not operate as it should. Specific examples would be helpful as it is difficult to deal with planning in a general sense.

The noble Lord, Lord Prior, commented on the proper levels of expenditure in Northern Ireland and I share his sentiments. Notwithstanding the present financial difficulties, we shall continue to ensure that Northern Ireland receives the financial support that it needs in the present circumstances.

As regards the leaked letter to which the noble Baroness, Lady Denton, referred, I do not know how the leak occurred. It is being investigated, but we can hope only that the effect will not be as damaging as some of the newspapers have tried to suggest. I shall comment on the letter in a few moments.

The noble Lord, Lord Cooke, referred to compensation payments as a result of the strong exchange rate, particularly with regard to the needs of farmers. I acknowledge that the Government have received from the UK farming unions and other producer organisations a case for EU co-funded compensation in respect of the effects of green pound revaluations. They have made that case and I recognise that farming organisations are seeking an early decision. I must advise that these submissions are being considered very carefully as there are obvious significant public expenditure implications. The Government will announce their decision as soon as they are able to do so. I do not thereby wish to suggest that that is inevitable; we are simply looking at the case. There are great difficulties in dealing with it because there have been times when the value of the green pound has risen and we have not sought to balance that out. When the green pound has risen and there has been a benefit we have not sought to reduce its impact, so a balancing factor must be taken into account.

The noble Lord, Lord Cooke, and others, asked about the Government's approach towards the difficulties as regards BSE. The latest position was announced in another place in answer to a parliamentary Question. The Secretary of State, Jack Cunningham, stated:

"The Government have decided to adopt a twin track approach of pursuing a revised export certified herd scheme and developing a new proposal for a date based export scheme. We have put our ideas to the Commission about both schemes and will press both with equal vigour. The export certified herd scheme is being revised, taking account of criticisms made earlier by the EU Scientific Veterinary Committee. Eligibility for the scheme will be more restricted than initially proposed, but it would still be open in principle to producers in all parts of the United Kingdom. Details of the date-based scheme will be announced when exploratory talks with the Commission have progressed and the Government are ready to put forward a formal proposal".

That is the present position. Obviously, the Government are pressing as hard as they can to get the whole ban on UK beef lifted in line with the proposal that I have described.

Questions were asked about energy and assistance to the gas and electricity industries. The noble Lord, Lord Cooke, asked why there should be further compensation as regards the privatisation of electricity some years ago. Some minor residual costs remain in respect of the privatisation of electricity, such as agents' fees. All costs are met from the proceeds of the sale of the electricity industry in Northern Ireland.

The noble Lord asked further questions in respect of the gas and electricity industries in Department of Economic Development Vote 2. A major element of that is the application of the nuclear levy read across; £20 million in 1997–98 and £25 million in 1998–99. That is to be used for the benefit of electricity customers in Northern Ireland. It is currently subject to negotiations with Northern Ireland Electricity PLC and interested parties. In relation to gas, there is minor provision for consultancy costs in extending the natural gas pipelines to outside the Greater Belfast and Lame areas.

The noble Lord also asked about cuts in training grants and how quickly they could be restored. The Training and Employment Agency is spending in the current year some £127 million on training and employment programmes, providing some 25,600 places, mainly under programmes such as Jobskills, through Enterprise Ulster and various other training programmes. In addition, the welfare to work initiative announced by the Chancellor in his recent Budget Statement will provide further and significant resources to be targeted at the young unemployed and the long-term unemployed. This will provide a major and comprehensive training network for Northern Ireland which will more than redress the cuts made by the previous administration.

The noble Lord, Lord Cooke, also asked about savings that might be made in health service administration. Northern Ireland will play its part in the Government initiative to reduce bureaucracy costs in the health service. The savings made will be directed to patient care, particularly in the development of cancer services and the reductions in waiting lists in the Province. There was already a target in the current year of 1.5 per cent. cash savings for the HPSS in general. That included the commissioning costs of boards and the management costs of trusts, the target for which has now been raised to 2.5 per cent. and will apply to all HPSS bodies. The Government will be looking for further savings as we move to dismantle the Tory internal market and its wasteful bureaucracy.

The noble Lord, Lord Alderdice, asked a number of questions. He asked me about the future of the water industry. I am not in a position yet to say very much about that because we are looking into it very carefully. It is clear to me that there has been under-investment for years in water and sewerage in Northern Ireland, particularly but not only in the Belfast area. I have asked my officials to look as quickly as they can at possible ways to ensure that we can improve the level of investment because there could well be a crisis in water and sewerage but particularly in the sewerage system in Belfast. We want to avoid that if we possibly can. Therefore, rather than dealing in detail with the questions asked by the noble Lord, I shall ask him to wait a little longer. I hope to be able to give him a more definite answer to the question that he put to me.

I welcome the words that he uttered about the recent decision on the landfill site near Larne, the Magheramorne Quarry development planning application. I thank him for that. We shall see what happens in the future as regards other aspects of the waste disposal industry which is being worked on at present.

The noble Baroness, Lady Denton, asked me a large number of questions and I shall do my best to do justice to as many of them as I can. She asked me about the leak in yesterday's newspapers. It may be appropriate to remind noble Lords of a very short Statement made by the Secretary of State yesterday about the document. She said:

"The document was an initial consideration by officials containing assessments and opinions of how the proximity talks should be approached. Neither I nor the Minister of State endorsed this document at the time or later. I insisted that the full range of options should be kept under review. In the event, I explored a wide range of options at the proximity talks with no preconceived agenda and treating both sides completely even-handedly".

The Secretary of State went on to say:

"I worked until the last possible moment along with others to achieve a peaceful accommodation. As the document said, the Chief Constable had genuinely not taken the decision and he did not do so until the night before the march. All feasible options were genuinely under consideration until the very last moment".

The noble Baroness, Lady Denton, asked about welfare-to-work. The new deal will be implemented in Northern Ireland on the same policy basis as in Great Britain. Individual elements of the measure will reflect local economic circumstances and priorities and those existing Northern Ireland programmes and structures that can be developed to deliver specific measures.

In delivering the new deal, the Government intend to make the fullest use of existing programmes, services and structures so that we can make the most effective use of the new resources. Departments are currently considering how programmes can be developed and adapted to deliver the new measures. In addition, Northern Ireland has an extensive network of training providers, voluntary organisations and community-based groups which will be well placed to deliver the new measures.

I turn to the question asked by the noble Baroness And other noble Lords on expenditure going to Northern Ireland, to which I have already made some reference. Northern Ireland will receive its fair share of the additional resources to existing plans announced by the Chancellor on 2nd July. Northern Ireland will receive an extra £27.623 million in 1998–99 for schools and £31.143 million for the health service. In addition, the new deal will provide Northern Ireland schools with a further £2.6 million this year and £7.8 million next year for refurbishment and repairs. Northern Ireland will receive £140 million from the windfall tax. That reflects Northern Ireland's share of the young and long-term unemployed who will benefit from the welfare-to-work measures and will enable Northern Ireland to implement measures reflecting those in the rest of the UK. There will also be some help for lone parents. Northern Ireland will also receive this year and next year a benefit from the share of the capital receipts initiative.

A question was asked about the decisions in relation to the Royal and City Maternity Hospitals. The Government are fully aware of the controversy that has arisen in the wake of the decision by my predecessor to centralise maternity and associated services in the Belfast City Hospital tower block. We shall honour the commitment to review the decision and we are presently considering that as a matter of some urgency. I hope to be in a position to say more about that in the near future.

A question was asked about the Veterinary Investigation Centre at Omagh and whether it will be kept open. The introduction of charges for veterinary diagnosis is currently being considered and will be subject to consultation with the industry and other interests in Northern Ireland before introduction. Any further decisions will stem from the result of that particular consultation process.

I was asked also about expenditure on security in the light of the weekend situation. As I pointed out in my opening remarks, the Estimates that we are considering today do not cover expenditure by the Northern Ireland Office on law and order. However, as the noble Baroness will recall from her time in the Northern Ireland Office, expenditure on law and order, including the costs of the RUC and criminal damage and criminal injuries compensation are funded from within the Secretary of State's block allocation. As the noble Lord, Lord Mayhew of Twysden, made clear on many occasions during his time as Secretary of State for Northern Ireland, resources would have to be restored to the law and order programme if terrorist violence returned to our streets. In such circumstances, economic and social programmes would suffer. The costs of the Army in Northern Ireland are met by the Ministry of Defence.

I was asked about the electricity inter-connector. The planned inter-connector project is being promoted jointly by Northern Ireland Electricity plc and Scottish Power—two private companies. The Government are supportive of the principles of inter-connection which will provide access to competitive electricity markets in both the rest of the UK and the rest of Europe in line with EU policy. Progress with the project is subject to the granting of planning permission in both Northern Ireland and Scotland.

A question was asked about quota hoppers. The Government believe that there has been a good outcome for the UK after tough talks in Brussels recently. What is good for the United Kingdom fishing industry is also good for the Northern Ireland fishing industry. There are close links between our fishing industry and the communities from which it operates. The Government believe that that deal gives us the opportunity to strengthen those links and ensure that processors have access to raw materials and that employment is sustained.

As regards Arthur Andersen and the DeLorean case, the Department of Economic Development is continuing its legal action for negligence, breach of contract, fraud and aiding and abetting fraud against the former DeLorean auditors, Arthur Andersen and Co. Government appointed joint receivers also continue to pursue recoveries from other parties involved in the DeLorean case.

As regards targeting social need, this Government will seek to develop the TSN initiative and so help to promote greater equality of opportunity. Through TSN, there is also the targeting of areas and people defined objectively as being in greatest need. An important effect of that should be to reduce community socio-economic differentials. TSN has been an important expenditure priority for several years and is an underlying principle which guides allocations across many departments.

A question was asked about agricultural directives and whether they have to be taken in separate legislation for Northern Ireland. Agriculture is a transfer matter which is traditionally handled through separate legislation. It is hoped that some day that will be done in a new Northern Ireland legislature.

As regards the PFI, the Government welcome Sir Malcolm Bates' review of the PFI/PPP and Northern Ireland Ministers will continue to pursue PPPs wherever that offers value for money.

As I said at the outset, the questions are very detailed and I have done my best to answer as many as possible. However, I shall do my best also to ensure that noble Lords who have asked questions which I have not yet answered will receive an answer in writing. I commend the order to the House.

rose to move, That the draft orders laid before the House on 23rd June be approved [5th Report from the Joint Committee].

The noble Baroness said: My Lords, I shall spend a few moments explaining why these agreements are important. The agreements are designed to extend economic and political co-operation between the European Union and partner countries in Latin America and the Mediterranean region. The European Union signed a Framework Co-operation Agreement with the Southern Cone Common Market—Mercosur—on 15th December 1995 and with Chile on 21st June 1996. The association agreement with Morocco was signed on 26th February 1996. It forms part of the EU's objective of creating a free trade area with the Mediterranean region by the year 2010. All three agreements aim to strengthen relations through increased commercial and economic co-operation. They include steps to liberalise trade and harmonise the partners' economic structures with the EU. That process should create new opportunities for trade and investment, bringing benefits to businesses and consumers in the European Union. They will also help to create the right climate for stable economic and social development in Latin American and Morocco.

The EU Mercosur Framework Agreement establishes a framework to strengthen links between the EU and the countries of Mercosur—that is, Argentina, Brazil, Uruguay and Paraguay. The main elements are trade and economic co-operation. The agreement is a recognition of the growing potential of the region. Mercosur is the most dynamic of the regional groups in Latin America. It is already an important trade partner for the EU and, with a combined population of 200 million and a total GDP of almost 850 billion US dollars, the opportunities it offers are immense.

The agreement provides a framework for discussing ways in which trade can be liberalised in the future. It is a two-stage relationship. The first stage will lead to a second agreement involving progressing liberalisation of trade in accordance with WTO rules. The second stage could have a significant impact on EU/Mercosur commercial relationship and on the operation of the multilateral trading system as a whole. The UK therefore supports the thorough and detailed approach established under the agreement.

There is also provision for Foreign Ministers to meet regularly for political dialogue. That takes place twice a year in the margins of other scheduled meetings and provides an opportunity to discuss a whole range of issues of importance to both regions such as regional development, sustainable development, the environment, drugs and human rights.

The EU/Chile Framework Co-operation Agreement provides us with an additional means to deepen links with the EU and Chile. It provides for enhanced political consultation and economic partnership and foresees progressive and reciprocal liberalisation of trade in line with WTO rules. A joint declaration on political dialogue annexed to the agreement allows for the regular meetings of Heads of State and Foreign Ministers in the margins of other meetings on a range of issues of mutual interest relevant to the international agenda such as human rights, the environment and drugs. The agreement also envisages in the medium term a further round of negotiations on an association agreement with the EU.

The EU/Morocco Association Agreement is the third in the series of new Euro-Mediterranean agreements now being negotiated. So far, association agreements have been signed with Israel and Tunisia; and an interim agreement has been signed with the PLO. Other agreements are planned with Jordan, Lebanon, Egypt, Algeria and Syria. Europe has strong geographical and social ties with the Mediterranean. The new agreements aim to foster a new relationship with the region based on trade and mutual co-operation.

The long-term goal agreed at the Barcelona Conference in November 1995 is the creation of a Euro-Med free trade area by the year 2010. That will encourage economic transition and help to create lasting stability in the region. EU business will also benefit from the agreement. This can only improve under the new agreement which allows for progressive dismantling of Customs tariffs, further boosting trade between both sides. The Morocco agreement also establishes enhanced political dialogue with Morocco in the form of an EU/Morocco association council which will provide a new forum for the EU to raise issues of importance with Morocco.

The agreements represent an important development in the EU's relations with Latin America and with the Mediterranean. Once implemented, they will provide the basis for a new level of communication and co-operation at all levels. I ask the House to support these important objectives by giving its approval to the principles behind the three agreements. I beg to move.

Moved, That the draft orders laid before the House on 23rd June [5th Report from the Joint Committee] be approved.—(Baroness Symons of Vernham Dean.)

My Lords, I very much regret having to enter a note of scepticism into the purpose of these various agreements. Over many years in the past we have witnessed what I believe to be a surfeit of newly-formed institutions and organisations, all of which appear to have a very advantageous purpose when studied at first sight. However, when it comes down to it, what do they all really mean? So far as concerns the European Community, it is composed of nations and the nations themselves have trading relationships with their counterparts in other parts of the world.

The activities of the UK commercially and manufacturing-wise, or, indeed, in the provision of services, are not carried out by governments; they are carried out by individual firms and individuals. Those relationships continue despite whatever grandiose exchange of views there may be between the various organisations that purport to represent groups of state. I certainly would not wish to enter into prolonged argument about the pros and the cons, the advantages and disadvantages, of being a member of one of these important associations. Indeed, that is not my purpose.

I have had the benefit of studying this entire matter as regards the UK for the past 34 years. Therefore, I am no novice in the field. United Kingdom firms, whether or not they are providers of services or manufacturers— or, indeed, a whole series of other tradable activities— act as firms as such. Their relations continue day after day, buying and selling, manufacturing, importing, and so on, irrespective of what their governments do.

We have before us three orders. In each one the European Community and its member states are made party to a collective agreement apparently, but put in order so far as concerns the UK by the European Communities Act 1972. The agreements are made on behalf of the Community and on behalf of its member states with other individual states—as, for example, with Chile. In the case of Morocco it is an association agreement and in the case of the Southern Common Market it is centered mainly around Argentina and South America. They are all made in accordance with a framework agreement.

If one reads the framework agreements one wonders what they amount to in commercial terms. How do they affect the day-to-day commerce which takes place by telephone, fax and possibly now the Internet, despite the flood of words incorporated in proposals, draft treaties or Orders in Council, all of which make much work for everyone? Indeed, I can assure your Lordships that it takes a very prodigious amount of time in order to study and check them. But what is the ultimate effect of them? How do they do any good? What does it matter to the average British trader, manufacturer or provider of services whether these measures are concluded or not? Of one thing we can be quite sure—I can tell your Lordships this from personal experience—they will most certainly result in a flood of proposals, recommendations, reports, the formation of committees travelling to and fro, questions being asked in the European Parliament and the production of vast tonnes of paper in order to explain them to everyone. But what will be the ultimate effect on the ordinary activities of individual people, their companies and even their governments? The answer, I venture to suggest, is very little.

However, I am well used to the activities of the Commission. I have been associated with it closely for four years and from afar for much longer. I can tell your Lordships that once it gets its foot in the door you can bet your life the whole body corporate will follow sooner or later with some regrets that the door was opened, even ajar, in the first instance. Your Lordships may say that coming from me this means little. I most certainly sympathise with anyone who at this stage may hold the view that my views are old hat and therefore not worth troubling much about. I accept that immediately and without any kind of rancour; in many ways I welcome it.

However, I should like an assurance from Her Majesty's Government on one point only. Can Her Majesty's Government tell me and tell the House that nothing in these agreements affects the existing activities of existing companies, individuals, partnerships or firms carrying out their lawful trade in various countries of the world, and that nothing in them would permit the Commission at any stage, directly or indirectly, to effect anything which is inimical to British interests? If they can give me that assurance, I shall at least be happy with these measures because as far as I am concerned, on the face of it, they are much ado about nothing.

My Lords, I had not intended to intervene in this short debate. However, I wish to make a couple of remarks. I am tempted to invite the noble Lord, Lord Bruce of Donington, to come across to our Benches because I have heard such a wonderful conversion to the doctrine of pure international free trade and the argument that government should not in any sense be involved in international commerce. However, these agreements are important. It was not the European Community itself which initiated many of these discussions, it was the countries concerned. The Euro-Mediterranean strategy is one of the more important elements of the European Community's foreign policy.

As the noble Baroness mentioned, there is a substantial budget under the Euro-Mediterranean agreements agreed by the Barcelona conference which is intended to provide a substantial amount of aid over the next few years towards the countries of the southern Mediterranean littoral. This is not just a matter of commerce; it is a matter of foreign policy and security policy. Morocco, Algeria, Tunisia and others—the noble Baroness mentioned our agreement with Palestine—are countries with close political relations with western Europe. All of them supply substantial flows of migrants towards western Europe which we struggle to contain. We all therefore have a direct interest in their continuing stability. I therefore welcome in particular the agreement with Morocco in those terms.

I hope the Minister will say a little more, now or later, on how the broader Euro-Mediterranean agreements are being put into effect. Certainly many of us had the impression that this was an initiative of the Spanish and Italian presidencies in connection with the French Government to which other member governments of the European Union did not attach much importance. However, it seems to be rather important in terms of the long-term stability of the Mediterranean periphery of the European Union.

My Lords, I think the noble Lord, Lord Bruce of Donington, was being a little modest. I can match neither his eloquence nor certainly his experience of, I believe, 34 years on this subject. As my Government—as they were then—were party to negotiating these agreements, the noble Lord and the House will not be surprised to hear that we are supportive of the three framework co-operation agreements before the House today. Nor do we believe that there is anything in them that is inimical to British trade interests abroad. On the contrary the thrust of all three of these agreements is to take progressive steps towards freer, more open trade and to permit greater opportunities for companies which need to exercise their business acumen within the countries concerned and in their relationship with the European Union in order to undertake business, make a profit and create employment.

I give one example to show why these agreements are a considerable step forward and are not much ado about nothing, to use the noble Lord's phrase. I refer to the negotiations that took place between the European Union and Morocco. The negotiations were not easy; they were protracted and painful. The reason for that is that it took a long time to move forward to a more liberal and open approach to agricultural exports coming from Morocco into the European Union. I think the Moroccans were rightly aggrieved in the early stages of the negotiations that the agricultural arrangements seemed to fall short of what they wished, which was the much more open market sought after both by the noble Lord, Lord Wallace, and the noble Lord, Lord Bruce of Donington.

Many observers thought that both France and Spain were being unduly protectionist on the question of agricultural exports. What was needed was a detailed negotiation culminating in a reasonable decision and a step forward which would allow far greater opportunities for companies to do business from Morocco into the European Union and vice versa. Morocco would much prefer to have seen a system of free competition as it quite rightly maintained that its consumers were happy with its agricultural products, as were European consumers. It argued that market access was important. Agreement could not be reached to the extent that Morocco wished, but the final agreement was a significant step forward and I hope there will be further openings of the door towards a wider, more open market and towards open free trade in due course. That is one of the long-term objectives of this agreement and the surfeit or plethora of agreements. The noble Lord referred to that surfeit of measures in his speech. The agreement is a step forward in removing the barriers to trade and in enhancing competition.

The motive underlying the agreement is the same as that which underlies the other two orders that are before the House today. Far from being inimical to British or European Union trading interests, I argue that these three agreements represent significant and important steps forward to more open trade and ultimately, I hope, to a global free trade organisation which has appropriate regulation but which enables much wider more open trade with significant trading partners. As was rightly pointed out by the noble Lord, Lord Wallace, this all emerged from the Barcelona process launched in 1995. I believe that process has been significant in developing closer co-operation between the European Union and the Mediterranean region. Tunisia was the first Mediterranean country to sign an association agreement with the European Union.

The agreements before the House today concern Morocco, Mercosur and Chile. However, that is not the end of it. I welcome the commitment given by the Minister today that further agreements are also due to be ratified with Egypt, Jordan, the Lebanon, Algeria and, as I understand it, Syria. Those are all important and welcome steps forward. Just as we have developed and broadened our relationships with the Mediterranean region, it is also important that the European Union begins to develop its already thriving links with Latin America through the two additional agreements, first, with Chile, and, secondly, with the Southern Common Market—or Mercosur, as it is better known to your Lordships' House.

In these agreements, Europe not only advocates freer trade, but also looks to the need for self-determination and territorial integrity. I welcome the Minister's comment that the agreement will also lead to opportunities for policy developments for the environment. I should like to learn more about that from the Minister. The agreements add a secondary dimension to the critical core issue: the realities of global trade and inter-communication. That is what the three development frameworks seek to achieve.

The effects of the frameworks should not be seen to be limited simply to successful trading alliances. I hope and believe that there will be other diplomatic advantages to the Government. I refer to the extension of the European Union's influence in regions of disturbance, and the welcome measures that we have heard—we shall look forward to seeing them in practice—in regard to human rights and human rights abuses in those countries where, as a result of closer trade relations, we shall have an opportunity to exert greater leverage in order to develop sensible and practical solutions to the problems of the day.

When we discuss trading links with Latin America, and in particular the Southern Common Market, we are referring to some of the largest economic engines in the world. Brazil's GDP is of the same order of magnitude as that of China, and 50 per cent. larger than that of India. The Argentine province of Cordoba alone has a GDP equal to that of Bulgaria. The Southern Common Market already accounts for 7 per cent. of the national product of the world. I suspect that it will grow very fast—far faster than the more mature economies of Western Europe. We have already played a key role in this region's success story, in particular through the privatisation initiatives which have dominated domestic policy throughout the region. So the strengthening of the economic ties with Europe forged by this agreement are welcome, important and positive steps forward.

My noble friend Lady Hooper, who has considerable well-known expertise on South American politics, had intended to be present to speak on the draft order regarding Chile. She asks to be associated with my congratulations to the Government of Chile on the work that they have done both in the negotiations on this agreement and as an economic paragon in Latin America. It has become a remarkable example of a country where free trade policies and privatisation can fuel economic growth and create jobs. Chile's economy grew by 7.1 per cent. in 1996. It was the largest growth rate of any of the major economies in the Americas.

I seek to praise Chile for the remarkable success of its pension programme. In practice what that pension programme achieved is a lesson to all development economists. It created a strong enfranchised middle class. Through that pension provision, and through the creation of a strong middle class, one no longer has the traditional problems of a ruling elite and a disenfranchised working class. But with the creation of a middle class, one has a strong springboard to growth—exactly the same springboard as created success, for example, in Taiwan. The strength and courage of the Chilean politicians and economists in creating that is a model. It is a model that is widely acclaimed around the world. The orders present a useful opportunity to praise the Government of Chile for the success of their free trade policy and their openness towards foreign investment. It is noteworthy that Chile's major trading partners include the United Kingdom and Germany. The agreement before your Lordships' House today develops and nurtures that trading link. It is a further step towards free trade with this successful nation and will, I hope, create a framework for continued prosperity between us.

I also believe that the agreement will help fulfil the ambitions expressed by all speakers in this short debate for global free trade in the future, in our case we hope early in the next century. Chile has become an entrepôt between a number of key trading groups. Although not a member, it has close dealings with NAFTA, and as an associate member of Mercosur it will undoubtedly be instrumental in developing a free trade zone across the whole of the Americas.

But Chile is also a member of the APEC grouping which brings together the countries of the Pacific Rim. I envisage a future where freer trade groupings of the world are able to unite to create less inhibited global markets. I stand short of a global free market zone. I think that that aspiration is probably beyond my lifetime, although it is one that I would welcome.

The agreement is important to us politically because as an entrepôt in those trading organisations Chile can be important as a key to unlocking the potential of closer working relations between the trading groups.

Finally, on Morocco, it is incumbent on the European Union to develop bilateral agreements with those closer to home. Of all the regions with which I believe we need to develop a closer understanding, the Mediterranean is perhaps the most important. It is, after all, on our doorstep; and, moreover, it is politically turbulent. I believe that the Barcelona process which is keen to develop closer integration between the European Union and the countries of the Mediterranean can play a very active part in the Middle Eastern peace process. I look forward to agreements being ratified with Egypt, Jordan, Lebanon and Algeria as well as Syria. Morocco is, happily, in a more stable situation than most. Nonetheless, just as we can prosper by developing our markets with Morocco, so we must ensure that Morocco has access to the markets of Europe.

I mention the specific example of the lengthy and protracted negotiations over agriculture. But this agreement is welcomed by the Government in Morocco. It is welcomed by the nation states, the countries, the members of the European Union. It is an important step forward. All those who have worked to achieve this agreement deserve our support and recognition of their success.

The agreements vary considerably. The agreement with Morocco steers us towards a closer political dialogue. It concentrates on the liberalisation of trade in goods and services, and capital, and the expansion of economic social relations. It will also encourage the integration of the Maghreb group of countries. In contrast, the agreement with Chile, although also primarily concerned with trade and political dialogue, will ultimately lead, I believe, to the establishment of a political and economic association between the European Union and Chile.

Finally, the agreement with the Southern Common Market, the Mercosur, is perhaps the most wide-ranging of the three agreements. It will seek to strengthen existing relations, and, I hope, prepare the ground for the creation of an inter-regional association. It will seek co-operation and progress on trade liberalisation and other areas of mutual interest including energy, transport, science and technology, telecommunications and, as the Minister mentioned, the environment, education and training.

I had warned the Minister that I intended to ask her a number of questions today. I have not done so not only because I know that she will be extremely confident in answering any questions that I ask, but because I believe that it has been useful to try to answer the important point made by the noble Lord, Lord Bruce of Donington, as to why these three agreements are important today and why a great deal of time has been put into negotiating them. I hope that my comments will find at least some agreement with the Minister. I believe that these important steps forward are beneficial trading opportunities for European companies and the three areas of the world about which we have been talking. The agreements are important steps forward to free trade. They will be seen by history as door openers to further economic, political and trade policy.

I thank noble Lords who participated in the brief debate this evening. I shall try to answer some of the points raised.

My noble friend Lord Bruce of Donington added what he described as a note of scepticism to the debate when he asked what the treaties meant and whether in fact they mattered. They do matter because the agreements are aimed at reducing bureaucratic barriers to trade, not increasing them. As the UK is part of the EC Customs Union, third-country agreements are now negotiated on behalf of the European Union as a whole, but that does not prevent us from continuing to promote bilateral UK trade with the region. These agreements are a clear example of what Britain supports most in the EU: progressive removal of barriers to trade, leading to increased long-term prosperity on all sides.

My noble friend asked some specifics in relation to the three treaties. Latin America is a key emerging market. It is a place of huge opportunities. We do not want British companies to lose out. The UK has significant interests in the region. We are the third largest investor, with capital flows per annum of £3 billion. We need to protect those interests.

As regards Chile, the UK has significant interests there, too. We are the third largest foreign investor, again with investments with a book value in the region of £3 billion. UK exports to Chile in 1996 were worth £185 million.

The new Morocco agreement allows for the progressive dismantling of tariffs, opening the Moroccan economy for EU business and making Moroccan products available to EU consumers.

The noble Lord, Lord Wallace of Saltaire, raised a number of questions. As far as the Government are concerned, as I said in my opening remarks, the importance of the agreement is primarily in the liberalisation of trade. But as the noble Lord himself said, we should not put on one side the other advantages open to us. In being able to discuss human rights issues, much has improved in recent years, but there are still problems in these countries which we shall wish to discuss. We shall wish to pursue the environmental issues; and we shall wish to discuss with those countries the consolidation of their newly found democratic systems.

The noble Lord, Lord Moynihan, raised questions about agricultural market access in Morocco. He raised issues—if not specific questions—about delay. It is important to remember that, on the one hand, the EU has a commitment to provide assistance to its Mediterranean neighbours in the form of trade concessions. On the other hand, the southern member states of the EU have problems in accepting trade liberalisation in Morocco's main agricultural products since those who are the main producers of southern member states own the farming industries. The package offered to Morocco reflects the balance between those factors. That is also the case with the other Euro-Mediterranean agreements; I know that the noble Lord had some concerns about Mediterranean agricultural issues.

I listened with interest to the points raised; I hope I have been able to answer them satisfactorily. I give my noble friend Lord Bruce of Donington the assurance that he sought that these agreements will not lead to any detriment in the trade of individual UK companies with the countries concerned.

The European Union agreements with Morocco, Mercosur and Chile represent an important development in the European Union's external trade and economic relations and are consistent with the Government's policies towards those countries. We should therefore give our firm support to these new agreements. I commend the orders to the House.

rose to move, That the draft order laid before the House on 24th June be approved [5th Report from the Joint Committee].

The noble Lord said: My Lords, the draft order is presented in accordance with the requirements of the Industrial Organisation and Development Act 1947. Its purpose is to wind up the affairs of this purely Scottish body in recognition of the recent establishment of a new GB Potato Industry Development Council.

It might be helpful if I first briefly rehearsed some of the background to this issue. The Scottish Seed Potato Development Council was first established in 1981 to promote and develop the market for Scottish seed potatoes both at home and overseas. Since that time it has given excellent service to Scots seeds growers and merchants, promoting this extremely high quality Scottish product world-wide. Uncertainty over the Council's future began in December 1993 when the then Ministers agreed to dissolve the Potato Marketing Board. Resultant restructuring in the potato industry has ultimately led to the dissolution order now before you.

A statutory review of the SSPDC (as it is more commonly known) took place in 1995 and extended the Council's life for a further two years while proposals for a successor body to the Potato Marketing Board were discussed. This allowed Scottish growers and merchants time to consider whether their interests would be best served in the future in a GB context or by a separate Scottish body.

A poll of Scottish-registered seed growers carried out in April of last year voted 61 per cent. in favour of a GB body.

In February this year your Lordships approved an order establishing a new GB potato industry development council, now called the British Potato Council. This body has now taken over some of the functions of the Potato Marketing Board, which was dissolved on 30 June this year.

To protect the often separate and largely Scottish interests of the seed potato sector, Ministers agreed to provide for a statutory seed sectoral group as part of the new council. This group will offer advice and recommendations to the main council on all seed issues. It is chaired by a specialist Scots seed grower and has helped to offer reassurance to the Scottish industry that their needs will be adequately catered for in this new GB body.

As required by Sections 8(1) and 1(3) of the Industrial Organisation and Development Act 1947, a consultation exercise was carried out requesting views on the dissolution of SSPDC. I can confirm that all representative Scottish bodies consulted, including the chairman and members of SSPDC, have agreed to dissolution in favour of the British Potato Council. Credit for this unanimity must go to the Potato Marketing Board and other industry organisations who for more than three years put immense effort into developing proposals for a successor body which would be acceptable to all industry sectors.

I will now turn briefly to the dissolution order itself and bring two points in particular to your Lordships' attention.

First, although a power has been provided in Article 5 which would allow the Secretary of State to impose an additional levy to cover any shortfall in funds, I should point out that this power is unlikely to be utilised since SSPDC is currently in the position of carrying a small surplus of funds

Secondly, Article 6 provides for those surplus funds to be transferred to another development council for the industry. In practice, that will be the British Potato Council. I understand that that body has agreed to use the funds for the specific benefit of the Scottish seed industry.

The SSPDC has provided a valuable service to the industry, which I am pleased to acknowledge today. However, the industry is undergoing major structural change and the Scottish seed growers recognise that their interests would now be better served by the British Potato Council. I beg to move.

Moved, That the draft order laid before the House on 24th June be approved [5th Report from the Joint Committee].—(Lord Sewel.)

My Lords, perhaps I may intervene in this debate for 30 seconds. I am glad to see my neighbour, the noble Lord, Lord Mackie, waiting to succeed me. I shall not delay him for long. I was delighted to hear the Minister say that in the winding up there is a small surplus. Since by training I am a humble accountant, I looked at Articles 5 and 6.

The Minister said that there is a small surplus. It seemed encouraging to me that it will go for the specific benefit of the Scottish seed potato industry. Can he confirm to me—perhaps at a later stage—whether that is what I would call "material". I am impressed to learn that there is a small surplus in the winding up. After all that has been done for the industry over the past 14 or 15 years, I am pleased that we have come to this satisfactory conclusion. I thank the Minister for introducing the order so nicely.

My Lords, I hope that this dissolution order will not cause the havoc to which the dissolution of the Potato Marketing Board contributed. We have the lowest prices today due to a surplus, which again was largely due to the lack of any control of acreage by the Potato Marketing Board.

I also hope that the Minister will confirm—can he confirm?—that no pressure was exerted on the 61 per cent. who agreed to the dissolution and the 100 per cent. who welcomed the British Seed Potato Marketing Board, if that is what it is to be called. I very much doubt whether it is a good move. Scots seed potatoes are "the" seed potatoes in Britain. We supplied the English market. We were in the healthiest area and the freest from aphids. The reputation of Scots seed potatoes is exploited by a number of people from Scotland in various markets in Europe today. We are not nearly so good at it as the Dutch, but I must say that the name of a Scots board would do a great deal more for sales than would a British name. Previously, the largest part of England was in fact a ware producing area and not a seed potato producing area.

Obviously, this is a fait accompli but I doubt whether it will be for the good of the Scottish seed potato industry in the future. It may well be. But with the Scots name and Scots direction, it would have been much better.

Furthermore, the order is totally against the trend that we have been discussing for the past few days in this House. Surely, one of the things of which the Scottish Parliament should be in control is the development of any export trade for Scottish produce. I shall not vote against the order but it does not look all that good to me.

My Lords, I welcome the introduction by the Minister of the dissolution order. I confess that I recognise some of the history that he described as the background to it. This is an important moment for a vital industry. As the noble Lord, Lord Mackie, said, in Scotland the seed potato industry has become of especial importance in terms of job creation, exports and so forth.

The only point that I wish to raise with the Minister tonight reflects perhaps the sentiment expressed by the noble Lord, Lord Mackie, when he spotted the difference between the major legislation with which we are dealing in this House at the moment concerned with Scotland and England and the somewhat contrary Motion that this dissolution order seeks to express.

If, in a few years' time, the Scottish seed potato industry decides that it made a mistake in voting to amalgamate its interests with the British Potato Council and have its interests represented merely by a committee of that UK-wide council, will it be possible for the Scottish seed potato industry to resurrect a Scottish seed potato development council? Will that be possible in both theory and practice?

We hope that circumstances will not arise in which the seed potato industry in Scotland decides that it has made a mistake and that its interests are compromised. But should such a circumstance arise, I am sure that the House would be interested to hear the practicality of the Scots re-establishing their own council.

My Lords, let me refer to the specific points raised during the course of our brief debate. The noble Lord, Lord Lyell, asked about the surplus. One of the strongholds of the seed potato industry is the north-east of Scotland. One would expect a small surplus to be generated because of that itself. I understand that the size of the surplus is £30,000, which is not bad. It offers a chance; it makes a start.

The noble Lord, Lord Mackie of Benshie, referred to the dissolution of the Potato Marketing Board. I share many of his views on the wisdom, or lack of it, of the dissolution of the Potato Marketing Board. But I can assure him that no pressure was exerted to secure the 61 per cent.

It is important to recognise that, within the GB context, there is recognition of the specific contribution of the Scottish seed industry and statutory recognition of the establishment of a seed sector group, which, as I said, is chaired by a specialist seed grower from the north-east of Scotland, Mr. Jim Cruikshank. So that gives the Scottish industry some identity and some comfort that its specific interests will be looked after.

We have now had a little reference to yesterday's business. The noble Earl, Lord Lindsay, perhaps misunderstands devolution. Devolution is about devolving to Scotland the ability to make decisions. That is exactly what has happened in this case. The decision was taken by the Scottish industry. Once power is devolved, it is perfectly possible and rational in many circumstances to seek administrative arrangements on a GB or UK basis. That sensible way forward has been followed on this occasion.

My Lords, may I raise just one point? Will the Minister give us an assurance that he will not promote any move to sell British whisky abroad?

My Lords, I do not think it would be a very good seller, in fact. I do not think it would achieve a great deal.

The very fair point made by the noble Earl was the possibility of resurrecting a Scottish body if, in time, it proves that the present arrangements have not worked out successfully. There will be a statutory review of the GB council in three years' time and that will provide an opportunity to review the arrangements. In those circumstances, I should have thought that, if the Scottish industry expressed dissatisfaction with the arrangements, modifications would be put in place. But at the moment it is a little premature to prejudge the success or failure of the new body.

rose to move, That the draft order laid before the House on 24th June be approved [5th Report from the Joint Committee].

The noble Lord said: My Lords, the order before the House today seeks your Lordships' approval for an emergency order made on behalf of the Secretary of State for Scotland to ban fishing for certain types of shellfish in waters around the Orkney Isles. The order is almost a hardy annual. It comes before your Lordships' House on an almost annual basis. The order was made as a result of a build-up of the naturally occurring paralytic shellfish poisoning toxin—or PSP as it is known.

The decision to make this order was based on test results from the Government's PSP monitoring programme which were over the internationally agreed safety levels of 80 microgrammes of toxin per 100 grammes of flesh. The essential purpose of the order is the protection of public health.

PSP in humans develops approximately 30 minutes after ingestion of toxin. It is characterised by tingling, numbness and dizziness. Paralysis may follow. Gastro‹intestinal symptoms may also occur, with diarrhoea, nausea and vomiting.

The order was made on 20th June as a result of tests showing elevated levels of toxin in a variety of species, including a level of 339 microgrammes per 100 grammes in queen scallops taken from within the prohibited area. That is over four times the agreed safety level. The species affected by the order are mussels, queens and scallops and razor clams.

The routine PSP monitoring system is based upon testing at 43 fixed sites around the Scottish coast, supplemented by additional test locations when rising levels of toxin require more data to establish the extent of an outbreak. The order which we are discussing today is based upon a scatter of high results. In Scapa Flow we were able to use data from shore- based sites and from vessels fishing in open water. Over such a large area we could not be sure if the toxin was spread evenly or, perhaps more likely, occurring at random hot spots which were unpredictable. The scale of the results was too high to ignore. It would have made no real sense to close small areas around the highly affected locations that we had detected because algal blooms are not static. A piecemeal approach would have been inadequate in safeguarding public safety. Accordingly, the area extends over a considerable stretch of water around the Orkney Isles which takes in the whole of Scapa Flow and a substantial stretch of open water to the north and east or Orkney mainland.

Of course the closed areas must be monitored. When areas of open sea are closed to fishing, the Scottish Office must authorise vessels to go out to take samples from the banned areas for testing. Samples from the closed area continue to be monitored so that we know as soon as it is safe to re-open the fisheries, which I trust will not be too far distant.

I must emphasise that our aim in taking this action is to ensure effective protection of the public from PSP toxin. The order will be revoked as soon as the results of continued sampling and medical and scientific advice indicate that it is safe to do so. I beg to move.

Moved, That the draft order laid before the House on 24th June be approved.—(Lord Sewel.)

My Lords, I advised the Minister earlier of my question. He said that the order was a hardy perennial. I seem to recall Ministers from previous administrations introducing this measure. Can the Minister say whether the date tends to fluctuate?

The Minister mentioned the date of 20th June in his remarks. Does that date fluctuate one week to another? Is it dependant upon the temperature of the water, or is there some good reason why it is 20th June? Does the Minister expect the period of the order to be roughly the same as last year or previous years?

Can the Minister say whether the area described around the Orkneys has changed this year or whether it is broadly the same as in previous years? If the Minister can let me know in due course—not necessarily tonight—I shall be more than obliged.

My Lords, I wish to ask a similar question. The Minister said that he hoped the order would not be in existence for too long. Can he say what gives the Government that hope? Why or how will that come about? The answer will be interesting to us all.

My Lords, I thank the Minister for his eloquent description of the order and the symptoms of PSP poisoning. Taking into account the topical nature of global warming and rises in sea temperature, how much research is being carried out to tackle the problem?

Is the Minister aware of any shellfish fishermen disregarding the order in the past? Also, if the area bounds onto the coastline, is it dangerous for families—I am sure that some noble Lords visit the Orkneys with their families and take time on the coast—to take mussels off the beach and eat them? The Minister nods. If that is the case—obviously it is—is there any way of warning holidaymakers and fishermen that that danger exists?

My Lords, again, perhaps I may try to reply to the specific points made in the debate. The noble Lord, Lord Lyell, asks about date and timing. I understand the usual closure is from May to September, over the summer period. To respond to part of the question raised by the noble Lord, Lord Mackie of Benshie, during the at-risk period monitoring takes place and as soon as we see an indication of a decrease—two clears—then the fisheries can reopen. That is what I meant when I said that I hoped it would not be too long. However, it may be through to September before we are able to reopen the fishery.

It is interesting that nobody knows what is behind the phenomenon. It is an algal bloom but nobody knows what sets it off—whether it is something to do with water temperature and so forth. It goes back to the 18th century, so we cannot blame it on modern pollution. It is an aspect of nature.

The noble Earl, Lord Courtown, asked about research. That is running at a level of £112,000 per year. It is a significant research programme to try to get to the bottom of the problem. That is an indication of the importance that the Government recognise concerning the economic significance of this type of closure. If we could somehow limit it, it would have significant economic implications for those who fish that industry.

The noble Earl also made a good point in relation to warnings, particularly on sea beaches. Notices are placed on sea beaches where appropriate and it would be hazardous for individuals to go round picking up mussels, razor clams and so forth and eating them. The means of informing people is through local authorities, trade associations and the Scottish Fisheries Protection Agency. I believe that I have covered all the points raised in the course of the debate. I commend the order to the House.

rose to ask Her Majesty's Government how they propose that the European members of NATO should most effectively develop the "European security and defence identity" to which NATO is committed.

The noble Lord said: My Lords, I tabled my Question in a spirit of inquiry and puzzlement. I should say, before the noble Lord, Lord Sewel, leaves the Chamber, that his attempts to suggest that agriculture has more acronyms than defence is very brave but entirely unsuccessful. We shall talk perhaps about the ESDI, WEU and the European pillar, but I know that we can all spatter our speeches with more acronyms than any farmer has ever dreamed of.

The European security and defence identity is something which has been contained in NATO communiqués and ministerial speeches for some time. Digging around in what the last government had been saying, I note that Douglas Hurd had been talking about the need for much closer European defence co-operation as a necessary part of the consequence of the end of the cold war, back in December 1990. He said that a stronger WEU within a stronger European defence co-operation would,

"build bridges to the Twelve",

and create truly a proper European pillar within the Atlantic alliance. In July 1994, Mr. Heathcoat-Amory, a Minister in the previous government, wrote in The World Today:

"Britain has consistently made clear its support for the development of a European Security and Defence Identity".

My question partly is: what do the new Government think their commitment to a European security and defence identity is? Do they yet have a settled policy on ESDI? I am conscious that in defence, as in many other areas, governments often sign documents committing Her Majesty's Government to objectives in multilateral declarations which they never expect to be fulfilled. Mrs. Thatcher was famously amazed to discover in December 1989 that her government had for very many years signed NATO declarations supporting German unification. Indeed, she herself had done so. However, I am told she said that she never really meant it. My question therefore is: when Her Majesty's Government sign documents like the NATO/Russia Charter which repeat the ESDI commitment, do they really mean that they want it, or would they be shocked and surprised if progress was actually made? What do the Government understand by a European security and defence identity?

I think what I understand by it—I have been asking friends not only in this country but in others what they think they understand by it—is Western European Union plus a stronger network of bilateral and multilateral patterns of defence co-operation within western Europe; a European pillar of NATO; sorting out the mess which is currently WEU, CFSP, European Union foreign policy, which we so signally failed to sort out in the Amsterdam treaty; and moves forward in terms of practical co-operation.

After all, we have made a number of practical moves forward in the past few years. It was a British government initiative—a Conservative initiative—that the Western European Union should be made more effective by moving it from its two half-headquarters in Paris and London to Brussels in 1993. The NATO communiqué of January 1994 specifically declared NATO's commitment to a European security and defence identity and followed that on by proposing that the Europeans should be encouraged to develop combined joint task forces for European autonomous operations, for which the United States would provide material assistance but in which the Europeans themselves would take the lead.

British engagement in integrated forces on a European scale is high. The Dutch-British marine amphibious force is one of the oldest integrated forces and one of the most effectively integrated. Since 1990 we have taken part in the multinational division in Germany—under British command—and we have British command of the allied rapid reaction force. We take a leading part in standing naval forces in the Channel and the North Sea. There is a new Franco-British air wing and we collaborate actively on European arms procurement and are taking a leading part in suggesting that co-operation in the European arms industry should go a great deal further. All those are practical and positive steps forward. It seems to be very much in Britain's interest that they should be taken further.

It would be in Britain's interest to raise the question of the balance of spending among west European countries. After all, Britain contributes a great deal more than some of its partners. If we are to hold up the defence efforts of smaller European countries, such as Belgium, we have to encourage them to lock their national defence efforts into a broader multilateral context. If we are to bring pressure to bear on the Italians to take greater responsibility for their own defence as part of a common defence, similarly, a stronger European framework is in our interests. We must train together, with common equipment whenever possible, and operate together.

My spirit of inquiry as to what Her Majesty's Government think they mean by ESDI is also accompanied by a spirit of concern at the tone of Labour in opposition, of the Labour Party manifesto and of some of the statements of Ministers and some of the briefings which officials have given in the short period since the Government took office. One has a certain impression of Atlanticists par excellence, dismissive of any further steps towards European defence integration. One of those whom I was quizzing, asked what it was that the Labour Party in opposition had been thinking about European defence, remarked that one had to understand that it could not afford to be seen in any way as more European than the Conservatives on this issue and had fallen a little too far the other way and ended up sounding less European than the Conservatives and more determined to follow the twists and turns of American policy than them. Reading the press cuttings this morning of British Government briefings just before the Madrid European Council, I was struck by the degree of that kind of tone—demonstrably loyal to the Americans; aggressively dismissive of the French perspective.

One must ask awkward questions here. The question of what the United States wants, expects and needs from its allies; and the question of what is in the United Kingdom's best long-term interests. I suggest that what the United States wants and expects is solidarity from its European allies and not individual loyalty accompanied by collective disunity. It wants to see the European allies develop the ability to operate autonomously so that the United States will not necessarily always have to be heavily engaged on the ground. It wants to see the effective utilisation of limited resources through increased military integration.

I would add that many of us—and not only those on these Benches—have a degree of unease at the current degree of American domination of NATO, the American trend towards unilateralism and the American preoccupation with their own domestic pressures and concerns at the expense of their allies' pressures and concerns. I worry that the American concept of NATO as it expands differs increasingly from that of its west European allies; that the United States, to judge from what President Clinton and Madeleine Albright have recently been saying, sees NATO increasing as a global alliance in which the United States and its supportive European allies will project power globally, whereas most of its west European allies see it much more as a regional security organisation for increasing the security of Europe as a whole.

Here is a major building block for the strategic defence review. We cannot indeed have a strategic defence review unless the Government tell us what they mean, if anything, by a European security and defence identity. I suggest that they need to define what they mean, to pursue an active policy in partnership with their neighbours and then to explain it to the public. Across western Europe we are at the moment in a degree of confusion about how far anyone is serious about further European defence co-operation. It is easy for the British to blame the French, the Germans, the Belgians or the Italians. We share responsibility for that confusion because we have on the whole wanted not to be more integrated; we have wanted to be the most loyal to the Americans and the closest to the Americans. What we need now are new proposals and initiatives. We do not want a British government who will bump along waiting for others to take the lead. If, after all, as our new Prime Minister has said on a number of occasions, Britain is to take the lead in Europe, this is an area in which we should also be helping to define what we believe is best for Europe; or is our commitment to European security and defence identity merely a matter of empty rhetoric, as so often in NATO declarations?

My Lords, I must again declare an interest in view of my work with non-governmental organisations like Saferworld and in the sphere of international security.

The noble Lord, Lord Wallace, is to be congratulated on having achieved this short debate at the precise time of the Madrid Summit. It is a bit late to influence the events but still it is a good time to have it.

In saying that, I am glad that he looked at the relationship of the European defence identity to NATO because I want to start unashamedly by talking about what is happening in Europe in the NATO context and then move on to the more narrow point of what is normally thought of as the European defence identity.

It seems to me that there are five significant arguments deployed in support of the expansion of NATO. First, expansion will fill the security vacuum left in central and eastern Europe since the collapse of the Warsaw Pact. This will forestall the danger of alternative arrangements developing which might conceivably, at some point in the future, prove antagonistic to the West. At the same time it will meet the anxieties of countries which fear the possible return to power of some future expansionist Russian regime.

Secondly, expansion should reduce the possibility of future conflict in this area by defusing, preventing and containing the escalation of tensions. Conditions of membership such as commitment to democracy and human rights, the absence of border disputes and democratic accountability of the military will increase stability. The prospect of future membership of NATO is already encouraging the settlement of existing border disputes and the resolution of legitimate minority concerns. The co-operation of neighbours in joint exercises, together with military transparency, reduce the risk of inter-state conflict. Indeed, many believe that Greece and Turkey would have come to blows without NATO.

Thirdly, unless NATO expands it will lose its raison d'être. That could lead to diminished US commitment, which in turn could cause a destabilising "renationalisation" of defence and security policy by the remaining NATO members, with a consequent increase in national defence expenditures. It is also important to consider whether a world in the 21st century moving towards separate US and European defence structures would be more or less secure.

Fourthly, membership of NATO can facilitate the reconstruction, development and political stabilisation of the new member countries, and the growth of democracy can be both rewarded and encouraged. Expansion of NATO can be a useful, less costly way of extending west European co-operation eastwards without risking over-extending the European Union too soon.

Fifthly, NATO should not be deterred by a domestic Russian agenda. Russia may well have been posturing as part of a negotiating stance. NATO should be driven by a realistic calculation of its own interests and values. The Russians, it has been argued, will ultimately back down and accept a fait accompli. Indeed, firm resolve and clear signals may be exactly what Russia needs as the context for sound development of her own political system. Cynics might also add that in any case, even if the Russians do not come to terms with these developments, their threat capability is limited.

These are powerful arguments. Nevertheless, statesmanship, prudence and common sense demand that we take great care to avoid unnecessarily antagonising Russia, provoking dangerous nationalism and jeopardising the prospects for peaceful co-operation between Russia and the West.

NATO's purpose was always that of a security alliance to confront the former Soviet Union; in other words, in reality an alliance opposed to the Soviet Union. The demise of the Soviet Union and the re-emergence of Russia have not removed that perception. It is not just in the Russian political elite, but far more widely, that NATO expansion is therefore perceived as a threat and is instinctively opposed. Indeed, there has already been a disturbing rise in anti-democratic, anti-western elements and in nationalist sentiments within Russia. It is not impossible that a situation could be provoked which resulted in a Russian government and president with which the West would find it very difficult to do business.

Related to this is the danger that NATO expansion could remilitarise the Russian-western relationship. It would surely be a sad outcome if we went back to the two blocs of cold war Europe, with the development of an alternative, Russia-centred security alliance to the east. Efforts to improve controls of nuclear weapons and the conventional forces in Europe agreement could be undermined were Russia to become paranoid and unco-operative. For all these reasons and more, it is imperative that, whatever happens to NATO, efforts to build real, substantial and demonstrably meaningful relations between NATO and Russia are vigorously and relentlessly pursued at all times.

If the rationale for NATO expansion is to such a large extent about greater stability and political confidence, the run-up to the Madrid Summit has been a strange way to pursue it. The argument until the 11th hour plus between the US and the UK, on the one hand, and France, supported by Italy, Spain, Portugal, Greece, Turkey, Belgium, Luxembourg, and Canada, on the other, as to whether new membership should be limited to three countries—the Czech Republic, Hungary and Poland—or widened to include Romania and Slovenia has hardly promoted the cause of calm and reassuring evolution. Indeed, it has been described as having the attributes of a lottery. We must do better than this.

In the political community of NATO, consultation and consensus are essential. Force majeure is no basis for the alliance's future strength. As it is, the negative effects on would-be candidate members who do not make it are indeed worrying; they hardly promise stability. And the reckless promotion of altogether unnecessary arms sales, backed by arms-related aid, in the absence of a convincing need for these, but on the dubious thesis that to be eligible for membership of the NATO club requires a qualifying level of military machismo as distinct from essential professional military competence—not always conspicuously a characteristic of the new potential members—is an unedifying phenomenon. Think of what could have been achieved with those resources in sounder economic and social terms as a real contribution to stability.

It will be essential to strive to minimise any adverse consequences of exclusion. More central and eastern European states will be excluded from enlargement than included. Investment in the OSCE must therefore be seen as a high priority for Europe and North America as a parallel means of promoting security. Real resources will be necessary for this. The North Atlantic Co-operation Council still matters and should be taken seriously; and Partnership for Peace must be more than cosmetic. It can play a real part in promoting democratic accountability of armed forces. But again, NATO member states will need to ensure that its activities are properly funded and accorded the priority they deserve.

As for the future of NATO itself, Article 5 of the North Atlantic Treaty, with its real and tested commitment to the collective security of its signatories, must not become fudged or eroded. This is the core of the alliance. Without its continuing credibility everything else would become hollow. Nevertheless, NATO has also demonstrated that it does have a wider role in conflict prevention and conflict management. Its credibility has been an important element in the Bosnian peace process. But, as recognised in the 1991 Strategic Concept, it is essential that NATO deployment outside its own boundaries is invariably with the political mandate of the UN, or of OSCE within the UN framework, and remains accountable to them. Otherwise we shall be using NATO to undermine rather than to enhance the viability of global collective security as centred in the UN Security Council. To my view it is disturbing that accountability to the Security Council has been far from clear in Bosnia.

However vital, the military aspects of NATO can only be one strand in the alliance's security posture. Economic and social policies are even more fundamental to long-term security.

The recent EU intergovernmental conference has reflected a deep ambivalence about the degree to, and manner in which, European countries are committed to the goal of a European security and defence identity. The revised treaty on European Union does envisage the EU requesting the Western European Union to undertake the so-called Petersburg Tasks— peacekeeping, preventive diplomacy and crisis management operations. This is a practical starting point for the development of an identity within the framework of NATO so long as WEU really has access to adequate resources to fulfil these functions. The Joint Task Force arrangement would allow for WEU to call upon NATO for the provision of necessary assets. But its effectiveness obviously depends upon the availability of requested units in a real situation. This will need to be watched.

I, for one, trust that any identity expressed through the reactivation of WEU will build upon the record of relative willingness of European states, as compared with the US, to contribute to long-term peacekeeping beyond the immediate periphery of their countries and thereby to assist significantly in maintaining and developing global security. For example, the EU has stated its commitment to help in the development of conflict prevention capabilities in Africa. There is inevitably a military dimension to this. A vital role for WEU could be the provision of programmes to assist in enabling African militaries to be able effectively to undertake preventive deployments and peacekeeping missions in their own continent.

Last week we debated the forthcoming defence review. The issues the noble Lord, Lord Wallace, has raised so well this evening will, I believe, be central to it.

My Lords, if one were to conceive in the abstract 15 nations wishing to get together in an ever-closer union, one would assume that the first thing that they would try to do would be to organise their defence policies and defence arrangements in common. It is all very well to think of harmonising the size of tomatoes or apples—a heroic if somewhat surrealistic adventure—but to harmonise the size of tanks, fighters or guns seems a much more logical beginning. But if I say that, I am forgetting that just such an enterprise was launched in the pre-history of modern Europe, in the early 1950s, with the European Defence Community of which, if it had gone through in 1955 (as it might have), we would now be celebrating the 42nd anniversary. It is worth remembering when addressing ourselves to this important debate, which has been so appropriately introduced by the noble Lord, Lord Wallace, that that European Defence Community was not abandoned in 1955 because it was a bad idea; it was defeated by a bad alliance between the French Gaullists and the Communists in the French Assembly.

I have a second preliminary point. We are all, I suspect, used to being harangued by our American friends who complain, "Here you are, you rich and prosperous Europeans, why can't you now get together and organise your own defence?" That point of view was put even more frequently in the old days before 1989 than it has been put since. Of course, there is always a question mark—the noble Lord, Lord Wallace, tangentially raised this in his speech—about the extent to which the United States would really like the Europeans to get together and to organise their own defence but, in practice, all responsible North American statesmen from John Foster Dulles at the time of the EDC to George Ball and President Kennedy when the concept of the European pillar was first launched, have expressed themselves in favour of just such a European defence collaboration and identity. Therefore, I do not think that we need worry quite as much as might be thought with regard to that question and it is, therefore, entirely appropriate that the noble Lord, Lord Wallace, suggests that we should address ourselves to the question again today.

Although I suspect that we are all in agreement in this House that the commitment of North America (the United States, as well as Canada) to Europe is the most important element in our defence—the keystone of our defence arrangements—nevertheless, things change and we are all aware after a visit to the United States that North Americans are preoccupied with many other parts of the world, as well as with Europe, such as the Caribbean, Latin America and the Pacific—zones of power which sometimes do not receive much of a mention in our own newspapers in the late 20th century however much they might have done in the 18th and 19th centuries or the earlier part of the 20th century.

I must say fairly and squarely that what I would like to see in the long run is something like a European defence identity within the marque of the NATO treaty, of course, but one which would progressively be capable of developing so that in the long run it could cope with most of our security concerns; not concerns which might involve us in a major war against a major power— certainly not—but with a great many minor ones, such as Yugoslavia seemed to be at the beginning. Our incapacity to act in Yugoslavia—in this case I am using the pronoun "our" to indicate Europe—seemed to be a reproach to Europe as such. It is worth reminding ourselves that the United States would have much preferred us to have been able to act in those ways in Yugoslavia.

My own impression is that the new Government reacted a little too hastily in turning down any suggestion of a European defence development along the lines suggested by the French in particular, but also supported by some of the other European partners. After all, it is an interesting idea. We want the French to play a major part in European defence in the future. The best way to achieve that and to ensure that that great country will play a major part is to show interest in its ideas, such as thinking that there is a case for WEU to operate as a dependency of the European Union by the year 2010. We may not agree with that, but we should at least express curiosity, interest and the realisation that it is a new idea which deserves to be taken seriously.

There may be noble Lords who will still think such ideas heretical, naïve, unsophisticated and dangerous, despite the fact that, as the noble Lord, Lord Wallace, reminded us, there has been a good deal of commitment to the concept in principle by Ministers over the past 10 years or so—anyway since the NATO communiqué at the Paris summit in 1990 declared itself for the first time in favour of a European dimension to NATO. If it is thought that these ideas are naive, we should bear in mind that they could very well be a way in which NATO could be rejuvenated.

Noble Lords will remember that at one Conservative Party conference the former Secretary of State for Defence, Mr. Portillo, made fun of the idea that the British people should be asked to fight for Brussels— his actual words escape me—and it is true that Brussels is perhaps not an inspiring city for which to fight. However, I remind noble Lords that Britain did fight for Belgium inter alia in 1914. Perhaps I should emphasise "inter alia" since what the British fought for in 1914, 1939 and were willing to fight for since 1945 in the cold war, although it did not come to it, was the idea of European civilisation, however defined.

Those of us who are anxious to secure greater popular support for the idea of the European Union should bear in mind that loyalty and patriotism are usually geared to a successful defence dimension. Some may say that to speak of patriotism in the European context is ridiculous. Nevertheless, we are all capable of different levels of patriotism. We are loyal to our locality, family, city (in some cases), country and civilisation. The concept of European patriotism is something that we should seek to engender in the context of a developing WEU within the marque of a revised North Atlantic Treaty Organisation.

My Lords, it is always an honour and pleasure to follow the noble Lord, Lord Thomas of Swynnerton. In 1961 a book was written. The noble Lord wrote that book. That book was entitled The Spanish Civil War. I read it in 1970. I suggest that its title could have been The Beginning of the Second World War. I shall not rehearse what happened in the Spanish Civil War, but I know that two totalitarian states fought it out on Spanish soil. I do not know when the noble Lord, Lord Thomas of Swynnerton, wrote that book. He could predict that within a matter of 30 years Spain would be a democratic state and have a constitutional monarchy, that it would have joined the European Union and NATO and that a conference would be held this week to discuss the expansion of NATO. I believe that that gives us some optimism. It took 30 years.

I thank my noble friend Lord Wallace of Saltaire for introducing this debate. It is the second or third debate that he has introduced since I have had the honour to be a Member of your Lordships' House. I am interested that this debate has come from these Benches. I am delighted and I salute him for his public spirit.

I am concerned about the outcome of the Madrid Conference. We may be concerned here. Most of us live about 2,000 miles from Moscow. I live 300 miles from Moscow for most of the year. I live in the northern Baltic state of the free and independent Republic of Estonia. I declare an interest. Last week I became secretary of the British-Estonian Inter-Parliamentary Group. Many of these groups have been formed following the general election when a number of Members lost their seats or retired from politics. Perhaps these inter-parliamentary groups can assist the process. Maybe we can get the other nations of Eastern and Central Europe to form similar groups so that we can have a dialogue at parliamentary level, because these are emerging parliamentary democracies after 50 years of repression.

I am concerned about the states of Eastern Europe. We are told that three will definitely be admitted: the Republics of Hungary and Poland and the Czech Republic. Two may come in later, but what of the others? What are their options? I suggest that there are four. They can wait to join NATO. They can wait perhaps five to 10 years, but for them time is running out. They do not feel secure; they feel threatened every day of their lives. Their next option is to remain in the partnership of peace. As to their third option, they have United Nations contingents. Many of them joined the United Nations because they saw what happened in Kuwait. A Western and Arab alliance assisted Kuwait, but Kuwait had oil. Do we believe that that great alliance would have been formed if there had been carrots and not oil in Kuwait? I doubt it. The fourth option is to remain neutral. Switzerland has that option. However, those in Eastern Europe have long memories. Certainly, the Baltic states declared neutrality. Both Stalin and Hitler took no account of that at all. Another option may be to try to form a Baltic league. Between 1920 and 1930 they tried to do so. The problem was that then Poland argued with Lithuania about Vilnius and Sweden and Finland would not come together because of Swedish neutrality. I do not believe that that is a serious option.

What can we do? We have the finest army in the world when it comes to training soldiers below battalion level. I have had the privilege of witnessing this. The Royal Marines carried out the training of the United Nations Baltic Battalion. That process took about 18 months. I have not seen one reward in the Honours List in relation to the Baltic Battalion. I have not heard one statement from any of the present Ministers or from the former Ministers either in this House or in another place. Why? Do we have something to hide? Are we ashamed of what we have done? The people of Eastern Europe are very grateful. They would like us to carry on with that kind of activity. We have some of the best training establishments in the world. Need I mention Sandhurst or the various training establishments that have been very seriously cut over the past few years? Perhaps we could make a contribution in that way. I am delighted that this summer two Territorial Army sergeants will spend a few weeks training the territorial reserve armies of the Baltic Battalion. I wish them success, but two Territorial Army sergeants? Can we not do a little more? Perhaps the Minister can tell us the future plans.

I am delighted that there is to be a defence review led by the Foreign Office. I trust that the Foreign Office will talk to its ambassadors on the ground who have defence attachés who can brief Ministers about what is needed, what is practical and what is possible. I look forward to that defence review. But if one cuts the core army any further one will be unable to carry out the military training commitment in Eastern Europe which is so valuable, welcome and does not cost much. It produces very good results because, having carried out that training, one can ensure that they train themselves.

Last week we were informed by those on the ministerial Benches that the right honourable Member for Livingston in another place was due to meet Foreign Secretary Primakov this month. I welcome this. Perhaps the Minister will remind his right honourable friend the Foreign Secretary in another place of what happened when Mr. Bevin met Mr. Molotov in Paris in 1947. The famous Ernest asked one question, "What are you about, Mr. Molotov?" I look forward to learning that that is the same question as the right honourable Member for Livingston asks Mr. Primakov. I hope he will get an answer. If he is not satisfied with his answer, I hope that he will ask many more supplementary questions until he gets the right answer. We shall not have peace in Eastern Europe, or in Europe as a whole, until we have squared, diplomatically, the Russian Federation. We must show the Russian Federation that we shall give all the support that we can to the free and independent nations of Eastern and Central Europe.

My Lords, the argument seems to be going very much in the direction that I hoped that it would and I believe the noble Lord, Lord Wallace, hoped that it would. I have little too add, and less that I could put better than did the noble Lord, Lord Wallace, and other speakers.

One of my main concerns is one that I present often in the House. I am worried about becoming typecast or boring your Lordships with it. It is about the difficulty of living with the new United States—it is not the same United States with which we were brought up—in a great alliance, compared with the comparative ease of living with our European allies, however disparate they may be. As an example of that I wish to tell your Lordships something—it is not at all important, but it is striking.

Today is of course the day in Madrid when the decision is being taken about whether and whom. The answer is fairly clear, but there is an eminent and usually extremely objective and forceful American journalist called Jim Hoagland who often writes in the International Herald Tribune. He is an adversary of NATO enlargement. He is one of that large, and perhaps growing, band of American commentators and politicians who think that the whole idea may have been misconceived. He said this morning that the enlargement was taking place to assuage the guilt of the existing members of NATO, in particular the Western European members of NATO, at having betrayed Czechoslovakia, Hungary and Poland before the Second World War.

Let us pause for a moment. Yes, we did betray Czechoslovakia. There was Chamberlain's Munich visit. We were terrified. I remember it; I was 15. The nation was in a state of terror. It was a pity that we were. I do not know whether it was a right or a wrong judgment, but we betrayed Czechoslovakia. Hungary was a fascist country in alliance with Hitler. That was the government that it had. We had to face that. Poland of course was the cause of the beginning of the Second World War when this country and France declared war on Germany for the defence of Poland. Here we have an eminent American commentator who does not even know that, and he is among the best. It is difficult to live with our friends sometimes.

I want also to draw attention to the general question of US bilateral arrangements in Europe, which are outside NATO and about which we consequently cannot find anything upon which to comment, because we do not know. I should like to mention two. The first is an exercise called Sea Breeze which is being mounted by the American armed forces on a bilateral basis with the Ukraine. It will consist of naval exercises off the Crimea, followed by a landing in the Crimea from the sea. All of it is mimicking. It is a simulacrum of an invasion of the Ukraine—the Crimea in particular—by a neighbouring country adverse to the diversion of the Ukraine to the West.

At one stage it was announced that the Russians were perfectly happy about that, but that was evidently not true. They are not taking part in it, I understand. The exercise is a strange phenomenon, verging on provocation of Russia. It is hard to make out what other purpose it can have—to do a facsimile of what they would do if Russia were to be so disobliging as to invade the Ukraine.

Another is the bilateral arming of the Moslem government in Bosnia. We tend to forget that when NATO countries, acting under the UN and the OSCE, agreed that the USA should arm the Bosnian Moslems, it was on the basis that co-operation should already have broken out between them and the Croatian Christians. It never did break out. They are still at loggerheads. The bilateral arming carried on. It is not being done by the American armed forces. It is being done by a military commercial enterprise.

I put down a Question about that the other day to my noble friends. I forget if they were in the Foreign Office or the Ministry of Defence, for which I apologise. It must have been the Foreign Office. I received the answer that all inquiries about that should be addressed to the US. That was nothing to do with NATO, as indeed we all knew. It is nothing to do with NATO at all, but it is something else that is going on in Europe. It is another expression of US military activity in Europe over which we have no droit de regard, in the convenient French phrase.

The same of course applies to the military bases in Hungary which are bilateral. They are nothing to do with NATO or the PFP. Although I believe that it may now have ended, there have been the bilateral military arrangements between the US and Albania, the relationship between whom, from subsequent events, is impenetrable, like most things in Albania.

Before the cold war came to an end, the OSCE was there. The Helsinki Agreement was there. The OSCE was formed into an organisation. It remains the most rational and most defensible of all European organisations, with a potential for having a military capacity which exists in Europe. However, it has not got off the ground because the habit of NATO of regarding Russia as an enemy has been too strong to permit it to get off the ground. So realism dictates that we should think about other ways of internationalising the fact that we are a military power and that everyone else on the Continent is a military power.

NATO is really in Europe now a semi-military regional classification arrangement. Those are the operations that it undertakes. As such, it can be and is being extremely useful. But the European countries have the feeling that they would like to be able to operate without the US when it is really a matter of purely local European interest. The US, as several speakers have pointed out, fully understands that and backs it. Indeed, it appears ready to make available to us the heavy air transport which is all that we in Europe lack to be able to do it. We have far more men in Bosnia than they ever had or ever will have, but we do not have the aeroplanes to get them there. Such cases may arise elsewhere.

The noble Lord, Lord Wallace, was right in saying that here we need to hang together in the military sense more than we do. For what reason? We are here; we were born and shall die Europeans. Americans were born and shall die Americans. Long may they be our friends, and, if necessary, our defenders, although I hope that it will never come to that again. But they are not us and they cannot take the lead on this continent. It is unwise to try and it is unwise of us to withhold any doubts we may have about action in the field that we are discussing today. I join other noble Lords in urging that we should begin to veer distinctly towards our immediate neighbours.

My Lords, the House will be grateful to the noble Lord, Lord Wallace of Saltaire, for tabling this Question. It has given me much pleasure to listen to the contributions of other noble Lords. As we know, the Madrid Summit decided to invite the Czech Republic, Hungary and Poland to join NATO. The noble Lord, Lord Judd, referred to the difficulty of reaching that decision. It would seem that the Prime Minister and Mr. Clinton achieved one of their objectives at the summit.

We also expect the summit to explore the concept of a European security and defence identity. The debate is therefore timely. However, it is also appropriate that we, but more significantly the Government, should examine the issue of European defence capabilities in the context of the strategic defence review. I hope that what has been said tonight will be taken into account in that review. If we are seeking to reshape or revalidate the UK's defence capability for the long term surely our responsibilities as a leading European member of NATO are at the heart of that consideration.

The Question asks what the European allies should now be doing to develop the ESDI. To understand where we are heading, it is first necessary to appreciate where we have come from. As noble Lords will recall, it was the Rome Summit of 1991 which effectively redefined NATO's role and the strategic concepts which underpin that role following the end of the Cold War. There are three parts to this: a shift from heavy troop concentrations in Germany to more flexible, more mobile forces which could be deployed at short notice; a recognition that NATO could and should be used to support other international organisations such as the UN or OSCE; and a peace dividend in the form of a decision to make large reductions in the size of the Alliance's armed forces.

In charting this new direction, the Allies also recognise that European nations might in future take more responsibility for their own security without necessarily relying on assistance from the USA or Canada. How this was to be done and quite what roles the European Allies might be expected to perform was left for further discussion. However, at the UK's suggestion, the Western European Union was identified as a possible vehicle on which to base such European co-operation. This was important because the WEU, which for many years had existed in name only rather than in substance, is nevertheless the only institution capable of laying the foundations for European defence identity that is compatible with NATO. One key aim of our own was to reinforce the European defence capability within NATO, not to create something outside it. "Separable but not separate" was the catchphrase.

The Petersburg Declaration of 1992 defined the missions that the WEU should be prepared to undertake: humanitarian and rescue tasks; peacekeeping; and crisis management. However, territorial defence remained explicitly a NATO prerogative. After Petersburg, progress was somewhat gradual, but 1996 saw two important developments. The first was the UK presidency of the WEU. That presidency gave added impetus to making the WEU capable in practice of undertaking military operations in its own right. A great deal of useful work to that end was accomplished during the year. The second development was the meeting of the North Atlantic Council in Berlin. That meeting agreed that the WEU was indeed the right vehicle for providing the political control and strategic direction for Europe-only missions and that the ESDI should be developed within NATO using NATO assets.

So, my Lords, where are we now? There is a WEU Situation Centre in Brussels which can gather information and monitor operations. There is a politico-military group advising the WEU Permanent Council on policy and planning direction. There is a credible programme of exercises mapped out. And the WEU already has under its belt some experience of real operations; for instance, minesweeping in the Gulf and sanctions enforcement around the former Yugoslavia. But much more is still needed. In particular, the CJTF— Combined Joint Task Force concept—agreed more than three years ago, needs to become more of a reality. Combined training—that is, training with other countries—needs to be developed on a broader base. And the integration of France and Spain into the NATO structure must be finalised.

We should also need to consider the best way of involving eastern European countries in these combined efforts—not only those who have been invited to join NATO in 1999 but also those who have not been, as identified by the noble Lord, Lord Judd. There is already good dialogue with these countries through the Partnership for Peace initiative and from the immense amount of practical experience gained alongside them in Bosnia. Admission to the WEU may in due course be one way forward.

However, security is a concept that is broader than defence alone. Security does not just come from the barrel of a gun. That is why we must recognise— although I am bound to say that not all noble Lords have done so tonight—that alongside the WEU the European Union has a considerable role to play in reuniting the continent of Europe and in building mutual trust. The enlargement of the EU over the next few years is therefore an important part of this process.

Some people have concluded from this that the logical next step should be to subordinate the WEU to the EU. We on this side of the House regard that idea as fundamentally mistaken. The EU has an essential contribution to make to regional security in the non-military field. But saddling it with military responsibilities would not only marginalise some of our NATO allies across the Atlantic, it would alienate Russia to the idea of EU enlargement. Furthermore, it would put the neutral members of the EU into a position of influence in matters of defence which it would be unfair to everybody to have them exercise. Can the Minister confirm that that is also the Government's view?

At the heart of this must be the recognition that decision making in defence—decisions which risk the lives of the men and women of the Armed Forces—can be taken only by national governments accountable to national parliaments. The difference between security and defence is an important one. That is why we must insist on defence remaining an inter-governmental matter, as indeed it is under the modified Brussels Treaty. Will the Minister confirm that nothing in the text of the Amsterdam Treaty alters that essential aspect of the EU's common foreign and security policy?

As we take forward the idea of a European Security and Defence Identity, there is a danger that discussions become bogged down in institutional questions rather than engaging in a practical assessment of what Europeans are actually capable of doing together. That task-based approach to defence planning should act as a key prompt to what improvements are necessary to the WEU's capabilities. Equally though, that approach should not lull us into thinking that there is some pre-defined test to determine what missions should and should not be carried out by the WEU as opposed to NATO as a whole. There can be no such test divorced from a case-by-case assessment of the circumstances of each mission. Who does what can be decided only by consultation between allies.

Practical defence co-operation between European countries will proceed over the years ahead in a variety of ways—through the WEU, PfP, and bilateral or multilateral initiatives such as the Baltic Peace Battalion and the UK/Netherlands Amphibious Force. It is crucial that nothing should be done to amend institutional structures, which might call into question the role of NATO as the primary forum for consultation among all allies on questions of security and defence.

Perhaps the most significant insurance policy against any damaging divisions between North America and Europe is the successful development of the CJTF concept. The prospect of CJTF's being able to draw upon US assets is not only important operationally; it is significant politically. The noble Lord, Lord Kennet, touched on the point of heavy air transport. With commitment and energy, I am confident that over the next five years we can show that the reshaped and revitalised post-Cold War NATO has come of age.

My Lords, by the common consent of your Lordships, we are all grateful to the noble Lord, Lord Wallace, for providing us with this opportunity to discuss the development of the European Security and Defence Identity. He started by giving us the origins of the ESDI which went back, as he pointed out, to 1990. He confessed that he had a little difficulty with some of the acronyms. I must confess that when I first saw ESDI, I thought it referred to a European strategic defence initiative. I got a little twitchy, and I still do every time I see it. I have to remind myself on my department's papers exactly what it refers to.

The main question which the noble Lord raised was whether the Government mean that they want an ESDI. I am confidently able to give the answer from this Dispatch Box that that is exactly what it means: they want a European Security and Defence Identity. I hope that in the course of my remarks, I shall be able to convince him of that. I share, as do most of us, some of his concerns about how the balance of the burden of those matters is distributed within Western Europe but those matters are long standing, and I doubt whether we shall take them much further forward this evening.

The noble Lord said—and this was a theme which ran through some of my noble friend's comments—that he had the impression that this Government were Atlanticists par excellence and that we were dismissive of further European co-operation. I have no difficulty whatever in pleading guilty to being an Atlanticist. In fact, anybody who has had the sort of responsibilities that I have had from time to time at the Ministry of Defence could not fail to be impressed by the value to this country in terms of intelligence and nuclear matters which arise from our very close relationship with the Americans, a relationship which could not be substituted in any way by our relationships with our European allies.

But I do not believe that having an appreciation of the value of those matters is in any way inconsistent with wanting to see a greater development of European co-operation in security and defence matters in the widest possible sense. I quite agree with the noble Lord, Lord Wallace, that one of our objectives should be to pursue co-operation with our neighbours and then explain it to the British public, if I am quoting him correctly. Moreover, I feel that I owe the noble Lord a small apology in that last week I was not able to be present at that period of the first semi-public session of discussion of the Strategic Defence Review until after he made his contribution. I simply could not get there until he had already sat down.

My noble friend Lord Judd, in an extremely wide-ranging contribution, very fairly listed several of the benefits which would accrue from widening the membership of NATO, including that it had already helped to reduce international tensions; that it will contribute to political stabilisation in new member countries; and of course he insisted that it should be driven by its own values and interests. I agree with him entirely. I have always said that it must be a paramount consideration in any present or future expansion of NATO that we should avoid antagonising Russia. I hope that my noble friend takes comfort, as I do, from the NATO-Russia Founding Act and the similar developments between NATO and the Ukraine, and, of course, the host of confidence-building measures which have sprung from those two arrangements and which we hope will develop much further. I agree also with my noble friend that it is essential to maintain the credibility of Article 5 if NATO is to have any credibility itself in the future.

I turn now briefly to the remarks of the noble Lord, Lord Thomas of Swynnerton, about the harmonisation of defence equipment. Having been responsible twice for defence procurement, his remarks struck a chord with me. I assure him of that. However, I should point out to him that it is not necessarily a question of having identical pieces of kit which will enhance the fighting power of the alliance. It is interoperability which is at the heart of improving our military posture. While if all the same pieces of kit are procured that would reduce the costs of equipment, it would also reduce the number of problems that would be set for a putative enemy.

As I understand it, the noble Lord would like to see an ESDI within NATO, and that is precisely the objective of Her Majesty's Government. He said that he would like to keep the French involved, and that is the objective of us all.

The noble Earl, Lord Carlisle, referred to some of the difficult choices which will confront us in relation to the unsuccessful candidates who wish to join NATO at this time. I assure him that the expansion of NATO is not contemplated to be at an end by any means.

The noble Earl asked me also a question about the Territorial Army sergeants. I am afraid that, even with an encyclopaedic knowledge of defence matters, I cannot answer this evening but I shall find out for him the answer to that question.

He referred also to Ernest Bevin meeting Mr. Molotov and wondered whether or not our present Foreign Secretary, Mr. Robin Cook, would take the same robust attitude to his distinguished opposite number. I can say that I happen to know that Mr. Ernest Bevin is one of Robin Cook's greatest heros. In fact, he is trying very hard to ensure that a blue plaque is put on a house where I understand Ernest Bevin lived for a large part of his life.

The noble Lord, Lord Kennet, said that it was very difficult to live with the new United States. I am tempted to tell him that new Labour will find it easier than some to live with the new United States. However, I fully understand the significance of his remarks about how, from time to time, we find ourselves a little left behind at some of the unilateral activities—those perfectly legitimate activities of the Untied States taken on a bilateral basis with other countries in Europe. However, the noble Lord emphasised very fairly not just that European countries wanted to be able to operate without the United States but also that the United States wanted that to happen. As I understand it, that is a major theme of the development of a European security and defence identity that we are developing with our European allies.

I should tell the noble Earl, Lord Attlee, that of course we want to get the French and the Spaniards into the unified command structure. I certainly take his point that security runs much further than just defence matters alone. I very much agreed with the whole tenor of the noble Earl's speech, and I can certainly confirm that it is the view of Her Majesty's Government that the assimilation of the Western European Union into the European Union is mistaken. Indeed, we share his view on that and that will inform our policies in the years ahead.

The noble Earl also asked me a question about the Amsterdam Treaty. I must confess that I do not have such details with me this evening, but I shall certainly write to him on the matter.

As I am sure your Lordships know, the summit has today, as anticipated, invited the Czech Republic, Hungary and Poland to accession talks with NATO. The goal is to sign the Protocol of Accession at the time of the ministerial meetings in December of this year and to see the ratification process completed in time for the expanded membership to become effective by the 50th anniversary of the Washington Treaty in April 1999. I should point out that enlargement is just one element of the much wider NATO agenda for Madrid. What we want to do is build a real partnership across the whole of Europe. I believe that that covers some of the points made by my noble friends about the OSCE and Partnership for Peace. At the same time, we have to maintain the bedrock of the alliance which is a strong transatlantic link.

One of the things that I should like to make clear tonight is the fact that all NATO Ministers agree on the need for Europeans to have the capability to act together in circumstances when our North American allies do not wish to become involved. As I said, the Canadian and American governments not only support that concept; indeed, they have attached very great importance to it. The British Government's view is that the development of the European identity, firmly rooted within NATO, is the only way to provide Europe with a credible, capable security and defence identity without undermining either the alliance or the transatlantic link. In that respect, we have had some very notable successes, including the development within NATO of European command arrangements which can prepare, support, command and conduct WEU-led military operations. Arrangements are in hand for identifying those NATO assets and capabilities which could be used in WEU-led operations. Both NATO and the WEU are developing the detailed mechanisms required for their release, monitoring, return or recall. NATO has begun the process of military planning for WEU missions involving NATO assets and capabilities and both organisations are working towards joint exercises which would test that concept.

A key element of the new European defence identity is the new WEU-related aspect of Deputy SACEUR's role. Provisional terms of reference for Deputy SACEUR would give him WEU-related responsibilities in peace and in time of crises. Placing those responsibilities at the heart of NATO's command structure would ensure that WEU-related issues are discussed and recognised at the highest levels within NATO.

From all that I hope that your Lordships will recognise that substantial practical work is well in hand. I should add that the WEU has also become actively involved in NATO's defence planning process. It has contributed to the guidance which regulates the whole process and which the Defence Secretary endorsed last month. NATO planning will now, in addition to taking account of the full range of alliance missions, include WEU-led operations. Thus the embodiment of ESDI-WEU-led operations using NATO assets and capabilities is now a consideration within NATO from the very roots of its defence planning processes.

I have now come to the end of my permitted speaking time. I hope, therefore, that I have said enough this evening to persuade the noble Lord, Lord Wallace, that we in government do understand what ESDI should mean for this country and that we do mean what we say.