asked Her Majesty's Government:

My Lords, Sir David Ramsbotham was appointed for a period of five years expiring on 30th November this year. Under the terms of his appointment, that period may be extended by a maximum of three years by agreement between Sir David and the Home Secretary. There is no entitlement, by contract or otherwise, to any extension of the appointment.

On 9th June the Home Secretary announced that, with Sir David's agreement, his appointment was to be extended until the end of July 2001, when Sir Graham Smith, Her Majesty's Chief Inspector of Probation, also retires. The Home Secretary also said that aligning the dates on which both appointments expire provides flexibility in considering how to ensure that arrangements for inspecting the prison and probation services best support closer working between the two.

The response to the consultation exercise which we held in the autumn showed clear support for bringing the two inspectorates closer together, while keeping the two chief inspector posts entirely separate. In the Government's view, the retirement of the current chief inspectors provides an appropriate moment to establish new working arrangements in order to achieve that. Both Sir David Ramsbotham and Sir Graham Smith have made a significant contribution to raising standards in the prison and probation services, and we are most grateful to them for that work.

My Lords, I thank the Minister for his reply, to which I listened very carefully. However, could not the facts of the matter be interpreted slightly differently? At the time that it was proposed to merge the two chief inspector posts, it was suggested to Sir David that he should retire and that his appointment should continue for only another seven or eight months. That proposition is no longer on the table. It has gone.

Does the Minister agree that under those circumstances everything possible should be done to ensure that an outstanding chief inspector such as Sir David—whose thematic reviews, for example, of young prisoners are becoming a bench-mark for the treatment in prison of those between the ages of 15 and 21—continues in post for another three years? Is that not now a possibility? Will not the Minister, with the Home Secretary, review the matter? Surely it is impossible that the appointment of someone who has shown the frankness, honesty and bluntness of Sir David should be prematurely terminated because he has perhaps become a thorn in the flesh of some senior civil servants.

My Lords, it is worth reminding the noble Lord, Lord Renton, that we have already extended Sir David's term of office for a further eight months. I made that plain in my first response. However, I am sure that the noble Lord will appreciate that it would be improper for me to do anything other than follow the normal conventions in these matters. It would be wrong for me to comment on the decisions made about the appointment of individual public servants, whether by our administration or by previous administrations.

I believe there is widespread admiration for the important work carried out by Sir David and Sir Graham. We are most grateful to them for the robust, independent and, yes, sometimes irritating reports that have been produced. Those reports have an important bearing on the way in which we view prisons, the way in which the prisons work and the way in which we formulate policy. Therefore, we all pay tribute to Sir David for his hard work in the past and we shall be most grateful to him for completing his term until July 2001.

My Lords, when the noble Lord referred to the fact that Sir David's contract had been extended by eight months, he implied that it was an act of graciousness by the Government. In reality, is it not the case that the Government did so for self-interested reasons? They were considering the amalgamation of the two posts but then dropped that misconceived idea. That is why the contract was extended and for no other reason. Secondly, is the noble Lord aware that many of us take the view that an outstanding Chief Inspector of Prisons is being treated with a singular lack of graciousness by the Government?

My Lords, I hope that the noble Lord heard what I said earlier. I did not consider my comments to be ungracious; however, it is for others to interpret them. We are most grateful to Sir David for the independent and robust way in which he has carried out his duties. The fact is that we have extended his period of appointment—it is not a contract—for a further eight months. The noble Lord is right to say that we were considering the future of the inspectorates for probation and prisons. We carried out a consultation exercise, the fruits of which were clear. People believed that there was great sense in bringing the two inspectorates closer together for good public policy reasons. Now we have embarked upon another approach, and there the matter rests. We believe that the right policy is in place. It would be inappropriate for me to comment on decisions made about public appointments and it is not a course that I intend to follow.

My Lords, if the Government have not yet committed themselves to anyone else for this appointment, is it not still possible for Sir David to be asked to complete a further term as from next year? In the absence of my noble friend Lord Janner, perhaps I may express the hope that the issue of age will not be held against a person who is extremely competent.

I do not believe that the question of age arises in this case. We have said that the next chief inspector will be appointed in accordance with Nolan principles, which, among other things, require open competition, designed to attract as wide a field of candidates as possible, and an independent assessment of the selection process. Of course, Sir David is eligible to reapply for the post, should he wish to do so.

My Lords, perhaps I may express the hope that these exchanges will be drawn to the attention of the Home Secretary. Sir David Ramsbotham has been an outstanding Chief Inspector of Prisons. His reports have been penetrating and very critical of the regime and administration of the prison system, emphasising the lack of attention to education and training. They have often been uncomfortable for the prisons department and for the Home Secretary. That is what they should be. I hope that the Government will think again about reappointing Sir David because one needs a robust and independent-minded person, and that is what he has shown himself to be par excellence.

My Lords, I am sure that the noble Lord heard what I said. He has used many of the same words as I used. I agree that robustness, independence and so on are important virtues. I accept that and the Government accept it. That is why we need a truly independent inspectorate. At this point perhaps I should give credit to noble Lords opposite who were in government in the early 1980s and who, following the May report, established a more independent inspectorate for prisons. They were absolutely right to do so. We believe in the independence of the inspectorate. It provides a great service to the Home Office and to the Prison Service as a whole.

My Lords, is the Minister aware that the system of prison inspection in this country, and in particular the work of Sir David Ramsbotham, is highly regarded throughout the world and is being copied as a model by other jurisdictions? Therefore, can the Minister say whether the Government have any plans to alter the terms of reference of the inspectorate and, if so, in what way?

My Lords, I am aware of the high regard in which our prison inspectorate is held, both nationally and internationally. We have no plans to qualify in any way, shape or form the independent nature of that inspectorate. However, following the consultation to which I referred earlier on the prospect of bringing the work of the probation and prison inspectorates closer together, there will of course be an opportunity to review the terms of reference within which those two independent inspectorates function. However, that is as far as our consideration of the terms of reference will go.

asked Her Majesty's Government:

What plans they have for the orthodontic treatment within the National Health Service of children with crooked teeth or defective bite.

My Lords, the Government want to ensure that dentists can identify appropriate cases for treatment and use the most clinically effective and cost-effective approach while maintaining high quality standards. That will be achieved by concentrating NHS resources more on cases of true clinical need and less on minor cosmetic work.

My Lords, I thank the noble Lord for that Answer. Does he therefore deny reports in two national newspapers which say that the provision of orthodontics to children is to be removed from the National Health Service? Is he aware that at present there are 650 specialist practices which do nothing but tooth straightening but half of the straightening of teeth is carried out by 8,000 ordinary dentists in practice?

The British Dental Association is extremely concerned about what will happen to general practitioners and the role they play in straightening teeth. Does the Minister not agree that aesthetics are very important but in this case it is more than aesthetics; it also a question of a child's bite and his whole mouth arrangement?

My Lords, that was an extremely instructive question. I certainly agree that aesthetics are important for many people. However, I do not think that we should go down the route of certain countries where there seems to be a fashion for everyone to have orthodontic treatment and they all seem, to me at least, to end up looking as though they are wearing false teeth.

On the specific matter which the noble Baroness mentioned, she is right that many general dental practitioners undertake the work that she described. Certainly, under the new arrangements, many of them can continue to do some limited orthodontic work. We are trying to ensure that the most pressing treatment is delivered as quickly as it possibly can be because at present we have a situation were people who really need treatment are having to wait too long, and we must put that right.

My Lords, children's teeth are very important and I share many of the concerns of the noble Baroness, Lady Gardner. Fluoridation is a matter of some controversy in this context too. Can the Minister give an indication of the Government's response to the York University study into fluoridation?

My Lords, fluoridation had a very good ride in the debate on health yesterday. York University undertook a very thorough review. It found that evidence showed that fluoridated water helps to reduce tooth decay. It found no clear evidence of other adverse effects on general health associated with water fluoridation, other than the increased risk of dental fluorosis. The report also identified the need for more good quality research. We have asked the Medical Research Council to suggest where it might be possible to strengthen the evidence. We have said also that we consider that, in those parts of the country where dental disease is a particularly serious problem, fluoridation is one policy which health authorities may consider.

My Lords, does my noble friend accept that what he described as minor cosmetic work could be of very great importance to a young teenage child? Is he suggesting that under the new regulations—and I apologise for not knowing what they are—many children will have to put up with minor irregularities which may become very important in their lives?

My Lords, we are talking about very minor cosmetic treatment which it would be unnecessary for dentists to provide. At the moment, we reckon that 20 per cent of children have orthodontic appliances every year and about 120,000 of those will have work done in the GDS. It is expected that there may be a reduction of about 20,000 in the number of children who will have orthodontic appliances. However, I assure my noble friend that in those cases where a child might not need treatment for a clinical reason but there was a particular problem in relation to appearance, application can be made to the Dental Practice Board for approval in those circumstances.

I should say that this matter is out for consultation and we are at present considering the comments that we have received.

My Lords, what yardstick is it intended to apply in determining what is cosmetic and what is a necessary straightening of teeth for the child's future?

My Lords, it is all very straightforward. There is an index of orthodontic treatment need which attempts to rank those matters in terms of dental health need. That consists of ranking that on a scale of one to five. That is based on reasonably objective measurements. There is a separate aesthetic component on a scale of one to 10 where number one is the most attractive and 10 the least attractive. Essentially, it is considered that grades 1 and 2 need either no treatment or little treatment and grade 3 is borderline but it will be tipped into treatment need when associated with an aesthetic component of six or above. Grades 4 and 5 all benefit from treatment on health grounds alone. So there is a very careful scheme under which those judgments are made.

asked Her Majesty's Government:

My Lords, the arrangements give travellers healthcare on the terms available to the host country's own people. As countries have different healthcare systems, variations in benefits provided are inevitable. Overall, however, the Government believe that the present arrangements provide a reasonable outcome for the people of this country.

My Lords, if it were a truly reciprocal arrangement, surely it is wrong that if we fall ill in France, we have to pay 25 per cent of the costs of treatment whereas if a Frenchman falls ill in England, he receives that treatment totally free of charge? Furthermore, will the Minister confirm that in April of this year, a certain London psychiatric hospital stated that it thought that 20 per cent of its beds were being utilised by foreigners?

My Lords, I know that various allegations have been made over the years. I have yet to see hard conclusive evidence that that is so.

On the substantive point raised by the noble Lord, it is true that, for example, France and Belgium require a personal contribution of respectively 30 and 25 per cent of costs from patients in many cases. But there are also examples of UK citizens receiving more favourable treatment in other EEA countries than they would from the NHS; for example, prescription charges are lower in several countries, and access to dental treatment and physiotherapy is immediate and free in Germany. The EEA countries and those with which we have a bilateral agreement number over 50. To negotiate NHS-type provision for people in those countries and vice versa would be a bureaucratic nightmare. Although in some cases, UK citizens may be disadvantaged, surely the arrangements represent a sensible and reasonable outcome.

My Lords, is not part of the problem with this issue of so-called "health tourism" that it is possible for a visitor to this country simply to lie when he is asked whether he has lived here for more than certain length of time? Is the Department of Health considering some form of smartcard identification system which could weed out people who were trying to abuse the system?

My Lords, although allegations have been made, hard evidence is very difficult to find. Hospitals are asked to ask all patients whether they are ordinarily resident in the UK. If they are not ordinarily resident, further questions may be asked to determine whether they are liable to be charged for using the NHS.

I accept that the guidance currently issued to the NHS on how to deal with the kind of issues which the noble Earl mentioned may well be in need of updating. That is being done at present. When that work is completed, we shall issue it to the health service. If there are specific problems such as those which the noble Earl mentioned, I hope that we can deal with them. Overall, I believe that the general arrangements that we have in place are very sensible.

My Lords, is it not the case that sometimes the provisions are too fiercely enforced against British citizens who return to this country? When charity workers who have worked abroad for a temporary period in Asia or Africa return here, they are not eligible for National Health Service treatment except in the case of an emergency. Will the Minister undertake to look at that matter as part of a revision of the Patient's Charter to see whether that unfair provision can be mitigated?

My Lords, I am grateful to the noble Lord for advance notice of that Question. People who work abroad, either for the UK Government or in employment that is financed in part by the Government, retain their entitlement to free hospital treatment. That would include anyone recruited to work abroad under the British volunteer programme. In addition, people who have lived in the UK for 10 years and who are now employed by charitable organisations abroad outside that category may retain their entitlement to free treatment for at least five years and perhaps for longer, depending on their individual circumstances. If there are specific issues that the noble Lord would care to bring to my attention, I shall investigate whether there is a problem in the way in which the regulations are drawn at the moment.

My Lords, will the noble Lord reflect on the fact that the French system, which, as I understand it, applies equally to their own citizens as to citizens from other countries in the European Union, has a great deal of merit? As the Government grapple—not with a great deal of success—with the problems of the National Health Service and with the financing of it, there may be some merit in looking again at the French system as a model that we may follow.

My Lords, it is unusual for the Benches opposite to propose France as the model that we should follow. I do not agree with the noble Lord. I believe that the essential components of our National Health Service—a service that is free mostly at the point of delivery and funded out of general taxation—is the right one. I do not accept the points that the noble Lord makes about our stewardship of the NHS. We are bringing in extra staff; we are building many new hospitals; and under the NHS Plan we shall make the service truly great again, underpinned by the enormous extra resources that we are committing to it.

My Lords, following the Question posed by my noble friend, what happened to the European health card which was intended to facilitate the reciprocal arrangements throughout the European Union?

My Lords, I am not sure what the noble Baroness means by a "European health card".

My Lords, there were proposals for a health card, a smartcard, that could be used throughout the European Union. It would enable people to be recognised as having particular health conditions and it would make for easier understanding of the system in the countries concerned.

My Lords, I am grateful to the noble Baroness for that explanation. I am not aware of progress in relation to a smartcard, but I shall certainly find out whether any progress has been made. However, I am certain that generally the arrangements between countries in the EU are working fairly well in relation to reciprocal healthcare. Where there are problems, for example, with the administration of E111 forms, this Government are always prepared to take up individual cases with the country concerned.

asked Her Majesty's Government:

My Lords, the Government's integrated transport policy was outlined in the transport White Paper and supported by our 10-year transport plan that set out a £180 billion programme of spending, including £60 billion for rail to ensure that our transport policies are delivered.

Our rail policies are founded on increased investment to maintain, renew and enhance passenger arid freight services and will be delivered inside the frameworks approved only recently by Parliament in the Transport Act 2000. We shall, of course, make adjustments as necessary to ensure that we carry out safety recommendations arising out of the inquiry currently being conducted by Lord Cullen.

My Lords, I welcome the thrust of the noble Lord's reply and the Government's announcement this morning of further spending that will help in the longer term. However, we have a more immediate problem. As the train delays are to continue until Easter, and possibly beyond, and as increasing numbers of hard-pressed people are having to switch from rail to the airways and to road travel, will the noble Lord take every step—we have great faith in him—to ensure that we do not have a repeat of the chaotic situation on the railways in our airports and on the motorways?

My Lords, we shall try to ensure that there is no repetition of the situation on the railways. In some sense, that situation is unique because it has been caused by a phenomenon known as "gauge corner cracking" and a rate of propagation that was quite unexpected by the engineers. Be assured, we are doing everything in our power to try to support Railtrack in its attempts to deal with the problem. At a Rail Recovery Action Group meeting this week I was assured by Railtrack that by the end of January 85 per cent of services will be returned to normal.

We have brought the Rail Recovery Action Group together because we believe that having the Health and Safety Executive, the DETR, the Rail Passengers' Council, the Strategic Rail Authority and Railtrack round the same table will not only give the Railtrack bosses the confidence that they need to proceed, but it will also lessen the distractions on their valuable time. Their priority must be to get the railways running again.

My Lords, does the Minister agree that the sheer scale of the present problem is without precedent not only in this country but also in any other major railway passenger system? Does he also agree that the fragmentation of the post-privatisation management structure is a major part of that problem? Is it not time that we considered returning to a more logical structure, while retaining a mixture of public and private finance? We must not simply try to patch it up and continue with the present system.

My Lords, I respect the analysis offered by the noble Lord, Lord Marsh, in view of his background as Secretary of State for Transport. I believe that the railways are too fragmented; and I believe that that is accepted even by the previous administration now that they can see the outcome. Further, I believe that it is also a matter of management. We are assured by the management now in place in Railtrack that they understand where some of the difficulties have arisen through over-extended lines of supply and communication with their maintenance contractors. I also understand that the strategy of Sir Alastair Morton and his refranchising of the railways anticipates that there will be a consolidation of ownership there too. By giving as much support as possible to the industry, I believe that we shall see changes occurring that will be consistent with the analysis that the noble Lord offers and that we shall see a rationalisation of the railways in the future.

My Lords, does my noble friend agree that much of the splintering of the railways is a result of the privatisation caused by the previous government which his 10-year plan is supposed to put right? Does he agree with the report of the Select Committee on the Environment, Transport and Regional Affairs in another place, published yesterday, that Railtrack's management has been guilty of systematic, often-repeated failings, and that radical changes should be made to the way that the company is managed.

My Lords, I believe that the Railtrack board itself has accepted that it may have done better in the past. It is a company that emerged from public ownership only a few years ago. I believe that it is still in the process of finding the right kind of balance and expertise that it needs to manage such a complicated system. I do not believe that it is necessary to intervene in the ways suggested, such as government shareholdings in the railways. The shareholders, through the board, should ensure that they have the right management in place. If the right management is not in place, the board can take action; if the board does not take that action, the shareholders can take action and ultimately the market can deal with it by a takeover of that company if it does not perform as the shareholders want. I suggest also that within the structures that have been created, we shall be able to help it to manage better.

My Lords, does the noble Lord still say, as he did in the famous New Statesman article, that, "There is no rail crisis", or does he agree with the Prime Minister who said earlier this week that travelling on the railways is absolute hell?

My Lords, I am grateful for that question. In the unlikely event that the noble Lord opposite is a subscriber to the New Statesman, he will see in it today a letter from me which puts on the record that my reply to the question of, "Is there a crisis on the railways?", was, "I think that there is a crisis and that crisis must be managed". I then went on to talk about other crises of investment, confidence and political control. I agree that what is happening on the railways is dreadful for too many people. That is why we are working with such vigour to try to get things sorted out as quickly as possible.

My Lords, I beg to introduce a Bill to make further provision in relation to the safety of sports grounds and the arrangements to be made for or in connection with spectators at certain football matches; to make further provision in relation to the regulation of Royal Parks and the functions of the Historic Buildings and Monuments Commission for England; to make further provision in relation to culture, films, libraries, museums and galleries; to make further provision in relation to the Osborne Estate, public statues in Greater London, and certain bodies established by the Development of Tourism Act 1969; to make provision relating to the Superannuation Act 1972 in connection with culture or recreation; and for connected purposes.

I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.—(Lord McIntosh of Haringey.)

On Question, Bill read a first time, and to be printed.

My Lords, I beg to introduce a Bill to give effect to the Statute of the International Criminal Court; to provide for offences under the law of England and Wales and Northern Ireland corresponding to offences within the jurisdiction of that court; and for connected purposes. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.—(Baroness Scotland of Asthal.)

On Question, Bill read a first time, and to be printed.

My Lords, I beg to introduce a Bill to establish a committee of inquiry into the implications of a withdrawal by the United Kingdom from the European Union. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.—(Lord Pearson of Rannoch.)

On Question, Bill read a first time, and to be printed.

My Lords, I beg to move the Motion on the Order Paper standing in the name of my noble friend Lady Jay of Paddington.

Moved, That, unless any Lord objects, leave be given to the Chairman of Committees to move the seven Motions standing in his name en bloc.—(Lord Williams of Mostyn.)

My Lords, I make no apology for appearing to do a hat trick in raising this matter on three successive occasions. Here again we have two Select Committees appointed on which no Peeress sits. It is a pity, particularly with regard to the Parliamentary Office of Science and Technology. I know that there is nothing we can do about it on this occasion. But I hope that the Committee of Selection, which is an all-party group, will bear that in mind in future Sessions.

My Lords, I did hear the two previous interventions which the noble Lord, Lord Renton, made in this regard. My noble friend the Leader of the House gave similar answers on both occasions, which I repeat and endorse. I recognise that the noble Lord has a valid point and undertake to transmit it appropriately.

On Question, Motion agreed to.

My Lords, I beg to move the seven Motions standing in my name on the Order Paper.

Moved,

Deputy Chairmen of Committees—That the Lord Boston of Faversham be appointed to the panel of Deputy Chairmen of Committees for this Session

Hybrid Instruments—That a Select Committee be appointed to consider hybrid instruments and that, as proposed by the Committee of Selection, the following Lords together with the Chairman of Committees be named of the committee:

• L. Burnham,
• L. Campbell of Alloway,
• E. Courtown,
• V. Craigavon,
• L. King of West Bromwich,
• B. Thomas of Walliswood,
• B. Wilkins.

Personal Bills—That a Select Committee be appointed to consider personal Bills and that, as proposed by the Committee of Selection, the following Lords together with the Chairman of Committees be named of the Committee:

• L. Hogg of Cumbernauld,
• B. Knight of Collingtree,
• L. Sandberg,
• L. Templeman,
• L. Wilberforce.

Standing Orders (Private Bills)—That a Select Committee on the Standing Orders relating to private Bills be appointed and that, as proposed by the Committee of Selection, the following Lords together with the Chairman of Committees be named of the committee:

• B. Ashton of Upholland,
• L. Brett,
• V. Bridgeman,
• L. Brougham and Vaux,
• L. Greaves,
• E. Liverpool,
• E. Sandwich.

Statutory Instruments—That the Lord Lea of Crondall be appointed a member of the Joint Committee in the place of the Lord Walker of Doncaster.

Parliamentary Office of Science and Technology (POST)— That, as proposed by the Committee of Selection, the following Lords be appointed to serve as members of the Board of the Parliamentary Office of Science and Technology (POST):

• E. Erroll,
• L. Flowers,
• L. Oxburgh,
• L. Winston.

Parliamentary Broadcasting Unit Limited (PARBUL)—That, as proposed by the Committee of Selection, the following Lords be named as members of the Parliamentary Broadcasting Unit Limited (PARBUL):

• L. Burnham,
• L. Mackay of Ardbrecknish,
• L. Morris of Castle Morris,
• L. Thomson of Monifieth.—(The Chairman of Committees.)

On Question, Motions agreed to.

rose to move, That the draft order laid before the House on 23rd November be approved [33rd Report from the Joint Committee, Session 1999–2000].

The noble Lord said: My Lords, the House has before it two orders which are closely connected. The first one which we are to consider is the Millennium Commission (Substitution of a Later Date) Order 2000. This order extends the commission's funding life until 20th August 2001. After that date, the commission will continue to operate as a grant-giving body, but we propose that it will get no further direct income from the National Lottery.

Although we are debating the two orders separately, it may be helpful for me briefly to describe the second order, as it takes up the story where the first one ends. In that way I hope to give the House an overview of the Government's intentions. The second order—the Apportionment of Money in the National Lottery Distribution Fund Order 2000—provides that once the extension to the Millennium Commission's funding life comes to an end, all the lottery income which previously went to the commission will instead be allocated to the New Opportunities Fund.

I return to the first order. The Millennium Commission was established by the National Lottery Act 1993. Its purpose is to fund projects,

"to mark the year 2000 and the beginning of the third Millennium".

Under the 1993 Act the Millennium Commission stops receiving funding on 31st December 2000. However, the Act recognised that that date may have to be extended and allows that to be done by order.

The decision to extend the funding life of the commission was made by the previous administration. The then Secretary of State for National Heritage, Virginia Bottomley, said in another place on 20th January 1997 that,

"An Order will accordingly be brought forward to extend the funding life of the commission for one year".—[Official Report, Commons, 20/1/97; col. WA448.]

The reason for that was to cover variations from the estimates in the Millennium Exhibition Business Plan without prejudicing the commission's existing grant programme.

This Government reaffirmed that commitment. Before going any further, it may be helpful for me to say a little about the mechanics of the order-making power. The nature of the legislation does not allow the Government to make an order which simply states that the Millennium Commission will receive £X million. It does, however, allow the Government to extend the life of the commission to a specified date. The order before the House extends the commission's funding life to 20th August 2001. We estimate that that will mean that the Millennium Commission will receive £2,286.5 million of income from the National Lottery. After that date, we propose that the commission will receive no further income from the proceeds of the National Lottery.

I should point out that the previous administration proposed an extension until the end of 2001. Our proposed extension is shorter than that.

Let me say a few words about how we arrived at this new figure—£2,286.5 million—which is an increase of £269.5 million on the previous announced total of £2,017 million. The purpose of the increase is two-fold. First, we agree with the view of the previous administration that the Millennium Commission's other projects should not be adversely affected as a consequence of additional grants to the Dome. That accounts for £198 million of the increase, £179 million of grants and £19 million of lost interest on that amount.

Secondly, there are some additional worthwhile activities which we believe that the commission should undertake within its lifetime budget. Those account for the remaining £71.5 million of the increase. The additional £71.5 million will enable the commission to do a number of things which would not have been possible under its previously agreed income ceiling. Those are as follows: it will be able to put £6.5 million towards the cost of New Year's Eve 2000 celebrations; a further £10 million will be available to support projects reflecting the achievements and aspirations of black communities in the UK; and an additional £30 million will be available to support the commission's existing £3 billion programme of projects, many of which are still being completed. With this funding, the commission will be able to ensure that its capital projects have a solid foundation on which to build for the future.

This order allows for the Millennium Commission to use £25 million to support science centres. While formal decisions cannot be taken unless and until this House supports the order before us today, the Millennium Commission is minded to set up an endowed fund to provide resources in a few years for refurbishment work on the network of science centres around the UK which the commission has funded.

As well as being fun to visit, science centres are playing a key role in informal education, both for school children and for adults. It is increasingly important that people have the opportunity to widen their knowledge of science, technology and medicine as these will have a major impact on their lives.

I am pleased to say that the Wellcome Trust, the world's largest medical charity which has also made a major contribution to science centres across the UK, has agreed to consider working in partnership with the commission and providing some funds to increase the value of the endowment. This fund will enable the centres to maintain their attractiveness both as visitor centres and educational resources.

All of those are extremely worthwhile initiatives and I am extremely pleased that the commission will be able to support them if the order is approved. I indicated that much of the increase is required to make good the undertaking by this and the previous administration that the Millennium Commission's other programmes should not be affected by grants to the Dome. Without this order, there would be a hole in the commission's budget plans due to the grants made to the Dome. This order repairs that hole and ensures that the commission's other programmes do not suffer.

In other words, some of this additional money is as a consequence of the Dome, but it is not for the Dome. It is to make good the money that the commission has already agreed to pay to the Dome so that the commission can carry out all its other non-Dome-related activities—the vast bulk of its work.

What would be the effect of the order not being approved? Would it stop grants to the Dome? No, it would not. Those grants have already been made. The effect would be to take money away from the Millennium Commission's other commendable and popular programmes. So whatever noble Lords' views of the Dome, I hope that they are clear that a vote against the order would not be a vote against the Dome but a vote against the commission's other programmes. And it would be an abandonment of the Opposition's stated policy that the commission's other programmes should not be damaged by support for the Dome.

I look forward with pleasurable anticipation to the debate on the order.

Moved, That the draft order laid before the House on 23rd November be approved [33rd Report from the Joint Committee, Session 1999–2000].—(Lord McIntosh of Haringey.)

rose to move, as an amendment to the above Motion, to leave out all the words after "That" and insert "this House calls on Her Majesty's Government to withdraw the draft Millennium Commission (Substitution of a Later Date) Order 2000, unless they give a clear undertaking to the House that no additional money beyond that already reported to Parliament will be paid to the New Millennium Experience Company or to any other body which may have responsibility for the Millennium Dome or be its proprietor".

The noble Baroness said: My Lords, I beg to move the Motion standing in my name on the Order Paper. The Minister explained why the Government believe that this House should agree to the order as it stands. Never has an order looked so innocuous but signified so much. We are asked to accept that the Millennium Commission should continue to receive lottery funds intended for millennium year projects for an extra 33 weeks to a sum of approximately £269.5 million. Why do the Government need to do this? The Minister gave us some of the details. It is because the money which the Millennium Commission should have had available to spend on the good-cause projects has already been blown. It has been poured into shoring up the finances of the Dome. But, as the Minister rightly says, if the commission does not receive more money, the good causes will suffer.

The Minister mentioned science centres and I am grateful to him for that. I visited the Bristol project just over a year ago. I remember Bristol city centre a lifetime ago, in the late 1960s, when I was at university there. It had inner-city dereliction, a socialist local government which was at war with itself and nothing much was going well for the people living in the area. When I returned a year ago I saw a harbour-side which had been transformed. I visited a project which I found most impressive, as indeed were the people who were running it.

I am in no doubt that the Bristol project will play an important part in the regeneration of the city centre. I believe it is vital that the good causes get the money they need in order to survive and thrive. Therefore, noble Lords opposite and my noble friends might be wondering why I have tabled my amendment. It is a fair question and I shall give a fair answer.

First, I want to be absolutely sure that any extra money going to the Millennium Commission goes to the good causes and not to the Dome. The Minister gave encouraging assurances. Secondly, I believe that the public deserve to hear the Government say that as far as the money pit of the Dome is concerned, enough is enough; that no more of the public's money—their lottery money—should be handed over to the New Millennium Experience Company, apart from that which has already been reported to Parliament.

The Government appear to have acted as though the Millennium Commission were a bottomless pit of money that could be mined for the benefit of the Dome. The Minister rightly referred to the previous government's action with regard to giving a commitment that the life of the Millennium Commission could be extended in certain circumstances. In addition to the quotation from Hansard which he made, I refer the House to the Written Answer of my right honourable friend Virginia Bottomley on 20th January 1997, where she stated that any application for extra money with regard to the Dome and in consideration of the extension of the Millennium Commission,

"will only be made for contingencies and inflation which at present cannot be predicted".—[Official Report, Commons, 20/1/97; col. WA 448..]

At that stage, no one could have predicted the chaos that would characterise the finances of the Dome during the guardianship of this Government. There has been an extraordinary failure of corporate governance, one that has been examined in detail by the National Audit Office. We have had a detailed debate on that matter and I shall not abuse the procedure of the House by going through it.

The Millennium Commission originally budgeted for £399 million as a grant to the Dome, with a contingency of an extra £50 million which it expected to be repaid. That £50 million contingency was handed over in November 1999. I was intrigued by the Minister's comment today and tried to listen carefully to the figures he gave. He referred to the grant as being £179 million and the fact that extra interest would increase it to £198 million. Was he thereby saying that the Government expect that £50 million contingency money to be repaid to the Millennium Commission? If not, the amount outstanding to the Millennium Commission would not be £179 million plus interest but £229 million plus interest.

After receiving that £50 million, this year we saw the Dome snaffle up an extra £179 million. In February it was given £60 million. In May it was given £29 million. Then on 5th June, the right honourable Chris Smith said on GMTV that the Government had made it clear that the Dome should not come back and ask again. He said that it should budget with the money it had already received from the commission.

But in August the Dome was back again for another£43 million. In September it was back again for another £47 million. Indeed, on two occasions the commission's accounting officer gave advice to the members of the commission that the extra grant to the Dome would not represent good value for money for the public and a letter of direction had to be sought.

The financial chaos oft he Dome since May 1997 has been an extraordinary saga—but one which needs to come to an orderly end. I, my noble friends and my honourable friends in another place have repeatedly asked the Government to put on record that the grant made in September would be the last. But so far we have not received that assurance. One has to wonder why.

I am not usually given to cynicism, although in politics perhaps one becomes used to trying to be a little more cynical rather than innocent, as of course we all are. If the Government cannot give the assurance which I seek in my amendment today, will the Minister tell the House why extra money will be needed for the Dome and how much? It is only when I know the answers to these questions that we on these Benches can decide whether to press the amendment. I commend it to the House.

Moved, as an amendment to the above Motion, to leave out all the words after "That" and insert "this House calls on Her Majesty's Government to withdraw the draft Millennium Commission (Substitution of a Later Date) Order 2000, unless they give a clear undertaking to the House that no additional money beyond that already reported to Parliament will be paid to the New Millennium Experience Company or to any other body which may have responsibility for the Millennium Dome or be its proprietor".—(Baroness Anelay of St Johns.)

My Lords, we on these Benches have had uncharacteristically lengthy discussions on these two statutory instruments. I congratulate the Minister on his clear description of what the orders entail. As to the first one, the purpose of which has now been explained by the Minister, I and my noble friends did not gain much assistance from the Explanatory Note. It is not good enough simply to provide an existing lump of legislation with hardly any further enlightenment. If that is the trend, one almost reaches the stage where one requires an explanatory note of an explanatory note. Having said that, the matter is now extremely clear.

The amendment moved by the noble Baroness is unexpectedly helpful. We should perhaps be grateful to the noble Baroness who may well have inspired the very clear explanation of the Minister. The prolongation of the existence of the Millennium Commission was foreseen in the original legislation put in place by the previous government. However, they never contemplated today's rather sombre situation as regards the Dome. Enough has been said about that, and we do not want to join in any rancorous discussion about apportionment of responsibility for the present situation.

We on these Benches completely understand the reason for the date given by the Secretary of State. The original legislation provided for a period of six months rather than a year. Presumably, the reason for it, which has been reinforced by the Minister, is that, apart from the list of good causes described by the noble Lord—incidentally, we entirely support it—money is required purely to decommission the Dome. Can the Minister tell the House at what stage noble Lords will be given further information about the exact amount required for decommissioning? At the moment that matter is left rather open. The Minister's key remark, which we completely understand and accept, is that the money is only for non-Dome-related activity beyond what is required for decommissioning.

I understand from the observations of the noble Baroness that she is unlikely to press her amendment to a Division. However, if the noble Baroness did so, in the light of her remarks we on this side of the House would not follow her into the Lobbies. Nevertheless, the noble Baroness has been instrumental in throwing further light on the situation. The position is now much clearer than it was the day before yesterday when I and my colleagues discussed these matters which we did not then fully understand.

My Lords, I rise briefly to observe that the same facts can appear to be different to different observers. The noble Baroness described her time in Bristol in the 1960s. During that time I was president of Bristol Borough Labour Party and, therefore, took some responsibility for the policy of the council. The noble Baroness described the centre as having been regenerated. It is true that the centre is now an absolute delight to the middle and chattering classes of Bristol. However, the previous centre, which included some very good public lavatories and flowerbeds, was perfectly adequate. Public lavatories are always anathema to the middle classes because they do not like people stopping and slamming car doors. All of that has gone.

The only common denominator that remains is the statue of Burke. When I was a small boy I could not understand why Burke had been so famous when, looking at his statue, he had been the Member of Parliament for Bristol for only four years. It was only later I discovered that he had gone to Bristol from a pocket borough. Having represented the constituency for four years, he found the electorate rather tiresome. His main opponent, Kruger, refused a fat bribe to withdraw from the contest and Burke went off to another pocket borough. Burke is now hailed as the very acme of democracy and representation of the people and his statue remains in Bristol.

This matter is not of great interest to many Members of the House. However, if the noble Baroness visits some of the haunts of the working classes in Bristol she will find a very different view about the regeneration of which she is so proud.

My Lords, like my noble friend Lady Anelay, I am as anxious as anyone to see that money goes to the New Opportunities Fund and other good causes. My reason for rising this afternoon is to ask for responses to a number of questions. Some of those questions have been put before but not answered and there are one or two new queries. Those matters should be dealt with before we pass this order. We must have those answers because, as the Minister said in moving the Motion, a hole will appear in the budget if funding is not provided. I am worried about what happens if the current estimates of cost and future income for the Dome prove to be substantially wrong. Who then provides the funding, or is there a possibility that in that situation the Government will be forced to return to the House to ask for a further extension? If there is a potential hole we need to be absolutely confident about the numbers that we are talking about.

In the debate on 29th November the noble and learned Lord, Lord Falconer of Thoroton, told the House that the Dome needed about 4.6 million visitors, but he did not answer the question about the number of paying visits. The latest forecast by the New Millennium Experience Company is that it expects 4.6 million revenue-generating visitors by the year end. Is that number about right?

I turn to the present forecast cost. I was astonished by an Answer given in another place on Monday by Janet Anderson. She told the House that the total forecast project cost, based on the budget placed in the Library on 2nd October, was £798 million, including closure costs of £30.3 million. My astonishment arises from the fact that when I went to the Library of this House the budget of the New Millennium Experience Company that had been placed in it on 2nd October related to September. I understand that a subsequent budget forecast by NMEC for October dated 25th November had been placed in the Library. I am extremely puzzled as to why a Minister answering a Question in the other place in mid-December should refer Members to information that was already a month out of date. The matter is of some significance, because in the interval the estimated cost had risen from £798 million to £801.6 million.

Sums of money of between £3 million and £4 million may not be very significant, and there appears to have been some casualness about such expenditures in the past. But it is a little worrying that in a short space of time the budget has increased in this way and the Government have made statements to the public about forecasts that are already out of date. Therefore, I should like to know what the latest forecast cost is and whether the Government are confident about it.

The total £30.3 million decommissioning costs—I should say "decommissioning and closure" costs because there are two separate items which have to be taken together and some numbers have gone up and some have gone down—are £10 million higher than the August estimate. We should be a little concerned about the closure and decommissioning costs because if the estimates prove wrong we could be in some difficulty when the order comes to an end.

One reason why the decommissioning and closure costs may prove inadequate could be a collapse of the present negotiations with Legacy plc. So I should like to know whether the Government are absolutely confident that the present assessment of decommissioning and closure costs are accurate and adequate. Of course, there will be a real problem if the Legacy deal collapses because it is quite clear from the National Audit Office report that the cost of demolishing the Dome would increase those estimates substantially.

My Lords, I am grateful to the noble Lord for giving way. I am slightly puzzled as to why he thinks there may be a problem. The whole history of the Dome, which I regard as an outrage, has been a simple one: when one runs out of money, one votes some more. What will happen if it runs out of money—the collapse of the new purchaser or for whatever reason—is that they will vote more. With all the history to date, Parliament will vote it more money.

My Lords, it is precisely because I have the same fear in mind that I am making the speech that I am. The Minister in introducing the debate gave us an assurance—or I thought he gave us an assurance—that this was to be the end of the matter. He was not going to come back for more. I suspect that in order to persuade my noble friend not to press the Motion in the debate he is likely to repeat that undertaking. I am expressing some scepticism about the reliability of the numbers we are being given and want further assurance upon the matter.

The third point concerns the prospective sale to Legacy plc. I am aware that if I ask any questions I shall be told that the matter is commercially confidential, it is subject to negotiations and they might break down, although the noble and learned Lord, when he made his statement at the end of July about the previous prospective sale to Nomura, posed few doubts about it. However, he made one statement about that Nomura sale which is relevant. He said that there would be an early payment of £105 million with £53 million going to the NMEC.

In the debate we had on 29th November I asked a specific question. I asked if there was to be an early payment by Legacy plc, and, if so, when. I did not get an answer to that question. I should like an answer to that question today. I particularly want an answer to that question in the light of another extraordinary reply given by the Minister in another place on Monday. I find the words that she used not only extraordinary but rather worrying. She was answering a question about the value of the sale. We have been told in The Times, not by the Government, that the total value of the sale is £125 million, which is £25 million less than the consortium offered previously when they were in competition with Nomura. I do not know whether that is right or not because the Government have not put a final figure on the matter. The Minister in another place said:

"The details of the sale are commercially confidential, but I can tell the hon. Gentleman that £50 million will be paid on completion, and that the value of the total offer has been assessed to be more than £100 million".—[Official Report, Commons, 11/12/00; co1.336.]

I repeat that,

"the value of the total offer has been assessed to be more than £100 million".

Instead of an advance payment of £105 million, we shall now have a payment on completion of £50 million and a total deal assessed to be more than £100 million. What on earth do those words mean? My suspicions were roused. It seems rather unlikely that they mean there will be a cash payment. If there is not going to be a cash payment, I wonder what exactly will go back to the Millennium Commission. Incidentally, what impact will that have on the interest charges which have already added a considerable sum to the original total of £179 million which was going to be raised in order to cover the additional grants given during this year to the New Millennium Experience Company?

I have an awful suspicion that we shall see some creative accounting; that we shall be told that the future earnings can be discounted back and valued in some way. I may be entirely wrong. It may be that the answer given by the Minister in another place was off-the-cuff and she was inadequately briefed, and it will be a cash payment; there will be an early receipt; and we shall get an early payment back to help fill the hole to which the noble Lord referred in opening.

I believe that before we pass the order we should have answers to those questions. We should have answers about the latest estimate of paying visitors, not the inflated totals of those who are invited in for jollies. We should have some clarification of the two budgets, to which I refer, of total costs. I would prefer to have details of the latest budget rather than the one offered to the other place by the Minister. I should like clear answers to the questions that I have asked about the sale to Legacy plc, the date of an early payment and whether it will be real money or some product of creative accounting.

My Lords, I have had the honour and experience of serving on a regional millennium committee. Therefore, it is not in my own interests to be too critical of the order and that which went before. In my view the moneys were well spent, not just in my region but in others. Naturally, we could not satisfy all the applicants, but then we assumed, rather cynically, that the bids had been somewhat inflated in the first place and that applications were made for rather more money than they expected to receive.

I have one question to put to the Minister: will there remain a restriction on capital projects, which capital expenditure guidelines we rigidly observed in our committee? We had the inevitable borderline cases and sometimes it was extremely difficult to draw a dividing line. It would be helpful to have clarification regarding, what one might call, the "new money" which is to be available in the months remaining. Apart from that query about the grants for capital expenditure, I have no great reluctance in supporting the order.

My Lords, when we last debated the matter a couple of weeks ago, the noble and learned Lord, Lord Falconer, recited at length the numbers of parliamentary Questions, debates and other exchanges which had taken place on the matter. It is therefore the case, I fear, that those of us who have taken an interest in these things may be running the risk of becoming a bit boring on the subject. If I am about to fall foul of that sin, I apologise in advance to noble Lords.

I shall confine my remarks to one question. It is clear—is it not?—that back in July of this year things really began to get very bad for the New Millennium Experience Company. The suggestion has been made by those more expert in these matters than I that perhaps the New Millennium Experience Company was trading at that time while insolvent, a time when the noble and learned Lord was a shareholder—the only shareholder—in the company. He was not a director, but he was the shareholder. It would be a serious matter if the company was trading while insolvent, although I recognise at once that the law in these matters is far from straightforward and that no doubt the noble and learned Lord and his colleagues took the best possible advice.

However, there has been a suggestion that at that moment the Government somehow gave assurances of one kind or another, be they formal or informal, to the New Millennium Experience Company that it would be provided with the necessary funds if things went badly wrong or if the Millennium Commission, against expectations, had not advanced the additional funds that were required. It may be that, armed with those assurances, the directors of the New Millennium Experience Company were able to satisfy themselves that they were not trading insolvently. If that is so, it is no doubt perfectly well understood. But the noble and learned Lord has been very cagey about whether or not such assurances, whether formal or informal, were ever asked for or given. I hope that we can have a clear answer to that question.

Is it or is it not the case that certain assurances were given by the Government to the New Millennium Experience Company at about that time which would have covered the position if the Millennium Commission had not in the event advanced the additional funds that were required? As I said, up to now Ministers have been very cagey about that. I hope that when the noble Lord, Lord McIntosh, comes to reply we can have a clear and plain description of the position.

My Lords, I shall not repeat all the questions that have been asked by my noble friend Lord Crickhowell. My noble friend referred to a later budget of income and expenditure, which I have not seen, that has been placed in the Library. Perhaps I may move on to an estimate of the assets and liabilities—for those who have not been trained as accountants, that is not the same as an income and expenditure statement—which we were told in the NAO report was expected to be produced by the end of November. That estimate of assets and liabilities should show NMEC's assets, what they are worth and what liabilities have accumulated and are expected to be paid out. We could then see the net financial position on an estimated basis. That was supposed to be done by the end of November. I should like to know when that estimate can be made available to us.

An important part of the overall financial position will be the financial deal that is done with Legacy. When will we be given a full estimate—not the words that were given in another place—of the straightforward cash-flow from the Legacy deal? We need that information to work out what the final financial position will be.

When the Minister explained the financial impact on the Millennium Commission, he in effect assumed that nothing would be received by the Millennium Commission in respect of the Legacy deal. Will he confirm that the working assumption now is that whatever moneys come—if any do come in cash form—there will be nothing surplus to be repaid to the commission, which was always the intention when the early grants were made? I should be grateful for the noble Lord's views on that point.

My Lords, I shall declare a series of interests. I have been a Millennium Commissioner since the inception of the commission in February 1994. I have been co-chairman of the finance committee for most of that time and chairman of the internal audit committee for the whole of that time.

I rise to speak principally as an individual who has given seven years of his life to the Millennium Commission. The work that we have done has been tremendously exciting and rewarding, but there has also been a large amount of frustration and disappointment in a number of areas, the performance of the NMEC being one of them. However, it is worth putting on record that as long ago as 1995 or thereabouts, when we conceived and then gave birth to what later became known as the NMEC and talked about visitor figures of 10 million to 12 million, we realised that 12 million was certainly in the top echelons of possibility and that there was considerable risk. As an aside, it looks as though the Tate Modern will have 1 million visitors a month. That puts the matter in perspective. The information we had at that time from other events made the 12 million visitor figure plausible.

However, at that stage we had no idea of the content. We had a dream. Following the Great Exhibition of 1856 and the Festival of Britain, which were both great successes, we believed that the kingdom was ready to put on another exhibition. I believe that it was. Unfortunately, the general election got in the way. I do not say that from a political point of view. But the management team lost several months of clear decision-making while it had to hold back waiting to see what would happen in the election and whether a Labour Government would agree to take on the exhibition. That definitely was a shame. Those points are not generally known.

It is also worth making the point—a good many political points have been made and I have taken no part in them—that at the time of the election and soon after it there were negotiations between the present Prime Minister and my right honourable friend Michael Heseltine and others about what would happen to the NMEC. We were delighted when the Labour Party agreed that it would take the NMEC on. It did so on condition that it had three months to carry out an in-depth investigation into the finances of the whole process, which one assumes it duly did. I have recently ascertained this figure. Had the Labour Party chosen to kill the project there and then, it would have cost £25 million. I was given that figure today.

My Lords, I am grateful to the noble Lord for giving way. Does he not think—I say this, admittedly, with the benefit of hindsight but the noble Lord was there at the time—that that would have been a fantastic bargain?

My Lords, with the benefit of hindsight, I do not believe that it would have been a fantastic bargain. In money terms, one might say that, but I still believe that there will be legacy in terms of what has been achieved on the Greenwich peninsula, with all the inward investment that has been made and the infrastructure that will be there in 20 years' time. The whole regeneration of that part of London was what I stuck my hat on.

I played Devil's advocate to the exhibition from day one, as my colleagues on the commission know only too well. What I was very disappointed about— I raised the point on many occasions—was the fact that Mr Blair chose to raise the political temperature by claiming the project as a fine example of Blairism. That was a great shame because at that stage it was not a political show; it was purely a national show. It was also a shame that the place was so mismanaged, which it clearly was. The NAO has demonstrated that. However, I still stand by it. I believe that the decision at the time was right.

My Lords, I am grateful to the noble Lord for giving way. He referred to the legacy of the improvement of the Greenwich peninsula cited that, in responding to the intervention of the noble Lord, Lord Marsh, as being the value of the project. That is well so. I can understand the Government and, in particular, the noble and learned Lord, Lord Falconer, saying that. However, I do not recall, from the rationale given to the public or to Members of this House, that public support for this venture rested on the regeneration of the Greenwich peninsula, admirable though that aspect has been. Rather, it was sold to the country as a national exhibition, entertainment and celebration which, unfortunately, has gone wrong.

My Lords, in answer to the noble and learned Lord, Lord Falconer, it was always clearly stated within the commission's raison d'être that part of the reason for undertaking this project was the regeneration of Greenwich. That element was very much a part and parcel of the argument and debate as regards where the exhibition should be held. I walked about the Greenwich site in gumboots and a hard hat when it was a nasty, smelly former gasworks. A great deal of work went into the site. Throughout this project, I have been comforted by that effort. From day one, I was not one of those great believers that the exhibition would be the howling success that it has now not proved to be. However, I did believe in the legacy.

This afternoon, I should like to put that argument to one side. As I understand it, and speaking for my colleagues, although obviously I cannot vouch for them, I do not believe that another penny will move from the Millennium Commission to NMEC or anywhere else. We have a programme of which we are intensely proud. We have spent something in the region of £1.3 billion of our own, which has generated one-and-a-half times that of public sector money right across the country on 190-odd projects on over 3,000 sites, as well as distributing around 34,000 Millennium Awards and many other activities. The projects about which we are excited are not only the big ones. Having said that, re-linking the River Clyde to the River Forth with a fantastic piece of engineering in the form of a huge caisson wheel to take the place of six locks which will not be reinstated, was a tremendous success. From the Dome to the Eden Project, everyone has heard about these.

However, hundreds of other projects have been completed in local communities. In my own Province of Northern Ireland, Northern Ireland Millennium Halls have regenerated or built 54 new village or community halls. I believe that the figure is something over 400 for the whole country. Thousands of miles of cycleways have been constructed. Woodlands have been planted close to urban areas and green spaces have been preserved. New science centres have been set up, as well as practically a new university in Scotland. These are wonderful projects that we have overseen. We should not consider only the highly visible projects such as the British Museum, Tate Modern, Cardiff Arms Park and the Millennium Stadium in Glasgow.

If this order is not passed, nearly all of those projects will suffer to some extent. Some of them may well fail. I stand here as a Millennium Commissioner, speaking for myself—with some passion, I know. I truly believe that this order should be passed. Furthermore, I can assure noble Lords that, to the best of my ability, not another penny will pass from the Millennium Commission to NMEC.

My Lords, if the noble Baroness, Lady Anelay, will allow me, perhaps it would be better if I commented on the succeeding contributions and then finish by referring to the words of the amendment that she has moved. However, I cannot do so without saying, first, how grateful I was for her support for the science centres and other good causes. That support has been echoed in the debate by a number of other noble Lords.

Perhaps I may turn to the noble Viscount, Lord Falkland. I am grateful for his general response to the order and for his support, in turn, for the good causes. He asked me a specific question as regards when further information on decommissioning costs will be available. The noble Lord, Lord Crickhowell, made a point on the same issue. A budget for decommissioning is in place. It will enable NMEC to carry out its decommissioning to the level to which it is legally obliged to carry out such work, but any further decommissioning required as a consequence of the Legacy plc deal or, indeed, a deal struck with any other buyer—the Legacy deal is not sewn up—is a matter for discussion between Legacy or another buyer and the competition team. It is therefore not possible to give him an answer at this time as regards the final decommissioning costs. We do not yet know what will be the level of decommissioning. For that reason, there have been and may well continue to be different costs for decommissioning because it is a moving target.

I think that the noble Lord, Lord Crickhowell, commented on an increase from the August figures. A part of that was due to the need to take into account the PricewaterhouseCoopers figures, but, in his own calculations, the noble Lord does appear to be putting PWC figures alongside NMEC figures. I do not think that it is possible for that to be done in quite the way followed by the noble Lord.

My Lords, I should point out that I have quoted figures taken exactly from the NMEC.

My Lords, indeed the noble Lord did so, but he asked also about the reason for the increase. The reason for the increase is, as I have said, because the PWC figures have been taken into account.

I do not think that I should interfere in any dispute that might have taken place between the noble Lord, Lord Cocks, and the noble Baroness, Lady Anelay, about Bristol. That is not a city I know as well as I would wish to know it.

The noble Lord, Lord Crickhowell, asked a number of specific points which I shall attempt to answer. He asked for the latest figures for the number of paying visitors to the Dome. My understanding is that 4.7 million people have already visited and that bookings are very good until the end of this month. Indeed, my noble and learned friend Lord Falconer and I have just given advice to the Clerk of the Parliaments, who intends to visit on Sunday. We said that he ought to purchase tickets in advance for himself and his family because it is likely to be full—as I found when I visited three weeks ago. Indeed, although I paid the full price for my tickets, I had to pull strings in order to get in because it was full on the day that I went. That was because 20,000 Girl Guides were visiting the Dome on that day. That was "fun", as well.

The noble Lord went on to ask me about the budget. The total budget stands at £798 million as compared with the original budget figure of £758 million. NMEC is confident that it can achieve solvent liquidation within this figure.

My Lords, I have in front of me the NMEC forecast for October 2000. The figure that has just been given, £798 million, is set down under the heading, "August forecast post-PWC report". The current forecast is £801.6 million. Those figures have been placed in the Library of this House and are dated 25th November. My complaint here is that the Government keep referring back to the budget of previous months. Surely we are entitled to the latest figures?

My Lords, I am not sure that a difference of something considerably less than 1 per cent of the total—£3.5 million on £800 million—is one which needs to be continually reported to this House. However, if I am wrong about that, I shall be glad to write to the noble Lord. The noble Lord, Lord Crickhowell, also asked me whether the figures given by Janet Anderson in the House of Commons were correct. I can confirm that the figure of £50 million on completion from Legacy, and a total assessed figure of more than £100 million, is correct. However, negotiations are of course still continuing. At this time, Legacy is only a preferred bidder. Until the negotiations are completed, there will not be and could never be a final figure.

I do not have the answer to the question of the noble Lord, Lord Molyneaux. If he will allow me, I shall write to him.

The noble Lord, Lord Trefgarne, asked me a question which he said had not been answered before. I am surprised. He asked me whether the Government had given assurances to NMEC to enable it to continue trading. I can confirm that no such assurances were given. Whether that answer was not given clearly before, I do not know.

I believe that I now have an answer to the difference between the £798 million and the £801 million. The £801 million includes the London New Year's Eve event, to which I referred in my opening speech.

The noble Baroness, Lady Noakes, quite rightly said that an income and expenditure account is not the same as an asset and liability statement, although she referred at different times to that and to a cash-flow figure. Again I have to give the same answer: until the negotiations with Legacy or any other buyer are complete, it will not be possible to give a final balance sheet or cash-flow figure.

My Lords, I thank the Minister for giving way. The NAO report referred to an estimate of assets and liabilities being made available by the end of November. Can the Minister say whether that has been received and will be made available to the House?

My Lords, we are not aware of any such commitment being given that it should be made available to this House. I can give the noble Baroness a commitment that as soon as any estimate of the assets and liabilities is received and can be made available to this House—in other words, it can be released from commercial confidentiality provisions—it will be made available to the House. I undertake to ensure that the noble Baroness is made aware of its availability.

I am grateful to the noble Lord, Lord Glentoran, for his sterling service on the Millennium Commission over a period of nearly seven years and for his reminder of the longer-term regeneration benefits of the Dome project. I can confirm that he is right in his response to the noble Viscount, Lord Falkland, that the regeneration effect in east London has been an objective of the Dome project from the very beginning; it was contained in the original press release. I am also grateful for the noble Lord's description of the achievements of the Millennium Commission.

I return now to the terms of the amendment—

My Lords, before the Minister comes to the amendment, he mentioned the additional £3 million identified by my noble friend Lord Crickhowell and said that it was the cost of the New Year's Eve celebration. I imagine that he was referring to this coming one. Is that the celebration that was cancelled by the Mayor of London, Mr Livingstone? Does it reflect the costs of the fireworks that he bought and which will not now be set off?

No, my Lords. The Mayor of London—

My Lords, if the Minister will permit me. Yes, it is. We took the money, which has been distributed throughout greater London areas. The festival will now be better enjoyed by local people in various boroughs than would have been the case with the celebrations proposed originally.

My Lords, I can confirm that. I am glad that my own borough of Haringey is one of those which will receive money for this purpose. I am sure that the noble Lord is right in saying that New Year's Eve celebrations which are held more widely among the population are more effective than the centralised celebrations of the kind that caused the Mayor of London such difficulties.

Turning to the terms of the amendment, it seeks a specific assurance that,

"no additional money beyond that already reported to Parliament will be paid to the New Millennium Experience Company or to any other body which may have responsibility for the Millennium Dome or be its proprietor".

I can assure the noble Baroness, Lady Anelay, that, particularly in the light of NMEC's improved financial position, we do not expect or intend any additional money to be provided to the Dome. In particular, I can confirm that none of the additional money provided for in this order, beyond that already reported to Parliament, will be paid to NMEC or to any other body which may have responsibility for the Millennium Dome or be its proprietor.

In the light of what I have said already about the destination of the additional money flowing to the Millennium Commission as a result of this order, I hope that the noble Baroness will feel that that is a full answer to the issue that she has quite properly raised in the amendment.

My Lords, I thank the Minister for his answers to the questions that have been posed.

Perhaps I should begin by referring to the novel intervention of one of the Minister's noble friends. The noble Lord, Lord Cocks of Hartcliffe, suggested that I might visit, what he calls, the working class areas of Bristol. I offer him a deal. If he shows me where they are, I shall follow him there. I await with interest what I am about to see. It could be, perhaps, a different experience.

This has been a serious debate on a serious matter in which noble Lords have raised a variety of questions. Some of the answers have been a little jaw-dropping in regard to the information we have or have not quite received—certainly in respect of the information about the current budget and the amount of money that has been dispersed in relation to New Year's Eve. But those are matters to which noble Lords may wish to return by way of written questions and further debates in the future.

Returning to the specifics of my amendment, I am grateful to all noble Lords who have asked questions. Perhaps I may trespass on the good humour of the House and refer in particular to the speech of my noble friend Lord Glentoran. It was an honourable speech—that was no surprise to me for I know him to be an honourable man—and I thank him for what he said.

The Minister has given assurances which are sufficient to encourage me to withdraw my amendment. I say that because when this Minister gives such commitments and assurances, I know that I can trust him. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Motion agreed to.

rose to move, That the draft order laid before the House on 23rd November be approved [33rd Report from the Joint Committee, Session 1999–2000].

The noble Lord said: My Lords, as the House now knows, the first order extends the funding of the commission until the 20th August 2001, after which it will receive no more proceeds from the lottery. This order, the Apportionment of Money in the National Lottery Distribution Fund Order 2000, takes up the story from that point by determining what happens to the Millennium Commission's share of lottery funding thereafter.

I am sorry that the noble Lord, Lord Glentoran, is no longer in his place. He and I have both inadvertently misled the House on the previous order and I should like to put that right. My noble and learned friend Lord Falconer has indicated to me, sotto voce, that the £3 million extra was for last year's London river event. I allowed myself to be distracted by the confident assurance of a member of the Millennium Commission. I apologise to the House for that error.

It has been a long-standing government policy that once the Millennium Commission's share of lottery income ceased, its share should be transferred to the New Opportunities Fund. The second order before us gives effect to this policy. It provides that immediately after the Millennium Commission stops receiving new income from lottery proceeds, the New Opportunities Fund's share of lottery income increases from 13⅓ per cent to 33⅓ per cent. In other words, from the 21st August 2001 onwards, NOF will receive one out of every three pounds paid into the National Lottery Distribution Fund.

The creation of NOF as a new UK-wide lottery distributor focusing on health, education and environment reflected the Government's intention to target lottery funding more directly on key areas of social inclusion and disadvantage. The fund has established itself as a major grant-maker and has developed innovative grant-making practices. It has enabled much-needed educational, environmental and health-related initiatives to go ahead which would not otherwise have been funded. Barely two years from its creation, NOF is already making an impact on the nation's quality of life. From a healthy living centre for the elderly in Devon to new childcare provision where none previously existed in County Tyrone, NOF money is flowing into projects of great benefit to people and communities.

A recent MORI survey confirmed public support for the targeting of lottery funding on the areas of health, education and environment in which the fund distributes grants. When asked to identify the two or three most important areas for lottery funding out of a list of 10, 69 per cent of respondents identified health, 55 per cent education, and 26 per cent the environment. Over 2,000 grants have been awarded, many involving large numbers of individual projects. Over £614 million has been allocated to projects. The impact of these grants already includes childcare schemes that will create more than 110,000 new childcare places; training in the use of information and communication technologies for over 160,000 teachers; new cancer equipment in hospitals; and new preventive health services for deprived communities. NOF's increased income will allow it to target more areas where a real step change in the quality of people's lives can be achieved.

The Government launched the consultation paper, New Opportunities from the Lottery, on 6th November, which proposed a number of new initiatives for NOF to fund. In summary, these proposals are: £750 million for additional sports facilities for schools and wider community use; £50 million for outdoor adventure and other activities for young people; £300 million to boost the fight against heart disease and strokes, providing extra money for the fund's existing initiatives to combat cancer and provide palliative care for adults and children with life-threatening and chronic illness; £200 million for the provision of childcare places for children aged nought to three years, together with further support for the over-threes, particularly in deprived areas; £150 million for a programme of environmental renewal and community regeneration which would support community regeneration, promote recycling and develop renewable energy sources; and an amount to be provided as small grants for community groups to support local health, education and environment projects.

The order fulfils a second purpose. In the event that the Millennium Commission receives more than £2,286.5 million in the period up to 20th August 2001, the order ensures that any additional amount is transferred to NOF—in other words, the order acts as a cap on the Millennium Commission's income. I commend the order to the House. Together, the two orders give a coherent account of our plans for extending the funding of the Millennium Commission and redirecting the commission's funding to NOF after 20th August 2001. I beg to move.

Moved, That the draft order laid before the House on 23rd November be approved [33rd Report from the Joint Committee, Session 1999–2000].—(Lord McIntosh of Haringey.)

My Lords, I thank the Minister for his clear explanation of the order. It indeed gives effect to the Government's intention that 33⅓of all lottery funds shall be handed over to the New Opportunities Fund when the commission completes its financing of the millennium projects next August as a result of these provisions.

In the past we have made our views and concerns about the New Opportunities Fund very clear. We believe that the fund diverts money which would otherwise have gone into the arts, sports, and good causes, as originally agreed by Parliament. I want to make it clear again today, as I have in the past, that I have absolutely nothing against the projects themselves; they are good causes in their own individual right. My objection is to the fact that the Government are taking money from the arts, sports and good causes lottery funds to provide for them.

The National Lottery was established in 1994 in order to,

"restore our heritage and promote projects which will become a source of national pride";

It became a massive success story. Lottery money has brought about a renaissance in the arts in Britain and it has revolutionised sport. Today, the Minister has referred to £750 million which will go through the New Opportunities Fund to sport in schools and for use by the wider community. But surely money such as this would be better channelled through Sport England, with its excellent track record, rather than being subject to the vagaries of lottery funds.

The Labour Party opposed much of the National Lottery scheme at its inception, saying that the Conservatives would use the proceeds as a surrogate for government expenditure. Time and again, during debate on the Bill in Committee in another place, Labour Members accused us of that—and it was untrue. The Conservative government presided over the lottery for three years and no such action was taken. That action was taken when this Government took over. My worry has always been that the creation of the New Opportunities Fund has made a mockery of the additionality principle under which the lottery fund was established.

We believe that the National Lottery should not be used to fund projects which should be the Government's core responsibility. The Government should have the courage to say which projects are worthy of core government funding and back them. We should not go on year after year committing projects to the New Opportunities Fund.

It is important that the projects that currently receive funding are not subject to any risk of losing it and thus losing their future security. We must all work to achieve that. Today, I shall not ask my noble friends to oppose the making of this order.

My Lords, it will come as no surprise to the Minister and other noble Lords that we on these Benches greet this order with less enthusiasm than we did the previous one. We disagreed in the first place with the redistribution of these moneys to areas that were a departure from the five original good causes. We have rehearsed these arguments on various occasions.

We have no objection to the New Opportunities Fund. We fully support the concept behind many of the projects listed by the Minister. He referred to the popular support for the use of lottery funds in areas such as health, education and the environment. There is no argument with that. Unlike many other countries in Europe, were they to face the same debate, in this country the prospect of lottery moneys going to the arts—it may be a question of language or of history and culture—is met in some cases with indignation and in many cases with reserve. If asked where they would like funds to go, many people in this country would say that they do not want money to go to the Royal Opera House, that they do not like going to museums and galleries and that they do not like Radio 3. There is a division in our society as regards the role of the arts and the good that they do. That is a fact of life. I know that the Minister fundamentally shares my views. He has been an effective, excellent Minister for the arts and we have had some excellent debates on various subjects in this House.

My noble friends on these Benches agree, as may other noble Lords, that it is a great pity that this escalation in the amount of money going to the New Opportunities Fund—from 13⅓ per cent to 33⅓ per cent as a result of the inclusion of Millennium Commission moneys—accentuates the problem. There may be an overlap in funding; there may be matters which can be dealt with by the New Opportunities Fund.

However, one considers, for example, the tragic events that recently took place in New Cross and in other deprived areas. I shall probably receive a measure of agreement from the noble Lord, Lord Cocks, who talks about "working-class interests" and "working-class areas", although they are not terms that I would use. It has been said on television by child psychologists and others that such projects as sports centres and new schools are not always the answer in terms of improving the lot of people living in abject misery. It is much more fundamental and basic than that; and the arts can do so much.

It is not a question of opening theatres or providing access to better television programmes or, indeed, organising trips to museums or to performances of Shakespeare. It is much more basic. People in this country, especially young people in deprived areas, need to know that there are new perspectives available to them that they could be enjoying. They need to know that there is a new quality of life, which is not currently open to them but which will be available if the arts are carefully projected, planned and funded. We were so overjoyed when the lottery was created, with approval by Parliament, because we believed that those areas would be covered. Such areas are not easy areas to deal with out of central taxation. Therefore, we are somewhat dejected that this trend to move away from the arts and sports into other areas seems to have become a part—an accelerating part—of the Government's programme.

There is nothing better for young people in deprived areas, as well as those in other areas, that will give them self-confidence, a feeling of self-worth and which will—probably more than anything else—unlock the creativity that is to be found within all of us. It enables people to do things that are positive in life rather than engaging in certain negative activities in deprived areas, such as, vandalism, absenteeism, crime, and so on. The trend that is illustrated in the order by way of the proposed shifting of funds, which were originally so welcomed by the arts community—as well as by the sports community, because sports play a similar though not as basic a role as the arts—is a fairly desolate progression.

I know that the Minister is sympathetic to our views. But perhaps the noble Lord can tell us in his reply whether the imbalance created by the order could in some way be corrected by the department. I know that both he and the Secretary of State basically share much of the thinking that I am trying in my inadequate way to articulate. I wonder whether they can redress this imbalance by finding further funding. That will enable better concentration in these areas to take place, so that this will seem less of a deprivation to the arts community.

My Lords, I am tempted to follow the noble Viscount who has just spoken, but the Minister and I debated these issues at length in the Moses Room when the legislation was before the House. I rise to speak because I am rather anxious on this occasion that the noble Lord should be spared embarrassment. I believe that he should qualify the answer that he gave very much on the spur of the moment about the extra £3.8 million, which he put down to some kind of celebration. I have the advantage of having the two comparative budgets in front of me today. I think it is very unfair that the noble Lord should be asked to produce an immediate answer. It is clear that the increase comes from an increase in the other close-down legacy costs. It would be wise for the noble Lord to seek further advice and, perhaps, return to the matter by placing the relevant information in the Library of the House, or by providing it in some other way. I shall certainly not hold it against him if he finds that he has to change the advice that he has been given—

My Lords, perhaps I may respond to the noble Lord now and say that I shall certainly do so.

My Lords, I am happy to accept the remarks of the noble Viscount, Lord Falkland, about deprived areas because I used to represent one of the most deprived areas in Bristol. In fact, the council has just closed the secondary school in the area, which was the heart of the community. It was labelled a "sink" school and castigated publicly by the authorities; and then those authorities closed it on the grounds that parents were reluctant to send their children to the school. I am afraid that my own Secretary of State endorsed this, although when I was the Member of Parliament for the area I managed to persuade Sir Keith Joseph to keep it open.

But what is becoming objectionable here is the blanket of secrecy about the source of this lottery money. It is the most successful lottery in the world, and produces an enormous revenue. But, basically, that comes from the working-class people of this country. They are the people who play the lottery. Yet there is no acknowledgement of that fact. We have been given figures this afternoon regarding so many million on one cause and so many million on another cause. We are told about a MORI poll relating to what people think about the question of whether 67 per cent should be spent on this, that and the other. The one thing that we are not told is who is actually playing the lottery and producing the cash.

As the Minister will know, I referred in an earlier debate on the matter to the conversations that I had with Camelot. I recalled how a very helpful person on the telephone said, "Oh, yes. We do survey the social classes that the money comes from, and there is a regular report". When I mentioned this in the House, as I told the Minister during that debate, I received a "snow job" of information from Camelot within days, followed by persistent questioning about who in the office had actually revealed this information. As your Lordships know, one does not give away one's sources. But we are still not told who are the players. We deserve to know that. When we are considering the allocation of the resources and where they should go, the people who are paying in should receive special attention.

Therefore, can there not be some proper acknowledgement of where this money is coming from, so that we can make a better judgment as to its disposal? As the noble Baroness said, basically things are now going on which would otherwise be funded by the Government—ergo, if it is the working class who are playing the lottery, it is a tax on the working class.

My Lords, I fully recognise that both the noble Baroness, Lady Anelay, and the noble Viscount, Lord Falkland, are expressing concerns that they have held consistently and honourably since the origin of the New Opportunities Fund was established under the National Lottery Act 1998. They have not changed their views in that respect, and it is entirely appropriate that they should express them again. It is also entirely appropriate that I should give the same answers, because they are still true.

The first answer that I have to give is that, as we anticipated in 1998, increased receipts from the National Lottery into the National Lottery Distribution Fund have meant that there has been no loss in cash terms to the original four "good causes" of arts, sports, heritage and charities. Of course, there has been a loss in percentage of a larger figure, but money has not been taken away as a result of the creation of the New Opportunities Fund, or, indeed, of NESTA.

I believe that I should also repeat the argument that I used about additionality, because that is still true. The projects of the New Opportunities Fund add to, but do not substitute for, services that are already provided by government. The NOP's money is for specific, time-limited initiatives that are additional to core taxpayer-funded programmes. Sometimes they overlap with some of the projects that might be undertaken by the arts, sports, heritage or charities lottery distribution bodies. The example of sports facilities for schools and for wider communities, to which I referred when introducing this order and which the noble Baroness, Lady Anelay, mentioned in her speech, is very appropriate.

The noble Baroness asked why the money should not he spent through Sport England. The answer is that there is no reason why it should not be. The New Opportunities Fund is a UK-wide provision, but there is no reason why Sport England and the other sports bodies in the other countries of the United Kingdom should not be involved. Indeed, they are being consulted to ensure that the money is targeted to achieve the maximum benefit for young people and the communities in which they live. So nothing has really changed since 1998. With this order, we are doing what we said we would do two years ago when the Millennium Commission came to an end. I understand and respect the reservations that the opposition parties have expressed regarding that provision, but we still do not accept the argument put forward.

As for my noble friend Lord Cocks, he has, as recently as Monday of this week, made the point that this is a regressive tax. I cannot contradict him because I ought to have the information but do not. As I said on Monday, this is a matter which in the first instance Camelot has a duty to establish. I rather think that the amounts paid by people in socio-economic groups C2, D and E are similar to or less than those paid by A, B, and C1s, but they probably account for a higher percentage of their income. I think that that is a proper definition of a "regressive tax". However, we shall see what information we can find on the subject and we shall see in what way we can best share it with the noble Lord, Lord Cocks, and with other Members of the House.

I want to say a few words to the noble Viscount, Lord Falkland, about arts provision. I entirely take his point that there is unfortunately in this country a great deal of public reservation about arts expenditure. That is expressed as reservation about expenditure on particular projects such as the Royal Opera House. However, one must consider the wonderful Great Court at the British Museum—that museum is visited by nearly 6 million people a year—and the projects which have until now been supported by the Millennium Fund and may be supported by the New Opportunities Fund in the future. I believe that the balance between arts, sport, heritage, charities and the new good causes of health, environment and education is a proper balance. On that basis I commend the order to the House.

On Question, Motion agreed to.

rose to move, That this House takes note of the Report of the European Union Committee on The Common European Policy on Security and Defence (15th Report, Session 1999–2000, HL Paper 101).

The noble Baroness said: My Lords, it is a pleasure to introduce this report to the House on a topic which has for the past month occupied so much newsprint and air time. In politics timing is everything. When we published our report on 25th July it sank without trace. There was not a ripple of interest. However, for the past month it has been the hottest topic around. This week, like London buses, we have had three debates on this topic in a row. Our committee was gratified to note that all the concerns discussed in the report have been featured in the past few weeks. I do not think that any issue that has been lately debated was not discussed in our report.

The newly-formed House of Lords committee on European foreign and defence policy was initially chaired by the noble Lord, Lord Howell of Guildford. I am delighted to see that he is present. But since his translation to the Front Bench opposite in April I have had the honour and pleasure to be chairman.

We took evidence on 10 occasions and also visited Brussels where we had meetings with the Secretary-General of NATO, Mr Javier Solana, and with Chris Patten. We are grateful to our Clerk, David Batt, and to our specialist adviser, Dr Anthony Forster, Director of Research at the Staff College at Shrivenham and also to our witnesses, in particular, to General Klaus Naumann who came from Germany and gave us frank and illuminating evidence

I begin by summarising the historical background to this initiative. There has been a long search for agreement between various European Union nations on matters of security and defence. This was given a fresh impetus by the ending of the Cold War, American troop withdrawal from Europe and the decline in the relative importance of territorial defence of member states. However, new security challenges and problems in the Balkans also led to strengthened support for a WEU (Western European Union) solution to purely European issues. It has become essential that Europe should be able to manage and intervene in crises of disorder and unrest.

In June 1992 at the Petersberg Hotel near Königswinter the WEU produced the Petersberg Declaration enumerating the so-called "Petersberg tasks". These included the deployment of military units in humanitarian and rescue tasks, in peacekeeping tasks and in tasks using combat forces in crisis management including peacemaking. It is this final task of peacemaking with combat troops that has caused us most unease and the most discussion due to the lack of clear definition and the overlap with the main tasks of NATO.

The WEU, however, made no further progress on that project and failed to establish appropriate mechanisms to underpin any effective military intervention. In December 1998 at an Anglo-French summit at St Malo there was an agreement between the two most effective military powers in Europe, France and Britain, that Europe should contribute more to military and humanitarian missions and rely less on the United States. This agreement was driven by at least two major factors. The first was European failures in Bosnia and Kosovo. Only half the European troops required were actually deployed as only 2 per cent of our largely conscript armies were capable of such deployment. Conscripts on short-term engagements lack both training and professionalism.

Moreover, Europe lacks equipment such as "heavy lift" and the satellite intelligence that is provided by the United States. It is not a matter of a lack of troop numbers. We have within European Union countries 1.9 million men and women under arms compared with 1.4 million in the United States. But our expenditure is only 60 per cent of theirs and we lack equipment and training. Instead of conscript armies with limited military utility in the modern world, we need highly mobile, combat-ready forces with appropriate logistical support in the form of planning, analysis and command and control. This will be expensive, as will be re-equipping.

The United States is also increasingly reluctant to get involved in European adventures and is not willing to commit ground troops. There is also in the United States a strong feeling that Europe should do more in the way of burden sharing within NATO. On the other hand, as has been highlighted by many speakers in the past few weeks, the United States attaches great importance to NATO and would not wish any European initiative to undermine it. Our committee's report emphasises our concern about this issue.

At Helsinki in December 1999 the European Council adopted a strengthened European policy on security and defence and declared,

"its determination to develop an autonomous capability to take decisions and, where NATO as a whole is not engaged, to launch and conduct EU-led military operations in response to international crises.

Much of our report and the public discussion since have centred on the extent to which Europe can either decide or act autonomously and on the relationship between EU members and members of NATO, including militarily important countries such as Turkey and Norway. That has also been a matter of considerable concern.

On 20th November this year in Brussels more concrete form was given to the European defence initiative with a conference at which each member state pledged its commitment to the headline goal of a force of up to 50,000 to 60,000 troops to be deployable within 60 days. I am rather astonished that this is called a rapid reaction force. In the police service rapid reaction is a matter of minutes and hours, not 60 days. However, the rapid reaction force has been the title under which this body of people has become known. It is also intended that these troops should be sustainable in the field for a year. It is intended that this will take effect by 2003.

On 30th November our committee reconvened to hear evidence from the policy heads of the Foreign Office and the Ministry of Defence. We have published a short supplementary report about their evidence.

The commitments conference provided satisfactory pledges of a pool of 100,000 troops, 400 combat aircraft and 100 ships. These are, of course, purely paper commitments and many of them overlap with other commitments to the United Nations, for example.

Progress has been made in many respects on the European defence initiative and since the deadline for the completion of this initiative is 2003, we hope that many future hurdles will be satisfactorily overcome.

However, there are still many issues which need to be resolved. Some of these will be taken up in greater detail by other members of the committee who will take part in the debate. They will address concerns such as the definition of tasks. They are referred to generally as "Petersberg tasks". But that is ill-defined and does not take account of such things as mission creep. (We have all learned a new vocabulary!)

Another question which concerns us is overstretch, particularly of our troops, and the double and triple hatting under various obligations. There is also the question of planning, analysis and command and control. Although we have been assured to the contrary by our own Ministers, we are sure that there will be the costs of equipment and training. Our committee will continue to examine those issues in the months and years ahead.

I believe there are two major issues. First, this initiative has to be fully interlocked with NATO decision- making and support. I welcome, therefore, the Prime Minister's Statement after the Nice Summit in which he said:

"It was made plain, first, that European defence would operate only when NATO chooses not to be engaged; secondly, that it be limited to peacekeeping, humanitarian and crisis management tasks; and, thirdly. that …the commitment of national assets to any EU-led operation will be based on 'sovereign national decisions'".—[Official Report, 11/12/00; col. 120.]

My second major concern is that this is essentially a political initiative. I am concerned that to some extent it does not take sufficient account of the needs of troops in the field. If it is to work, it must be based on sound military planning and decision-making.

It has been clear to the committee throughout that the European initiative cannot be free standing. To set up parallel structures to NATO would be inordinately expensive and would severely weaken not only NATO but also our relationship with the United States and other important countries such as Turkey. However, if this initiative is successful and produces more effective European military forces, then NATO will be not be weakened but strengthened. I beg to move.

Moved, That this House takes note of the Report of the European Union Committee on The Common European Policy on Security and Defence (15th Report, Session 1999–2000, HL Paper 101).—(Baroness Hilton of Eggardon.)

My Lords, I am sure that I shall carry every member of the committee with me in thanking the noble Baroness, Lady Hilton of Eggardon, for all she has done in leading us during the past few months since my noble friend Lord Howell disappeared to the Front Bench. She has led the committee extremely well. I should like to he the first to pay tribute to her.

Over the past 13 or 14 years I have heard the continual cry from my friends in the United States that, "You Europeans must start to do more about your own defence. You must make a better effort within NATO, with United States support and without it, to look after your own interests". I heard that cry in the 10 years before I joined your Lordships' House when I was a member of the NATO assembly. I heard it in the seven years before I joined your Lordships' House when I was the leader of the British delegation to the OSCE assembly. I have heard it in the almost 14 years that I have had the honour to be the secretary of the British-American Parliamentary Group. It has been a continual loud cry from our American friends.

What is clear is that military forces in the European states are neither sensibly co-ordinated nor seriously effective to deal with the Petersberg tasks to which we are now committed. If Europe is to do more in response to the pleas from the United States, serious changes are necessary. The noble Baroness, Lady Hilton, referred to the fact—it is a surprise to many when they hear it—that the Americans have fewer troops under arms at 1.4 million than we have in the European states at 1.9 million. As my noble friend Lord Hurd said recently, although within the European states we spend only about two-thirds of the amount spent by the United States, we do not get two-thirds of the capability of the United States. Clearly, it is entirely right that we move in that direction.

I have made this clear to noble Lords previously but I think that it is worth saying it again. In approaching this problem, I am no Eurosceptic. I do not react like one of Pavlov's dogs at the mere mention of the word "Europe". I am convinced that the currently proposed European reaction force is in no way a European army. I see the current proposals as a logical outcome of the past 10 years of negotiations by three Prime Ministers.

In assessing how Europe should do more, we have to pose a number of questions. The noble Baroness, Lady Hilton, posed some of them. Some have been satisfactorily answered by Ministers within this week. On Tuesday of this week, to my pleasure, the noble Baroness, Lady Symons, said at col. 345 of the Official Report, that,

"none of what we are doing means weakening NATO, nor building a competitor to the alliance".

That was a welcome statement. On Monday, at col. 120 of the Commons Official Report, the Prime Minister said that,

"European defence would operate only when NATO chooses not to be engaged".

Those are statements I wish to hear in contemplating this initiative. These should be the rocks of the policy which the Government are enlarging. Woe betide this Government or any other government if they were to use stealth policies to side-step those essential conditions.

However, over the next year a number of vital questions arise which could cause the whole policy to sink or swim. I hope that when the Minister responds she will be able to answer them. First, we want to have made clear to us the attitude of the United States to the proposals. One seems to be able to read whatever one wishes into Mr Cohen's various statements. We have heard quotes from him which seem to lead us in many directions. But now that we have a new President-elect in Washington, it is essential that we get from the new administration as soon as possible a clear statement of full-hearted support for this project. What are the Government doing to clarify the attitude of the United States?

My second question has not been satisfactorily answered at Nice or at the earlier pledging meeting in Brussels. How will the non-European Union or non-NATO European states be integrated? Turkey is an obvious example. We now hear of recent discussions between France and Russia on these matters. We must have it made clear where Russia fits in.

We must have made clear to us what tasks are to be undertaken by this European force. I have detected a certain backsliding by the Government in recent weeks on the issue of tasks. As the noble Baroness, Lady Hilton, rightly said, the Petersberg tasks clearly embrace peacemaking. However, that word seems to have dropped out of a good deal of the rhetoric of the Prime Minister, the noble Baroness and others. I hope that the Minister will make it very clear that peacemaking continues to be one of the force's tasks.

I think that I saw the Minister nodding at me a few moments ago. If peacemaking is still to be undertaken by the force, we want to know a great deal more about how the essential heavy lift and intelligence provision is to be acquired. It is clear that if the Americans are not involved and we are into the business of peacemaking, we shall need a great deal more heavy lift and intelligence provision than we currently have. We need to know how long it will take for those resources to be put together.

Are the Government satisfied that the United Kingdom could continue to enjoy its current privileged intelligence relationship with the United States under the new circumstances? Would the United States allow us to take the intelligence position within a European organisation that they have been able to give us within NATO, where intelligence information is not freely shared among all the allies? It is vital that the United Kingdom continue to be able to share intelligence and information from the Echelon system and other sources that we currently enjoy within a worldwide system that includes Menwith Hill and Fylingdales.

How will it all be paid for? The evidence that I heard in the Select Committee over the first eight or nine months of this year led me to doubt greatly whether all the changes can be achieved and the new facilities acquired across the European states against a background of falling defence budgets merely by shuffling the money and the effort. The states that have signed up to the commitments have to understand that a sensible force of 60,000 troops—which comes to 180,000 troops if we take into account rotation over a year—cannot be put in the field on the basis of present budgets.

Finally, there is a crucial question about command and control. It is a great sadness to me that the noble and gallant Lord, Lord Inge, is unable to be with us today through ill health, because he has added a huge amount of expertise on the subject in the sub-committee. The command and control structure is unclear. What will be the role of Deputy SACEUR? What will the command structures be? Will we need a new headquarters—maybe at Northwood or in France—for these enterprises?

I was interested in the reply that the noble Baroness, Lady Symons, gave on Tuesday, when she was asked whether a separate command structure or operational planning system would be created. She said:

"I should make clear again that the EU is not establishing such things".—[Official Report, 12/12/00; col. 345.]

With respect, that does not answer the question that my noble friend Lord Howell put to her at col. 235, when he quoted from the Presidency Conclusions about the defence arrangements—Standing Arrangements for Consultation and Co-operation between the EU and NATO. The document said:

"The entire chain of command must remain under the political control and strategic direction of the EU throughout the operation, after consultation between the two organisations".

There is some misunderstanding on the issue, which I hope that the Minister will clear up, particularly given the piece on the front page of The Times this morning, which speaks of the French still demanding that the European Union force should be independent of NATO. The issues appear not to fit together. It is essential that the Minister clarifies the situation.

Finally, I hope that the enterprise is successful. I hope that it is a more powerful manifestation of Europe's defence capacity and responsibilities. It would be unmitigated disaster if it fell flat on its face and the European nations were unable to come together and look after their own responsibilities.

My Lords, it gives me great pleasure to follow the two very thoughtful speeches that have just been made. This is the first time that I have taken part in a defence debate in the House. I confess at once that I do not feel qualified to discuss many of the technical questions that have been raised about the rapid reaction force. I leave them with great confidence to the noble Baroness, Lady Hilton of Eggardon, and her colleagues. Many of those important issues of the kind raised by the noble Lord, Lord Jopling, are highly relevant to the issues under discussion.

I shall concentrate on the broader picture. It might be said that we had the opportunity to discuss the broader issues on Tuesday, when I was away, but that would be a wrong view in a debate that is explicitly focused on the so-called rapid reaction force. We should be clear about the long-term vision behind it. What are we trying to accomplish?

I found this recent Select Committee report and its evidence extraordinarily interesting. I do not say that in the usual way in which we pay compliments in the House, when any report, however dull, is praised as enormously exciting and any speech, however bland, is regarded as the most eloquent speech ever delivered. I genuinely found the report very interesting, particularly the evidence.

What are the main issues? First, it is clear that it will take time for the force to develop. As the noble Lord, Lord Carver, said on Tuesday, what has been announced is a first step. He added that he thought that it was a step in the right direction. I shall say more about the direction in a moment. At this stage, it is still largely a paper exercise.

Secondly, we do not yet have a clear common European defence policy, because that depends on having a common foreign policy. There is not yet a clear European foreign policy. To reassure possible critics, it has been emphasised on the British side again and again that it is not a European army. The force will operate only when NATO is not engaged. It has been emphasised again and again that NATO is the basis of our defence policies. We have received many reassurances that it is an inter-governmental operation and that it will not be moved into the first pillar of the European Union. After all, as the Nice conference made very clear, at the moment inter-governmentalism rules. Whether or not that is for the best is a separate question.

As I said, I want to ask a fundamental question. This is a first step, but a first step to what? I believe that the noble Baroness, Lady Park, asked some very pertinent questions in the course of the evidence. She stated:

"It seems to me quite extraordinary that we should be prepared to accept and involve ourselves in yet another [commitment]"—

when we have many other commitments—

"when surely either the United Nations or NATO ought to be able to deal with most of the problems that any of us could encounter militarily".

I believe that it must be clearly established when the force will operate independently and for what purpose.

The French have a clear view about the ultimate reason for the force. In a way they see it—not now but in time—as an alternative force to NATO. They see it as part of the vision of the European Union as a superpower. They do not see Europe as a superstate—that concept appears to be almost wholly confined not only to Conservative Europhobes but to those who live in a strange world where every new step in Europe leads immediately to a superstate. That is not something which worries other Europeans. But the French see the need for some redress of the balance in a world where the United States is over-mighty. They envisage a multi-polar world and Europe as one of the poles.

It may be somewhat unfashionable but I have some sympathy with the French view, and I do not see myself in any way as anti-American. Why? First, if we are to be realistic, I believe that we should realise that the European Union and the United States often see the world differently and have somewhat different interests. They take a very different view of the Middle East and a somewhat different view of UN peace-keeping. In his speech on Tuesday, my noble friend Lord Roper pointed out that the European Union spends more than 50 per cent more than the United States on UN peace-keeping. The European Union is more interested in Africa; the United States is much more directly concerned with East Asia. That is inevitable. Of course there are different interests, but that does not mean to say that they need clash.

Secondly, if we are being realistic, it is unwise to take for granted for all time the United States commitment to European defence. I am amazed by how long that commitment has continued. Decades ago—certainly 10 years ago—the US commitment was questioned constantly, but the Americans have continued to commit themselves to the defence of Europe and to committing forces to Europe. In my view, the United States has been one of the most enlightened world leaders of any power in the past which has been a world leader. Despite areas where one might differ about the effects of its policy—perhaps in South America or the Middle East—overall, it has kept the peace and has done so in a most enlightened way.

I have no doubt that, while NATO lasts and is effective, it should be the basis for our defence policy. If it is the basis for our defence policy with a firm American commitment, we should accept the American overall command. It is an effective alliance; it can take effective decisions. However, it takes time for nations to adjust to new circumstances.

It seems to me inevitable that a change of balance of power in the world with the end of the Soviet Union means that we cannot expect the United States to be for ever committed to the European Union's defence in the way in which it has been in the past. Many more voices have been raised in the United States, particularly among those who have been advisers to what is likely to be President Bush, which have questioned the nature of United States commitments in different parts of the world. The US does not see itself as continuing as the world policeman in every part of the world.

That is no argument for following any policy which is likely to accelerate United States withdrawal. I believe that we should be extremely careful in that regard. Everything that has been said by the Government and by the noble Baroness's committee has quite rightly indicated that that must be avoided. However, it makes sense to prepare now for the circumstances which may arise if the American commitments fade. Therefore, I return to the fundamental question: first steps to what? And what should be the nature of the force to which we are committed? Must it remain for ever a purely inter-governmental arrangement?

At the moment I do not personally advocate a federal Europe. I am not absolutely sure what a federal Europe means. The kind of federal Europe advocated by Mr Joschka Fischer is a very decentralised one. However, at present the tide is flowing against federalism in Europe. When there is talk of a democratic deficit, I do not believe that that will be met by granting more power to the European Parliament, although there may be a case in individual instances for more accountability to the European Parliament.

At the moment, democracy in Europe is based on national Parliaments. They are real; they are what citizens care about, and those citizens do not know who their MEP is. That does not mean to say that there is not an important role for the European Parliament, but that is not the direction in which sentiment is flowing at present.

There is a further, important point which I have stressed time and again. I wrote about it in a paper on the euro and tax; I have spoken about it in this House; and it was emphasised on Tuesday in a notable contribution by my noble friend Lord Dahrendorf. It is nonsense to talk about a federal Europe when it will have no resources. Everyone is agreed that a maximum of 1.27 per cent of the budget should be available at the centre. But one cannot run an effective federal superstate with a central budget of 1.27 per cent of GDP.

Nevertheless, with national vetoes there are limitations to the inter-governmental approach, especially if one seeks to evolve an effective foreign policy and common defence. There will be a need for decisive action and quick decisions. That is the whole virtue of NATO at the present time—it can be effective because it takes decisions quickly.

If in Europe we base our policies on national foreign policies, the influence that they can have is extremely limited. I do not say that such influence is meaningless—we have only to consider the intervention of Britain in Sierra Leone, the intervention of France in Francophone parts of Africa or, indeed, the role played by Italy in the Albanian crisis. However, the European Union as a whole can be far more effective than the sum of its parts. If we are to have real influence on the world, it must be within the European context. There is every reason to wish to see effective European common foreign and defence policies. In time, that will be possible only if there is, in this field, some extension of qualified majority voting, perhaps with an opt-out. Personally, I prefer the idea of an opt-out to an opt-in.

What sort of institutional solutions will that require? In my view, those are some of the most difficult questions which the rapid reaction force will have to face. I do not favour the move of defence into the first pillar. I do not think that it would be helpful to have direct control by the European Parliament in that particular field. But we should not let a serious debate about maximising the influence of European defence and foreign policies be inhibited by phobias about a European superstate.

A European superpower perhaps. I do not particularly like the superlatives. But the question is: how can we make the European Union a more powerful force in the world? In the field of trade, there is no doubt about it: we need an effective European policy on trade. If, in co-operation with the United States, in time, looking at the long-term—and not in opposition, rivalry and competition with the United States—we create an effective European defence force, then that is something which will be good for Britain, good for Europe and good for world peace.

My Lords, I begin by thanking the sub-committee for producing these two excellent reports. They are reports of great intellectual distinction, as one might have expected from the members who make up that particular sub-committee.

So far there has been a lot of talk, as, indeed, there was on the debate on the gracious Speech, about what one might call the nuts and bolts of the European security and defence initiative. As the noble Lord, Lord Taverne, said, that raises much wider problems than the somewhat mechanistic problems of how to set up a force and who commands it.

Two major issues emerge from a careful reading of the report. They are two issues on which I suspect the Government's mind is already made up. They have their policies clearly defined and I believe that it would take a lot of argument to shake them from them. So perhaps I should be directing my strictures this evening to the Opposition Front Bench in the contingency that they might perhaps soon be responsible for those policies.

The two major issues to which I should like to refer are our future place in what is now a totally new international global structure; and secondly, and perhaps not entirely unconnected with it, the role of armed force in the conduct of international relations, which is becoming rapidly very confused.

I take first the place of this country in the international structure of today and the future. As has been pointed out already in the debate this evening, and, indeed, is pointed out very clearly in the report from the sub-committee, we are now in the post-Cold War phase. The assumptions and scenarios which underpinned all our foreign and defence policies for all those years have now gone. As the noble Lord, Lord Taverne, rightly said, there is now a very distinct possibility that the United States will—withdraw is perhaps too strong a word—resile or recoil a little from too much involvement in the rest of the world and certainly too much involvement in Europe.

As the noble Lord rightly said, if we are sensible and intelligent about our policies, we must prepare for that. It would be foolish not to. However, having said that, I draw different conclusions from the noble Lord, Lord Taverne, about how we should be preparing for it.

This idea of a common security and defence policy and a common defence and foreign policy for Europe has a direct impact on the role which I believe this country should be playing in Europe, although, as I said, it would be of only limited utility for me to try to impress those issues upon the Government.

I agree that it is foolish and profitless to talk about a European superstate. There is also not much use talking about a European superpower. I feel that Europe cannot ever be a superpower, a superstate, united states or any other kind of common organisation of that kind. Unlike the United States, it consists of a large number of countries of different languages, cultures, backgrounds, history and, more important, interests in foreign policy. In my view—and I hope this is not too heretical—the whole idea of a common defence and foreign policy for Europe is a pipedream. I do not think that it could ever possibly be evolved.

And yet, as we know, there are still people, in spite of what has been said by noble Lords this evening, who are pushing in that direction. There are federalists in Europe. There are people who believe in a high degree of political integration in Europe and they are trying to bring it about. I advance the proposition that the European security and defence initiative is a part of that process.

I do not suggest that there is any conspiracy or hidden agenda; that those who propose the establishment of this force are using it consciously as some kind of trick to bring about a greater federation in Europe. But there is a dynamic here which simply cannot be ignored.

I wish that we could get away from this ridiculous idea that it is not a European army. Perhaps I may borrow a phrase from someone else. If it waddles like a duck and quacks like a duck, the chances are that it is probably a duck. As Romano Prodi said, you can call it Margaret; you can call it Mary-Ann; but it is a European army. I do not see why people do not accept that. There is nothing wrong in having it if that is what you believe is wanted. I do not happen to believe that it is wanted, but that is another matter.

The whole idea of common European institutionsߞthe euro for one and the common defence policy for anothe—has a dynamic towards an increased political integration in Europe. The whole idea of a common foreign policy, a common defence policy, a European central bank, all the other institutions, are moving inexorably with a dynamic of their own towards closer political integration in Europe. For some people, that may be all very well. For some people, it obviously is. But I want to make the point—and this is where I come to our role in the world—that that will have a considerable effect upon our relationship with the United States of America.

The noble Lord, Lord Jopling, raised the question of intelligence, as, indeed, I did on the debate on the Address. That is an absolutely vital link that we have with the United States of America. If we move any further towards political integration in Europe, and especially defence and foreign policy integration, that link will be placed under threat. We should be in no doubt about that. Any respectable commentator in Washington, journalist or politician, will underline and endorse that.

I bring this part of my speech to a close. I believe that we should be thinking very hard about the proposition put forward by the noble Lord, Lord Taverne, that if we are to have a role in the world, it must be in Europe. I dissent from that most strongly. It is not necessary that that role should be in Europe at all. If the other countries of Europe wish to become closer, wish to become federal and wish to have a European army, let them do so. But we must be looking at our own national interest, which may lie elsewhere.

It may be idiosyncratic on my part, but I believe that our links with the United States of America are far more important than our links with Europe. In considering our future we must also not forget certain countries that we do not seem to talk about much nowadays, such as Canada, Australia and New Zealand. I believe that those countries should be considered in relation to our future role in the world. At the moment in this country we appear to have become disastrously eurocentric in our policy thinking.

I turn to the use of armed force, which is entirely relevant to the common defence policy. We are moving into a time when the use of armed force is changing. The Kofi Annan doctrine in the United Nations and the recent changes in the strategic doctrine of NATO mean that armed forces, national and others, are mainly for the purpose of intervening in—one may say interfering in—the domestic affairs of sovereign nation states. The aim of armed force now appears to he humanitarian and peace-keeping rather than what I take to be the conventional use of armed force in international affairs.

The result is that our forces are now dispersed in penny-packets all over the world. They cannot be trained in the high-intensity warfare in which they should be trained and which—make no mistake—may yet still be required of our forces. The idea that high-intensity warfare will exist no more is a very dangerous assumption indeed. Now we have armed forces that are stretched beyond their capacity because we do not seem to be able to provide the equipment or the manpower to fulfil all the commitments. However, I am sure that the decisions have been made and I am probably being quixotic in thinking that there is any possibility of changing them now.

However, I want to mention the effect of the growth of the European strategic defence initiative upon NATO. The noble Lord, Lord Jopling, said that it was not clear to him whether the force would be autonomous, with a separate chain of command. I am not surprised that that is not clear to the noble Lord; I do not believe that it is clear to anyone.

The fact is that after the conference in Nice, the Prime Minister said that the matter had been settled; that there would be no separate chain of command; and that the whole of the European strategic defence initiative and the whole of the European army would function under the umbrella of NATO. No sooner had those words left his lips than the French said exactly the opposite. They said that there has to be a separate chain of command which has to be autonomous and it must be within the European Union and not within NATO.

If the French are saying one thing and the British are saying another—the two most important countries, politically and militarily, in Europe—what will be the outcome? The matter is not settled at all. The Government may claim that it is, but it is not. There will be major debates and arguments before such a force can be set up.

Bringing together those two issues, I believe that if we do not handle this issue properly we shall face a serious breach in our precious links with the United States of America. What for? I believe that it is dubious whether the European strategic defence initiative will come to anything.

The report of the Select Committee makes it clear that the capacity of Europe to enter into something like this is limited. In the report one can see that the level of expenditure on defence in Europe has declined. The majority of EU countries spend less than 2 per cent of their GDP on defence. That is in the report. Unless that is changed, the possibility of a European strategic defence initiative coming to fruition is remote. That outcome would be dangerous. If we sacrifice our links with the United States of America and with other countries in the interests of something that in the end will be a damp squib, we shall find ourselves in an extremely dangerous situation.

I end by looking at page 30 of the 15th report of the Select Committee. A number of points made there should be inscribed in letters of fire in 10 Downing Street, in the Ministry of Defence and in the Foreign Office. I shall read some of them. First:

"We confirm that we do not believe that the EU should consider the creation of such an army".

Secondly:

"it will be vital for the EU first to secure the goodwill and tacit support of the United States".

If anyone believes that that support and goodwill will come in the context of a French view of the European strategic defence initiative, they live in a dream world.

I end by reading what I believe is at the heart of the report and what I believe should ring in our ears as we go away tonight:

"We cannot express too strongly our anxiety at the danger of the CESDP turning into a damp squib and consequently into seriously deteriorating relations with the United States".

My Lords, first I pay tribute to our chairman, not merely for her chairmanship of the committee but also for her cool, elegant presentation of the main findings of our report earlier this afternoon. It is of enormous help to be able to speak against a background of that kind.

I cannot proceed without paying tribute to the noble Lord, Lord Chalfont, who has made more sensible comments on this subject than anyone since the public controversy of whether we are to have a European army or not burst out some months ago. It has been a real joy to listen to him. I agree with virtually every proposition on which he has spoken, including his clear statement that it is ridiculous for us to imagine that we have only a European role to play and that therefore we need and should envisage an ever-closer integration of our country, in all its affairs, including military and foreign policy, with that of the European Union, when quite clearly our interests, connections and strength lie just as much outside that continent as they do inside. That is one of the great truths that we have to remember. So frequently in these ongoing debates we forget that.

The noble Lord referred to the European army and the noble Lord, Lord Jopling, dismissively, but correctly, said that a lot of rubbish has been talked about it. I agree, although one cannot help but be amused by the fact that the main references to a European army have come from the lips of that well-known eurosceptic, the President of the European Commission, Mr Prodi, whose words were sensibly quoted by the noble Lord.

I am amazed at the lack of historical knowledge that so many commentators display. One more recent statement on the subject came from the present German Finance Minister, Herr Hans Eichel. In January 1999, just before he took over as Finance Minister, when talking about EMU and the fact that they had achieved agreement, he said,

"We will now strive towards political unification … EMU will not be enough. Why do we still need national armies? One European army is enough".

Those sentiments, as those who have studied these matters know well, were stated with perhaps even greater force and clarity a few years earlier by Chancellor Kohl. Those of us who have some memory of events—most of us are not youngsters in this House—will remember in 1953 the first attempt to create a European army. The European Defence Community agreement of 1953 was passed under the French initiative, and would have been achieved but for an extraordinary failure of nerve when the French abandoned it. They lost their nerve and withdrew from it.

But agreement on that European army was achieved down to battalion level. The armies of the six had been brought together. So when people say that European armies and things of that kind are just Eurosceptic rubbish, they are being ridiculous. In fact it is worse than that. Those comments come from people who believe that there has been no history or that history began on 1st May 1997.

I put that matter to one side; it is only part of my complaint. I am grateful to my committee colleague, the noble Lord, Lord Jopling, for spelling out so well the fact that many questions remain to be resolved. Our committee has been rather "cool" about it. We said that if, as the Government appear to think, it is simply a question of strengthening the European side of NATO so that it can take more effective action with the United States, excellent; we are genuinely for that. The trouble is that we know very well—again I am grateful to the noble Lord, Lord Chalfont—that not everyone in Europe believes that that is what it is or should be about.

Our principal opponent in all this is the Government of France. But they are not alone. Although other governments are somewhat cross-pressured, the truth is that there is a difference of purpose which exists between our stated position and that of a number of our European allies.

The noble Lord, Lord Taverne, rightly asks what is the purpose. Is this not just the first step? It must be embarrassing for the noble Lord to admit that it is the first step, because we know the steps he wants to take and the general direction of his thinking.

I too want to turn to the question of purpose. There has been a misunderstanding from the beginning of this public debate. People talk about a European defence policy. But it is nothing to do with defence—again as the noble Lord, Lord Chalfont, pointed out. NATO is about defence of the borders of its member countries, which includes most of the European Union countries, though not all. This is about something entirely different; it is about the projection of military force by the European powers elsewhere in the world.

Some people may say that it is an excellent thing for Europe to develop the capacity for intervention elsewhere. But I have considerable reservations in that regard. I trust NATO and the American presence much more than a separate European initiative and armed force.

A point so often forgotten in these debates is that what the European Union is trying to do is not just to create a military availability for projection elsewhere; it is trying to create a common foreign and security policy. In the evolution of that policy it begins, quite properly, by using the mechanisms of the Rome treaty. It is the Commission that initially applies all the economic and trade sanctions against an offending nation, such as Serbia. Then we get a foreign policy "creep", quite naturally. If the enemy does not respond to external economic pressures, we put in a police force. In fact we created one in the last summit but one. If that does not work, we then have to put in military force.

What is evolving is not merely a kind of European military weapon of defence; it is a growing comprehensive European Union foreign policy reflecting its own priorities, its own interests and now backed up with the military means of enforcing, if necessary, those policies. That is not a minor matter; it is a major development in European history and the history of the European Union.

As I say, we start from the knowledge that we and the principal partner, the French, have an entirely different agenda. Let us be clear about this. The French intend to create an autonomous military power, and they have every entitlement to do so. I do not know whether anyone has read recently the St Malo joint declaration which we trace back to the fons et origo, of the whole of this enterprise. That communiqué is only around four paragraphs, part of which reads:

"The European Union needs to be in a position to play its full role on the international stage"—

"its" full role, whatever that might be—

"… to this end, the Union must have capacity for autonomous action, backed up by credible military force, the means to decide to use them and a readiness to do so. (St Malo Joint Declaration, Chirac/Blair, 4 Dec.1998)".

It goes on, and this is perhaps even more significant,

"The European Union will also need to have recourse to suitable military means (European capabilities pre-designated within NATO's European Pillar or national or multi-national European means outside the NATO framework)".

Both are envisaged. And we signed that declaration in St Malo with the French. So this is clearly something about which we must have our eyes wide open from the beginning; that we are embarking upon a venture for which our principal partner has an entirely different objective, or is likely to have.

We then move on, inevitably, to United States worries. It is hardly surprising that the United States expresses concern. I am not pleased with the Government. They have rather foolishly, but deliberately, tried to minimise the extent of American concern. Statements have been made that there is not a single American of distinction who does not willingly associate with our joint endeavour in the European Union defence capability.

The Americans are entirely in favour of the European end of NATO being strengthened within NATO. However, as one would expect, they are desperately concerned about the three "Ds". The first is decoupling from the Europeans the second is the duplication of the facilities which NATO already has; the third is the disintegration as it might affect members of NATO who are not members of the EU, for instance Turkey.

The Americans have said that repeatedly. General Wesley Clark said it—I could quote him but I shall not. Most recently—and most embarrassingly for the Government the—American Secretary of State for Defence, on the eve of the Nice meeting, deliberately restated what the Government have denied by stating that everyone in important positions in America is wholly happy with what is happening. On the contrary: the Secretary of State clearly raised the danger not merely of weakening but of destroying NATO.

Anyone who has been following these events knew from the beginning that such problems and tensions existed. It does the Government no credit to pretend that they did not exist and, frankly, their credibility has not been helped by their handling of that situation.

I have a final point to make about autonomous capacity and European separation from the Americans. Two important aspects of military action were mentioned by the noble Lords, Lord Chalfont and Lord Jopling, who are committee members. They referred to the necessary intelligence gathering and to heavy-lift capacity for transferring tanks, guns and so forth. The French are developing precisely that intelligence gathering capacity in their Helios 2 satellite system. And who is their partner in that enterprise? It is Germany, which signed up for its development in June this year.

Beyond that, Europe has chosen for its heavy-lift capacity the A400M, the military version of the airbus. The French will have more than 75 and we and the Germans will have about the same. Whether they are assigned to NATO or whether from the start they will be available in a national capacity is not clear. Obviously, they will be available in both capacities if needed. I should have thought that that was conclusive evidence of the way things are going.

Finally, we signed almost blindly the commitment to a rapid reaction force: one of our aircraft carriers, a substantial number of our aeroplanes and almost certainly 36,000 troops in order to make that real. And we have not catered for any increase in our military spending. It does not sound right to me, particularly when a year ago we made the same commitment in larger quantity terms to the United Nations. In that memorandum of understanding, we agreed to have available rapid reaction forces for UN Security Council purposes world-wide.

I apologise for speaking at length but I believe that it is a major issue. We are engaging in something which could turn out to be disastrously and dangerously wrong for our own country. That does not have to be the case but, my goodness, we need to be vigilant in the period ahead.

My Lords, I, too, begin by thanking members of Sub-Committee C for their work in providing the 15th report and the update which we are considering tonight. I thank in particular the noble Lord, Lord Howell, and the noble Baroness, Lady Hilton, who chaired the sub-committee during that period.

On Tuesday, I was pleased to hear that I shall be joining Sub-Committee C and I look forward to taking part more actively in its work. The report is extremely valuable, as is the update which the sub-committee produced a few days ago.

I am also grateful to the Government for their reply to the first part of the report. However, as it was made in October, no doubt the Minister in reply will be able to update it.

The noble Lords, Lord Shore and Lord Chalfont, will not be surprised to hear that I do not share all their views. But I do share their concern about the relationship between this country and the United States. However, there is an important difference. I see absolutely no contradiction between being a good Atlanticist and a good European. In my view, this is not a zero-sum game; if we do it well, it can be a win-win situation. We need to think about how we can do it well and how we can make sure that it is a win-win situation.

That view is held not only by a few eccentrics in this country but by most of our European allies. They are both our allies within NATO and play a part in the European Union. I am sometimes surprised when I hear remarks about countries in the European Union, because people seem to overlook that they are also our partners in NATO. It would appear that NATO cannot be so effective if those inadequate countries are members of it!

I return to our relationship with the United States. I agree with the committee that if the project does not succeed a great deal of harm will be done to the NATO alliance, which we agree has been the cornerstone of our defence, and to the European Union—but some may be less worried about that than I. I agree with noble Lords who have spoken that it will not succeed unless European countries are prepared to strengthen their defence capabilities in order to fulfil their obligations under NATO's defence capacity initiative and to the European Union.

That can be done either by increasing the resources which they devote to defence or by using the existing resources more effectively. One of the reasons why Europeans get bad value for money is the absurd duplication among European countries. By using our resources more effectively, we shall be able to achieve better value for European taxpayers. It will not succeed if we do not obtain the necessary agreement between the European Union and NATO, a point which the Prime Minister made in his Statement on his return from Nice.

On the other hand, if the European countries live up to their commitment, by increasing the defence capabilities of the European members of NATO it can provide the basis for a more effective transatlantic partnership on defence and security. It can provide us with an ability to be better partners of the United States. In addition, it can provide the European Union with the crisis management capability which would give substance to its common foreign and security policy.

Having decided to initiate that policy, there is an obligation on the member states of the European Union to do their best to make it succeed. Failure to do so would have a negative effect on the arrangements for collective defence which we have developed and relied upon for the past half century.

However, tonight I want to concentrate on one of the most difficult remaining aspects. Even as we speak, it is being considered at the ministerial meeting of the North Atlantic Council in Brussels. I hope, as was suggested by the Foreign Secretary at lunch-time, that it will be possible for them to welcome unanimously the decisions made in Nice.

The matter to which I refer is the relationship between the developing European security and defence policy and Turkey, which was referred to this morning by the noble Lord, Lord Robertson, in his interview on the BBC. Turkish membership of NATO during the cold war was critical to our collective defence. At that time we argued that 25 Soviet divisions were deployed just on the border with Turkey. Therefore, if they were there they were not facing us on NATO's central front. Now that Turkey does not have that function she has legitimate concerns about the risk of being marginalised in the post-cold war situation.

It was partly because of that—I remember it well—that Turkey was pleased to become an associate member of the Western European Union in the early 1990s when it was thought, following the Treaty of Maastricht, that the WEU might have some responsibility in developing European security and defence policy. But when Turkey saw the more recent developments, it was anxious to maintain the privileged position that it had enjoyed in the WEU along with Norway and Iceland. There was very lengthy discussion on this matter last year at the Washington NATO summit. One of the most difficult tasks at that summit was to get Turkey's agreement to this matter.

At the Cologne and Helsinki Councils, the European Union tried to find ways to work with the six members of NATO who are not also members of the European Union, Turkey, Norway and Iceland, together with the three new members, the Czech Republic, Hungary and Poland. As for the last three, this is only an interim problem as they are likely to be members of the European Union by 2004. Neither Norway nor Iceland currently seeks membership. The problem arises with Turkey. It has been accepted that in due course Turkey should become a member of the European Union, but it is a country with which negotiations have not yet been initiated.

Two problems have arisen: the interaction between Turkey's immediate relationship with the European security and defence policy, which we are discussing this evening, and its long-term aim to become a member of the European Union. As we have learnt from recent discussions, that has become linked with Turkey's option as a member of NATO to block NATO's relationship with the European Union on defence. The EU has tried hard to find a mechanism whereby the six European members outside the European Union, and the nine other European countries which are candidates for membership, can be involved in the policy formation process and, if they contribute forces to an action, the operational decision-making of the EU's force.

However, the EU has maintained that the specific decision as to whether to use force would be reserved to the 15 EU members. Turkey has been reluctant to accept that position, although it has proved acceptable to the other countries concerned, including apparently the United States. Turkey has been perceived as maintaining a block on the availability to the European Union of NATO planning staff and the equipment conditionally promised to the European Union in the Washington declaration of last year. In spite of those problems, we should remember that at the capabilities commitment conference held in Brussels on 21st November Turkey pledged a brigade to the force which was to be set up.

Recently there have been more worrying developments. Last week, just prior to the meeting of NATO Defence Ministers, the Turkish Defence Minister, Sabahattin Cakmakoglu, gave a press conference in which he said that Turkey had not been given the role which it wanted and expected in the common European security and defence policy. He went on:

"If the arrangements in question are not bettered in a way that will satisfy us, it would be impossible to record progress in [the] demands of the EU from NATO".

There is no doubt that if such a block were maintained it would considerably strengthen the arguments put forward by some EU countries that the European Union should develop its own parallel systems of planning, command and control, with all the costs and disadvantages referred to in the report which have been discussed both in this House and another place in recent weeks.

It has been suggested by American journalists writing in the International Herald Tribune and elsewhere that it was Turkish obstructionism within NATO that could block a satisfactory agreement which was one of the principal targets of the anger of Secretary of State Cohen at the meeting in Brussels last week. Since then, in the Nice documents, which we have an opportunity to consider this evening, the European Union has made further progress in offering facilities to European members of NATO outside the EU.

The EU has also made progress in the past 10 days in providing an outline road map at least for the progress of Turkey to membership of the European Union. But there remain Turkish objections to the agreement which in some European countries are seen as approaching a blackmail. According to reports from Ankara that I have received, those objections have led to such concern in Washington that earlier this week President Clinton wrote to the Turkish Prime Minister, BÜlent Ecevit, to try to persuade Turkey to support the development of the common European security and defence policy within the European Union at today's NATO Foreign Ministers meeting. The President was reported to have stressed that co-operation between NATO and the European Union would be to the advantage of all. Such a message from the President of the United States will have removed any illusions in Ankara that might have arisen from reading much of the British press and listening to some of the observations made from time to time in another place and occasionally even in your Lordships' House. Ankara will see that the United States wishes this project to succeed if the President is prepared to write in those terms to the Prime Minister of Turkey.

I hope, therefore, that the president's letter and other contacts which have taken place at a very high level earlier this morning between the Turkish and the American authorities will lead to a more positive approach from the Turkish Foreign Minister at the NATO meeting today in Brussels. I do not know whether when the noble Baroness replies to the debate she will be able to give us any information on today's developments in Brussels, but I very much hope that there has been a satisfactory outcome.

I am aware of Turkey's concerns and the complications created by the involvement of Cyprus in the ESDP, but I believe that an inflexible attitude from Ankara would have a serious effect on long-term relations between the European Union and Turkey. To remove this Turkish objection and possible veto to NATO co-operation with the European Union will not guarantee the necessary agreement between the EU and NATO which is central to the satisfactory development of the European security and defence policy, as is made clear in the committee's report. However, without it the opportunity to reach such an agreement and to develop a satisfactory policy will be very small.

My Lords, I did not want to interrupt the noble Lord in the middle of his extremely interesting speech, but before he sits down perhaps he will deal with the following point. The noble Lord referred to our EU partners also being our NATO partners. Does he agree that our most significant partner in the EU is France, which is not a member of the integrated military structure of NATO and is, at best, an equivocal member of the alliance?

My Lords, it would take too long to discuss the relationship between France and NATO since the time of Suez, when France pursued a different option from this country. Both of us had problems with the United States at the time of Suez. The French believed that they could never trust them and had to build something of their own and we decided that we had to be as close to the United States as possible. But it is worth remembering that in the past decade—President Chirac has taken a number of steps in this direction—the French have played a much more active part within NATO actions; in KFOR, in SFOR and in the extraction force which was planned to go into Macedonia to take the Kosovo verification mission out of Kosovo if that had been necessary. If one goes to KFOR or SFOR one will find that the French are now, de facto, integrated, even though, for reasons of theology, the Quai d'Orsay, is not always prepared to admit it.

My Lords, it has been both a pleasure and a challenge to have been a member of the committee which produced the report. I joined it fairly late in the gestation of the main report. Therefore, I can pay my own tribute to the work of the committee, to its advisers, to its clerk and, not least, to its admirable chairman.

The committee identifies many concerns for the future which I share: notably, how we are to ensure accountability to national parliaments; how we are to ensure that NATO is not sidelined and the years of building up an effective military machine working by common consent are not wasted; and, not least, how we propose to provide the resources to meet an ever increasing number of commitments which may conflict. As the Secretary of State has said of our defence forces, there is only one set of people available for all these tasks.

I do not find the experience of Nice reassuring. It is good to hear that,

"any significant operation will require NATO assets and any such operation will be planned at NATO by the planning staff at SHAPE".

I quote from the Nice declaration.

According to the French provisional version of the Treaty of Nice, Article 25, however, the EU Political and Security Committee will exercise, with council authority, the political control and the strategic direction of crisis management operations. The declaration annexed to the final act of the conference says that in conformity with the texts approved—the presidency report and its annexes—the object of the EU is to become rapidly operational. That does not sound like merely having a committee structure.

A decision to that effect is to be taken at latest in the Belgian presidency in 2001. The revised Article 17, which applies to the Petersberg tasks, including missions of combat troops for purposes of crisis management, including missions to re-establish the peace, also lays down that the present article shall form no obstacle to the development of a closer co-operation between two or more states on a bilateral basis in the framework of the EU and of NATO, so long as that does not hinder the operation of the existing Article—a reference, I take it, to enhanced co-operation.

The French text of the revised Articles 17 and 25 contains a number of references to paragraphs and sentences deleted from the original draft, so it is difficult to know what the original proposals were. The revised Article 25, however, refers to the presidential conclusions and annexes. So what do they say? The draft presidential annexes circulated on 30th November say that the European Council approves the presidency report plus annexes, on the European security and defence policy and advocates that the EU should quickly be made operational in this area. There is no reference to any amendments or deletions. That can only mean that the draft presidency report, with its annexes, as published in November, was approved without any changes.

It is reassuring that, despite the many references to EU autonomy and the need to respect the autonomy of EU decision-making, the draft report, now approved, says that in operations requiring recourse to NATO assets and capabilities, operational planning will be carried out by the alliance and planning bodies. That is unequivocal and clear enough. But it leaves it to the EU to decide whether and when to involve NATO. I think that what concerned the committee was that while the EU clearly needs to develop a suitable planning and analysis capacity, it is imperative that it should not set up rival structures to duplicate NATO.

It is not reassuring to read both in the French presidency report and its Feira predecessor that the EU has set up an ever proliferating list of committees. Bureaucracy breeds more bureaucracy and, moreover, it engenders a wish to be seen doing something. The whole tenor of the report is that the EU and NATO are equally effective and their relationship is only consultative.

The Poles, as one of the new NATO members who are also to join the EU, said in their written evidence to the committee that they were anxious not to have to face such duplication. They cannot afford it and believe it can only cause strain on limited assets and confusion over tasks. After all, they are used to NATO procedure. Many of these committees were set up expressly to relate the headline goals from the NATO audit, but the mission of the EU military committee apparently is to:

"provide military advice to the Political Committee and military direction to the EU military staff"—

and—

"exercise military direction of all military activities within the EU framework".

That is pretty comprehensive.

I cannot see how such an ambitious project can fail to produce serious problems of command and control and of duplication of all too limited resources. Nowhere in any of the annexes, or reports I may say, is there any reference to budgets and costs, with one important exception under Article 48.

We must be concerned about a gradual blurring of the lines between national defence and NATO's defence role on the one hand, and the offensive military adventures undertaken for primarily political reasons for no obvious reason of vital national interest on the other. It could be a dangerous illusion to suppose that the paper tiger that we are setting up could actually fight. The political consequences of a failure in any of the Petersberg tasks could be extremely unfortunate.

Unless these forces have trained together and have a common experience of command and control, it will be of little use on the day for the various national contingents to step forward and proceed to act as an effective force. NATO has been doing this training for years and we cannot afford to waste that investment nor duplicate it.

The presidency report states:

"The main challenge for member states is to develop military capabilities which can be put at the disposal of the EU for crisis management purposes".

It goes on to speak of launching and conducting EUled military operations in response to international crises and of a strategic partnership between the EU and NATO in the management of crises with due regard for the two organisations' decision-making autonomy.

I believe that we must keep a close eye on the emerging tendency of some powerful elements of the EU—among whom I would certainly name the Higher Representative and the French, for different reasons—to marginalise NATO. As I said earlier this week, the Russians, whose strategic aim must be to see NATO dissolved, have spoken of a document approved at an EU meeting with the French in October in Paris, in which Russia expresses readiness to co-operate with the EU in the fields of defence and security. Defence is NATO's province. Mr Ivanov said:

"We think that this is very important in order to create a single security system in Europe".

The EU had not yet, he said, passed the founding document, but when relevant structures are set up, when we clearly know the legal basis of the EU in this field, we shall start discussing specific spheres for our co-operation. That is presumably a first fruit of the common position on Russia under which Mr Solana discusses security with the Russians. The latter clearly found it a promising alternative to the NATO-Russian Council and a first possible move to make NATO redundant.

My other concerns have been touched on in the brief additional report on the capabilities' goals which has just been published. Does it really make sense that this country whose defence budget has been progressively cut since 1990, apart from a very minor rise which I know the noble Baroness will tell us about later, which is already committed to NATO under Article 5 and to Europe for the Petersberg tasks which have no geographical limits and whose forces are already engaged in Iraq, in Kosovo and in Bosnia and committed in Northern Ireland and in Sierra Leone, should also have signed in April last year, as has been said by other noble Lords, a Memorandum of Understanding with the UN? That could require us to commit forces up to brigade strength anywhere in the world for any length of time that the UN requires. It contains an annex setting out in great detail the exact numbers of helicopters, surface ships, aircraft and all too scarce special forces such as engineers, as well as armour and even hospital ships. We are told that that is only a hope, not a real commitment; "If we happen to have all that to spare when the UN wants it, well then…".

The sensible Prahami report this year to the Security Council, which owes part of its great common sense to the presence on it of General Naumann who spoke before our committee with such excellent equal good sense, makes the point, equally valid for the EU's plans, that if a UN force is to be deployed, then the various national components in it must have trained together and developed a common doctrine, leadership and operational practices. How do the Government, with our limited resources, propose to meet this not unreasonable condition, both for the UN and the EU, when even now it is proving difficult to release troops, pilots, ships and so on for NATO exercises? More to the point, the UN report quotes two billion dollars as the 2001 budget on peacekeeping operations before any of this has been considered, and that is before any of the proposals in the report, arising out of the memorandum of understanding, signed so far by, apparently, 11 countries, is implemented. When are we going to stop being told, reverting to the EU, that we need only to refocus our defence expenditure?

I know that the Minister will point to the money to be spent on strategic lift and aircraft—that is good—but are we really sure that either we or any of the other EU countries will be able to foot the bill when it comes to having a Petersberg task? Certainly, accordingly to Le Monde a week or two ago, the French military are deeply concerned about the cost of moving over to a professional army by 2002. Their forces are, as they say,

"living from day to day financially",

and being told—a familiar theme to us—that there must be compensatory cuts rather than budget increases. I hope very much that those words will not continue to apply to us. We are taking on too much and counting too much on being well out of Kosovo and Bosnia before any new political adventure occurs to the EU.

It is the idea of the political committee in the EU having such power in military terms which frightens me. In 1960 and 1961, in the Congo, I saw the appalling results when a large military force containing a number, then, of experienced troops from India, Malaysia and Nigeria to name only three, was totally mismanaged by a political committee in New York, with devastating results for the unfortunate country to which they were supposed to be bringing peace and stability. That was an extremely expensive operation and it was absolutely worthless. I do not want to see our troops one day in that situation, whether the political committee concerned is sitting in the EU or the UN. I only hope therefore that our troops in Sierra Leone, while they act to support the UN, never come under UN command. The people of Sierra Leone and our forces deserve better than that.

My Lords, I join other noble Lords in congratulating our previous chairman, the noble Lord, Lord Howell of Guildford, and our present chairman, my noble friend Lady Hilton, on the conduct of these debates. We have gone through a rather difficult period, if I may put it like that, because in several respects the scenery has shifted as we have gone along. What was agreed at Nice seems to have been put in jeopardy yesterday. What was the agreed position for the intervention of the noble Lord, Lord Robertson, on the "Today" programme seems to be in doubt. My noble friend said that it is a question of language. I do not believe that it is a question of language. It is a question of principle. Furthermore, the scenery has shifted yet again in the United States. We now have the result of the presidential election. We know that there is a president-elect who is, if the campaign statements are to be relied on, more reluctant than previous presidents to commit US forces to European problems. We need to consider those facts and think about how we should react.

I welcome the initiative that has been taken. I say that outright because I do not want to be negative or critical. Nevertheless, there are certain problems. First, I hope that my noble friend the Minister will reinforce what was in the gracious Speech, which proclaimed the supremacy of NATO as the basis of the United Kingdom's defence and security. That is your Lordships' primary interest. Secondly, if the so-called French insistence on independence, autonomy or whatever one calls it is adhered to in any reasonable respect, that cannot be consistent with NATO's supremacy as our guarantee of security and defence. Those are the two principles on which I would start.

All these things have to go through a long process. But I do not think that, operationally, they make up for any serious military capability or initiative. The Petersberg tasks include humanitarian and rescue tasks, peacekeeping tasks and tasks of combat forces in crisis management, including peacemaking. As far as I can see, the humanitarian and rescue tasks could properly be performed by what is proposed. What I cannot see is how, if the United States and NATO decide not to participate in one of the tasks—given the new administration, I suspect that that may be a problem—the proposed rapid reaction force will accommodate that situation. I ask my noble friend to respond to that point.

The Petersberg tasks are okay on humanitarian relief, rescue relief and so on, but we all know that any operation in which one becomes engaged can soon become a much larger operation. Humanitarian relief may start with one thing, which may be in the province of what is proposed, but it may end up in peacemaking or indeed in making war. What will happen if, in a situation like Rwanda or Sierra Leone, the rapid reaction force goes in to rescue citizens of the European Union or others and finds itself in a conflict situation? It may well be at that point that those members of the organisation who had decided to participate in a limited operation then say, "We are terribly sorry. We are out of the party. This has developed into guns and casualties and we do not want to become involved". What then happens? Do we make a telephone call to Washington to say, "We're terribly sorry. We've embarked on something which we thought was in our remit, but it has now exploded into something rather serious. Could we please have some help from the United States?" What would be the response? Such a situation is known—in the jargon, I am afraid—as "mission creep". An operation is embarked upon, but then it turns out that the operation is not only of a rescue or humanitarian nature, but has become a serious war.

It is that kind of circumstance which gives rise to my unease about what is proposed. Unless the United States is prepared to back this proposal to the hilt, we, the Europeans, will find ourselves in an impossible situation where British troops are in the field and being shot at without proper logistic and intelligence support from the United States.

Although I support the initiative, I look to my noble friend to explain how it will work in practice, if she is able to do so. There are serious problems as regards the whole relationship between the European Union and NATO which I know will be handled by the Swedish presidency. It is a matter of extreme concern, not only to myself but also, I am sure, to other noble Lords.

My Lords, with the exception of two notable interventions, the debate so far can be summarised briefly as, "Good policy, look out for the elephant traps". That seems to be the general feeling and I believe that it reflects the sentiment underlying the report of the sub-committee. When we discuss security and defence we often refer to "double-hatting". The sub-committee utilised its own variety of that system. I should like therefore to thank the noble Lord, Lord Howell of Guildford, the chairman. He launched the inquiry on the right lines. I thank also the noble Baroness, Lady Hilton of Eggardon, who brought it to a satisfactory conclusion. That demonstrates that certain varieties of double-hatting can be extremely effective from time to time.

I believe that the report we are discussing today renders a service in at least three respects. First, it traces the key elements of the defence component of the common foreign and security policy of the Union and shows how far it has developed in a short period of years. Some, including those sitting on the Benches in front of me, may find it disconcerting to see that there has been a progression from a few words in the Maastricht Treaty to an agreement, as we have today, on a European Union force, not a standing army, but a capability of up to 60,000 troops. Most will probably feel that it is right that the Union should put itself in a position to respond, if NATO does not wish to act, to humanitarian and rescue tasks, peacekeeping tasks and tasks of combat forces in crisis management, including peacemaking. These are of course the so-called "Petersberg tasks" which were drafted in 1992 by the Western European Union in order to distinguish them from common defence. That is why the Petersberg tasks are set out in this way. There was an extremely long argument over the phrase "peacemaking". I have heard it before and, while it is an important point, that argument took place when the tasks were first drafted.

The defence of our territory is, of course, a matter for the United Kingdom itself and for NATO. The European Union rapid reaction force is to respond to a different kind of potential need, as described in the Petersberg tasks. The experience of recent years, in particular in Bosnia and Kosovo, has shown that problems of racial strife can give rise to such suffering that a peacekeeping or humanitarian role could be justified. So it is now the intention of the European Union that some forces should in effect be earmarked so that they could form a rapid reaction force—or, as the noble Baroness, Lady Hilton, said, a "fairly" rapid reaction force—to respond to such a need. I think that most people in this country think that in certain cases, we do have a moral obligation to act and that, if NATO does not wish to act, we should still respond to that moral obligation.

Secondly, the committee's report clearly describes what is the headline goal and, in the very recent update report, the committee reports on the key elements of the commitments conference of 20th November, when the member states of the Union agreed to the assembly of a pool of 100,000 troops, from which up to 60,000 could be used at any one time. Other noble Lords have already pointed out that it is a matter of satisfaction that a number of other states currently outside the European Union, in particular Turkey, have also agreed to make a contribution. Certain points of detail may still be under discussion, but Turkey has agreed to make an important contribution, and I welcome that very much.

I conclude that in general there is a broad measure of agreement in western Europe on the approach. That seems to be the reasonable conclusion to draw from the response of the various states which took part in the capabilities conference.

Thirdly, the committee picked out the key political and practical points which follow on from the decision to go forward with the rapid reaction force. These are important points. It is essential that we should stress them and that they should be properly monitored. Indeed, that is an important contribution from the committee. A particular point is that NATO should be the first choice to lead any military mission and that the European Union should act alone only when the alliance as a whole is not engaged. As others have pointed out, this goes to the heart of our relationship with the United States, to which I shall return in a moment.

For the same reason, it is important that the rapid reaction force should be operational by 2003 so that we can demonstrate a real European contribution to the peacekeeping role. Furthermore, all the partners must show that they can meet the costs. I think that it was legitimate for the committee to raise its concerns as regards command and control. The Government seem relatively relaxed about it, but it is a very important point because this function is essential. The relationship with NATO needs to be clear.

I turn now to relations with the United States, which, through NATO, has made such a huge contribution to our collective defence over many years. For myself, I see a real consistency in United States policy over the period. It has been fully committed to NATO and to collective defence but, not unreasonably, it has looked for a strengthening of the European pillar of that defence. It looks for "a realistic effort" from the European allies. I choose this phrase, which is half a century old. In September 1950, when President Truman deployed four US divisions to Europe, this action was subsequently endorsed by Congress only on the basis of a resolution which insisted that the Joint Chiefs of Staff,

"should certify that the European allies were making a realistic effort on behalf of European defence".

This demonstrates that I have a very long memory. It has been the consistent position of the United States over a long period.

Subject, therefore, to the essential points made by the United Kingdom Government and by the committee on the maintenance of NATO's position and on the avoidance of duplication, it seems to me that the strengthening of Europe's capacity to respond to what now seem to be the type of crises which do arise is in line with the thrust of US policy over very many years. I personally find the remarks of Secretary Albright, Mr Strobe Talbot and Secretary Cohen all consistent. I know that they had points to make, points to criticise and points to stress, but they seem consistent with the well-established core of United States policy, even when they stress that changes resulting from the European Union initiative must not leave NATO in a weaker position. Why should they? That is a very good point to make from their point of view. The policy of the United States does not seem to be at risk in the way that we are going forward. We should remember that we are talking about a British/ French initiative.

Of course, we do not know what will be the policy of the new US President and administration on the role of NATO, but, if they want to maintain their commitment, the strengthening of a European capability to deal with limited crises—which is, in effect, what it will be—must be also in the interests of the United States also.

Having finally received the draft Treaty of Nice—I do not think that I am allowed to speak French here, so I shall not quote from it in French, which is the only text I have received—I have been struck by the force with which the maintenance of NATO's role is stressed. In Article 17 of the Treaty of European Union, which is revised in some other aspects, as referred to by the noble Baroness, Lady Park of Monmouth, the treaty stresses that the Union policy respects the obligations resulting from the NATO treaty for members such as the United Kingdom which consider that their common defence is realised in the framework of NATO.

In addition, there is the formal declaration, to which reference has been made, annexed to the final act of the conference—and which will therefore appear in the treaty documents—stressing that the objective of the European Union is to be rapidly operational, and setting the timetable for the decision making by the European Councils.

In sum, the committee has been right to point to the potential problems and to emphasise the possibility of difficulties in terms of potential overstretch of our own forces in the United Kingdom. I am glad to see that in their reply the Government have sought to respond positively to these points. They have pointed out that the intention is further to develop the role of DSACEUR in order for him to assume fully and effectively his European responsibilities, and thus to avoid duplication of NATO structures, and that the UK will influence the ongoing work.

Quite often there is a tendency to assume that something will not work; it is an old British habit. Of course, we need to stress the risks and the dangers, but that is quite different from saying that something will not work. I have complete confidence that the reaction force will come into effect and will work.

My Lords, as a relatively new Member of your Lordships' House, may I say how pleased I am to have completed my first report. It was a privilege to do so in such distinguished company—a former Chief of Defence Staff, a former Secretary-General of the European Commission, a very senior police officer, distinguished former Secretaries of State, diplomats and so on. Indeed, this is the House of Lords at its best, providing added value to the work of the democratic Commons. We have produced two excellent and unanimous reports. Despite wide variations of views, there was not a "Chadless" vote in sight.

In August, our principal report was published. Two months later the issue of the so-called European army blew up in the media, but your Lordships' report was largely ignored. That may have been a failure of the fickle press— which nevertheless, in contrast, at the same time took up your Lordships' report on, for example, complementary medicine—or, alternatively, it may have been our fault for failing to communicate our work to the press, the media and the public outside. Perhaps we need a rapid reaction force or unit to help us in that task. I suspect that for too long the House of Lords has suffered from overstretch—too few resources for current and future tasks. It is time that we considered resourcing better your Lordships' House, especially the work of its specialist committees.

Noble Lords will recall that our August report welcomed this British initiative. Nevertheless, the report correctly set out our real concerns and identified deficiencies that must be remedied if the Government's ambitions are to be fulfilled.

Two things have happened since the publication of the report to confirm our original optimism: first, the Nice IGC, where the French view was marginalised. Indeed, it seemed to me that the French came out of the confessional with our PM more supplicant than priest and agreed to a text which, for all its post-conference splutterings, is British in tone and tenor. Secondly, the November capabilities commitment conference was a big and successful first step on the road to the realisation of our 2003 goal.

Your Lordships will recall that we were seeking to provide a rapid reaction force of 60,000 troops capable of being mobilised within 60 days, sustained for 12 months and backed up by a further 180,000 troops ready to relieve the core 60,000. We got more—not only assurances on the 180,000 back-up troops but also an immediate down payment of 100,000 troops, exceeding the core 60,000 target by 40,000. In addition, commitments were given with gratifying alacrity by the four non-EU countries, which could quite reasonably have withheld their hand at this early stage. They did not. That says a lot for the acceptability of the idea of the rapid reaction force and for the power of the European Union to unite countries across the continent to the wise and common purpose of collective security and defence. It was truly a leap of Bob Beaman proportions, which has jump started this British initiative of strengthening defence and security in the European Union and within NATO.

How does the rapid reaction force support British objectives? I suggest that the acid test is to determine what the added value is to Britain of investing in this initiative. First, Britain aspires to a leadership role in Europe. Here we have demonstrated it. This in turn will help us in our ambitions to institute other reform, including economical, institutional and market oriented.

Secondly, it gives coherence and focus to our existing bilaterals, typified by the German, Italian and British joint air group, which will see Luftwaffe pilots training with the UK's Tornado force; or by Exercise Quickstep, carried out in conjunction with the French armed forces—a veritable pas de deux planned by the dancing major conducting the previous Conservative administration.

Indeed, previous Tory governments have rightly encouraged such co-ordination and integration. Presumably, they did not fear then, as they do now, that the cannabis of such bilateral co-operation would somehow lead on to the cocaine of the rapid response force, which they now so clumsily misrepresent, misinterpret and malign as a putative and spectral European army.

Thirdly, it means that soldiers from the 2 million currently under arms in the European Union can be mobilised into an effective and efficient force of some 60,000 troops. The various conflicts in the Balkans have exposed Europe's previous failures to apply its existing assets to practical problems. It must be in Britain's interests to foster this distinct piece of enhanced co-operation, which gratifyingly enlists all 15 EU states and beyond.

Fourthly, the proposal will have the beneficial effect of prompting our European allies to modernise their military capabilities and, it is to be hoped, injecting more money into their military budgets. They are far more likely to undertake their own defence spending reviews now that such reviews have a definable content. The egregious case of the German armed forces mentioned by the noble Baroness, Lady Hilton of Eggardon, where men are in over-supply to machines, is well known. The German aspiration to spend existing resources better is to be applauded and will be accelerated by the need to prepare for the rapid reaction force. Getting Britain's allies to change and improve is in Britain's direct interest. It is our own form of encouraging burden-sharing among EU allies within NATO, a point made tellingly by the noble Lord, Lord Roper.

Fifthly, the proposal will strengthen the drive towards a common procurement policy for arms and equipment among EU members. That, in turn, will stimulate a dormant, or perhaps sleepy, single European armaments market—which is, again, good news for Britain and its defence industries. These are jobs for Britain, born of defending Britain.

Sixthly, the proposal will aid and abet the process of enlargement, especially for countries in eastern and central Europe which set such store by their security and defence needs. A safer Europe means a safer Britain.

Seventhly, a better use of existing resources will help with the vexed question of overstretch. This initiative's attack on duplication and overlap represents a gain for British policy. The example of the Nordic countries providing a joint field hospital facility is a noteworthy example of the potential to fight overstretch. Incidentally, overstretch is not a function of how many hats you wear for various defence purposes but of whether the hat is waterproof against a foreseeable tempest. If the cap fits, Britain should wear it.

This initiative will strengthen NATO, the lodestar of Britain's and Europe's defence and security policy. That is why the Americans support this initiative. They look with despair on the jigsaw of Europe's armed forces and weep! It is no wonder. They long for the burden to be shared on a more equitable basis.

There are some who are opposed to the proposal for a rapid reaction force and who cite a minority of siren voices on the American scene warning of the potential break-up of NATO. But let me state clearly my belief that giving succour to the slumbering isolationist tendency in United States politics is more likely, not less likely, to encourage complementary and heretical moves by some of our European allies to develop a fully-fledged European independence in the fields of defence and security.

I might add that we give our sincerest wishes to President-elect Bush for his imminent presidency. But he must examine closely the proposed national missile defence system, one of whose unfortunate side-effects might be to encourage isolationism in each of our continents. Governor Bush, who in the past has shown little interest in foreign affairs, must appreciate that the future is a different country. We must do things differently there. Any such American hibernation from the challenges of the future would frustrate Britain's vital interest, which seeks to ensure that all our relationships, not just with America, remain special.

Our report rightly highlights the need for more work to be done on the lacunae of deployability, sustainability and the command and control mechanisms of the rapid reaction force. That work, I am confident, will be successfully completed.

The anxieties concerning the remit of the force, regarding the harder end of the Petersberg tasks, must he assuaged. Nevertheless, at the moment, it is surely true that were we to contemplate serious peace-making without NATO, a lack of heavy lift facility and suitable intelligence-gathering systems would ground our force quicker than a Charlie Dimmock makeover!

With the Petersberg tasks, we should emphasise Britain's opportunities. Our experience gained in Northern Ireland should ensure us a leading role in Europe in practical peacekeeping.

But what are the views of the Opposition on the rapid reaction force and of the Nice IGC confirming it? Some Conservatives have agreed that Britain got the best deal it could from Nice. The noble Lords, Lord Jopling and Lord Howell, are opponents who always advance forceful arguments that test our own. But others have continued unthinkingly to speak of a European army. Indeed, it might be said that the variety of views among the Conservatives in both Houses are as thick as the leaves that fall in Vallombrosa, and sometimes thicker than that!

Do the Official Opposition, in the form of one Mr Francis Maude, the invisible man who apparently signed the common defence paragraphs of the Maastricht Treaty in invisible ink, really want to repudiate Nice? Do they really want to wreck the rapid reaction force, which so clearly serves British interests and enhances its influence? The high command of the Conservative Party must really become more choosy about the choice of barge poles with which it seeks to push Britain further into the Atlantic. Must we be for ever, at its behest, left on the Continental Shelf?

This is a good beginning. The rapid reaction force is up, if not yet running. It is an initiative that deserves our support, our comfort, our care and our scrutiny in your Lordships' House as it grows from European adolescent to NATO adult in our widening family of transatlantic nations.

My Lords, it was a privilege to serve on the sub-committee. I join with other noble Lords in congratulating the noble Lord, Lord Howell, on his former chairmanship, and our current chairman, the noble Baroness, Lady Hilton.

It was extraordinarily interesting working on the sub-committee and, despite considerable disparity of opinion at times, it was very good-humoured. I was interested to hear the noble Lord, Lord Williams, refer to the fact that differences of language are not always at the root of misunderstanding but they can, of course, contribute to it. Those of us who were present will remember for a long time the slightly surreal moment when a gentleman from France gave evidence to the sub-committee and appeared to say that he was in favour of a European army, which is how most of us understood him; then, as he faced a barrage of protest, he explained that what he was really saying was that he was not in favour of a European army. Language can make quite a difference.

I said that there was a wide range of opinion among members of the committee, and that is clearly true. But there was one consistent, refreshing and uniting theme. It is clearly expressed in the opinion of the committee given at paragraph 95. It states:

"Europe's critical need is for forces that can contribute effectively in international crises. Therefore what is needed is military capabilities, not symbolism".

The committee liked General Naumann's expression of Europe's need for "capabilities, not new institutions".

Therefore, it is important that the capabilities commitment conference in Brussels on 20th November, to which reference has been made, was in practice, as is stated in our committee's update published this week,

"the first major test in the development of the CESDP".

The purpose of the conference was to reach an agreement on the commitment of troops sufficient to meet the policy's headline goal. As the noble Lord, Lord Harrison, made clear, it succeeded in that. We state in the update to our report that the Capabilities Commitment Conference (CCC),

"has succeeded in reaching its main aim".

The first test of reality against rhetoric has been met.

It is also important to state that we face a situation today whereby 11 out of 16 European NATO member states are now increasing their defence expenditure. Perhaps I may express it like this: the "post-lottery win" euphoria of 1989 and the end of the Cold War has now come to an end—and a good thing too!

Of course, this is not the first, or the last, time that your Lordships' House has, or will, debate the CESDP. Indeed, our Select Committee promises to return to the subject. When we do so, it will be important for us to strive again to seek reality and to resist hyperbole. Good reconnaissance seeks to distinguish between shadow and substance, suspicion and fact.

I was told last week about a recent dinner party here in London where one European Union member state's ambassador to the Court of St James was rather startled when a guest sitting opposite him at the table rather aggressively asked him to justify his nation's support for "this rapid reactionary force". We must be very careful that we do not become a rapid reactionary force. It was also refreshing when, a short while ago in this House, the noble and gallant Lord, Lord Bramall, condemned,

"any hysterical reaction against closer European defence co-operation",

in the discussion on European defence co-operation. His views are clearly treated with the very greatest of respect in the House.

In fact, when one considers the situation, it seems as if the real mover of what has now been agreed at Nice was not in some ways Maastricht in 1991, with its commitment to the,

"eventual framing of a common defence policy, which might lead to a common defence"—

a commitment signed up to by the Conservative government at that time. Indeed, when looking at Nice, whether or not we read it in French or in English, it is clear that NATO remains the basis of our collective defence. This is about something different. The impetus has come not from euro aspirations but from proven European weakness, which was demonstrated at Kosovo and in Bosnia, and the salutary realisation that Europe must enhance its capability if it is not to try the patience and comprehension of the United States to breaking point.

It was over Kosovo that Europe could only fly one-fifth of the strike sorties. As the committee's report testifies, despite spending the equivalent of 60 per cent of the United States' total defence budget, only 2 per cent of European forces were capable of being deployed in Kosovo. That is fact. As the committee says in paragraph 9 of the report, European countries have had to acknowledge that they are over-dependent on the United States. Further on, in paragraph 12, we say:

"European governments have come to accept that in the future they cannot take for granted US involvement in the humanitarian, crisis control and peace support missions in which the EU has an interest".

That has to be a realistic judgment. It is one upon which we should ponder most carefully as we now move towards a new presidency in the United States.

Kosovo, as the Americans say, was the "wake-up call". If the CESDP had not been conceived at Maastricht, given objectives at Amsterdam, headline goals at Helsinki, the means to turn the EU into "an intelligent customer" of military capability at Cologne and its own commitment to pool capabilities given in November in Brussels, we would have to start again now right at the beginning and move even faster. In the circumstances, I find it extraordinary that Mr William Hague has already made entirely clear in another place—and committed his party to it—his intention not to ratify the Nice treaty at this stage.

If we were to turn our backs on the painstaking advances that have been made in the field and oppose what was agreed in Nice, we would be rejecting reality and Europe's responsibilities. It would be such an action—not one what was agreed at Nice—which would justifiably invite the exasperation of the United States and, in the end, risk the United States' ultimate disillusionment with the transatlantic European Union American Union Alliance.

The report before us this evening is a valuable document. I hope that the House will welcome it. From these Benches we welcome the CESDP. We welcome the commitment of the United Kingdom Government to it and we shall continue to look, with hope, for deeds and not words. I also hope that we shall be assured tonight by the Minister of the Government's consistency of purpose and commitment to that policy. We are still told that apparently no real, if any, increase of resources will be required to make a reality of this policy by Her Majesty's Government. Can this really be so? The Government are eager to point to this policy as an example of their commitment to leadership in Europe. But leadership always carries a price: it requires credibility. Simply to point to the Strategic Defence Review as that job completed is surely too complacent and potentially misleading.

Finally, there is a sense in the House—as, indeed, there was in the committee—that what we are discussing here is truly significant. We do not know the ultimate destination of the course upon which we have embarked. But two things have become quite clear and have been the major motor of this policy. The first is that Europe must do more if we are not to invite America to do much less. Secondly, at the end of the day, Europe must take the responsibility that its wealth and strength provide and be prepared to play its full and proper role.

My Lords, I intend to be very brief because the noble Lord, Lord Ampthill, approached me a short while ago and whispered in my ear a reminder that the most important social function of the parliamentary year will be starting in about one minute's time. I do not want to delay those who wish to attend that function. This is not in any way to denigrate the importance of this debate, but we held almost exactly the same debate (at even greater length) on Tuesday last. As the Minister gave a very comprehensive reply to all the points raised on that occasion, I hope that she will find it possible to respond fairly briefly tonight.

In any case, I find it almost unnecessary to say anything, as it has been said very much better by the noble Lord, Lord Chalfont, and, indeed, by the noble Lord, Lord Shore. I am delighted to see that the noble Lord has just returned to his seat in the Chamber. I should like to say how much I admire what he had to say and to express the surprise that I sometimes feel that he does not move one seat backwards or, possibly, one seat further forwards.

The noble Baroness, Lady Hilton, pointed out that the report was published in July not with a bang but with a whimper. I took note of that point and believe that particular attention should be paid to the evidence, which seems rather more timeless, rather than the report itself. That is not to say that the report is not of great value. I pay particular attention to the statement of my noble friend Lady Park to Dr Menon—namely, "I could kiss you". I wonder whether that was a declaration of interest.

The report is of particular value in that the British Parliament comprises the only people not to have been told how many people are involved. On its first page the report quotes the Helsinki Agreement which states that member states must be able by 2003 to deploy within 60 days and sustain for at least a year military forces of up to 50,000 to 60,000 persons. It is not unreasonable to ask how many people in total will be required to sustain these numbers; how they are to be split up among the European nations and, most importantly, how they will be paid for.

It is not only in taking a look at the logistics of getting the various forces together that the report is of great value. It makes it clear that it will be necessary to add another superstructure, exactly the thing that the noble Lord, Lord Robertson, in his speech at the celebrations of the 50th anniversary of NATO said that we did not need. He is quite right. It is interesting to speculate whether, and to what degree, the present Secretary of State is in agreement with his predecessor.

There is no doubt that such a superstructure is also planned physically. A purpose-designed twin office block is to built at Kortenberg to house the staff of EU military structures and policy unit and the external affairs directorate-general. I wonder whether it will house one set of staff or two.

In the British view, the EU command and control are intended to complement NATO. But in the report Dr Menon says that the,

"French Government has a different view of the sequence notion to the Americans, that the EU should decide first and then go to NATO".

As was made clear on Tuesday, the US is a vital component of all NATO tasks. Speaking without notes, the noble Lord, Lord Shore, could remember only two of the three "Ds". The third is no discrimination against non-EU members of NATO. I have some notes on that subject. As he said, the other two were no decoupling and no duplication.

The noble Lord, Lord Watson, commented favourably on the evidence given by General Klaus Naumann. His evidence I believe to be absolutely vital and almost the most important element in the whole report and the evidence. I hope that the Minister and the Secretary of State will read it with much care, if they have not done so already, and that they will ensure that all their European partners do so too.

As all the speakers in today's debate know, the committee has sat on the fence. Its members rightly felt that they had raised a large number of questions which have to be answered. It looks to me as if, on occasions, their collective tongues are firmly in their cheeks. I particularly like the point in their consideration of the Petersberg tasks where they say that peacemaking can include war fighting.

Members of the committee may correct me but they seem to have a wholehearted cynicism about the whole project. However, this is balanced by what was undoubtedly the principle adopted in Nice; namely, "We must do something; this is something; we must do it". I should like the Minister's comments in brief.

My Lords, before the noble Lord sits down, he asked members of the committee whether they had cynicism. I think that I can speak for all Members of the Committee when I say that we had no cynicism at all. We were trying to set out the agenda without any particular bias one way or another. There was no cynicism.

My Lords, I consider that to be a pity. I think that we should all be cynics.

My Lords, I, too, thank my noble friend Lady Hilton of Eggardon and her committee for tabling this important debate. I am grateful for the opportunity to respond on behalf of the Government and to thank all noble Lords who have participated for their valuable contributions to the debate. I am also grateful to the committee for its detailed and constructive report on this important subject and for the update published earlier this week. I take this opportunity to respond to the points made by the committee and to address some of the key criticisms which have been levelled at the initiative. I shall do my best to bring your Lordships up to date, as the noble Lord, Lord Roper, suggested.

Since the publication of the 15th report by the Select Committee, the profile of the Common European Policy on Security and Defence has been, as we all know, substantially raised, in particular in the aftermath of the Capabilities Commitment Conference and now in the reactions to the Nice European Council. It is regrettable that in general too much attention has been focused on the rhetoric and perhaps too little on the facts. However, I am bound to say that all the contributions from noble Lords this evening have been honourable exceptions. However, I say to the noble Lord, Lord Burnham, that I did not detect the note of cynicism that he detected in the report of the committee chaired by my noble friend.

As I think most of us acknowledged, recent developments are a direct consequence of the treaties of Maastricht and Amsterdam. Perhaps more significantly, they are a continuation of the pragmatic approach that the United Kingdom has always taken to ensuring that the organisations that provide our security adapt to the changing circumstances of the world in which we live. The United Kingdom has been at the forefront of discussions on the modernisation of NATO, just as we have taken, and will continue to take, a leading role in the debate on the new arrangements for European defence.

Ever since the Prime Minister called for fresh thinking in the autumn of 1998, we have shaped the course of the debate. We said then that NATO remained essential to European security. That remains our position. It is our cornerstone. It is fundamental. I assure my noble friend Lord Williams of Elvel that that is the position. Our commitment is unchanged and it is undiminished.

We also said that Europe needed to take a greater share of the security burden. We have begun to make this ambition a reality. We have consistently ensured that the debate has focused on what really matters, the strengthening of European military capability, as so cogently argued by my noble friend Lord Harrison.

I welcome the committee's recognition that above all else European defence needs improved military capability. Like the noble Lord, Lord Watson of Richmond, I stress that this is about military capability; it is not about symbolism or new institutions. We fully agree with the points that the committee made. Without better European military capability, the new arrangements will amount to very little, as the noble Lord, Lord Roper, said.

That is why the United Kingdom has been at the forefront of efforts to strengthen Europe's military capability. Last year, with Italy and then with France, we put forward the case for concrete targets for improvement by EU member states. We challenged Europe to do better. This challenge resulted in the Headline Goal agreed at Helsinki last December which requires EU member states by the year 2003 to be able to deploy up to 60,000 ground troops and maritime and air elements within 60 days and sustain them in a theatre of operations for at least a year. These troops should be capable of conducting the full range of Petersberg tasks. I assure the noble Lord, Lord Jopling, that the full range includes peace enforcement.

Since Helsinki, on the basis agreed by heads of state and government at the Feira European Council, defence planning experts from the member states have developed the Headline Goal into a detailed statement of requirements. They have done so with significant support from NATO experts. I emphasise to noble Lords that defence planners from NATO headquarters and from the Supreme Headquarters Allied Powers in Europe (SHAPE) have been in regular and close contact with EU colleagues. The EU's activities have been fully transparent to NATO. I hope that that is an important reassurance for many noble Lords.

At last month's Capability Commitment Conference, the EU member states and other European partners identified the type and level of forces that they are willing to make available and from which elements could be assembled but on a case-by-case basis for crisis management. It is enormously important that we are clear on that point. Much of the worry and concern about European defence has arisen from an entirely false premise, the premise "European rapid reaction force". We have not done so. We have not created, or even taken the first steps towards creating, a European army. I was enormously grateful for the clear acknowledgement of that point from the noble Lords, Lord Jopling and Lord Taverne. The report of the French presidency to the Nice European Council is explicit on this point. It says:

"This does not involve the establishment of a European Army".

We have earmarked forces for use in possible EU-led operations, just as we earmark forces for NATO or for UN operations. This is not a question of semantics, as some seem to suggest, but a fundamental point, and for some a fundamental misunderstanding. We have not given away the right to say where and how British troops will be deployed. I assure the noble Baroness, Lady Park, on that point. We have not placed another burden on our already overstretched Armed Forces. We have not signed up to duplicate or independent structures that would in some way damage NATO. We have simply taken steps to ensure that European nations are better able to act in crises—a lesson learned, as the noble Lord, Lord Watson of Richmond, reminded us, as a result of Kosovo.

The Capability Commitments Conference looked to the future. As well as earmarking certain forces, the EU member states identified where their military capability is lacking, as my noble friend Lady Hilton said—for example, in enabling capabilities such as strategic lift and in the characteristics of our Armed Forces, which were enumerated so well by my noble friend Lord Harrison, and availability, deployability, sustainability and interoperability. We committed ourselves to identifying additional measures to respond to those needs. This determination will encourage more efficient defence spending and better European military capabilities for NATO and for Europe.

In addition to the 12,500 troops, 18 warships and 72 combat aircraft, we announced major equipment undertakings, including strategic air and sea lift and precision guided munitions and logistics. We are keen to take forward a number of promising ideas for multinational defence co-operation that we have discussed with several partners.

The noble Lord, Lord Jopling, asked what our EU partners were doing. It is a very good question. Eleven of 16 European members of NATO have announced real-term increases to their defence budgets for next year. Given that, we hope that it is true that European nations are beginning to deliver. The committee rightly recognised the importance of a system of review against individual and national targets. Nice agreed a mechanism for peer review of performance against collective and national aspirations which will now be implemented and aligned with NATO's defence planning system.

The committee and noble Lords have raised a number of key concerns that must be addressed. The first is planning. Some of the misunderstandings about what we mean about the planning process lie at the root of some of the arguments, so I must be clear about what has and has not been agreed. The EU has not agreed to establish a separate operational planning system. Nor does the EU have any plans to do so. The EU military staff, established in interim form by the Helsinki European Council, is a centre of military expertise whose advice and support will ensure that the EU political authorities—the representatives of the 15 member states—are able to take competent and sensible defence decisions. I am sure that no one could argue that military support to decision making is unnecessary, especially when troops are deployed into areas where they may risk their lives.

The EU military staff will also act as a link to the military command chain and to operational planners. The noble Lord, Lord Williams of Elvel, asked how that happens. As regards many EU-led operations, certainly when the EU draws on NATO assets and capabilities, operational planning will be conducted at SHAPE, under the supervision of the Deputy SACEUR. The Deputy SACEUR will often in such cases act as the operation commander at the head of an operational command chain drawn from NATO but under the political control and strategic direction of the governments of the EU. The ability of the EU to draw on NATO's planning and command and control structures, as well as other common assets and capabilities, is a key piece in the jigsaw. NATO Foreign Ministers are taking stock of the progress made in discussing the way ahead. We hope that we shall be able to say more about that when the discussions are completed. The noble Lord asked me whether I could bring any further light to bear on the discussions today. I am afraid that I am unable to do so. But we shall do so as soon as we are able.

In other circumstances, for smaller or less demanding operations, the EU may draw on existing European national and multinational headquarters, for example, the UK's Permanent Joint Headquarters, for operational planning and as the basis of a command chain.

In a similar vein, the noble Lord, Lord Jopling, the noble Lord, Lord Chalfont, and my noble friend Lord Shore of Stepney also raised questions about intelligence. Let me say again that it is inconceivable that we would deploy British troops without the best possible intelligence support. Of course we would not do so. I am sure that no noble Lord would wish us to do so.

My Lords, will the noble Baroness give way? I am reluctant to interrupt, but she stated that in the course of the debate on the gracious Speech. Of course whenever we deploy British troops we want the best intelligence. We have it. This is nothing to do with any European security and defence initiative. If we deploy British troops, we ourselves have sufficient intelligence capability to get all the intelligence we need to deploy those troops. We do not need to share it with anyone else.

My Lords, if the noble Lord will kindly let me finish, perhaps I may be able to answer that point.

Arrangements are being defined that will allow EU member states to feed intelligence into the EU decision- making process. It is just the same as in NATO. And just as in NATO, it will be done on voluntary basis. We will follow that model.

Perhaps I may cast a little more light on the issue for the noble Lord, Lord Chalfont. British intelligence will be directed to British staff officers in the EU military command. Decisions as to how that intelligence should be used or shared, to take up the noble Lord's point, will continue to rest in the capitals from which it emanates, just as it does in NATO operations today.

The noble Lord, Lord Jopling, raised concerns about our intelligence relationship with the United States. We have no reason to believe that our relationship with the United States in this important area would be in any way prejudiced by this initiative. We would be operating on the basis which already pertains, which we already all know and understand. It operates very effectively when we operate within NATO.

I must address another great concern voiced by some noble Lords today: America's views on this issue. I strongly endorse the points made by the noble Lord, Lord Jopling, about the Americans wanting Europe to strengthen our military capability. As the secretary of the British-America parliamentary group, the noble Lord speaks with particular authority because it has strong contacts with the United States over a long period. The bottom line is that the American administration has been consistent in its support for this initiative. Only three weeks ago Robin Cook and Madeleine Albright published a joint article in the Observer addressing criticisms and inaccuracies. But the administration has also, and rightly, been consistent in its insistence that it matters how European defence is implemented. Of course it does. Enormous care must be taken on this. State Secretary Cohen was clear on this when he spoke at the NATO Defence Ministers meeting earlier this month. But the fact is that we agree with him. We see eye to eye with him on this issue. We must not do anything that damages the transatlantic interest and we will not damage NATO.

I was going to go into some detail with the noble Lord, Lord Shore, about his quotes from Mr Cohen and Wesley Clark. If he examines our debate of 12th December—I know that he will because he is an extremely conscientious man—I am sure that he will find the context of those remarks is a little fuller than his remarks earlier today may have led us to believe. Of course it is important what is happening with the incoming administration. We have had some interesting indications of the beliefs of the incoming administration through some of the remarks already made, notably by the adviser Mr Zoellick to President-elect Bush. I welcome the committee's recognition that NATO is an effective organisation and that the common European security and defence policy must strengthen, not rival, the alliance. I entirely agree with the well argued comments of the noble Lord, Lord Williamson of Horton, on that subject.

The Nice agreement is specific about the relationship between the EU and the alliance. It says that NATO remains the basis of the collective defence of its members. That is the position not just of the United Kingdom Government, but of the whole European Union. It says that NATO will continue to play an important role in crisis management and that the EU will act in crisis management where the alliance as a whole is not engaged. I am sorry that we have repeated that again and again, but it is enormously important, because if I left that point out on this occasion, there might be thought to be a change in the Government's stance. In the coming weeks will shall all have to contend with the fact that every public statement that anybody makes on the initiative will be examined in detail and pored over by every commentator who has a pen in his hand or a microphone in front of him to find some different nuance in what is said. We have to look at what we have agreed and written down between us. In that respect, your Lordships will not find such a gulf of difference between what we say and what our EU allies say.

I believe that I have dealt with the questions raised by the noble Baroness, Lady Park, on the role of the military committee, but I shall be pleased to write to her further on that if she wishes. The noble Lord, Lord Williams of Elvel, raised important points about mission creep, but I am afraid that such issues will always be raised when we are militarily engaged. It is not peculiar to an EU-led engagement, as we have seen from the amount of comment—a good deal of it hot air and nonsense—in our media earlier this year about our operations in Sierra Leone. For day after day we heard about nothing but mission creep. It is always right and proper for the Government to keep reviewing the deployment of our troops and to ensure that they are there for the purpose that was originally designated or a purpose that is in concert with how matters are developing on the ground.

I should say something about France, which was mentioned by the noble Lord, Lord Taverne, and, in a very different way, by my noble friend Lord Shore of Stepney. The noble Lord, Lord Shore, is right in so far as France and Britain have always had different approaches to European defence matters. That is why we have worked so closely with France throughout the process. It has succeeded only because we have been able to find a large amount of common ground. We are not trying to camouflage the disagreements over detail. There are disagreements in every multinational organisation. However, France has signed up to the same agreement as everybody else—an agreement that ties in European defence arrangements closely with NATO. There is no suggestion that the French wish to depart from that agreement.

We have had a good debate. The subject has generated a great deal of hot air elsewhere, but your Lordships have brought a good deal of wisdom to bear on the matters. This has been a timely opportunity for us to set out the position after the Nice European council. We have long argued that Europe needs to face up to its security responsibilities. We have shown in Kosovo that Europe can be a force for good in the world. However, we are not yet doing all that we can. We must strengthen our military capabilities and co-operate more fully at all levels through NATO and the EU.

The recent developments are not about a European Army, undermining NATO or relinquishing sovereignty. Neither are they about adding to the burdens on our Armed Forces. They are mechanisms to ensure a more effective defence effort by European forces, to ensure that European nations can play a more effective part in the alliance's operations and to ensure that, where NATO is not engaged and if its member states wish, the European Union can take action. Through positive, constructive engagement, the United Kingdom has ensured that the EU has followed the right road. Nice was another milestone along that road, which will allow Europe to be able to discharge our responsibilities as one of the richest, most developed groups of nations in the world. It is important that we shoulder those responsibilities properly.

My Lords, I am grateful to the contributors to this debate, which I have found very interesting. I am delighted that the noble Lord, Lord Roper, is going to take over as champion of Turkey—an issue that I have pursued in the committee. The committee showed genuine support for the project and the noble Lord, Lord Burnham, should not confuse friendly advice with cynicism.

I am particularly grateful to the Minister for emphasising her reassurances about the role of NATO—for the third time this week, I think. I put her on warning that the committee will return to the subject in the months and years ahead.

On Question, Motion agreed to.

House adjourned at five minutes before eight o'clock.