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Lord Howell of Guildford: My Lords, I am grateful for this first opportunity to address your Lordships' House and extremely grateful for the kind anticipatory remarks from the Lord Privy Seal and also from my noble friend Lord Cranborne and the noble Lord, Lord Barnett. I hope that my comments do not disappoint after those generous trailers. I must confess that I regard it as quite a challenge to follow the very proper rule that a maiden speech should be unprovocative and uncontroversial, especially when dealing with issues of this kind which generate such intensely strong feeling and leave behind, like an American whirlwind, a trail of political wreckage. So it will not be easy; but I must stick to the rules.
I hope that it is not too provocative to say that this is a treaty I have actually read, although I must confess that I do not understand every word of the word-processor English that tends to find its way into these documents. It is even more of a challenge for me to think how, as a newcomer, I can contribute to the huge granary of accumulated wisdom in your Lordships' House on European issues. The size of that collective wisdom is amply demonstrated by the excellent reports of your Lordships' European Communities Select Committee and its sub-committees which are very widely read all over Europe. I can vouch for that fact because, over the past 10 years, I had a role in the other place which involved my visiting all the parliaments of Europe--both EU members and would-be EU members. Everywhere I went, there were very favourable and constant references to the reports of your Lordships' House. There is not much that a newcomer can add to that kind of learned wisdom; however, I shall endeavour to contribute my pennyworth.
It has been said on all sides of the House, so it is not controversial to say, that the Amsterdam draft treaty to be agreed in October is a fairly modest affair. It is not the great leap forward that some hoped for; nor is it the great leap backwards or sideways for which other people hoped. It will not create the entirely new directions for Europe that some were hoping for, but it does not unravel Europe which was the hope of others.
One mild test that can be applied to the draft treaty and to the presidency conclusions--this was mentioned by the noble Lord, Lord Barnett--is to ask what it does for what Foreign Office officials are fond of referring to as the "three Es"--enlargement, employment and EMU--or balanced and sustainable growth, whatever the jargon is in the treaty and in the presidency conclusions. In the few moments that I shall have your Lordships' attention, I propose to try out that test. I turn first to enlargement. Again, I believe it has been agreed on all sides of the House that the draft Treaty of Amsterdam really does not register much progress on the matter. The presidency conclusions claim that it paves the way for enlargement and it is true that, since then, we have had the Agenda 2000 document from the Commission setting out its priorities.
However, priorities are one thing. Creating the practical steps to get enlargement going is something quite different. It is a matter of regret that the draft treaty does not contain any proposals on how on earth the Commission is to be reorganised to cope with 20 or 24 members. Similarly, as my noble friends have observed, it does not address the question of the weighting of votes. Nor does it really come to grips with the huge issue which dominates the whole enlargement question and stands in its way; namely, the need for fundamental and radical reform of the common agricultural policy without which the enlargement process will not be able to proceed when it comes to grapple with the vast capacities, low cost but also very impoverished capacities, of Polish or Hungarian agriculture.
Moreover, Agenda 2000, which perhaps your Lordships will be debating in due course, does not really come to grips with the enormous sensitivities of choosing one Baltic state--Estonia, which I am very glad is in the preference list--and leaving out the other two. It fills me with alarm that we may be recreating historic problems which in the past led to great tragedies. Similarly, none of us has the remotest idea of how we are to tackle the problem of Cyprus and bring a divided island into the European Union without sparking off huge new antagonisms of the kind featured in today's press reports. The Turkish Government are already cutting up extremely rough. Therefore, on enlargement, let us pray, hope and work for what we have always wanted to see; namely, an enlarged, free single market running from the River Bug in eastern Poland to Lisbon in the west. Let us hope that that is achieved, but there is not much here so far to encourage us.
As to the questions of employment and monetary union, which are both wrapped up together, the treaty and the conclusions call for a high degree of sustainable convergence. Those are rather inelegant words, but it is the language used. There is a problem here; namely, that the European economies are not converging. If anything, they are at present in a divergent mode. The contrast is obviously particularly strong between the major continental economies of Germany and France and our own country. All the major trends are moving in opposite directions, notably on the employment side but also in other fields. There are people who will say that we should not worry about it because it is really just a question of the business cycle, the phases of which will bring France and Germany along and the differences will diminish. I do not believe that, so perhaps I may put the alternative view to your Lordships.
People like Dr. Walter Eltis, the former distinguished adviser to the President of the Board of Trade, are much nearer the truth when they point out that there are fundamental structural reasons why convergence is not taking place between the UK and the continental economies. Until those fundamental reforms of structure are addressed in Paris and in Bonn--and, indeed, throughout the whole of those two great countries--with much more vigour, the divergence will remain with all the dangers inherent in trying to impose a system requiring convergence on a pattern of countries and economies which are not moving in the same direction at the same pace.
I have to agree with noble Lords who have spoken that it is doubtful that the soft euro, which the markets and the experts expect--indeed, they assume that there will be a soft euro--will be very good for us, for Europe or for the entire global monetary system; indeed, it could be very damaging. As for 1999, the treaty and the presidency conclusions express the hope that the relevant conditions will be achieved by that time so that we can have the irrevocable locking of currencies. I do not want to comment in my first speech to your Lordships' House on whether or not the single currency is a good idea. I shall just concentrate on the technical problems of the years after 1999 when it can be observed that there will be three years during which these currencies will be locked. However, that will, of course, be a golden opportunity for everyone in the currency markets to go long on the deutschmark and the guilder and short on the lira, the peseta and the French franc. I say that because it is a costless exercise. Astonishingly, they are being offered a three-year, costless one-way currency option. They cannot lose. If the currency link is broken, the hedging funds will make billions.
Therefore, it is rather an unnerving prospect which lies ahead. I, for one, agree with Alan Greenspan who is quoted as saying that the,
If we even pause to think about that, we must accept that, after 1999, we will be heading into a period--indeed, it may already have started--of immensely dangerous currency volatility for which, frankly, the conclusions of Amsterdam and the revised treaties which govern the EU do not really prepare us. It is no surprise to me that people are already beginning to talk about yet another treaty, possibly in the year 2000, in order to cope with the entirely new conditions coming into play, especially on the currency side, which may indeed be very disturbing.
I share those thoughts with your Lordships. I am grateful to noble Lords for listening. I believe that the European Union is not the most important issue today in either this country's foreign policy or global foreign policy. We should give more attention to the emerging markets and to the Commonwealth with its fast growing economies. Perhaps more than is recognised, a great deal of our future interests, assets, prosperity and jobs will be determined by what goes on there rather than in the European Union. But the fact remains that it is our region, our neighbourhood, and we have to get our relations with the European Union right.
Even after Amsterdam, the opportunity is still open for the noble Lord the Lord Privy Seal, his ministerial colleagues and the Government today to pursue a highly positive European line. That opportunity is open less through developments in this country than because of developments in Bonn and Paris where entirely new perceptions are developing on how Europe should be shaped.
I hope that what I say is non-controversial. I believe that the Government have the capacity and the opportunity for various reasons--some of their own skill and making--to pursue a more positive policy, in the interests of this country narrowly but of Europe more broadly, to create a Europe which is more robust and more competitive, and a Europe able to deal with the oncoming currency storms, which will be severe and difficult, and to produce the kind of Europe for which many of us over many years have been hoping but now have an uneasy fear may be threatened.
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