European Union Referendum Bill

Lord Blackwell Excerpts

Tuesday 13th October 2015 Lords Chamber

[Lord Blackwell (Con)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Maclennan, whom I greatly respect even though we often disagree on this topic. Before I begin I should make clear that, while I have a number of business interests set out in the register, in speaking today I will be setting out my personal views.

Given my contribution to previous debates in this House on this topic, you will not be surprised to learn that I strongly support the Bill and the proposed referendum. Indeed you may remember I introduced a Bill into the House in 2004 to bring about the promised referendum on the European Constitution, a referendum opportunity that was sadly missed. Like others, and given the huge changes in the European Union since 1975, I believe even more strongly now that a referendum is long overdue. I also strongly support the Prime Minister’s attempt to negotiate a more viable relationship with the European Union before the country is asked to decide on continued membership.

The fundamental reason for those views is the continued drive, reinforced by the Lisbon treaty, to move ever closer to a political and economic union among the majority eurozone and would-be eurozone members. It is essential that they do so to provide the cross-country financial support, common fiscal discipline and common social policies that they need for the euro to survive. We should not stand in their way but that means that the current position of the UK—bound by the same treaties and institutions—may become increasingly unsustainable. We are not and never will be part of the eurozone, so the reality is that we cannot be at the heart of a European Union that becomes increasingly focused on the governance and political decision-making of an integrated eurozone core. With most decisions on a wide range of EU competencies now taken by majority voting in the Council of Ministers and the European Parliament, the UK risks being bound by laws imposed by a political group of which we are not a part and which in many areas has different interests, different legal, social and political traditions and often different attitudes towards free markets.

This should not be a question of win or lose or whether we can win a few concessions at the expense of other members, or indeed whether we can impose our vision of reform on the rest of the European Union. Rather it should be about whether we can get agreement across Europe to a new settlement that suits everyone: a new kind of treaty relationship between the UK and the eurozone members that makes it sustainable for us to become and remain a member of a wider but looser European Union club, alongside but apart from the eurozone core—a member of the European club but not part of or a brake on their ever-closer political union. That decision, when it comes, is of sufficient political and constitutional importance to justify putting it to the people in a referendum.

Those who oppose or perhaps regret this democratic process make two arguments. The first is that it is too complicated an issue to put to the UK electorate and risk coming up with the wrong answer; the noble Lord, Lord Liddle, called it a “reckless gamble”. I have no sympathy with that view. Indeed, I share the view that the attitude of European leaders holding that perspective over the last half century has caused the widening gulf between the leaders and the wider populations across Europe. The evolution of the European Union and particularly the creation of the eurozone has moved the project from a purely economic to a strongly political and constitutional union. You cannot force nations into shared sovereignty and pooled democratic oversight unless the people feel that they have become or are becoming one nation. Politicians who do not carry their electorate with them in those decisions rapidly forfeit their trust and ultimately risk exacerbating rather than removing national tensions.

The second argument I have heard is that the objective of staying in the European Union is a foregone conclusion, and that even raising the possibility of exit weakens our ability to play a strong role within the European Union and creates damaging uncertainty. For the reasons I have set out, I do not agree that remaining in the European Union without a significant change in the current treaty arrangements is ultimately sustainable from a political and constitutional perspective. Nor do I believe that there is a compelling economic argument to override those considerations. Of course, under any outcome it would be simplest to stay in the single market if we could do so while protecting the global competitiveness of the City of London and other key sectors from unwelcome regulation. However, whatever the nature of our relationship that emerges, it is clearly in the interests of both European and UK businesses to maintain a workable trade arrangement. Therefore the long-run impact of a change in our position will depend on whether any attempts to create trade barriers are offset by the potential benefits from being free to develop a less regulated and potentially more globally competitive UK economy. There are voices on both sides of that argument, but in the end our global competitiveness in the fast-growing markets outside the European Union must be a primary concern.

Equally, whether we are in or out of the European Union, we can and should maintain close co-operation with our European neighbours on non-economic matters of common interest, including of course defence and security. On the other hand, unless we seek to negotiate a new relationship and do so with the full understanding on both sides that a significant change is needed, we are unlikely to get an outcome that secures a sustainable position for the UK within the European Union in the longer term.

As for uncertainty, I am afraid that that is the price of living in a democracy. While uncertainty may mean that some business investment is held back in the short term, there are many reasons why the UK is likely to remain an attractive global location whatever the outcome, and ignoring the democratic process may be even more costly, as I have argued. I hope that a sensible debate will emerge so that, in the light of what the Prime Minister’s negotiations achieve, we can have a level-headed assessment of what future will best deliver a global vision for a competitive UK economy and a sustainable relationship with our European neighbours—a relationship that addresses the reality of the increasing economic and political integration of the eurozone within the EU club.

It is important that the House is seen as upholding the democratic process by endorsing the commitment of the Government to put the best achievable outcome of the EU negotiations to the electorate and abide by the result. We should give the Bill our full support.