European Union Membership (Economic Implications) Bill [HL]

Lord Davies of Oldham Excerpts

Friday 25th November 2011 Lords Chamber

[Lord Davies of Oldham]

My Lords, I, too, offer my congratulations to the noble Lord, Lord Pearson, on introducing his Bill and on opening the debate with his usual stirring speech. This has been a striking debate because, while on the whole cost-benefit analyses have played a relatively small part in our deliberations either in or out of Europe, they have been the burden of the majority of speeches. That is why, when the noble Lord is congratulated in some quarters on the timeliness of this debate, I am afraid I beg to differ. I cannot think of anything less timely than Britain beginning a potential process of long debate on whether we should continue as members of the European Community when the whole of the world is in such an intensive economic crisis.

We in Britain know the costs that are being borne by our people at the present time. We know about the increase in unemployment. We know about the reduction in services on which our people rely. Of course, our crisis looks relatively marginal compared with the crisis in the eurozone. I do not hold it against those who have long careers of criticism of the European Community to use the crisis in the eurozone to some advantage, particularly if they are in the position of being able to say, “We told you so”. At the time, the Labour Government also said, “We told you so”, because we made sure that we did not join the eurozone.

However, it is not just Europe: the United States economy is largely stalled. The one part of the world that is expressing itself in more positive terms in its economy is of course China, the other south-east Asian growing economies and India. When China is suggested as a possible solution to the problems of sovereign debt crisis in Europe, do we not learn the lessons of interdependence? Do we not appreciate that we are not going to solve these problems through unilateral action but by considerable international economic action to promote growth, develop jobs and stimulate demand?

We know that we cannot do this on our own. We know that we cannot do it readily if the European market stays as depressed as it is. Yet we have today a suggestion that we do a cost-benefit analysis on Europe. The noble Lord, Lord Bilimoria, suggested that the Treasury does this every day. The Minister will find the response to that particular point fairly straightforward. I am not so sure that the analysis is carried out in the Treasury every day in quite the comprehensive terms that the noble Lord, Lord Pearson, suggests. The Treasury should be engaged in rather more significant matters of reviving the British economy at the present time than that which is proposed in the Bill.

I had some sympathy with my noble friend Lord Lea when he asked about the methodology of the small group of carefully balanced individuals setting about their cost-benefit analysis. I appreciated rather more the contribution of the noble Lord, Lord Risby, who said that we cannot get away from our geography or avoid the consequences of the European crisis at the present time. That is why we should be directing ourselves towards new solutions to the situation.

As always, I have considerable sympathy for the Minister responding to a debate of this extent and complexity, to say nothing of passion. He will have noticed that the noble Lord, Lord Risby, is alone in being a Member from his own Benches who is not severely and totally critical of the market. The noble Lord demanded that the Minister get some pretty clear indication today that this cost-benefit analysis would bear some kind of fruit in Britain's future in Europe.

A cost-benefit analysis would certainly need to address itself to some rather tricky points. My noble friend Lord Davies of Stamford asked the obvious question of whether the Japanese motor companies would be in Britain if Britain were not part of the European Community. How does one set about counting the benefits derived from that analysis against the background where we all know where the British motor car industry was in the mid-1980s until the Japanese companies arrived here?

Surely what we need at this point of real crisis is not to cast uncertainty in Europe and uncertainty in the markets about where Britain would stand in relation to Europe. In this crisis, we do not need added uncertainty, certainly not one of such significance as this. Surely what we need are degrees of confidence. To cut ourselves off from a market of 500 million customers is scarcely conducive to international confidence. It would suggest that we had lost faith in Europe and it might even suggest that we had lost faith in our ability to compete with our European rivals.

It is clear that high-value services and highly skilled manufacturing need to be underwritten. I heard what the noble Lord, Lord Kakkar, said about the particular issues of the directives that he is concerned about. As ever, European directives certainly exercise our minds greatly in a whole range of areas, but the noble Lord would be the first to acknowledge that medical science is international in its research and international in its advances and that a great deal of that work depends on international co-operation of a high degree.

In addition to medicine, we can quote the issue that cropped up in this debate if only in passing: the whole issue of the environment. Britain has been in the lead in Europe in developing policies on the problems of our environment. We all know what the challenge is and we all know that significant costs are involved for industry and for householders as well as for the economy in coping with climate change. We also know the catastrophic consequences of us not acting. Yet Britain has been the lead in Europe on this project.

In Committee we will enjoy more fruitful debates on this Bill and analyse some of these issues with much closer scrutiny than we have been able to do in general terms today. However, although I will be only too happy to see the Bill get its Second Reading and I look forward to future exchanges, the real issues that face this country are not those of membership of the European community but more fundamental economic issues.