European Union Referendum Bill

Debate between Lord Davies of Stamford and Lord Pearson of Rannoch

Wednesday 4th November 2015 Lords Chamber

[Lord Davies of Stamford]

I do not think that the noble Lord is a great expert on the views of the Labour Party. I would be delighted to take him to some party meetings in Lincolnshire where he would find enormous support for our membership of the European Union from people in all walks of life. The fact remains that the Labour Party supports our Members of Parliament in the other place who, by an overwhelming majority, have voted, and will continue to vote for our policy of believing that it is fundamentally in this country’s interests to remain part of the European Union.

I must move on to speak to Amendment 58. If there is a discordant element in my sudden change of subject, I say, in anticipation of someone rising to complain, that I am not responsible for the grouping of amendments.

[Lord Pearson of Rannoch (UKIP)]

Will the noble Lord enlighten your Lordships as to whether he would be taking the same attitude on the last amendment if the Labour Party was as split on this matter as the Conservative Party? UKIP got 8% of the electorate voting for it in the last general election, against 24% for the Conservatives—one third of their vote. We all know that the Conservative Party is pretty split on this issue. Would the noble Lord, Lord Davies, be taking the same attitude if his party was in the same position?

[Lord Davies of Stamford]

In relation to the principles of our public life and our constitution, I like to think that I take positions that are consistent. Therefore my answer to the question must be yes. Political parties have an essential part to play in our democracy and their position should be respected. They should not be in any way suffocated by being told that they cannot have any money for a campaign that they genuinely believe in and where their members are willing to support them financially.

As for the complaints that the noble Lord always makes about the treatment of UKIP, in this case he does not have the ground that he normally has for complaint, because the amount of money available to UKIP—

EU Council June 2014

Debate between Lord Davies of Stamford and Lord Pearson of Rannoch

Monday 30th June 2014 Lords Chamber

[Lord Pearson of Rannoch (UKIP)]

My Lords—

[Lord Davies of Stamford (Lab)]

My Lords—

European Union (Referendum) Bill

Debate between Lord Davies of Stamford and Lord Pearson of Rannoch

Friday 24th January 2014 Lords Chamber

[Lord Davies of Stamford]

I have given way already on two or three occasions. I think that I have shown considerable courtesy in giving way several times before speaking. I say with the greatest sincerity that I have nothing but the greatest admiration for the noble and learned Lord, Lord Mackay. Anybody who knows him knows that he is a man of the greatest integrity, and he was undoubtedly an extremely distinguished Lord Chancellor. But I was really quite shocked by something that he said this morning and I feel that, for once, he has allowed party loyalty to override his general judgment.

He seemed to suggest—I wish I could believe that I had misheard him—that we should allow in this place any kind of rubbish to become the law of the land simply on grounds of political expediency, as a substitute for party manifestos as a declaration of future intent or something of that sort. That seemed to me an extraordinary thing for any Member of this House to say, particularly a former Lord Chancellor.

We have a duty, which it is perhaps not an exaggeration to call a sacred duty, to make sure that anything that goes forward from this place on to the statute book has been thoroughly examined. If we see something coming from the House of Commons which we believe to be anomalous or improper, or not up to the highest standards of a democratic legislature or false in any way, we must do everything possible to modify and improve the text before it leaves this House.

Equally, there is really no doubt that there is something very false about the text of this Bill. There is something very artificial about the language of the question. We all in this House think that we understand the English language. We think that we understand the difference between the verb “to be” and the verb “to remain”. We know perfectly well in any context, be it a newspaper or a novel, that if we changed every use of the verb “to remain” to “to be”, we would fundamentally change the meaning and produce complete chaos and nonsense in many cases.

If I were to say to a friend of mine, “Do you think that I should be a member of a trade union?” or “Do you think that I should be a member of my local rotary?” or “Do you think that I should be a member of the Mormon church?”, and if, subsequent to the conversation he discovered that I was already a member of a trade union or a member of the local rotary or a member of the Mormon church, I think that he could come to only two conclusions. One would be that I was going slightly mad, perhaps showing the advanced symptoms of Alzheimer’s; I can see some noble Lords who have felt for years that I have had that. Alternatively, he would feel, with reason, that I was being very disingenuous and slippery and that he needed in future to be very cautious in his understanding of everything that I had said. That, I am afraid, is the position of the Government, or the position of the Tory party, or the position of the proposers of this Bill. They have subscribed to a use of language which is clearly very slippery and disingenuous, and we have to ask why they have done it.

I have no doubt that they have done it because the spin doctors have said that people confronted with a question will be inclined to vote for the status quo, particularly if it is a matter not of immediate concern to themselves or their families—we know that Europe is not a matter of immediate concern to most people and their families—and particularly if it is a slightly complicated matter. That is the easy option—some people would say the lazy option—so that, if you want to get an answer against membership of the European Union, you imply, although it would be quite false to do it, that our membership of the European Union is something new and is not the status quo. We all know that that is the game that they are playing. The question is whether the Government, or the Tory party more precisely, should be allowed to get away with that or whether the House of Lords should feel it wants the Government of the day to get away with that. That is the question that we have to weigh very carefully, because on that depends the integrity to a very large extent of our processes here.

If it becomes known in the country that the Government of the day can get away in a referendum with posing an obviously slightly bogus and biased question, what does that say for the integrity of our democracy? What does that say for people’s confidence in our political processes? There is already enough cynicism in this country about politics without adding to it in this fashion.

Even if there was no such thing as an Electoral Commission in this country, quite openly and straightforwardly on the basis of the two texts we are comparing this morning, the one put forward by the noble Lord, Lord Armstrong, is undoubtedly the one we should go for. However, there is an Electoral Commission. We have established it as an umpire to deal with precisely these matters, to give better confidence to the British people that politicians cannot get away with dirty tricks. Here, the sponsors and supporters of the Bill propose that we should simply override the views of the Electoral Commission—the umpire. Two things follow from that. First, it would be quite clear that there is no point at all in having an Electoral Commission. Why are we spending public money on an Electoral Commission if the Government of the day—or anybody who can get a majority in the two Houses—can always override its views? There would be complete cynicism about the Electoral Commission. Secondly, there would be even greater cynicism about all our political processes. I have my name to several amendments in this group but I am delighted to support the amendment put forward by the noble Lord, Lord Armstrong.

[Lord Pearson of Rannoch (UKIP)]

My Lords, I do not know if others of your Lordships are in the same position as me in that I remain confused about procedure between your Lordships’ House and the House of Commons on this Private Member’s Bill. I am fairly sure that very large numbers of the British public would be similarly confused having listened to this debate so far. I refer here particularly to the helpful interventions from the noble Lords, Lord Forsyth and Lord Elystan-Morgan, and the noble and learned Lord, Lord Mackay of Clashfern.

I will not make more of a speech on the Bill itself except to remind your Lordships, yet again, that the Bill passed through the House of Commons unopposed and is on a subject upon which a very large majority of the British people say they want a referendum. Of course, it would be a very foolhardy Government in future who dared to repeal this Bill if we passed it.

I still have a question on which we need an authoritative answer from the government Front Bench. I regret that the noble Baroness the Chief Whip is not in her place but the noble Lord the Leader of the House is—or perhaps it is the duty of the noble Lord, Lord Dobbs, to answer this. The question is, quite simply: what happens if we pass any amendment to this Private Member’s Bill? Will there be time in the Commons to consider it and get it back to us, or will we in effect kill the Bill? What are the prospects of a similar Bill in the next Session and before the general election? Even if the wording in the proposed question may not be perfect, are we in effect killing this Bill if we vote through this or any other amendment? We should be very clear about that before we vote.

European Union: Recent Developments

Debate between Lord Davies of Stamford and Lord Pearson of Rannoch

Monday 17th December 2012 Lords Chamber

[Lord Davies of Stamford]

My Lords, this is not the first occasion when I have had the pleasure of following the noble Lord, Lord Dobbs, in a European debate. As he rightly anticipated, I did not agree with him this time any more than I have done on previous occasions, though he said his piece with his usual charm.

It has been a stimulating and worthwhile debate, but it is essential that we have another debate when the Prime Minister has made his long-awaited speech. Can I urge the Government that when that happens we have the whole day for the debate, and that the Government do not reduce the time by introducing Statements or debates on matters that, however fascinating they may be to some people, do not have quite the same potential historical significance as this one.

I may be a bit old-fashioned but I still have the idea that a debate should try to make progress, so I want to take advantage of being put rather low in the batting order this afternoon, not to make a prepared speech but to comment on some of the remarks that have already been made, particularly those that appear to be most memorable.

I am delighted to see the noble Lord, Lord Taverne, come in at this very moment, because the first speech that I want to refer to is his. He made a masterly analysis of the justice and home affairs issue. He demonstrated clearly and conclusively that there are no pragmatics about the Government’s attitude to this; the national interest is completely irrelevant. The Government are simply playing politics with the national interest. A bone—a very important bone, sadly—is being thrown to the Eurosceptics for purely party political reasons. This is a disgraceful state of affairs.

I also to pay tribute to my noble friend Lord Monks, who made an excellent speech about the Social Chapter, based on a unique degree of experience in these matters. I would like to add something about that issue. I am not known to be timid about attacking the modern Tory party or for being particularly indulgent to it. However, I wonder whether even the modern Tory party would seriously go about repealing the limited government measures that have gone through under the Social Chapter, to which my noble friend referred: the parental leave directive, part-time or agency workers’ directive and the four weeks’ paid leave directive. The one thing that Mr Cameron cares about is votes, and I do not think that he would get any if he legislated along those lines. No doubt the Institute of Directors, some right-wing think tanks and a lot of Eurosceptics would be delirious with pleasure; but I do not think that that would help him at the next election. So I anticipate that the Tory party is much more likely to say, “We want to pull out of the Social Chapter for ideological reasons, but we won’t actually repeal the measures that have gone through”.

If you think about it, though, that is the worst of all possible worlds. If we are going to have these measures—which are costly, of course, but essential in a humane society, to which we all want to be committed, and which are supported by all reasonable employers—it must be in our interests to ensure that they are part of the Social Chapter, and that there is no one else within the single market who can conduct their business without these kind of costs. Otherwise we would be damaging our own competitiveness within the single market, which would be a self-destructive thing to do. The Government pretend to care about the national interest, but an important aspect of the issue has not been taken into account at all.

Now I turn to the Government and to the noble Baroness, Lady Warsi. In a most excellent speech, my noble friend, Lord Liddle, quoted the Prime Minister as saying that, for him, Europe and referenda went together. I cannot think of another sentence that a Prime Minister could have pronounced which more obviously, immediately and dramatically would create uncertainty about our position and future in the European Union. Yet we had the noble Baroness, Lady Warsi—and, before her earlier today, the noble Lord the Leader of the House—saying, “Oh no, there’s no uncertainty at all; the Government are quite committed to our membership of the European Union and we haven’t created any uncertainty”. That is really quite a fatuous remark. The Government have gratuitously created a lot of uncertainty; as the noble Lord, Lord Pearson, said, a large number of people in this country believe that we are set on a course that will lead us to leaving the European Union in the next Parliament. Not only a lot of people in this country believe that and work on that basis, but a lot of our partners, sadly, believe that and will be working on that basis, which will mean a reduction in our bargaining power with them on many issues. Worst of all, many investors believe that, are working on that basis and therefore will not invest in this country. Whether they are British-domiciled or foreign-domiciled, they will invest somewhere else in the single market if they want their operation to be certain to continue to be in the single market and in a country that has a full weight in the decision-making process of that market so it can protect their interest.

I turn to the noble Lord, Lord Pearson of Rannoch. I do not want him to think that this is a personal attack. In fact, I have a high personal regard for him; I admire his courage and persistence in continuing to voice views that I think are completely misconceived but he does so very lucidly. Since he has set out so lucidly today what is the standard narrative of Eurosceptics, both in UKIP and the Tory party, I hope that he will not mind if I make him the object of my final remarks.

The problem that all Eurosceptics, whether UKIP or Tory, have in this country is that you just cannot make a credible economic case for leaving the European Union. There is no way that anyone can argue—I have not seen anyone even pretend to do so—that the mere fact of leaving the European Union will add one job to our national economy or one basis point to our GDP. Of course it will not; the argument is entirely the other way. The argument is about how many jobs it will destroy and how many basis points, or, indeed, percentage points of GDP, it will remove and over how long. That is how the argument is conducted—on whether it is hundreds of thousands of jobs we will lose, or millions. Generally, people recognise that if we were left with no access to the single market altogether, it would be more in the millions than in the hundreds of thousands.

Faced with that fact, what do you do if you are a Eurosceptic? I am afraid that you go in for some pretty evasive and disingenuous arguments, which we hear the whole time, and I am sorry to have to say to the noble Lord that we heard them from him this evening. We hear people say in the same speech, “We can negotiate continuing access to the single market”, and, almost in the same breath or sentence, that what is all wrong with this thing is the regulatory burden that we face, which is why we must leave the European Union. Yet if you continue to have access to the single market you continue to have the same regulatory framework, to which you are committed. That is the case with Switzerland and Norway, and it would be the case under all circumstances if we negotiated continuing access to the single market.

The difference, and it is a very important one, is that you are no longer part of the decision-making structure. You have no influence on the evolution of that regulatory regime, on the new regulations or on changes to them. You have no opportunity to propose a reduction of regulations, if you think that is the right thing to do. You are out of the dialogue—

[Lord Pearson of Rannoch]

Would the noble Lord give way?

[Lord Davies of Stamford]

I do not want to speak for too long. I am afraid I cannot give way because we have had imposed on us an unofficial time limitation, because the Government have preferred to do other things.

[Lord Pearson of Rannoch]

My Lords—

[Lord Davies of Stamford]

I am afraid I must insist. I am very sorry. I would love to give way to the noble Lord. I believe in debate in that sense, but we cannot do it consistent with having a time limit imposed on us.

--- Later in debate ---

[Lord Pearson of Rannoch]

Before the noble Lord sits down, will he therefore tell us how every other country in the world manages to trade perfectly satisfactorily with the single market without having its ridiculous rules?

[Lord Davies of Stamford]

We have much greater penetration into the single market than other industrialised countries such as the United States or Japan, and we have that by virtue of being part of the single market. A great many businesses have been set up in this country, both by British-domiciled investors and by foreign investors—including, importantly, by Japanese and American investors—in order to have access to the single market. That is where we have gained enormously; we are part of the market itself. That is a priceless advantage and I think that the noble Lord implicitly accepted it when earlier on, slightly in contradiction to the question he has just asked me, he recognised that we must negotiate some continuing access to the single market or we shall face the most appalling economic losses.

European Communities (Amendment) Act 1993

Debate between Lord Davies of Stamford and Lord Pearson of Rannoch

Wednesday 25th April 2012 Lords Chamber

[Lord Pearson of Rannoch]

My Lords, I trust that the noble Lord, Lord De Mauley, knows that he has my sympathy in his very difficult, some might say impossible, task. I trust he will forgive me if I start by asking whether it is not surreal, even grotesque, that we have to submit anything, let alone our Budget, to the corrupt, expensive and now pointless outfit in Brussels, which has not been able to have its own accounts signed off for the last 17 years in a row. In the background, and as a related matter, is it not even more absurd that this outfit in Brussels now presumes to tell us how to reorganise our own accounting standards, how much our banks and insurance companies should reserve and much other mischief that is actively designed to diminish the City of London and our vital financial services generally?

Could the noble Lord tell us what exactly the United Kingdom’s convergence programme is? With what are we converging and to what benefit? We are told that we are doing this in pursuit of the EU’s stability and growth pact. Surely even the Government must now acknowledge that this is a dead duck: that the whole EU adventure has not brought any stability or growth but merely civil unrest, unpayable debt and slump. The countries of the future sail on, including the Commonwealth, while we stay on the “Titanic”, with the iceberg obvious in front of us.

The European Communities (Amendment) Act 1993 was the Act that put the destructive Maastricht treaty into our national law. Perhaps the worst aspect of that treaty, at least for our friends in Europe, was that it paved the way for European economic and monetary union, or the EMU, the bird that cannot fly. It came complete with its attendant single currency, the euro, which is now causing so much havoc among its members and elsewhere. The United Kingdom was of course right to avoid that part of the treaty, and credit for this is often given to the then Prime Minister, Mr John Major, and later to Mr Gordon Brown when he was Chancellor of the Exchequer. However, I understand from friends in the Civil Service that neither of these gentlemen deserves much credit for this fortunate deliverance. The credit should instead go to the bureaucrats in the Treasury and the Bank of England, who disliked the EMU because it would have passed much of their power to the European Central Bank in Frankfurt. The Treasury would no longer have been top dog in the British pecking order. That position would have passed to the Foreign Office—perish the thought.

Be that as it may, it seems that our proceedings today have their justification in the failed process of European economic and monetary integration. I cannot see, therefore, why we should have anything to do with it. Why should we submit anything at all to Brussels, let alone our Budget? It is true that the Government have rightly refused the insolent demand by Brussels that they should submit our Budget to Brussels before the House of Commons sees it. They are to be congratulated on that small show of defiance. However, I come back to the question: why are we doing this at all? I fear the noble Lord’s answer will be that it is a treaty commitment, that we take our treaty commitments seriously and that we will be fined by Brussels in the Luxembourg Court if we do not do it.

I conclude with some advice for the Government, which I have attempted to give before but which I do not think has quite sunk in yet: that there is no way in which the EU can enforce a fine against a donor member state such as the United Kingdom. EU fines can be enforced against individuals and companies in the national courts where they reside. Recipient nations can have their fines deducted from the money Brussels sends to them. This, however, does not work for donor nations such as us or Germany or, dare I mention it, Holland.

Perhaps the Minister could pass this advice on to his right honourable friend, Mr David Lidington, the Europe Minister, who I learned from today’s Daily Telegraph does not want us to pay the extra £890 million now being demanded by the Commission into the bottomless pit of Brussels. A senior EU official has apparently told the Daily Telegraph that we could be sent to the Court and fined if we did not pay up. So what? Just knock the fine off the £10.2 billion in net cash we sent Brussels last year—and it is more this year. Just knock it off and see whether they dare to do it again. If Mr Cameron and his Conservative colleagues started to behave like this, they might even win the next election. So it should be with this insulting Motion before us, which I oppose.

[Lord Davies of Stamford]

My Lords, I will come back to the Budget, if I may, and not take up the very challenging, provocative and frankly misconceived points that the noble Lord has been talking about in the European Union context. I do not want to come back to the macroeconomic stance represented by the Budget for more than two very brief remarks, because that matter has been thoroughly dealt with by my noble friend Lord Eatwell and the noble Lord, Lord Skidelsky. I also want to talk about two particular tax proposals in the Budget, the significance of which has unfortunately not been sufficiently understood so far.

Before I do that, I have those two brief comments on the macroeconomic debate. First, it is clear that the Government are committed to the Pigouvian idea, which was discredited in the 1930s and is clearly being discredited now, that if the Government cut borrowing and spending, then the reduction in aggregate demand following from that would be automatically compensated by an equal and opposite increase in borrowing by the private sector to finance consumption or investment spending. That is a very hoary doctrine that, as I said, has been proved to be wrong in the past. The Government seem to continue to be committed to it. It has become a sort of Panglossian piece of self-deception on their part.

The phrase that the noble Lord from the Treasury used this afternoon—I heard the Prime Minister use exactly the same phrase earlier today in another place—that the solution to a borrowing crisis cannot be more borrowing reflects the preference of this Government to fall back into PR slogans rather than to think through matters carefully. It is a completely nonsensical statement. Clearly, if you have a deficit, you cannot get rid of it overnight. If you are going to continue with a deficit, you are going to continue to increase borrowing. We are merely talking about the rate at which you continue to increase borrowing. There is no doubt that the solution, whatever it is—whether it is the one we on this side of the House propose, or the one to which the Government opposite are committed—would involve more borrowing. We want more clarity, a bit more analysis and perhaps a little more straightforwardness with the public, and rather less of the generation of PR slogans to disguise reality from the public.

The two particular points emerging from the tax proposals in the Budget which I want to highlight this evening are not matters which will rouse great passion around the breakfast tables of millions of families in this country. They might even seem, at first glance at least, rather technical and esoteric but they are extremely important in terms of the vibrancy of the supply side of the economy, the ability of the economy to respond to opportunities, and the willingness of people to risk their money—to invest in new or expanding businesses, to generate wealth and employment in the future. I have already raised in the earlier Budget debate the first measure that I am concerned about. I was given a one-sentence response by the noble Lord, Lord Sassoon, which made me feel that the Government either did not want to or could not be bothered to engage seriously with the issue. This concerns the introduction of a general anti-avoidance rule. I am in favour of the introduction of a general anti-avoidance rule, with the important condition—I always make this clear in any debate on the subject—that, to avoid doing considerable damage to the economy, it must be accompanied by a provision under which HMRC would provide pre-transaction rulings to taxpayers.

Briefly, what a general anti-avoidance rule—a GAAR—means is that every taxpayer is exposed to the risk that HMRC will suddenly challenge his or her tax return and say, “We are not accepting this particular structure or bottom line of taxable income because we think that you have engaged in some artificial practice for the purpose of tax avoidance. Therefore we are going to see through this structure and tax you on a completely different basis”. Under a GAAR regime, you never quite know when you may be exposed to such a risk. I suppose that it is true to say that if you always make sure that you adopt structures which cost you the most tax of any structure that you could adopt to solve a particular problem or to arrange for a particular transaction, you would not be exposed to a revenue challenge of this kind. That, of course, would mean that there would be an enormous increase in the tax burden. That would be a very undesirable thing. It is not something that the Government have ever thought of, I am quite certain. If, in fact, you have a reasonably tax-efficient structure which you have adopted for totally respectable operational, strategic or other reasons, you are always exposed to the Revenue saying, “No, no; you only did this in order to avoid tax, so we are going to attack you with the GAAR”. The only way around this is to have a system under which you can ask HMRC in advance whether or not it would accept a particular structure and, if it does, you know that you are safe. The IRS regularly provides pre-transaction rulings, and there is no reason whatever why HMRC should not do so. I will come on to that in one moment.

The first proposition that I put to the Minister is that the effect of introducing a GAAR without a pre-transaction ruling facility is greatly to increase tax uncertainty in this country, or to reduce tax certainty. I do not think that he will argue with that, but he will argue with my second proposition, which is that tax certainty is an important factor in the determination of willingness to exist and the location of investment decisions. That decision process which sometimes may be more intuitive and sometimes may be an explicit equation will always include certain key factors. Of course, these include political stability, the real output cost of labour, access to markets, availability of skills and monetary stability. All these things are important, but tax rates are important and tax certainty is extremely important. Therefore, if you change the variable of tax certainty, or produce a greater degree of tax uncertainty, you will change the outcome of that particular equation. You will have less investment. That is a very undesirable thing to do.

--- Later in debate ---

[Lord Davies of Stamford]

In response to what the noble Lord just said to the noble Lord, Lord Pearson, is it not the case that the auditors have consistently declined to sign off on those aspects of the accounts of the Union which involve money disbursed by member states—for example, structural funds and CAP funds? There have been a number of difficulties in a number of countries, but there has never been any doubt at all about the robustness of the accounts of the Commission and the institutions of the Community. Therefore, this issue is an indictment of a lack of federalism, not of too much feudalism. If the Commission were directly responsible for disbursing all these funds, there probably would be no problem. The problem is with member states that have had a lot of difficulty in keeping accounts properly.

[Lord Pearson of Rannoch]

Before the noble Lord rises to reply to that well known canard, it is, of course, true—is it not?—that a third of the budget is under the direct control of the European Commission. If the noble Lord, Lord Davies, would like to understand how it really works, instead of continuing to produce Europhile propaganda, I suggests he reads Brussels Laid Bare by Marta Andreasen. Then he will understand how the whole thing works, and we will no longer have these fruitless debates trying to pretend that this is not the fault of the corrupt octopus in Brussels but entirely the fault of the wicked nation states, which are also at fault, of course.

European Union Membership (Economic Implications) Bill [HL]

Debate between Lord Davies of Stamford and Lord Pearson of Rannoch

Friday 25th November 2011 Lords Chamber

[Lord Davies of Stamford]

My Lords, I congratulate the noble Lord, Lord Pearson, on bringing his Bill forward and on getting his Second Reading today. I disagree with him on European matters almost the whole time—I think that many of his arguments are very unconvincing and his plans for the future of this country would be disastrous—but nevertheless I genuinely admire his persistence and ingenuity in pushing his, to my mind, very misconceived views. That is what democracy is all about, and I hope that he will at least take that tribute. He will not get any more tributes from me in the course of my remarks; I thought that we had a series of unconvincing and indeed sometimes specious remarks from him, so I decided to throw away my originally conceived speech and spend my few minutes trying to set out where I think he has gone very badly wrong.

It was quite fatuous to suggest that the City of London was at threat from our membership of the European Union when the City’s enormous international prosperity has coincided with our EU membership.

On fish, I have to say to the noble Lord that fish have an unfortunate habit of not recognising national frontiers. Therefore, if you share a continental shelf with other coastal states, you have to have agreements about fish, because if one of those states overfishes then everyone else’s fishery is equally destroyed. If we left the European Union’s common fisheries policy, the very next day we should have to set up some international agreement under which we established quotas, and in order to do that we would have to set up the scientific machinery to advise on what the quotas ought to be. In order to ensure that the quotas were effective we would have to set up some enforcement procedure and some penalties—in other words, we would have to recreate the Commission and the European Court of Justice and the whole structure relating to fish. It does not seem to be very intelligent to leave a union one day and the very next day to have to set the thing up again in a new fashion.

The noble Lord seemed to think that we could save a lot of money by leaving the common agricultural policy. He falls into two errors there. The first is the assumption that we ourselves would not wish to support our own agriculture, which is unlikely. If we did support it, we would have to deduct the costs of doing that from his proposed savings.

The second error is something I would like him to reflect on for even longer: if we had left the European Union but remained in the single market in some way, as Switzerland has done—I think that that is what he wants to do—we could not avoid accepting agricultural imports from other EU states. They would never agree, and never have done, to a single market involving purely manufactures and services and not agricultural products. Up to now they have set up commercial agreements with countries such as Switzerland and Norway that have a higher level of agricultural protection, so the problem has not arisen, but with us they insist on a free market in agricultural products. If we did not support our farmers and the continentals and the Irish went on with the CAP, we should find that our farmers were at an enormous competitive disadvantage. They would be completely undercut by competitive products from the EU where a large part of the fixed costs of farmers is being met by various forms of subsidy and payment. The noble Lord’s formula there would lead the devastation of the British countryside.

The noble Lord mentioned a net cash figure of £10 billion. That is less that 1 per cent of GDP, which has always seemed to be to be a pretty small subscription for the enormous benefits of the single market, which I will come on to in a moment, and of our being at the decision-making centre of it. I have to tell the noble Lord that a lot of that money has to go to regions that are net beneficiaries. The country as a whole may pay out cash of £10 billion, but I am not sure that the part of Scotland that he lives in is not a net beneficiary—I suspect it is. Many other parts of the country would have to be compensated for the money that they were losing, so that would be a burden on, for example, the people of the south-east, who may think that at present they get the benefit of the £10 billion that he is talking about but they certainly would not. That, again, is very misconceived.

Even more importantly, some of that £10 billion goes to causes that surely we continue to want to support. Is the noble Lord suggesting that we should not be spending money on the neighbourhood policy and the stability of countries in north Africa and the former Soviet empire—Georgia and so forth? Does he want to cut that? If not, we have to pay that anyway. What about the EU’s overseas aid policy? Presumably, if we pulled out of that budget, we would still want to spend that money on those poor countries, or is he suggesting that we should pull out from supporting starving countries like Ethiopia? It is a thoroughly flawed argument, if I may respectfully say so.

Finally, but very importantly, he misunderstands entirely the important distinction between current business flows, which we might be able to preserve through some trading agreement with the EU, and investment in new capacity and new job creation. For example, if you speak to the three Japanese automotive companies that set up in this country, they should not have dreamt of setting up here if we had not been part of the EU and indeed part of its decision-making structure. We were going to be involved in any discussions about the future of the car industry, health and safety, consumer protection measures, international trade measures, environmental measures or whatever it might be. He would find exactly the same if he were to speak to Tata, which now owns Jaguar Land Rover; it would not have dreamt of moving into this country if that had not been the case. Similarly, no one would dream of setting up in the pharmaceutical industry in this region of the world without being able to benefit from the one-stop registration policy that you get if you are part of the European Union. An enormous number of jobs depend on decisions that would not have been made if we had not been part of the European Union.

On the other side of the coin, it would be at zero. I challenge the noble Lord to cite a single case of someone who would have invested here if we had not been in the European Union but did not invest because we were. If only one job was created, that would be infinitely greater than zero—

[Lord Pearson of Rannoch]

My Lords—

[Lord Davies of Stamford]

I will give way to the noble Lord when I have finished my sentence, if I may. Even one job would be infinitely greater than zero, so if you have a balance on which there is a positive number on one side and zero on the other, the result that the noble Lord gets from his commission inquiry will be quite clear.

[Lord Pearson of Rannoch]

My Lords, I will come back to at least four of the noble Lord’s points in my summing up. As he has challenged me on the question of investment in this country, is he aware that our UK Trade and Investment agency does not list our membership of the European Union among the eight top reasons for investing in this country? It is not mentioned at all.

[Lord Davies of Stamford]

If that is the best that the noble Lord can do by way of argument, to find a bureaucracy that does not mention the European Union in some handout, then I am even more confident of my position.

I do not want to take more than my fair share of the time. I have dealt with a number of the noble Lord’s points. As he can see, I disagree with him profoundly on the arguments but he will be pleased that I do not disagree with him about the Bill. I think that it is an excellent idea, and am quite confident that any such inquiry would come to the conclusion that the facts would indicate.

European Union Bill

Debate between Lord Davies of Stamford and Lord Pearson of Rannoch

Tuesday 3rd May 2011 Lords Chamber

[Lord Pearson of Rannoch]

The noble Lord and those of his view have been saying this now for 30 years. It has not happened and it is not going to happen. The solution for this country is to leave the common fisheries policy and take back our waters to the median line and whatever we had before in territorial waters into our own control. Then, when our own fishing industry, which has been decimated by the common fisheries policy, has been rebuilt, we can share any surplus and lease it out to people who want to buy it.

[Lord Davies of Stamford]

I do not know in which amendment the common fisheries policy arises, but I have to tell the noble Lord that if he is interested in that policy, he will rapidly find that the only explanation consistent with the facts is that the common fisheries policy suffered from an excess of member state sovereignty and an insufficiency of federalism. At every stage the European Commission, being the regulatory agency, has proposed quotas that, if they had been accepted, would have preserved the stocks. It is the member states pursuing their own individual interests that have always resisted those proposals on the part of the European Commission. As a result, the quotas have never been sufficiently tight and all these waters have been overfished. Under all circumstances, whether we had our own fisheries policy or not, it would be necessary for us to have regulation, quotas and some effective enforcement mechanism. If we disbanded the European Union, the next day we would need to set up a new common fisheries policy by agreement with a set of quotas and a common enforcement policy.

[Lord Pearson of Rannoch]

My Lords, when we leave the European Union, we will not do as the noble Lord, Lord Davies, suggests. We will take back those waters that were our waters, take back those fish that were our fish and re-establish our national fishing industry. That is what we will do. As the noble Lord has mentioned, this was not actually in the amendments but as the noble Lord, Lord Deben, mentioned it in connection with me, I thought that I would just touch on it in closing.

The noble Lord assumes, again, that some form of European common energy policy is in any way necessary for this country. We simply rebuild our own energy supplies. We do not let the European Union close down our coal-fired stations, as my noble friend Lord Willoughby de Broke has mentioned, but build new ones. We might even consider incineration of landfill. We certainly consider nuclear power. We therefore supply our own energy. If we then wish to go on buying Russian gas through France, which is what we have to do at the moment, then we may be able to, but I entirely agree with my noble friend that this pursuit of wind power is madness of a dimension that only the political class could be guilty of. I think that that covers everything that I had to say to the noble Lord, Lord Deben, and I shall sit down.

European Union Bill

Debate between Lord Davies of Stamford and Lord Pearson of Rannoch

Tuesday 5th April 2011 Lords Chamber

[Lord Davies of Stamford]

My Lords, I have a great many objections to this Bill under three broad headings. The first is the constitutional damage this Bill would do if it was enacted. I totally agree with what the noble Lord, Lord Garel-Jones, has said but, as he said himself, this is not the moment to go into that as we shall have other opportunities on amendments relating to referenda in Clause 18.

Secondly, I am concerned about the honesty of the Bill. I made the point at Second Reading that although it purports to offer referenda on a vast range of potential subjects, it seemed quite clear that there would in practice be no chance of referenda ever taking place on some of these secondary or tertiary issues and that the Bill is therefore something of a fraud on the public. I am quite concerned that there is another fraud going on here, which I will come to in a moment.

Thirdly, I am concerned about the practical implications of the Bill and there I agree again with what the noble Lord, Lord Garel-Jones, just said. The noble Lord, Lord Kerr, made it absolutely clear in moving his amendment that there is a serious discrepancy between the way that the Bill was presented as protecting the British public against any further concessions of power to the European Union—the entire rhetoric was that there will now be this block with a referendum—and the inclusion of decisions made under Article 48(6), which quite clearly and explicitly excludes any extensions of the powers of the European Union.

In fact, we have been offered a Bill with so-called protection for the public against a threat but which includes a provision that, by definition, could not form part of that threat. One has to ask why that has been done. Is it a matter of drafting carelessness? Surely not; the references to Article 48(6) are absolutely clear and deliberate. There are several of them throughout the Bill. Indeed, the noble Lord, Lord Kerr, and his co-signatories to the amendment have gone through the Bill and addressed them wherever they arise. There is clearly a deliberate intention here to go beyond what is in my view—I know it is a value judgment, but it is my view—the already extreme rhetoric with which this Bill was presented. The reality is even more extreme and one has to ask: why is that? Why is there an intention to have a referendum on matters which, by definition, cannot involve increasing the powers of or conceding capabilities to the European Union? I hope that the Minister will address this issue, as I cannot imagine that we could have an honest debate on this subject without it being explicitly addressed.

I also hope that there might be more contributions from the Lib Dems in the course of debate on this set of amendments. I suspect that a lot of Lib Dems were dragged, kicking and screaming, into supporting the notion of the Bill on the basis that all it did was to provide for a referendum in the event that further powers were being conceded to the European Union. In fact, the Bill that has come up is much more restrictive and goes far further. I do not know whether every member of the Lib Dem party has appreciated the significance of explicitly including Article 48(6) as it is being done, or of what that means. It puts much more of a brake on the European Union’s day-to-day activities, which I will come on to in a moment, than was ever suggested in announcing the intention to move forward with this legislation. It is particularly important that the Lib Dems, both in this Committee and in the country as a whole, have an opportunity to think really carefully about Article 48(6) before they decide what their ultimate attitude is towards the Bill. It would be artificial if we did not hear from more Lib Dems in the course of our proceedings, including on this amendment.

The third issue that concerns me about the Bill in general—I come particularly to the issues covered by this amendment—is its practical consequences. Before we pass any legislation, it is terribly important for this House to think through what its practical consequences will be. If you are sitting on a board of directors at a business and deciding whether to take a particular decision, you think pretty carefully about its practical consequences. You may ask your support staff and so forth, or you may ask legal advisers or other outside advisers such as management consultants, “What would be the consequences of our doing X, Y and Z”? You ask people, come up with as many possible answers as you can and weigh them carefully before you decide on the balance of advantage or disadvantage in going forward or not. It is important to look at particular cases.

Since the Government have set out for us in Schedule 1 the sort of issues which would require a referendum under the Bill, at least by way of an illustration which is not exhaustive and does not exclude other issues, we should think through in the course of the Committee’s proceedings what would happen if this Bill became an Act and was now on the statute book, and practical decisions needed to be taken in any of these categories. I shall take a few at random, without taking up too much time. Take, for example, Article 77(3) on,

“provisions concerning passports, identity cards, residence permits etc.”.

Some people would say, “We’re not part of Schengen so that doesn’t concern us at all”. If that were the case, why would we need a referendum on the subject? It baffles me. One can well imagine a situation in which we could not cut ourselves off from, let us say, immigration issues in the Schengen area. We remember the problems that we had with Sangatte, with a large number of illegal immigrants from France concentrating themselves in Calais with a view to trying to steal through the Channel tunnel in one form or another or on to ferries and come into this country. It was a serious practical problem for us. There was no point in using philosophical arguments to deal with it; it needed to be dealt with in a practical way. There are many possible scenarios that one can imagine where we will need to sit around a table with our partners and come to a sensible agreed solution to deal with, let us say, a massive and difficult immigration issue or threat that has suddenly arisen.

[Lord Pearson of Rannoch]

Surely the noble Lord would agree that if we had not pooled our sovereignty, as noble Lords like to call it, in the matter of immigration, which he has raised, if we had kept control of our borders and if the previous Government had not deliberately lowered our borders and our immigration, particularly to people from the European Union, the problem would not have arisen. Surely the answer is simply not to have been in the EU, not to be in the EU in future and to control our own borders. It is a no-brainer, isn’t it?

[Lord Davies of Stamford]

I think that by a “no-brainer” the noble Lord means giving the same answer to any question that is asked in any context whatsoever: that we should never have gone into the European Union. The noble Lord is fundamentally flawed in his analysis of the national interest in this area, but if I actually addressed his comments I should be making a speech about the reasons why we are in the EU. All I will say is that we have kept control of our borders. We have not joined Schengen although—and we should never forget this—we have a common travel zone with the Republic of Ireland, so we have a mini-Schengen. That is another reason why we cannot simply suppose that we can draw up the moat here and do what the devil we like; we need to discuss with the Republic of Ireland what it is doing in relation to Schengen at any one time, otherwise we should have to set up a border between Northern Ireland and the Republic or something of that sort, which would have all kinds of consequences that we would not want to contemplate.

I mention this to the noble Lord merely because, while I was not very optimistic that I would persuade him about anything, these matters are extremely complex and we cannot act as if we are in isolation in this world. There is a whole range of interdependencies—I was going to say “interdependabilities”—that we have with countries that surround us. That is a natural part of things and we should not reject it. We should be prepared to come to sensible, common-sensical, mutually advantageous arrangements with our partners on a pragmatic basis and we should not cut ourselves off from the possibility of reaching agreement with them—but that is exactly what the Bill does.

What would happen if there were a pragmatic, sensible solution of this kind dealing with, say, provisions concerning passports, identity cards, residence permits and so forth? The British Minister would be paralysed and would not be able to take part in the discussion at all. If the British Minister even started entering the discussion, he would immediately be guilty of bad faith. Everyone around the table would say, “This guy’s not serious; he’s not for real. Il n’est pas sérieux. He’s not going to have a referendum on this but he can’t agree it without a referendum, so why’s he sitting in the room at all? What’s this guy doing wasting our time?”. No one would be so rude and undiplomatic as to say that out loud, but that would be the effect. We would be sending Ministers to Brussels to find themselves in that extremely embarrassing situation. Do we really want to conduct our international relations, let alone those with such important partners and neighbours as our fellow members of the EU, on that basis? It is extraordinary.

Let us look at police co-operation, covered by Article 87(3). It does not need very much imagination, for people who have had some experience of public life like ourselves, to know that out of the blue you can suddenly have a very nasty threat. It can be something to do with terrorism, and clearly we are all concerned about that; there is a Bill going through the House at the moment. I sit on a Joint Committee with the House of Commons examining the contingent terrorist detention Bill, as noble Lords will know. We are rightly concerned that something will happen out of the blue. I will give way to the noble Baroness; I am just finishing my sentence.

Loans to Ireland Bill

Debate between Lord Davies of Stamford and Lord Pearson of Rannoch

Tuesday 21st December 2010 Lords Chamber

[Lord Davies of Stamford]

Undoubtedly had we been in the euro—and I totally agree with the noble Lord that I was, and remain, a partisan of our joining the euro—as a result we would have had to adopt tighter fiscal policies. The noble Lord may feel that the result of that might not have been entirely unfortunate for the future history of the country. Nevertheless, we would have done, and the counterpart to that would have been that we would have had lower nominal and real interest rates throughout that period. I happen to think that that would have been a good thing as well.

[Lord Pearson of Rannoch]

My Lords, I am sorry to press the noble Lord, but is he really saying that the predicaments in which economies such as Ireland or Greece, which would have kept their own currency, which would have over a period of years—in Greece’s case, 10 years—floated down on the international markets and which would have their own interest rates and exchange rates, find themselves now have nothing to do with their participation in the euro?

[Lord Davies of Stamford]

I am very happy to give, I hope, a very unambiguous answer to that as well. I do not believe that there is any virtue in the fluctuation of exchange rates. I believe that exchange rate markets, like other asset markets, fluctuate quite irrationally. They swing far too far, an enormous amount of damage is created, they are never at the theoretical point of equilibrium which some people read about in their textbooks 50 years ago and enormous economic costs are caused by these fluctuations. If you can replace them with a stable currency system, as we did before 1914 with gold, as the eurozone has done, as the United States has done with the dollar and so forth, that is a very good idea, all other things being equal. We can get into the “all other things being equal” on another occasion perhaps. I think that if you take the long 20-year view, Greece, Ireland and Spain have all benefited enormously from their membership of the European Union and the eurozone, and that will continue to be the case. We now have a momentary crisis, which looks very grim at present, but we should not throw the baby out with the bath-water.