European Union (Notification of Withdrawal) Bill

Debate between Lord Hamilton of Epsom and Lord Davies of Stamford

Committee: 1st sitting (Hansard): House of Lords
Monday 27th February 2017 Lords Chamber

[Lord Davies of Stamford]

Perhaps I may be permitted to correct the noble Lord, who I know is an expert on these matters and normally gets his facts absolutely right. We have sat on European Union committees together for quite a long time. But he is wrong about the EEA being a waiting room for applicants to the EU. Norway had a referendum which decided against joining the EU. It decided not to be a member of the EU but it decided to be a member of the single market and to join EFTA on that basis. For Norway, it is not an anteroom, it is an alternative, as it could be for us if we so wished.

[Lord Hamilton of Epsom]

I accept that but it was designed originally to be a waiting room for those who wanted to join and that is why it has been put in place and you have to comply with all the regulations of the EU. But I come back to my point that if we join the EEA, we do not join the customs union so we have all the problems of the customs regulations. It enables us to do free trade deals with others but it has many disadvantages and I still do not really understand why we have cannot have our own unique arrangement with the EU. I am sure that is the ambition of the Government and that is why the amendment should be opposed.

European Union Referendum Bill

Debate between Lord Hamilton of Epsom and Lord Davies of Stamford

Monday 23rd November 2015 Lords Chamber

[Lord Davies of Stamford (Lab)]

My Lords, I rise to speak, not that I intended to do so, because although we have been going over the same ground this evening that we have gone over before, and although no doubt many of these points will be debated passionately during the referendum campaign, I had rather hoped that the effect of these debates would be to separate out a bit the wheat from the chaff in the arguments and that those arguments that were found to be obviously unviable would be dropped by the various parties before the referendum campaign started. Therefore we would have a function here of hoping to clarify some of the essential arguments before the public debate begins in earnest.

In that context, I am quite amazed and very disappointed that two grossly invalid arguments continue to be put forward by the Eurosceptic representatives in your Lordships’ House. I thought that we might have seen the end of them. Those two arguments are so irresponsible and illusory that it amazes me that men or women of the world can seriously want to take them any further, even on an electoral platform, where I know the same qualities of intellectual analysis are not always deployed as they are in other contexts in life.

The first argument is the suggestion that this country might simply walk away from an international treaty in breach of that treaty. We have a long tradition going back over centuries of respecting international agreements, and it would be quite extraordinary for us seriously to propose to do that. We all know that Article 50 of the treaty of accession has a precise procedure to be adopted in the event that a member state wishes to withdraw; therefore withdrawal was properly and reasonably discussed at the time we signed that treaty. There was no material non-disclosure of relevant information or anything of that kind. No one was under any illusion. We signed that treaty with open eyes. Now, 40 years later, or whatever it is, suddenly to turn round and say, “We’re tearing it up and walking away”, is extraordinary.

I am amazed that anybody thinks that this country should behave like that. I would have thought that even those who are not influenced by the element of principle in this matter, which seems very obvious, or who cannot estimate or appreciate the diplomatic value—the soft diplomacy and soft power value—of having the reputation we have had until now of being a nation that takes international agreements and international law seriously might at least from sheer cynical pragmatism have realised that the last and worst thing you want to do when you are about to engage in a difficult negotiation with a group of countries, with whom we would be having a difficult negotiation to try to restore some access to the single market with our former partners in the European Union, would be, on the eve of beginning such a complicated, difficult and important negotiation, to tear up a treaty that we had previously had with them.

[Lord Hamilton of Epsom]

Has the noble Lord not missed the point, which is that the key to all this is when you invoke Article 50? Do you do it at the beginning of the negotiations, when we have just voted to come out, or at the end, after two or three years?

[Lord Davies of Stamford]

My understanding is that from the very moment you initiate the process you invoke Article 50, which sets out the procedure to be followed. I have certainly read Article 50, and that is the way I read it. I do not think that any interpretation we have heard this evening, including from the noble and learned Lord, the former Lord Chancellor, is inconsistent with that reading. The fact is that we must act in good faith in these matters. If we do not act in good faith out of moral principle, we should do so out of sheer selfish pragmatism because we will need to get a deal with the people who account for about 50% of our exports in the event that we want to leave the present arrangements we have with them. The idea that we start off by breaking an international agreement solemnly entered into is quite extraordinary.

The second extraordinary thing—I have heard this argument before and I hope I will not hear it again, although I am sure I will; I expect that it will be in the Daily Mail every day during the campaign—is that because we have a balance of payments deficit with the rest of the European Union, we have more leverage on them in these negotiations than they have on us. That is complete nonsense. I dealt with this argument before, and I used an analogy, which no one quarrelled with at the time, to try to make clear that the fact of having a deficit or a surplus is neither here nor there. What is important is the proportion of one’s total exports and, behind that, the proportion of one’s GDP which is exposed in a negotiation of this kind and which could therefore be subject to something nasty happening to it, such as having tariffs imposed or no longer being able to be sold at the same favourable terms as competitors could offer the relevant customers. The proportion of exposure of gross domestic product, and the employment that goes with it, is important.

European Union Referendum Bill

Debate between Lord Hamilton of Epsom and Lord Davies of Stamford

Monday 2nd November 2015 Lords Chamber

[Lord Davies of Stamford]

My point is that if we had a free-for-all, it would start off at £75,000, which is roughly the equivalent of €100,000—that is why we have that figure. Some member state might well then be tempted to say “We will offer €150,000”, then somebody else would come back and say, “We will offer €180,000”. Then another would offer €250,000. There becomes a Dutch auction in these matters, which is very much in no one’s interest. This is an example of where the collective interest is much better served if individual member states do not adopt their own rules on this matter. I leave the point there. Although it is very important, I am prepared to continue with it in another context.

[Lord Hamilton of Epsom]

On the same principle, would the noble Lord, Lord Davies, advocate that we all had the same corporation tax rate?

[Lord Davies of Stamford]

There could be economic advantages in doing that; equally, there are other advantages in having tax competition. I am rather in favour of the latter, as tax competition produces downward pressure on the level of taxes. A free-for-all in retail deposit insurance produces upward pressure on the guarantee and therefore on the liability of the member states extending it. The two things are diametrically opposed. I know that there are arguments in favour of unifying corporation tax rates but they do not persuade me. I do not imagine that they persuade the noble Lord either.

I come to the remarks of the noble Lord, Lord Higgins, who always speaks with great thought and wisdom on these matters, although I do not usually agree with him on European issues. He said something very depressing: he did not think that anybody—or very few people—would bother to read any reports produced on this matter and that people would take their decisions otherwise, perhaps by looking at the press. I have no illusions about this. I am very depressed and worried about this campaign, which could turn extremely unpleasant. I anticipate that a number of the large-selling newspapers, particularly the Sun and the Daily Mail—and the Daily Express, which does not sell very many—will adopt a very demagogic and emotive campaign, which will be rather subtle and indirect. It will use dog-whistle techniques but will really be all about foreigners, refugees and barbarians at the gate. I fear that people will be influenced by that sort of thing but I hope that it will not be a dominant number, or certainly not a majority.

We have a sophisticated democracy and an educated public, so we should not be too depressed or cynical about our fellow citizens. There must be literally millions of people in this country who will face the decision they will be asked to make in this referendum very conscious of its importance for the future of their country, their families and their communities. They will desperately want to have some clear advice and information from somewhere. If they go on to the internet they will have 5 million references and be completely paralysed, as we all are when we look up a matter which is the subject of substantial and wide-ranging controversy on the internet. It is utterly reasonable that they have a small, defined number of authoritative sources, some of which must be identified with the two campaigns but some of which should be identified with the Government.

We seem to be missing two essential points here. One is that the Government and Parliament are the servants of the public, not the other way round. It is our responsibility, and the Government’s responsibility, to provide such a source of material and information. Whether or not the elector chooses to bother with it at all would of course be his or her decision. The elector is sovereign but under no circumstances should we not fulfil our duty, which is to provide the opportunity for this important element in the decision that individual electors will need to take.