European Union (Approval of Treaty Amendment Decision) Bill [HL]

Lord Hannay of Chiswick Excerpts

Wednesday 23rd May 2012 Lords Chamber

[Lord Hannay of Chiswick]

My Lords, support for the Bill may come as something of a surprise to the government Front Bench from someone who has been generally critical of the coalition Government’s performance on European Union issues and remains so. I regard last year’s European referendum Act as a ball and chain around any future British Government’s negotiating position, and the decision last December to refuse to join the negotiation of a fiscal discipline pact as an unnecessary and self-inflicted wound. It may come as a surprise that such a person should wholeheartedly support the legislation before the House today, which is designed to enable this country to ratify a change to the treaty on the functioning of the European Union to which our Government have already agreed and which has already been approved by both Houses, as the noble Lord, Lord Howell, said in his introduction.

I give this Bill unqualified support, and not just because the failure of Parliament to do so would create an appalling precedent whereby a British Government’s word would no longer be seen as being as good as their bond, although that is surely a compelling enough reason. But the case for support runs rather deeper than that. It is based on a belief, which I have not heard mentioned in this debate, that the European Union for the foreseeable future will consist of both members within the eurozone—I am not speculating about how many of those there will be—whose currency is the euro and whose interest rates are set by the European Central Bank, and members outside the eurozone, such as ourselves but not only ourselves, who will continue to operate their national currencies and national interest rates.

I believe that it is crucial to achieve the maximum possible degree of solidarity and to reduce to the minimum the policy and institutional distinctions between those two groups. Only thus will we have any chance of ensuring that aspects of European policy as fundamentally important to this country as the single market and its further development remain firmly under the control of the European institutions and all 27, shortly to be 28, of its member states.

By enabling the operations of the European stability mechanism, which imposes costs on the members of the eurozone alone and not on us or those outside it, to be based firmly on EU treaty provisions, we are making another modest contribution to that solidarity. That is why I agree with the Government’s assertion that the ratification of this treaty change is in Britain’s national interest. It has to be admitted that that concept of solidarity is not much in evidence these days, particularly in debates on European matters in this country, even though our own future growth and prosperity is so closely bound up with that of the other members of the European Union—whether they are in the eurozone or not, or whether we are in the eurozone or not.

The emphasis is all on how to avoid solidarity and how to ensure that this country does not incur the slightest hint of a financial liability. In the case of the present treaty change, that issue does not arise, and I am not suggesting that it should. But I would suggest that it is an approach which is both short-sighted and misguided. The greatest financial risks to this country in the present circumstances arise from a possible breakup of the eurozone, not from its stabilisation and survival.

In the case of Ireland, we already faced and drew back from taking the dog-in-a-manger attitude which is so often commended in this country. Our rather niggardly approach to IMF replenishment—that criticism I am afraid applies to the Government and the Opposition—shows just how reluctant we are to recognise that need for solidarity. Yet, the awful example of the 1930s—I have heard some pretty odd interpretations for that decade in the debate so far today—when the countries of Europe and beyond definitively turned their backs on mutual solidarity and opted for protectionism, competitive devaluations and appeasement, are there to remind us of the possible consequences of such policies.

I confess that I was a little shocked but not the slightest surprised when at the briefing meeting on this Bill so helpfully organised last week by the noble Lord, Lord Howell, and his colleagues, the chairman of the European Scrutiny Committee in another place warned that the Bill was likely to run into major difficulties and opposition when it was presented there. I was not surprised because it is becoming ever clearer that a number of the Government’s supporters in the other place are determined to spare no effort to widen the gap between Britain and its European partners—indeed, to bring about an eventual parting of the ways between us. I say to those of that point of view that the eurozone crisis is seen as an opportunity, and not a challenge and a threat. They are frustrated that the Government do not seem to share that view, which is an opinion that has been expressed today sometimes rather eloquently but, in my view, not in a way that I could share.

As we are debating this Bill today, the leaders of the European Union are meeting in Brussels to consider how best to reconcile the policy objectives of fiscal consolidation and the need for growth in all our economies. Let us hope that our own Government are playing a full and constructive role in that wider debate and that in the next phase of the development of the European Union Britain can come to the table with ideas and not just with objections. That is surely the only way in which to make a success of Britain’s continued membership of the European Union and persuade the British people that that is the right course to take.