EU: UK Membership

Lord Howarth of Newport Excerpts

Tuesday 25th November 2014 Lords Chamber

[Lord Howarth of Newport (Lab)]

My Lords, the Prime Minister’s proposal to hold a referendum on Europe in 2017 has nothing to do with any foreseeable state of affairs in the European Union at that date and everything to do with the intractability of Europe in British politics. If the British people do vote on Europe in 2017, it is improbable that they will take their decision in a calmly reflective frame of mind. Europe is so emotive. For Europhiles, membership of the European Union is an article of faith; for Eurosceptics, membership of the European Union is a continuing source of irritation and not infrequently of anger. They resent the pooling of sovereignty and they resent being ruled, as they see it, from Brussels.

Unless the bread-and-butter case for Britain’s continuing membership of the European Union is clear and compelling, which it is not, as has been lucidly and rationally explained by Roger Bootle in his book, The Trouble With Europe, it is entirely possible that a majority of our compatriots would vote to come out. The establishment would, with the possible exception of one of the major party leaders, no doubt advise the British people to stay in. However, there is no longer the habit of deference that caused the British people to overcome their misgivings in 1975 and vote yes. It is quite possible that a majority of Britons will, echoing Churchill, say they are for the open seas.

Free movement of people is a great preoccupation at present but I suspect that there will be concessions on that because other countries have problems with this issue. The crucial issue is the euro. Britain opted out of the single currency but it cannot escape the consequences of the single currency. The deflationary bias, the catastrophic consequences of a single monetary policy across so many disparate economies and chronic banking and government debt crises are all dragging down the economic performance of the European Union and that of the United Kingdom. As the 18 member countries of the eurozone meet separately to determine their stance on major economic issues, Britain is increasingly marginalised within the EU and yet has to live with the consequences of decisions in which we have had no part. We have found ourselves in a situation which it was a cardinal principle of British diplomacy for hundreds of years to avoid, where the major continental powers combine in their own interests regardless of the interests of Britain.

It is hard to foresee that the minority of non-eurozone countries will be able to combine to counterbalance the power of the eurozone while maintaining a coherent European Union of 28 countries. It is hard to foresee that the countries of the eurozone itself will be able to resolve their political tensions simultaneously to satisfy the requirements of Germany for fiscal rigour and its reluctance to pay for the costs of fiscal laxity elsewhere while easing social hardship and averting baleful political pathologies. Can we foresee that there can be a viable European Union in which all the member states agree on issues of trade, the environment, crime, migration and defence while financial and fiscal issues and associated political issues are decided by the eurozone countries in a deepening political union?

Damage limitation will mean that there is no answer to that question by 2017, nor will Britain by that date, with or without the other non-eurozone countries, have devised an alternative strategy or found a “better ‘ole” to go to. It would be wiser not to cut short the diplomacy by that date by having an in or out referendum.

What is clear is that Britain will not join the single currency. However, for the single currency ultimately to survive, the eurozone will have to move to political integration and a federal state. The European Union will continue to be dominated by the eurozone. The political leaders of the eurozone countries have invested so much in that project that they will maintain the single currency for some years to come. If British policy is to be more than passivity and drift, Britain will have to establish new terms of membership in a substantially reformed European Union—that is Mr Cameron’s policy but it is hard to see how meaningful reform can be achieved given the requirement for unanimity for treaty change—or find a way to split the European Union into two separate unions, but we have no allies for that, or leave altogether. Perhaps a looser association will be possible but we should ask ourselves what pattern of engagements will make sense for Britain in a globalised world in which the European Union is a diminishing force.