Retained EU Law (Revocation and Reform) Bill

Debate between Lord Kerr of Kinlochard and Lord Hamilton of Epsom

Report stage
Monday 15th May 2023 Lords Chamber

[Lord Hamilton of Epsom (Con)]

My Lords, I shall speak to the amendments to which I have added my name, Amendments 2 and 4. Like my noble friend the Minister, we campaigned to leave the EU and we found that people decided to leave for a number of different reasons. One of those reasons was the resentment people felt that laws were being passed in Europe and delivered to us here, and we had no say on them whatever. I very much echo the words of my noble friend Lady Altmann.

We scrutinised this legislation. I was on an EU scrutiny committee and we wrote a number of reports, some of which were somewhat hostile about the legislation going through, and of course, they made absolutely no difference whatever. Therefore, if we had said to the people on the doorstep who were concerned that they had no say on much of the legislation coming on to our statute book, and over which Parliament had no say, “Well, we have a great plan: we are going to bypass Parliament almost completely”—

[Lord Kerr of Kinlochard (CB)]

I greatly enjoyed serving jointly with the noble Lord on the EU Select Committee. I point out that I was woken up three times on a Sunday evening by Delors asking me what the House of Lords European Union Select Committee had meant by a particular report on a particular piece of legislation. These reports were not a waste of time.

[Lord Hamilton of Epsom (Con)]

I slightly wonder what effect they had on the statute book. The legislation went through, nothing was amended, nothing was voted down—it could not be, under the EU accession treaty—so, if you do not achieve any change in the legislation, I am not sure you can claim any great credit for having done anything to it. So I do not really accept that. This is one of the problems, and people did find it very frustrating that they had no say over what EU legislation went through.

We have passed over the making of our legislation from an unelected Commission in the EU to the Executive. Who are the Executive? The Executive are made up of Ministers, and civil servants who, in my view, will have much more influence over what happens to this legislation than Ministers will. The Civil Service used to be regarded as a Rolls-Royce. I am not absolutely sure that definition would apply today; it looks rather like an old banger in need of a serious MOT. Let us face it, the Civil Service has not done well in trying to locate retained EU law. It was given endless opportunities to dig this stuff out, and what happened? Virtually nothing, until panic set in when this Bill was being debated.

It is the job of departments to know what legislation they have. This applies not only to EU law but to all law, and one has been given the impression over the past few months that they have absolutely no idea whatever what is on the statute book. Are these the right people to whom to pass all responsibility for EU law, without Parliament having any say? The answer is of course no. Parliament has to regain control of the legislative process. We have to make sure that Parliament decides what happens to this legislation, and that is why I am supporting Amendments 2 and 4 and subsequent amendments. I hope your Lordships will follow me through the Division Lobby.

Retained EU Law (Revocation and Reform) Bill

Debate between Lord Kerr of Kinlochard and Lord Hamilton of Epsom

Committee stage
Monday 6th March 2023 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

Before the Minister leaves the question of allowing Clause 10 to stand part, I am surprised at her disagreement with the Delegated Powers and Regulatory Reform Committee—a dangerously radical body containing wild revolutionaries such as the noble Lords, Lord Janvrin and Lord Goodlad, and the noble Earl, Lord Lindsay. Their view was clearly set out in their report: that Clause 10

“effects a significant transfer of power to Ministers”,

contrary to what was set out in the European Union (Withdrawal) Act 2018. The Act said it would be for Parliament to decide changes in primary legislation, rather than for Ministers to do so in secondary legislation.

I understand the argument the Minister is making, but it is not one likely to find much support across the House. We think we have a role in deciding what should be on the statute book; it is not simply for the Executive. I can see the point made by the noble Lord, Lord Hamilton—yet another dangerous radical—that it will take time so there will be, in a sense, continuing uncertainty. This is why I support an extension of the sunset deadlines—although that is not a sufficient cure, I think it is a necessary one for the Bill. But the noble Lord has to recognise that there is huge uncertainty now for economic operators across the country: they do not know which laws are to be amended, which are to be retained and which are to be extinguished. Once we know, perhaps it would be sensible to discuss how long it will take to make the necessary changes.

[Lord Hamilton of Epsom (Con)]

Surely the thing that concerns businesses is how legislation is going to be amended, not whether it is or not.

Retained EU Law (Revocation and Reform) Bill

Debate between Lord Kerr of Kinlochard and Lord Hamilton of Epsom

Committee stage
Thursday 2nd March 2023 Lords Chamber

[Lord Hamilton of Epsom (Con)]

My Lords, I am absolutely amazed that the noble Lord, Lord Fox, has such faith in the bureaucrats of this country such that, if you do not give them deadlines, they will still keep to the timescale. It is remarkable when you think that one of the tasks of all our departments is to review their legislation to see whether it is still current. At intervals, Ministers have said that they will produce only one new law in return for two revoked, but nothing ever happens. This is one of the inadequacies of the system in which we live, but we will let that pass.

I listened to the remarks of the noble and learned Lord, Lord Judge, with great attention, as I always do. But this is the first time I actually agreed with most of them. Unlike the noble and learned Lord, I campaigned to leave the EU. I did not actually stand on people’s doorsteps and say, “We have a wonderful scheme here. We have a drastically undemocratic system of people living in Europe dictating the laws that we should have in this land. But we are not going to restore parliamentary democracy; we are going to hand over all this power to the Executive.” If I had said that on doorsteps, and people like me who wanted to leave the EU had put that argument forward widely, it is quite possible that we would not have left the EU at all.

I am spoiled for choice with the amendments I could back in this group, but I very much support the noble Lord, Lord Whitty, and his Amendment 62A. I think that we need a sifting committee and the all-party one that he advocates is very much one that I would support.

I have been told that at least 40% of our retained EU legislation will be put back on the statute book unchanged. I suspect that that is a rather low estimate and will rise, particularly given what my noble friend Lord Benyon said about retention being the default position. There will not be much controversy about that and the committee of the noble Lord, Lord Whitty, could decide to do that by secondary legislation.

We then come to EU law that is completely irrelevant to this country. Isolated cases have been brought up, such as reindeer between Denmark and Sweden, and fishing in waters nowhere near the United Kingdom, as my noble friend Lord Benyon mentioned. We have also got the export of lemons. I do not think we are going to be doing a lot of that in the future—though with global warming, you never know, do you? Then we have got olive oil; I do not quite see us growing that number of olive trees in the near future, but it is obviously very important to the southern countries of the EU. All of that can certainly be binned, and I would not have thought that there would be any controversy about that whatever.

I suspect that the other amount of law that the Government are thinking of getting rid of, which is more difficult, is the area where there is already legislation in the United Kingdom which does this job better than the EU legislation. That is something which will have to be argued out, which is why I think the role of this cross-party committee could be critical.

We then come to other regulations which need very minor amendments. As we know, one person’s minor amendment is somebody else’s major amendment, so I would be more than happy that the committee viewed that legislation as well. If it was happy that the amendments were very minor—just changing dates and things of that sort—they could allow that through statutory instruments and secondary legislation. What is much more concerning is the ability that the Government seem to be giving themselves to scrap an EU law and introduce a completely new one. This is not what we voted for when we voted to leave the EU and is an extraordinary transfer of power. That is where I hoped that this committee would come in and say, “No, this must be dealt with by primary legislation.”

To sum up, I would be more than happy to back an amendment similar, if not identical, to that of the noble Lord, Lord Whitty. I will campaign among all the people I know to actually support it as well—and I think that I possibly represent one or two of the people who left the EU. If we do that, we might get an overwhelming majority which might make this Government change their mind.

[Lord Kerr of Kinlochard (CB)]

I am very glad that I gave way to the noble Lord, Lord Hamilton. I hope that the Government will reflect on such criticism coming from such a quarter. The noble Lord, Lord Hamilton, and I disagreed violently over Brexit, but the criticisms that he is making now, much more clearly than I could, are the criticisms that I want to make now. So the opposition to the Bill does not come under the remainer/leaver axis—it comes under the “good Government” axis.

There are just two points that I want to raise. I support the amendments in this group, particularly the amendments in the name of the noble and learned Lord, Lord Judge, the noble Lord, Lord Fox, and the noble Baroness, Lady Chapman, Amendments 39, 42 and 43. The first point I want to make is about unannounced repeal—the point made by the noble Lord, Lord Beith—although it is unannounced and undiscussed repeal that really bothers me. The other is about default.

On unannounced and undiscussed repeal, when we were last in Committee, on Tuesday, I asked what Parliamentary procedure would be available when a Minister decides that a piece of our law should be abolished. What procedure will enable Parliament to debate that decision? The Minister replying to the debate said that she would reflect on the point that I had made. I have not yet heard an answer, but it seems to me rather a significant point. Here we have a situation which I believe is improper in constitutional terms—and it is certainly absurd in practical terms that laws should disappear by administrative fiat, privately. I do not know how courts will be expected to apply that, and I do not know how citizens are expected to behave in relation to the law, if changes in the law have been made by administrative fiat, privately. I think it is constitutionally improper that that should happen without the opportunity for some discussion in this this place and the other place. I think it is important to address the question that has been raised by the noble Lord, Lord Beith, and I hope we are about to hear an answer.

European Union (Withdrawal) Bill

Debate between Lord Kerr of Kinlochard and Lord Hamilton of Epsom

Committee: 1st sitting (Hansard): House of Lords
Wednesday 21st February 2018 Lords Chamber

[Lord Kerr of Kinlochard]

I should like to respond briefly to what the noble Lord, Lord True, has said. He refers to the Article 50 date. Without deciding where we wanted to go, we chose to send in an Article 50 declaration on 29 March. That meant that we chose when the clock would start ticking. That is my answer to the noble Lord, Lord Hamilton—like Nelson, I cannot resist provocation from a Hamilton. However, there is not a single Article 50 date. There is provision in the article for the possibility of an extension and there is also provision for the exit date to be after the two-year period. If you read the article carefully, you will see that you are out after two years or when the withdrawal agreement comes into effect, so there is the possibility of a post-dated cheque.

In my view, the noble Lord, Lord Triesman, is exactly right. Flexibility in negotiation is extremely important. Giving yourself deadlines is crazy, as is surrounding yourself with red lines. The reading of Article 50 by the noble Lord, Lord Hain, is, in my humble view, completely correct. However, the big point in this debate is not that; it is the question of who takes back control. Who decides? Is it the Executive or the legislature? So the point raised by the noble Lord, Lord Tyler, is extremely important.

I end by saying that I warmly welcome what the noble Lord, Lord True, said about the Good Friday agreement and the Belfast treaty of 1998, and in particular what he said about Prime Minister Major. To someone like me who was an observer at the time, it is completely correct. I remember when the leader of the Opposition, Mr Blair, went to Washington when I was the ambassador there. He was asked about Northern Ireland and what he would do if he became Prime Minister. His reply at my dinner table to assorted Senators and the Vice-President was that he would try to do exactly what John Major had tried to do and he would be very pleased if he could do it half as well. It is very good to hear that the solid voice of the Conservative Party is not that of the Patersons and Hannans but is in favour of retaining all the good work done by the Conservative Government and then by Mr Blair’s Government in that astonishing first year.

[Lord Hamilton of Epsom]

If the House of Commons voted by an overwhelming majority to move Article 50, surely that was done on the understanding that the negotiations would be completed in two years. If the date was to be changed, surely that would need a vote in the other place.

European Union Referendum Bill

Debate between Lord Kerr of Kinlochard and Lord Hamilton of Epsom

Monday 23rd November 2015 Lords Chamber

[Lord Pearson of Rannoch (UKIP)]

My Lords, do I understand Mr Redwood’s position to be that, if we repeal the 1972 Act, all the other treaties that come after that Act—the Single European Act, Maastricht, Amsterdam, Nice and Lisbon—are all amendments to the original 1972 Act? If we repeal the 1972 Act, the other 27 member states may start getting difficult with us, but it is unlikely. We should be in the driving seat, not least because of the amount of money we give them, which of course we need not decide to axe overnight. We could say that if they behave themselves, we will taper the £20 billion a year we give them nice and slowly. Likewise, it is in their interests to go along with us and our free trade with them, the single market and all the rest of it, because we are their largest clients—as I said earlier. We have a certain amount of pressure with the non-EU free trade agreements, some of which have been organised entirely by the Commission and some by the European Commission and us in our sovereign right, as I am sure the noble Lord knows. It is a boggy area, but surely it depends on the political will of the Government of this country, and the political will of the Prime Minister.

Therefore I put it to the noble Lord that he is seeking to gaze into a crystal ball that is somewhat clouded. If the Prime Minister has negotiated a reform and comes back from Brussels with a piece of white paper saying “Reform in our time”, but the British people do not like it—if the British Prime Minister wants to stay in the European Union on those terms but the British people throw it out and vote against him—surely it is unlikely that he would survive as Prime Minister. Therefore, we would be dealing with a new Conservative Prime Minister, presumably somewhat less Europhile than the present one, and the whole ball game would change in the negotiations over Article 50, if we decided to go down the Article 50 route. Surely, though, we are in a position to say that we are not going to do that. Our position is so strong that we require our own free trade agreement. I do not want to follow the Norwegian/European Economic Area red herring anymore, because none of us has ever wanted to do that. How does the noble Lord react to that position, with a Prime Minister who has gone, a new Conservative leader who wants to get on with it, and a European Union that perhaps will not be as recalcitrant as the noble Lord hopes?

[Lord Hamilton of Epsom (Con)]

I am grateful to the noble Lord, Lord Green, for telling us that the noble Lord, Lord Kerr, drafted all this legislation. I think he should have declared an interest, because the last thing he will want to admit is that the EU is going to completely override everything that he drafted. When the eurozone was set up, I remember it was thought that there would be a big problem if Governments borrowed excessively and cumulative debt built up to very high levels of GDP, so limits were put in on how much Governments should borrow in the eurozone. The Germans found that too inconvenient, so they just overrode it. Then the French followed, and everybody else said, “If they are not going to follow the rules, why should we bother?”. So why are we obsessed with the legislative integrity of Article 50? It has never been tested; no one has ever left the EU. If we were to leave, it would be a unique situation. They would be losing their second biggest economy, and they would have to accommodate us.

Let us remember another thing that the noble Lord, Lord Kerr, omitted to tell us. This referendum will be advisory, not mandatory, and that is very significant.

[Lord Kerr of Kinlochard]

My Lords—

[Lord Hamilton of Epsom]

I shall give way in a moment. All we have to do in response to a leave vote is repeal the 1972 Act. After that we have to enter negotiations, and we can apply for Article 50 at the end of the negotiation.

[Lord Kerr of Kinlochard]

I think it is not for me, but for lawyers, to discuss what would ensue were we immediately to repeal the 1972 Act. I do not think it is a pretty picture, but it is not for me to depict it. On the noble Lord’s argument that we would have all these cards in our hand, I was trying to extend an olive branch to him earlier. There is a point that nobody would want us to go—that is correct. The Germans would want to go on selling cars, as the noble Lord, Lord Hamilton, reminds us almost daily.

My argument is that it might prove difficult to get 27 member states, many of which have a negative trade balance with us and not all of which are as friendly to us as our friends in Germany, to agree all the detail. The noble Lord, Lord Green, is right: the process could be prolonged and quite tricky, and the country should know before the referendum that that is the case.

European Union Referendum Bill

Debate between Lord Kerr of Kinlochard and Lord Hamilton of Epsom

Wednesday 4th November 2015 Lords Chamber

[Lord Kerr of Kinlochard]

Actually, you are a member while the Article 50 negotiations are proceeding. You are a member of every council. Your MEPs do not leave the European Parliament, your judges do not leave the court and your Commissioners do not go home. The only difference is that in the Article 50 negotiations you do not have a vote on the position of the EU—the position that it has in its negotiation with you. That is all. You remain a member throughout the period of the Article 50 negotiations unless you decide unilaterally to go home. You do not have to do Article 50 at all. If you want you can just stop paying the bills, stop turning up at meeting and in due course it will be recognised that you have gone. It is not the case that once you invoke Article 50 you are no longer a member of the European Union.

[Lord Hamilton of Epsom (Con)]

Surely the key to the decision taken in the referendum is that it is advisory and not mandatory, so therefore it would not be necessary at once for the United Kingdom to apply for Article 50. We could merely carry on with the negotiations with absolutely nothing changing whatever.

[Lord Kerr of Kinlochard]

Technically, that is correct. It is advisory. But it seems to me that anybody who thinks that the Government could do other than act fairly quickly on the advice they had received from the entire country is in cloud-cuckoo-land. The noble Lords, Lord Forsyth and Lord Hamilton, are right in a sense in that our influence in the councils of the European Union would go into very rapid decline. We would still be there but we would not be listened to a great deal if we were heading for the exit door. That is certainly true. However, we would be members, and the idea—with all respect to the noble Lord, Lord Hamilton—that the Government might consider whether they were going to act on the advice of the country or going to try some form of new negotiation is nonsense. If the country votes to come out, we come out.

European Union Referendum Bill

Debate between Lord Kerr of Kinlochard and Lord Hamilton of Epsom

Monday 2nd November 2015 Lords Chamber

[Lord Kerr of Kinlochard]

I am afraid I do not work in the British Government and do not have the statistics to hand. However, it is the case that a large member state such as the United Kingdom, with a voting weight proportionate to its population, has a considerable say in EU legislation. An EEA but non-EU member state, such as Norway, has none whatever.

[Lord Hamilton of Epsom (Con)]

Can the noble Lord explain the free trade treaty between the EU and South Korea? Does it bind South Korea to following all EU legislation?

[Lord Kerr of Kinlochard]

I had assumed that the principal interest of the noble Lord, Lord Hamilton, was making sure that we managed, as some sort of country member or associate, to remain within the single market. The Koreans have no such rights. They have a very good free trade agreement, which is greatly in the UK’s interest, and has produced a considerable increase in UK exports to South Korea.

There is no doubt that the UK could secure a free trade agreement with the EU. That is not an issue. But if we want access to the single market, we need more than a free trade agreement. That is why the Norwegians are in what is known as EFTA and the EEA and why they are complaining about their relations with the EU.

The noble Lord, Lord Forsyth, told us that nobody in Norway wants to join the EU. Actually, the entire Norwegian establishment would like to join the EU but has not, as yet, managed to persuade the Norwegian public of that.

--- Later in debate ---

[Lord Kerr of Kinlochard]

The impetuosity of youth is spreading all around the Chamber. The point will be addressed in a second.

If we had no structured relationship with the EU and operated purely as WTO members, the damage to our exports and inward investment would come more quickly, since UK exports to the EU would become subject to EU tariffs straightaway—10% on cars, 15% on food products and so on. We would also lose the benefit of the EU’s 200 or so trade agreements with third countries and regional groupings and we would need to negotiate our own.

Maybe there is too much Nordic gloom and doom in my analysis. Maybe the noble Lords, Lord Forsyth and Lord Stoddart, are correct. Certainly, that great Scottish economist, Peter McKay, writing in today’s Daily Mail, finds my analysis defeatist, but it is possible that the Norwegians know what they are talking about. Maybe we could, to address directly the point of the noble Lord, Lord Stoddart, secure a new sui generis deal more generous than any that the EU currently has with anybody. Maybe we could forget all these models and establish the new Union Jack model. It is true, as the noble Lord, Lord Hamilton, says, that we would have some cards in our hand. Some 6% of exports from the rest of the EU come to us and we could threaten to cut them off, so pleasing Mr McKay in the Daily Mail, if not the British consumer. However, we need to face facts—four facts. First, 6% of their exports come to us—3% if one excludes the Netherlands, Germany and Ireland—but nearly 50% of ours go to them. In a protectionist showdown, we would be shooting uphill. They would be facing a blip; we would be fighting for our lives.

[Lord Hamilton of Epsom]

The noble Lord talks about a blip. We are talking about 4.5 million Europeans losing their jobs, on top of the astronomically high levels of unemployment they have now. If that is a blip, I am very glad that the noble Lord does not advise me on economics.

[Lord Kerr of Kinlochard]

I do not recognise the figure of 4.5 million. Maybe the noble Lord is assuming that exports that did not come to Britain, because we erected a protectionist barrier against them, would not go somewhere else in the world. It is a static analysis.

European Banking Union: EUC Report

Debate between Lord Kerr of Kinlochard and Lord Hamilton of Epsom

Thursday 24th January 2013 Lords Chamber

[Lord Hamilton of Epsom]

Like the noble Lord, Lord Kerr, I pay tribute to our chairman, the noble Lord, Lord Harrison. He has always been a very genial and capable chairman. I am particularly grateful to him for the fact that we now seem to be getting before our committee rather more representative witnesses, who on occasions represent the majority of the British people. Unlike the noble Lord, Lord Kerr, who I enjoy having on our committee—we have our differences but they are always agreeable ones—I am not going to speak too much about the Prime Minister’s speech as my noble friend Lady Noakes has a debate on it next Thursday, to which I hope to contribute. All I would say is that it is a very clever speech. Rather like the Old Testament, there are bits in it which suit absolutely everybody. It does not really matter whether you are a Europhile or a Europhobe. There is something in the speech to keep everybody happy.

On our report, I do not know how many people have actually read it; certainly not an awful lot of action has been taken on it. We must be well aware that the single supervisory mechanism has been adopted, but an awful lot of other things that were heavily recommended in our report have not. I refer particularly to the recovery and resolution directive, which is possibly equally important, if not more so. Of course, the intention was that it would be introduced at the beginning of this year. I now gather that the Dutch and others who see themselves as picking up the tab for ECB intervention into banks have backed off. They do not want to get involved in that anymore. They are going back on earlier undertakings, which is rather typical of how the EU operates most of the time. It takes two steps forward and one step back, and if everything gets rather difficult or if things, as it seems to believe today, are looking rather better, it is a wonderful excuse to do nothing. If that is the EU of which we all want to be part, that is fine, but it certainly does not seem to be the answer for the United Kingdom. Earlier this week, we had some witnesses who described the state of European banks as they now are: they are European in life but still remain national in death.

We are now in a very significant situation. The problem with the EU is that it does things, with enormous reluctance, only when faced with a very major economic crisis. You merely have to lurch from one crisis to another before any difficult measures are taken. There may be people in this House who are dreaming of the day when Europe moves towards much greater integration but it is quite difficult to see how that will happen. It also seems quite clear that it will happen only when there has been one crisis after another.

In 2011, the Prime Minister called for the “big bazooka”. He wanted a major move made that would stabilise the sovereign debt crisis in the EU. What happened? Absolutely nothing happened and things got worse and worse. Interest rates on Club Med debt went through the roof. It became such a crisis that eventually the Germans agreed that Mario Draghi should make his statement that he would do anything necessary to stabilise the eurozone. At that stage, the markets calmed down. It was only because it took that long for German agreement to come through and, by that time, confidence had been undermined all over the eurozone. Sovereign debt was getting completely out of control. Investment decisions were being put on hold. When you get that across a large economic area such as the eurozone, you see the economy moving into recession and things getting very much worse.

I always get a wonderful narrative from my son-in-law, who is German and works for a German bank in London. He says that Merkel is playing a fantastically clever game. She is delaying like mad and restructuring the economies of countries in the eurozone. But what she has actually done is bring recession across the whole of the eurozone. Germany itself is now in recession. That does not strike me as being statesmanship. It comes as no surprise to me that she has just lost some Länder elections in Germany. I will be quite surprised if she wins the general election in September of this year. I do not think that there is much to be happy about with the way in which the eurozone is performing at the moment.

Earlier this week, our witnesses said that eurozone bank indebtedness would disappear like the snow in the sunshine once we had economic growth in the eurozone. There are two problems with that. First, we have absolutely no idea of the scale of bank indebtedness in the Club Med countries in the eurozone. However, we know that we are reaching a situation where a number of countries—because they are faced by serious social problems—have said that their banks cannot repossess properties and throw people on to the street. That means that people in those houses stop paying their mortgages because they cannot afford to do so. The next thing you have is moral hazard when someone says, “Well, hold on, my neighbour is not paying his mortgage repayments because he can’t. But I think I won’t pay mine either, although I can”. That leads to a very major problem in the banking sector because all the mortgages are going wrong and you are talking about sliding property prices anyway.

I agree that economic forecasting seems to have gone a bit wobbly right across the board, but if there is any consensus it is that there will be absolutely minimal growth in the eurozone for the next two years. I do not think there is any point in looking much beyond that. However, two years is a long time to have no growth and no relief on this side of things. For that reason, the banking crisis is certainly not over. If the ECB is not going to make itself liable for bank debt, another banking crisis will lead to a sovereign debt crisis and we will be back in much the same situation we were in a few months ago.

There are also serious questions about how much freedom the ECB has to buy sovereign debt. Officially, it is not allowed to print money and the Germans are desperate to try to keep a hold on how much money the ECB spends. They want to pass resolutions in Parliament before very much more money is extended to the ECB. We must accept that, although the recovery and resolution directive has not gone through, there probably will be a crisis which will eventually force it through. Then we will have a very interesting situation. There has been a lot of comment in this debate already about whether we are covered by a double lock voting system in the European Banking Authority. But, come on, let us live in the real world. In the real world, the executive arm will be the ECB, which will make up the rules as it goes along. I do not think that it will constantly refer back and say, “We have a crisis on our hands. Is the EBA happy that we can do this, that or the other?”. I think that the guidance that will come from the EBA will be extremely broad in anybody’s language and that the ECB will become very much more powerful as it goes along.

We also have the problem of what on earth we do about democratic accountability. It is not going to be a very satisfactory situation when the ECB moves in on a large bank and says, “This thing is going absolutely nowhere. Its liabilities are appalling. We must lay off half the people, break it down and get it into a more sensible state”. That will not be a popular move when thousands of people are put on the street. You can imagine that at that point the local politicians will all say, “This is nothing to do with us, you know. It is the ECB that is doing this. We don’t like to mention it but it is the Germans standing behind them”. That is the sort of situation you are going to get. If you have no democratic accountability—there is absolutely none as regards the ECB—you will have some very serious problems when things start to go wrong with banks. This is all far from being satisfactory and does not bode well at all for those eurozone countries which desire this great process of integration.

[Lord Kerr of Kinlochard]

The problem of democratic accountability is very real, as described, but I think that everybody is well aware of it. Certainly the European Parliament is extremely well aware of it, which is why it is linking the two texts. The ECB text is nothing to do with the European Parliament but it will not agree it until it has agreed the EBA text, which is to do with it. I am sure that it will insist on some sort of democratic accountability provision being built in.

[Lord Hamilton of Epsom]

I wish that I shared the noble Lord’s confidence, but I do not. I cannot see where this democratic accountability is going to come from because at the end of the day the EBA is the only thing that has any democratic accountability, and if it is laying down broad policies and the executive action is being taken by the ECB, that is where the rub is going to come—with the executive action being taken by the ECB. Perhaps something will happen, but there does not seem to be much sign of it at the moment.

We will face crisis after crisis, which will merely prolong the uncertainty and the general conditions that we have in the eurozone today whereby people are still very reluctant to invest in this area and stagnation seems to be continuing. Resentment will increase. Everybody says that we need a completely integrated fiscal union in the eurozone. Well, come on. You will have a growing problem with the Germans resenting massive transfers of money to the Greeks—to talk in extremes. The Germans will not allow those transfers of money to take place without enormous conditions being placed on the Greeks. The Greeks will all riot in the streets because they will say that the terms under which the money is being transferred are too stringent, and the Germans resent giving the money. Is this the sort of Europe we want to live in? Already we are beginning to see very extreme parties appearing in Greece. Everybody goes on about the fascists in Greece, but you have to bear in mind that the communists are much bigger than the fascists and much more likely to win the next election. Either way, we are seeing very extreme parties emerging.

Then we have the Prime Minister’s speech and the idea that we should have a referendum in 2017-18 on whether we should be in or out of the European Union. If the eurozone is going absolutely nowhere and is no better than it is today, as many people think will be the case, I cannot see this country ever voting to stay within the European Union.