European Union Referendum Bill

Lord Lea of Crondall Excerpts

Monday 2nd November 2015 Lords Chamber

[Lord Forsyth of Drumlean]

I am most grateful to the noble Lord for that intervention. The amendment refers to the,

“report on the effect of the United Kingdom economy of withdrawal from the European Union”.

In order to do that one would need to take a view on what is going to happen to the euro and if there is someone in the Office for Budget Responsibility who knows the answer to that question, I have to tell them they could be a billionaire tomorrow.

Of course no one knows what is going to happen to the euro. I agree the probability is that it is not going to survive unless there is very substantial further integration within the European Union but no one knows to what extent that will be possible. For example one can look at the attitudes towards the problem of mass economic migration into the European Union and the chaos which the members of the European Union are in at the moment and their inability to agree. Does anyone in the Office for Budget Responsibility know how to predict the outcome of that matter?

The noble Lord, Lord Kerr, is expert at dealing with the European Union. I can remember as a Minister arriving at meetings and he had already prepared the compromise that we would accept and the press release which announced a great victory by Ministers over the European Union to be released before we had even got off the plane. I know that he believes very much in the opportunities for flexibility in matters of wording but the wording on this amendment is asking the Office for Budget Responsibility to do the impossible—to tell the future. In so doing they will almost certainly get it wrong, like the Bank of England and everyone else who tries to tell the future, and that will damage their constitution.

[Lord Lea of Crondall (Lab)]

The bear trap metaphor is getting in the way of the thread of the noble Lord’s own logic. He has got lost in trying to demonstrate that this is either a job that no one should do or it is a job that should possibly be done, but not by the Office for Budget Responsibility. If it is the former, is it not the case that many people in the debate about the referendum are desperate for some sort of guidance on the two scenarios? Indeed the governor’s speech and what happened last week in Iceland are very relevant. Is the noble Lord saying that no one should do this job to the best of their ability, however difficult, or simply that the Office for Budget Responsibility should not do it?

[Lord Forsyth of Drumlean]

I am saying that the Office for Budget Responsibility should not do it and I am saying that the point made half an hour ago by my noble friend Lord Flight is absolutely right. These are matters of judgment, and the people who should make the arguments are the people who are on either side of the campaigns. It seems to me, listening to arguments from the noble Lord and from others on his side, that they have got quite a lot of work to do if they are going to persuade the British people to vote to stay in the European Union. Whether or not staying in the European Union is in the best interests of our economy is a matter of judgment. Even in Greece it would appear that a majority of the voters still think that it is in their interests to be in the European Union and within the eurozone. I am very happy to leave that to the judgment of the British people in the referendum.

--- Later in debate ---

[Lord Lea of Crondall]

The last 15 minutes have been very illuminating. We now have the position where the noble Lord, Lord Forsyth, has concluded that we do not want any attempt to have this independent assessment because it is up to the two sides to fight it out as if we were in Madison Square Garden. I will quote him many times in the future on that basis. These people do not want any independent analysis—they just want a shouting match to see who can shout the loudest. That is exactly what he said, and that is my first point.

[Lord Forsyth of Drumlean]

It is not what I said at all. I said that whether we stay or leave is a matter of judgment and opinion. The idea that the Office for Budget Responsibility can intervene in this matter is not sensible. In fact, it would be difficult for the Government, because I very much hope that at the end of the day collective responsibility will be suspended and that members of the Government will be able to campaign according to their own judgment. Therefore the idea that the Government or anyone else could produce an independent report is fantasy. Of course people must have the facts; I hope very much that people on both sides of the campaign will resist the kind of scaremongering which we have heard from people like the noble Lord—yes, indeed—who support that particular side of the argument. We have heard that 3 million jobs will be lost and other scare stories, which will simply turn off the voters. However, I do not believe that it is impossible for those on both sides of this argument to honestly put out arguments and facts and let the people decide.

[Lord Lea of Crondall]

It is quite often possible to summarise the general opinion of politics in this country, as a default position, as: “They just shout at each other and they don’t try to find the truth in the public interest”. This will be an historic decision for Britain, and the idea that we will not do our best to find any independent ground to give to the British people is quite extraordinary.

I was the person who, at Second Reading, first made this proposal and started this hare, or bear, running. That was done to meet the argument put forward by noble Lords such as the noble Lord, Lord Forsyth, that we must find out what the consequences would be of being out, because they on their side—and it is true that I am on one side, just as the noble Lord, Lord Forsyth, is on the other side—were saying that there will be absolutely no problem with being out, without any of the downsides; for example, that we will have all the benefits of EFTA. Of course, this weekend we now hear from the Prime Ministers of Norway, Sweden, Iceland, Greenland, the Faroe Islands and wherever that this is not the case. We have now got into the position where, this bear trap or whatever it is having been opened up, the noble Lord seems to be running away from the argument that his side started about a month ago, which is very interesting.

The only other way in which I guess we could have an independent analysis without it being done by the Office for Budget Responsibility would be to set up some new academic/ex-Whitehall or Civil Service commission, or something like that. It would not be easy to get agreement—as I think the noble Lord, Lord Turnbull, said at the beginning—in that rather heated atmosphere on what such a body should be like. I do not think that the noble Lord, Lord Forsyth, has doubted that the credentials of the OBR as regards its degree of dispassionate analysis could be bettered. It now has a reputation, with some ex-Treasury officials in it, as a body which does not kowtow to the Treasury, which some people feared. However, it established its own independence and credibility at the same time, not like a parliamentary Select Committee with an eye for newspaper headlines wanting to find something extravagantly newsworthy to say. This is therefore about as good an attempt as will be made.

Finally, we do hear a red herring from time to time, which is of course that after the referendum, if it leads to exit, another negotiation would follow whereby tariffs would not go up against Britain, and that otherwise they would. All these existing problems would suddenly be revealed for analysis when we are out, not before we are out—before we have voted—but when we are going to go out they would have another negotiation. That particular fox, to change the animal metaphor, has been shot dead three times, and I should think it is pretty dead now.

[Lord Collins of Highbury (Lab)]

My Lords, I will try to be very brief. I will start by saying that in the previous debate and at Second Reading my noble friend Lady Morgan made our position of support for the principle of reports and information quite clear. This comes back to the Electoral Commission’s submission that people want more information and informed debate. Clearly, we know that the debate will be focused on those who are committed to remaining in and those committed to leaving. However, the debate today highlights a problem we have with people who take a fixed position. I am one of those who believe that the Prime Minister is intent on negotiating progress within the European Union. I also believe that the European Union is open to constant reform. I do not see the date of the referendum as the date when everything stops, with it simply being a question of deciding, “It’s good now” or “It’s bad now”. The debate on reform is really important, which is why the Office for Budget Responsibility can have an important role to play.

The noble Lord, Lord Higgins, asked, “Who are these reports for?”. I could not agree with him more in asking that, but I think that they will make an important contribution and stop the debate deteriorating into one between those who simply want out at any cost and those who simply want in at any cost. The reform agenda must be very much at the forefront of the debate that we will have.

I think that the Office for Budget Responsibility is capable of doing the job. It produces reports on the Budget and is capable of producing a longer-term fiscal sustainability report on future trends and pressures. It is ideally suited to the job and I think that people will want to hear from it. There were debates in the other place about whether the Bank of England should or should not express an opinion. We support the independence of the Bank and it has been doing a good job. The noble Lord, Lord Forsyth, thinks that the Bank has got it wrong many times and asks, “Why should we listen to it now?”. However, I am also aware that when even a body like the Bank of England reports, the Guardian says that its report shows that the EU provides a dynamic environment for economic growth, whereas the Daily Telegraph said that the report has nothing to do with EU membership. So whatever the OBR produces, I have every confidence that the campaign to remain in the EU will say one thing and that the campaign to take Britain out will say something else. However, the British people deserve to understand the source of the information, which is why we will support both amendments.