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

Lord Liddle Excerpts

Wednesday 23rd May 2012 Lords Chamber

[Lord Liddle]

My Lords, this is a small Bill consisting of two clauses but, as we have heard in this excellent debate, it is about the huge topic of the future of the euro. As the noble Lord, Lord Howell, explained to us with his usual clarity, the Bill is an enabling measure. We are legislating here not on the substance of the European stability mechanism but only on the enabling treaty change to allow it to happen. Labour recognises the need for this enabling measure. As the noble Lord, Lord Lamont, said, it is already priced into the markets. No one should kid themselves that the establishment of the European stability mechanism is a sufficient response to the crisis that we have now. There is an enormous crisis in Greece and a growing calamity of collective austerity. To that extent but not much more, I agree with my noble friend Lord Reid.

My noble friend Lord Giddens said that he had had enough of talking about being on the edge of precipices. Perhaps I may say what I think is at stake here. At stake is a crisis that threatens the success of the post-war settlement that we have seen in Europe and the stability and prosperity that the European Union has brought to Europe. That is what is at stake in this crisis. I disagree profoundly with the noble Lord, Lord Flight, and his parallel with the gold standard. The difference between the European Union and the gold standard is that it is a political union, and politics can do something about it. If leadership is shown we can avert a crisis that threatens to break up the post-war settlement.

What we need, as the noble Lord, Lord Hannay, said, is a bit more solidarity and a bit less emphasis on limited liability. How should we go about trying to save the situation? First, the firewall needs to be a lot bigger in scale and more flexible in operation. The existence of the stability mechanism cannot be a substitute for a central bank. The central bank must be willing and prepared to intervene decisively in the bond markets to stem self-fulfilling speculation and panic. I do not think that we will get eurobonds at this stage; I do not think that the Germans will agree to eurobonds until there is established a European fiscal authority. However, we could have a more flexible stability mechanism.

Secondly, the stability mechanism should be preparing now to act quickly on recapitalising the banks in Europe on a pan-eurozone basis. If responsibility for sorting out the banks remains with the national countries—the sovereigns—the problems of countries such as Spain can only get worse because sorting out the banks increases the fiscal problem; dealing with the fiscal problem involves a squeeze that makes austerity more severe; and the impact of this fiscal squeeze on growth ultimately also deepens the problems of bad loans and zombie banks. We have to deal with this on a pan-European level and the ESM is the body to do it.

Thirdly, we need a more balanced strategy—not choosing growth over austerity but a balanced strategy. François Hollande’s victory has changed the political weather in Europe. There is a growth plan under preparation in Brussels. We have heard about it in our debate—unspent structural funds to be used better, recapitalisation of the European investment bank and an experiment in project bonds. Put with that, the noble Lord, Lord Davies of Stamford, talked about the need for structural reforms and the need to revive the single market which Prime Minister Monti is so behind. That is a credible package. They are welcome initiatives but from our side we not think that they are enough. For one thing, their impact would take too long to work. Infrastructure schemes and renewable energy projects are rarely ready to go. Southern Europe needs stimulus to growth now.

[Lord Davies of Stamford]

I am grateful to my noble friend for giving way. He will be aware that in Greece the motorway building programme was stopped midstream because of the bailout conditions. Those projects are shovel ready—a lot of work has been done on them and they are all ready to go. Some financing there could affect demand very rapidly.

[Lord Liddle]

The noble Lord, Lord Davies, is absolutely right. In addition to infrastructure, I think that we need a more moderate pace of deficit reduction. The Commission argues that the fiscal compact gives you all the flexibility that you need in a crisis situation. That should be done. Secondly, we should be mobilising the structural funds to tackle the employment issues, particularly the fact that in countries such as Greece and Spain, getting on for half of young people are out of work which is completely unsustainable socially and politically. It is also the case that a major competitive weakness of southern Europe is the low skills level of its workforce. That must be addressed from Europe through the structural funds—a crash programme of social investment in human capital.

Thirdly, the eurozone needs more balance between the strong and the weak in the urgent competitiveness adjustments that it must make. Stronger countries such as Germany have room for manoeuvre. Noble Lords talked about higher wages for German workers, which are certainly affordable. German wages have gone up very little despite the country’s enormous export success. I am glad that there is now a consensus between the Social Democrats and Christian Democrats on the introduction of a national minimum wage. Germany would have to tolerate only a bit more inflation to help the south, which is suffering debt-trapped deflation. That would enable the ECB to meet and maintain its target level of inflation of around 2% across the whole eurozone.

Our hope is that the political ramifications of the Hollande victory will result in a wider and bolder set of actions to build a stronger firewall, recapitalise the banks, adjust the pace of deficit reduction, offer immediate help on jobs and increase demand in countries with surpluses. That will not get us out of the need to make harsh adjustments. However, if we continue with collective austerity it will lead to collective suicide.

What is the coalition’s view? Is it still backing Mrs Merkel’s priority of fiscal austerity, which has been its policy at home for the past two years? Or is it undergoing a latter-day Keynesian conversion to the need for growth in Europe? If the eurozone can have a plan B, can we not have one at home? That is what we need. It is very odd for a Eurosceptic Conservative Party to argue that it is all right to have additional public borrowing through the EIB and project bonds at European level, but that of course it would be a complete disaster to tolerate any flexibility in the public borrowing of the UK. I find this an amusing contradiction in the present situation.

That confusion and contradiction, with a sharp eye for public relations, have been characteristic of the Government’s conduct of their European policy. As the noble Lord, Lord Williamson, said, they treat the eurozone as a convenient whipping boy to cover their own failures. As we know, last year growth in the eurozone was higher than in the UK. I am interpreting what the noble Lord, Lord Williamson, said.

[Lord Williamson of Horton]

It was a rather broad interpretation: the size of the Atlantic.

[Lord Liddle]

I apologise to the noble Lord, but the point is surely valid. Growth last year in the eurozone was twice that in the UK. Therefore, to blame the eurozone for the present double dip is nonsense.

The big point that the Eurosceptics fail to understand is that we cannot avoid the consequences of the euro by being out of it. In or out, our future is deeply affected because of our exports and the interlinking of our financial system. As Robert Chote said, if Greece exits, who knows what will happen? We may never in the foreseeable future recover the level of output that we had in 2008. A policy of splendid isolation from the continent was never realistic for Britain, but in the world of globalisation and economic integration it does not work at all.

Nor is our isolation very splendid. We are losing influence and clout in Europe to a dangerous degree. I will give one telling illustration. The Prime Minister claimed that the reason he used the veto and walked out of the December European meeting was that his partners would not accept a set of proposals that he tabled at 2 am in order to protect the City of London. A couple of weeks ago, on the capital requirements directive, the Chancellor, George Osborne, and the British for the first time found themselves outvoted by 26 to one at ECOFIN on a key question of financial regulation. The Chancellor has now recognised that he has to go along with the majority. That is not an effective use of the British veto. It just shows how influence is draining away from us at the moment.

[Lord Flight]

I was under the impression that the Chancellor had eventually obtained agreement to his point, which was that there could be some flexibility in the capital ratio of banks, with a view to the UK being rather more demanding than the rest of the EU.

--- Later in debate ---

[Lord Liddle]

I am sure that that is the Chancellor’s interpretation.

I recognise that there are some distinguished Members of this House who are long-term supporters of British membership of the European Union, but never believed that the euro could be made to work. We had wonderful speeches from the noble Lords, Lord Lamont and Lord Lawson, but I do not agree with what the noble Lord, Lord Lawson, said. He said that monetary union will work only if you have what the Germans call the coronation theory—the customs union first, the political union and then the monetary union to crown it.

I recognise that the euro was set up on a flawed basis. I thought that as the problems occurred they would be addressed incrementally and that reforms would be introduced that would make the system work. The trouble is that we have had a cushy decade of total complacency—it was a cushy decade for the UK as much as it was for the eurozone—in which the impetus for reform was completely lost. Short of federal union, if the eurozone took the kind of steps that Labour is advocating now it would have a viable future.

[Lord Reid of Cardowan]

Would my noble colleague consider that perhaps the problem was not complacency but precisely the assumptions that he has outlined to us: that as problems arose, incrementally we would go towards a central state in Europe and no one would ask the peoples of the nations of Europe? That is precisely the problem because what is being suggested now is one of these huge incremental steps. I promise him that there will be a reaction of nationalism in Europe because it will require not only centralisation but the imposition of austerity from the centre. We will create the very conditions that caused such resentment in Germany in the 1920s and 1930s.

[Lord Liddle]

I have the greatest respect for my noble friend Lord Reid, and in my life I have learnt an awful lot from him. However, his assumption that the only alternative to where we are now is a central state is fallacious. What have been lacking in the past 10 years are the incremental reforms of the kind that I have outlined that would have made the euro work.

I have gone on too long. I believe the consequences of a euro break-up, which some noble Lords seem to want to will on, would be horrendous. Eurosceptics make a fundamental mistake in thinking that for a country such as Greece, exit from the euro would solve its problems. A lot of British people think that it would be a classic devaluation, rather like our exit from the ERM in 1992. It would be nothing like that. Ordinary people’s savings would be wiped out as the Greek banks collapsed. There would be severe additional spending cuts, because with all borrowing cut off the Government would be unable to finance the deficit. They would have to cut welfare benefits and public pay. The new currency would plummet in value because there would be no private inflows of capital to sustain the balance of payments. It would be an economic disaster zone.

There would be huge social tensions between the better-off, who had already got their money out of the country, and the wage earners, the poor and the unemployed, who would have to live on the devalued drachma. We would see—here I agree with my noble friend Lord Anderson—the emergence of a failed state on Europe’s south-eastern flank, with incalculable consequences for relationships with Cyprus, Turkey and the rest of the Balkans. As my noble friend Lord Reid knows well, this is a part of the world on which we have spent blood and treasure over the past two decades to try to stabilise. Kick the Greeks out of the euro, and what are we going to do about stability in the Balkans? It is just too awful to contemplate. That is why the euro must, and can, be saved—if we adopt the right policies to do so.

The noble Lord, Lord Dobbs, spoke eloquently about his lessons of history. My lesson would be that a Greek exit would be followed by competitive devaluation, protectionism, a run on other countries, terrible contagion problems and an outbreak of nationalism. Conceivably, it could return Europe to the inter-war years, so I want Britain to play a constructive, committed and engaged role in trying to make this thing work, not a carping, hectoring and lecturing one. We need a rescue, we need the ESM, and that is why we need this Bill.

Queen’s Speech

Lord Liddle Excerpts

Thursday 17th May 2012 Lords Chamber

[Lord Liddle]

My Lords, I follow on from the excellent speech by my noble friend Lord Wood of Anfield on our Front Bench to ask what this Government’s vision is of Britain’s place in the world. The noble Lord, Lord Howell of Guildford, spoke eloquently earlier about Britain as a network. Fair enough, that is essential in a multipolar world but being a good networker is not the foundation stone of an effective foreign policy. That depends on firm alliances in a world where our position is that we will soon represent only about 2% of global GDP.

The transatlantic relationship has been the central plank of our foreign policy for my lifetime. It is what I grew up to believe in. To what extent will that still be the case in the decades of the Asian century now unfolding? What will be the impact of the coming US debt crunch on its defence budget, commitment to Europe and vital ability to help us, as it did in the recent Libyan operation? Alongside America’s reduced resources and increasing shifting focus to the Pacific, there is also every sign of increasing inwardness in the United States. Just look at the defeat of the excellent Senator Lugar in the Indiana primary last week—a man who contributed a lot to internationalism and Atlanticism in his distinguished career.

Yet, at the very moment that America’s Atlanticist commitment is visibly diminishing, the present Government appear to have set a deliberate course of loosening Britain’s ties with the European Union. Last December, we had the Prime Minister’s infamous non-veto—a petulant walk-out on our European partners that is already damaging our interests, for example on the recent financial services regulation. I fear that this is not a one-off. Look at the Government’s decision to focus precious Foreign Office time and resources not on the questions of how we strengthen the European Union and its role in world affairs or secure Britain’s role in what is increasingly an inner core/outer core European Union, but on how we weaken those ties. What else is the meaning of all this babble about repatriation of powers and renegotiation of the relationship, or, in coalition speak—the Liberal Democrats still have some power to change the words if not the substance—rebalancing of competences?

Last year, when the European Union Bill made its way through this House, Ministers assured us that the purpose of the referendum lock was to draw a line under the process of European integration as it affected Britain and enable the Government to go out on the front foot and make the case for British membership of the European Union. Since then, we have waited with bated breath. I was glad to see the reference in the speech of the noble Lord, Lord Howell, to membership of the EU as an essential pillar of our foreign policy, but can the Front Bench opposite point to a single speech or newspaper article in which the Prime Minister, the Foreign Secretary, the Minister for Europe or any other member of this Government has made a substantial and sustained argument—as opposed to a glancing paragraph—in which they argue the case for British membership of the European Union? I will of course apologise if I am wrong and these speeches and articles can be put in the Library of the House, but I would love to see them.

It is almost 65 years since the mighty, magnificent Ernest Bevin, in the wake of the Communist coup in Czechoslovakia, declared that “Europe must unite or perish”. I am thankful that we are in a very different world now, but the basic message remains the same. Today, the challenge is of potential decline: decline in Britain and Europe’s relative economic power; decline in our political clout as power shifts to other parts of the world; and decline in what, for all those terrible episodes in Europe’s past, has been the overall civilising influence of European culture and values. Decline may not bother some people if they think that they will be comfortable in their own lifetime and cosseted by our social model and welfare states, but I fear that this sense of comfort is illusory. The economic crisis we are witnessing now—in Britain as much as in the eurozone—may be deeper and more fundamental. It may be the end of the promise of betterment for future generations and the start, particularly for the low skilled and less fortunate, of a long process of squeezed living standards in response to a doubling of the labour pool available to global capitalism.

The question facing the nations of Europe in this harsh new world is: do we want to be pushed about and powerless, or will we unite to defend our interests and values? We can work together to deepen a single market and invest in research and knowledge that creates a dynamic and vibrant economic base that can withstand more global competition. That is a single market that takes the high road to competitiveness and, through the social and environmental standards of decency and sustainability that it sets and robustly defends, defies a global race to the bottom. That is a united Europe that will not be brushed aside at the world’s top tables on questions of energy, climate change, resources and development. That is a united Europe that can spread the benefits of democracy and stability to its wider regions, be capable of defending its vital interests, and be a force for good.

To conclude, in the next decade, Britain faces a stark choice about its global role. Do we succumb to the false seductions of comfortable little “Britzerland”, or play our full part in rebuilding Europe’s unity and strength? For all the problems of Europe and the eurozone, and all the EU’s difficulties in terms of its bureaucracy and the need to renew and restore its legitimacy, somehow—for the sake of our national interests—we have to make Europe work.

Eurozone

Lord Liddle Excerpts

Wednesday 16th May 2012 Lords Chamber

[Lord Howell of Guildford]

My noble friend is quite right: youth unemployment is a blight and a very serious issue everywhere, not least in this country as well as throughout Europe and many economies in the Middle East. The problem is general. My noble friend raised two points. She mentioned the European Investment Bank and the possibility of expanding its activities. This is a possibility and may well be discussed. As a broader point, she posed the question of austerity versus growth, as though they were opposites. The reality is that this polarised choice is a complete myth. Unless we can control our budgets effectively and run them with fiscal discipline, there will be no growth. There will instead be still further inflation, undermining the very growth that we want to see. A balance must be struck. It is not a choice; it is a balance.

[Lord Liddle]

On this side of the House we welcome what the Minister said about being open to increased resources for the European Investment Bank. However, will he tell us whether the Government broadly agree with the growth agenda being pursued by the new French President, François Hollande? Does he draw from the spate of election results that we have seen the conclusion that austerity in the eurozone is reaching its limits? Given that growth in the eurozone was larger than ours in the past year, will he draw that lesson for economic policy at home?

[Lord Howell of Guildford]

Neither the noble Lord nor I know how the discussions between the new French President and the German Chancellor will work out. However, he has read the newspapers, as I have, and it is fairly clear that some aspects of both arguments will have to be taken into account. That will demonstrate the very point that I just made to my noble friend. The picture that has been painted of either austerity or growth is completely unrealistic. The reality is that there will have to be the discipline on which the German people and Government have led very strongly, and in which they believe for strong reasons connected to their history, combined with the necessity to erode youth unemployment and to create and restore confidence in investment. This is a balance that must be struck. We certainly hope that the leaders of France and Germany will, in their wisdom, strike the right balance and maybe convey to the people of Greece the necessity for this balance, from which there is no escape. There is no unrealistic choice between going one way or the other—you cannot.

EU: Recent Developments

Lord Liddle Excerpts

Thursday 16th February 2012 Lords Chamber

[Lord Liddle]

My Lords, this has been a mammoth debate and a serious one, without any partisanship. In that spirit, I congratulate the noble Lord, Lord Howell, on his efforts to give a positive view of the Government’s European policy. I also thank my noble and learned friend Lord Davidson of Glen Clova for his analysis of that policy’s weaknesses. We have heard many excellent contributions and it is a privilege to listen to noble Lords with their vast experience as former commissioners, former diplomats and even as former Chancellors of the Exchequer, with their different perspectives from my own.

In particular, I pay tribute to the noble Lords who spoke up in favour of European unity. The noble Lord, Lord Bates, made an excellent argument for Europe. The noble Earl, Lord Sandwich, on the Cross Benches talked about his belief in a Europe of the peoples. From my own Benches, the noble Lord, Lord Grenfell, spoke about a federal Europe and the noble Lord, Lord Radice, said that it was not time to give up on the euro. The noble Lord, Lord Judd, talked about a social Europe, as did the noble Lords, Lord Monks and Lord Lea. These were inspiring contributions. Obviously, I cannot commit the Labour Party to every detail of what they said; none the less this is the case for Europe that needs to be made.

There have been two big themes in this debate: first, the trials of the eurozone; and, secondly, Britain’s position in Europe. On the trials of the eurozone, I think we have heard rather too much of a flavour from the Benches opposite of how the euro is doomed, and too much of the view that it is impossible to restore competitiveness without the recreation of depreciating national currencies. An internal devaluation is, of course, painful but it can be done. You only have to look at what Germany has achieved from the mid-1990s until the middle of the previous decade to know that adjustments in competitiveness can be made within a fixed currency arrangement. Therefore, that can be done, but obviously I would like to see a stronger plan for growth. Like the IMF, I would like to see countries that have room for manoeuvre to expand their economies taking advantage of it. We would like to see—as the noble Lord, Lord Newby, proposed—a greater emphasis on the single market and trade to create more job opportunities. However, we also agree with the noble Lord, Lord Giddens, that that has to be done in the context of a much wider reform strategy to which we all need to give much deeper thought.

The noble Lord, Lord Tugendhat, made an excellent speech in which he expressed fears about German policy. I did not entirely agree with that aspect. I read an excellent speech that Helmut Schmidt made to the SPD congress in December in which, at the age of 93, he spoke to 2,000 people. It was a most inspiring speech about Germany’s role in Europe which I recommend to all Members of the House. Like the noble Lord, Lord Monks, my own view is that we should never underestimate the political commitment to make the euro succeed. I suspect that the new Franco-German arrangements that come out of the French elections in May will result in a better balanced policy.

However, on the more significant point of Britain’s position in Europe, we on this side understand the inability of the noble Lords, Lord Kerr and Lord Hannay, to understand what the Government did in December, and why they did it. The noble Lord, Lord Howell, tried to explain that to us but I thought there was a fundamental contradiction in what he said between our objection to a fiscal union, which is a matter of principle, and the question of whether we would have signed up if certain safeguards had been met. However, I think that looking ahead is far more important. If we look ahead, there is a choice to be made for Britain between the view expressed by the noble Lord, Lord Lamont, that 20 years ago we made the choice not to be in the euro and we have to live with it, and the view expressed by my noble friend Lord Mandelson that in fact to make the euro work—which is going to happen—there is going to be a euro mark 2, which will have deep implications for the United Kingdom and its policies, and that we have to think through what those implications are. The noble Lord, Lord Brittan, made an excellent point in saying that he was not sure how deep integration had to go in fiscal terms to make the euro work. We need to think much more about these issues in our future discussions and debates.

I also agree with the noble Lord, Lord Cormack, that what the coalition seems to lack is a bigger-picture view of Britain’s place in Europe and the world. The Churchill view on this at the end of the Second World War was of three circles: the maintenance of the British Empire, with the US relationship and Europe overlapping it, half a century later we know that the empire has become a Commonwealth. We know that there are a lot of good things about the Commonwealth but that it is not a trade bloc or a guarantee of economic benefits. We had a painful lesson on that with the Indian air force contract in the past few weeks.

As for our relationship with the United States, President Obama flattered us when he came to Westminster last year and talked about the special relationship. That was an easy compliment but the reality is rather different. It is of an America that is increasingly inward-focused, Pacific-facing, and cutting back on global engagement, and a Britain that, however much we may will the ends, can no longer financially bear the means of that kind of global role.

That leaves us with the third of Churchill’s three circles: Europe. To rework inelegantly Dean Acheson’s famous quote from the early 1960s, Great Britain exchanged an empire for a Commonwealth half a century ago, its relationship with America is no longer so special, but it has yet to find its confident European role. The idea of the European role has always been anathema to the anti-Europeans in this House such as the noble Lords, Lord Pearson and Lord Willoughby de Broke, but what I find worrying is the half-heartedness on the Benches opposite about the European commitment. It is the people who say, “Yes, we are in favour of political—”.

[Lord Pearson of Rannoch]

My Lords, does the noble Lord accept that we Eurosceptics are not anti-European; we are merely against the ill-fated project of European integration?

--- Later in debate ---

[Lord Liddle]

You are anti-European Union. I should have corrected myself—but you are anti.

[Lord Deben]

Given that the noble Lord has been interrupted, perhaps I may point out that there are some on these Benches who are in no way uncertain about the future of Britain in the European Union and support every word that he is saying.

[Lord Liddle]

That is a nice compliment from the noble Lord. What worries me is when people say, “Yes, we want Europe because it is good where we can have political co-operation on where we agree. Yes, of course the single market matters, but let us draw a clear line at that”. Whereas in the post-war era it is said that we had the myth of Britain standing alone at Dunkirk, which kept us out of effective engagement with Europe for 30 years, we are now recreating a new myth about Britain’s role in the world, whereby Britain alone in the new globalised world of the 21st century can thrive without the “shackles”—as the anti-European Union people put it—of engagement in Europe.

Of course Britain has global reach and global interests, and it can be an influential and effective networker in this new global world, but there is the idea of Europe as a shackle, that the single market is no more than a monster of bureaucratic regulation, that free movement of labour stops us having our own immigration policy, and that the things that people do not like—such as the rights culture and the health and safety culture—are all because of Europe.

I noticed that the noble Lord, Lord Flight, was almost cheering when my noble friend Lord Monks said that four weeks’ statutory holiday for people would be scrapped if we were no longer part of Europe. That is a dangerous and seductive myth that may well seriously cloud our judgment as a nation as to where our future best interests lie. We must recognise that the health of the European Union is absolutely central to our global interests. British-based businesses sell a higher proportion of their exports into the single market than German exporters do of theirs. That is partly because, due to the single market, Britain has become such an attractive base for inward investment. It is because of the base of the single market that we can specialise and compete in world markets.

We do not strengthen our position in the single market by diplomatically putting ourselves out of the room when, for all the paper promises made, key economic questions affecting this country will be discussed. It is nonsense to think that the world will pay more heed to a Britain that accounts for—what?—2 per cent of world GDP than the European Union, which still represents the biggest economy in the world. People who think that Europe is putting us in shackles to meet the challenges of the global economy have to explain why Germany is one of the world's most successful exporters to China and the emerging economies.

The anti-Europeans have a vision of how Britain can make its living in the 21st-century that is deeply antipathetic to the instincts of those on our Benches. We believe in a European vision of a modern social market economy, a Europe that takes the high road to competitiveness and combines the opportunity for successful private enterprise with decent regulatory standards and essential public investment in low-carbon infrastructure, research, education, early years, a modern welfare state, and so on. The vision against that is essentially the vision of an offshore Britain, a deregulatory tax haven, a Hong Kong-type vision, which would be a disaster for most of our people but for the City of London as well.

The coalition would like to think that we can have the best of both worlds, to keep the benefits of the single market while avoiding most of Europe's obligations and political commitments. Of course, we should try to do our best to shape Europe in a British image, and there is a huge agenda of European reform that we need to pursue, but if we are saying that we will stay apart for ever from the single currency, we will have nothing to do with the fiscal stability union, we will be no longer in Schengen or part of the justice and home affairs parts of the treaties, what other nation in Europe shares that vision of Europe's future? Where are we looking for allies if we are trying to stay out of everything?

The European Union is an exercise in pooled sovereignty or it is nothing. If we are not prepared to join in and do our bit, we will ultimately make ourselves irrelevant. We cannot indefinitely achieve our objectives by staying out of the room when we do not like what is being discussed, and we cannot achieve them by opting out of so much that it begins to look as if we might as well not be in.

We have to resolve this issue as a country: is our future European or not? That is the lead that we are looking for from the Government.

EU: Treaties

Lord Liddle Excerpts

Monday 30th January 2012 Lords Chamber

Asked By

[Lord Liddle]

To ask Her Majesty’s Government whether the intergovernmental treaty presently under negotiation in Brussels will eventually become part of the structure of the European Union treaties.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, I think we can all cool down now. It is the prerogative of any member state to suggest additions to the European Union treaties. Any addition, including the proposed intergovernmental treaty, would need to have the agreement of all 27 member states.

[Lord Liddle]

I thank the Minister for doing his best in that reply. However, with all his experience of European matters stretching over five decades in politics, would he please explain to the House how the Prime Minister can one month take Britain out of the room, claiming that the proposed treaty is a threat to our vital national interests, and then the next month appear to want to wave it through, declaring that he does not mind at all if the intergovernmental treaty, of which we will not be part, makes full use of the EU institutional machinery? Is it not true, and does the Minister not agree, that really the only way to protect Britain’s vital national interests is always to be properly at the table in the room and not walk away, and that the only reason that the Prime Minister cannot do what is right for Britain is that his main concern is what he can get away with inside a divided coalition and a divided party?

[Lord Howell of Guildford]

I think that the noble Lord, in his enthusiasm for these matters, is getting a bit confused. This is an intergovernmental treaty; it is not going forward inside the European Union. The British Government are anxious that there should be orderly development of the eurozone and that obviously it should not collapse into chaos. Nevertheless, as I think the noble Lord himself has written, it has “design flaws” in it—I think those were his words—and therefore there has to be caution and care about the whole way in which it is carried forward. Certainly, the UK does not want to be involved in a treaty that supports a flawed system. We want to be supportive of a design for the future which is sustainable and which brings prosperity, not division, to Europe. That is the position. What is the role of the European Union institutions? We do not want to throw sand in the machine. If some of them can usefully be used in the aim of building a better euro system, we will support them, but we are reserving our position on exactly which institutions should be used and how they should be used. Our general attitude is supportive and constructive, and we are involved, as ever, in the machinery of building a prosperous and competitive Europe and a good single market. These remain our aims and we are taking a leading position on them.

Falkland Islands

Lord Liddle Excerpts

Tuesday 24th January 2012 Lords Chamber

[Lord Howell of Guildford]

I think we have been a little ahead of the game. Obviously, the intention of Argentina was, sadly, to obstruct the movement of Falkland Islands shipping. Before that could happen we secured, for a start, the full assurance of Brazil, Chile and Uruguay that they would continue to welcome shipping flying the British ensign flag and would not interfere with trade. We have every reason to believe that the same attitude will prevail in all other ports where Falkland Islands shipping may call. However, we have taken action. Our ambassadors have moved very quickly and we are, as I say, ahead of the game.

[Lord Liddle]

My Lords, following the question of the noble Baroness, Lady Hooper, would the Minister agree that the best form of soft security for the Falkland Islands is very good, strong British relations with the South American neighbours of Argentina? Can he give us an update on what has happened to British relations with those countries and why this matter has come forward as it has in relation to Falkland Island flagged vessels? In particular, what has happened, since the present Government took office and since President Rousseff took office as the new president of Brazil, to the excellent relations that the British Government had with Brazil under the Labour Government and President Lula da Silva?

[Lord Howell of Guildford]

As far as relations with Latin America generally are concerned, I can safely say that where excellent relations existed before they have been built on and are even more excellent now. Considerable effort has been made in renewing and expanding our relations with Latin America. My right honourable friend the Foreign and Commonwealth Secretary was in Brazil the other day on a highly successful visit. My honourable friend Mr Jeremy Browne, the Minister of State, constantly visits Latin American countries, and visitors have come here with whom I and others have liaised very closely. We feel that we have a very good developing relationship, which includes the expansion of our embassy facilities and capabilities in the region.

There are many theories as to why agitation and tension have arisen over this matter. Many experts point to the possible discovery of commercial deposits of oil around the Falklands. It is a great pity that Argentina bowed out of the hydrocarbons declaration, which would have enabled it to benefit from these developments on the oil front. However, it decided to stand aside from this and, instead, to complain and apparently grow angry at what is happening. That may be one reason.

EU: December Council Meeting

Lord Liddle Excerpts

Wednesday 11th January 2012 Lords Chamber

[Lord Howell of Guildford]

Of course, the European Court of Justice is applicable and is an instrument of the European Union treaties. Ad hoc arrangements and other co-operation arrangements that are not within the treaties would not be covered by the European Court of Justice. I was interested to see in the draft of the fiscal union treaty that is now circulating that the proposition that the ECJ should have precedence over national laws has been removed. I appreciate that my noble friend’s long-term considerations go much deeper, but it may be that here and now some of the concerns that he has expressed are being recognised.

[Lord Liddle]

Will the Minister bear with us as we continue with an old argument? Will he confirm that it is the clear policy of the Foreign Secretary and the coalition that there will be no attempt to repatriate powers from the European Union during this Parliament? Will he confirm that that is the Government’s policy and, if it is, how does he justify the Foreign Secretary permitting civil servants in his department to work with the new All-Party Group for European Reform to explore what powers might be repatriated? How is this Conservative initiative consistent with the policy of the coalition?

[Lord Howell of Guildford]

I do not want to play with words but I understood that in all parties, including the noble Lord’s party, and in the think tank with which he is closely associated, clear and forward-looking minds were looking at ways of rebalancing powers between Brussels and the member states as a whole—not just between Brussels and this country but between the European Commission, the European Council, the European institutions and the nation states. Again, there seems to be a very enlightened argument—of which I thought he was part, although he seems not to be so at the moment—that certain powers, particularly social powers and other detailed regulatory powers, would be far better administered close to the recipients, those in need of social care and those on the workshop floor, than by central organisations in Brussels. This is a sensible way forward and I am very glad that our officials are studying it closely.

Kosovo and Serbia

Lord Liddle Excerpts

Thursday 8th December 2011 Lords Chamber

[Lord Howell of Guildford]

I am very glad that the noble Lord made it back from abroad to make those two very valid points. Of course, he is absolutely right that we must ensure that Serbia is not minded to retain the utterly destructive views of the partition of Kosovo, or indeed Bosnia—so yes, very much, to the first point that my noble friend makes. The Kosovar Government have made some progress in the protection of minorities but he is absolutely right that major challenges remain, notably with regard to Kosovo Serb communities in the north. We urge the Kosovar Government to do all they can to guarantee the rights, identity and culture of Kosovo’s minority communities and set out a comprehensive strategy for the north, where the difficulties are acute, as my noble friend knows, to cover areas such as health, education and employment. These are two areas where I totally accept what the noble Lord says.

[Lord Liddle]

My Lords, the Opposition thank the noble Earl for his timely question, and welcome the progress made in normalising relations. Will the Minister convey our congratulations to the distinguished British diplomat, Robert Cooper, on the role he is playing as EU mediator working to achieve integrated management of border crossings? Does the Minister agree with me that this demonstrates the value of the new External Action Service in strengthening the capabilities of the European Union? How does the recent progress affect the prospect of negotiations being opened for Serbia’s membership?

[Lord Howell of Guildford]

I hope the answer is that it will be positive. The noble Lord is right. Robert Cooper is an extremely able servant of the European Union and, indeed, citizen of this country. The role of the EAS is relevant, although I know that the noble Lord is the first to recognise that with a number of international organisations down there—the UN, the EAS, the ICO and so on—co-ordination is very important. I cannot give an estimate of the speed of progress. It will all come up at the European Council tomorrow. We may see some progress after that but I cannot predict it.

UNESCO

Lord Liddle Excerpts

Wednesday 16th November 2011 Lords Chamber

[Lord Howell of Guildford]

It is early days for that. We will have to see whether the United States follows through on what appears to be its intention not merely to withdraw future funds but current funds as well. A very large number of countries—107—voted for Palestine's membership of UNESCO. There were 52 abstentions and 14 countries voted against. Therefore it was a fairly solid commitment to Palestinian membership. On the question of funding, we will have to wait and see how the matter turns out. Certainly there are major difficulties to be faced and resolved.

[Lord Liddle]

My Lords, noble Lords on this side of the House all share the concerns about the future of UNESCO and agree with the Minister’s comments. The fundamental issue behind this question is how strongly we are prepared to make clear to the United States our difference of view on the recognition of Palestinian statehood. While the Government’s position was sympathetic, it was ultimately a decision to have no position—to vote neither for nor against. How does this advance the peace process and the cause of a two-state solution, given the present stalemate and Israel's very recent decision to announce further settlements that will be deeply counterproductive? Should we not be more robust on these issues?

[Lord Howell of Guildford]

That is, of course, a broader question. The noble Lord is absolutely right that the question of Palestinian statehood lies behind the question of whether partial arrangements, as it were, for statehood should be made by Palestine applying to various UN organisations, of which UNESCO is one. It is the judgment and view of Her Majesty’s Government that the way forward must be by negotiation for the emergence of the Palestinian state. We reserve the right to recognise the Palestinian state at the moment of our choosing. We take the view that a fragmented application to UNSECO and other bodies is probably a mistake and will delay negotiation. We also take the view that, if the matter is to go to the Security Council—I say “if”—and if then, as is almost certain, the Americans vetoed it, that, too, would set back negotiation very substantially. It may be rather limited now but it is going to be even more limited—indeed, it will screw it up completely—if that course is followed. There are plenty of ifs and buts in the future. Beyond that, there is the possibility that it might go to the General Assembly as well, but all these matters have yet to be decided.

Commonwealth Parliamentary Association

Lord Liddle Excerpts

Thursday 8th September 2011 Lords Chamber

[Lord Liddle]

My Lords, I am grateful to the House for allowing me to speak in place of my noble friend Lord Triesman without giving proper notice, and I thank the government Chief Whip for facilitating this. I apologise on behalf of my noble friend Lord Triesman for his unavoidable absence.

We all owe a sincere thank you to the noble Baroness, Lady Hooper, for initiating this debate. It has been a great debate which has triggered some absolutely fascinating and, for me, educative contributions. She summarised very well the excellent work of the Commonwealth Parliamentary Association, and certainly the Opposition want to join her in celebrating its work on the occasion of its centenary. There have also been some great contributions from around the House. I have learnt a lot from the noble Lords, Lord Luce and Lord Glenarthur, who both have great experience; and from the noble Lord, Lord Alton, and the noble Baroness, Lady Boothroyd, who spoke most movingly about the grass-roots work of the Commonwealth Parliamentary Association. We all pay tribute to that.

My own views on the Commonwealth are very similar to those of the noble and learned Lord, Lord Howe. I am pro-Europe and I am pro-Commonwealth, and I do not see one as a substitute for the other. Indeed, I think that the noble Baroness, Lady Hooper, probably feels much the same. Perhaps I may say that this was embodied in my own family. My father-in-law, who was a Member of this House before he died, George Thomson, served as a Commonwealth Secretary in the Wilson Governments and as one of our first European Commissioners, so that is as pro-Europe and pro-Commonwealth as anyone can be.

A lot of people contributing to the debate have talked about what the Commonwealth meant to them personally. It certainly does not mean to me what it means to the noble Lord, Lord Selsdon, who was conceived on a Jamaica beach, and I do not want to annoy the right reverend Prelate the Bishop of London because obviously the Commonwealth is one of the great foundation stones of the Anglican Communion. However, the notable features of this debate were speeches from two Methodist ministers—my noble friend Lord Griffiths of Burry Port and the noble Lord, Lord Roberts of Llandudno. It was in chapel in my home town of Carlisle that I learnt the virtues of the Commonwealth. We had fairly well drummed into us, although it did not have to be drummed very much, the problems of world poverty and the essential need for racial equality, both of which were seen through the prism of the Commonwealth. These values, plus those of democracy and human rights, were for me as a youngster what the Commonwealth was all about.

Let me make one general point before I ask the Minister some questions. I think that we need to be clear about what the Commonwealth is and what it is not. The noble Baroness, Lady Flather, described the Commonwealth as a voluntary association of nations, but I think that it is more than that. I think that the Commonwealth should aspire to be a living network of values, sustained not just at the political level but at the people-to-people level, which many Members of the House have stressed. However, to be honest, I disagree with the noble Lord, Lord Lexden, that the Commonwealth is a kind of fool’s substitute for a proper foreign policy in the modern world. It is not a defence and security organisation or a trade bloc; it is not NATO or the EU, which are vital pillars of our economic security and our position in the world.

[Lord Lexden]

In describing the Commonwealth, I applauded the fact that, under this Government, it was becoming a major strand of foreign policy. I certainly did not intend to suggest—and I do not think that I did—that that was to the exclusion of many other important strands.

[Lord Liddle]

Of course, I was not trying to suggest that, but there is a little bit of a danger in the present Government’s discourse if you think about the three circles of influence of the past 60 years. There is clearly a weakening of the transatlantic tie with the United States, in that America is looking more Pacific-wards, it has its own economic problems and it does not think that Europe has stood up to the plate in world conflicts. Then we have all the problems with our relationship with the European Union, from which many Members of the party opposite would like to distance us. Given that that is happening to two of the three circles, I do not think that we can imagine that the Commonwealth is a substitute for those. I see the Commonwealth as playing a very big supplementary role in foreign policy because, as a multilateral organisation, it is an instrument of soft power. We should see it as a network of influence and values that can aid us in achieving our objectives.

On questions for the Minister, I want to ask first about the people-to-people aspects of the Commonwealth. I was very struck by the point made by the noble Lord, Lord Luce, that about 50 per cent of the Commonwealth’s citizens are young people. What ideas do the Government have for strengthening links between young people within the Commonwealth? That brings me to the point about higher education made by the noble Lord, Lord Kakkar, because there is no doubt that in the last few decades our universities have lost out in appealing to Commonwealth students—he mentioned the case of postgraduate medical students. How do we once again make our universities the first choice? Of course, we need to make sure that Immigration Rules do not stop that happening, which is a very important point.

On civil society links, the noble Lord, Lord Gardiner of Kimble, gave as a good example the Royal Agricultural Society of the Commonwealth. We need those kinds of links. How can we build on the initiative that the noble Baroness, Lady Boothroyd, spoke of so warmly in terms of raising consciousness about the need for girls’ education, which is an absolutely vital development issue?

On the government-to-government aspect of the Commonwealth relationship, what leverage can we exercise and what issues will the British Government put on the table as they try to strengthen the influence and role of the Commonwealth? As we have seen in this debate, there is clearly a role in climate change, both in highlighting the risks to the very survival of the island states in the Pacific and, as the noble Lord, Lord Hunt of Chesterton, mentioned, in persuading rich countries that they cannot become climate deniers—we have to be blunt with people like the Canadians, who have to live up to their responsibilities.

On the human rights issues that the noble Lord, Lord Black of Brentwood, mentioned, on migration which the noble Baroness, Lady Prashar, mentioned, and on the corruption issues that the noble Baroness, Lady Flather, mentioned, how are we going to prioritise these topics for discussion? How are we going to use positively the opportunity of membership of the Commonwealth to improve people’s situation—the noble and learned Lord, Lord Howe, spoke about Somaliland’s membership? Conversely, how can the Commonwealth be used as a sanction? The noble Lord, Lord Griffiths, gave the example of the actions taken by the Fijian Government against the Methodist Church and we have the very big example of Zimbabwe. How in future do we play this mix of incentives and sanctions? What are the Government’s proposals for strengthening the Commonwealth secretariat, including its funding, as I think the noble Lord, Lord Chidgey, mentioned?

This has been an excellent debate, which has shown the value of the House of Lords, has been well attended and has included some excellent contributions. It has celebrated the cross-party work of the Commonwealth Parliamentary Association—long may that continue—and it has demonstrated that the Commonwealth remains a good and great cause. Like the noble Baroness, Lady Benjamin, I would like to see the sun rise once again on the Commonwealth, but it will do so only on the basis of a proper analysis of its true potential as a unique instrument of benevolent influence in our very troubled world.