European Union Bill

Lord Wallace of Saltaire Excerpts

Monday 13th June 2011 Lords Chamber

[Lord Liddle]

My Lords, from the Opposition’s point of view, exotic as it may seem that we should at this moment be debating the circumstances in which we might join the euro, this Bill is intended to bind future Parliaments for a long time. Indeed, that is one of our major difficulties with it, which is why we will be moving the sunset amendments on Wednesday. However, given that it is a Bill that is intended to bind Parliaments for the future, it is important to get this right. We have listened to our colleague the noble Lord, Lord Kerr, at great length on this subject and are persuaded that he is right. The Opposition will therefore be supporting his amendment.

[Lord Wallace of Saltaire]

My Lords, no Parliament can bind its successors. That is one of the principles of parliamentary sovereignty. I am grateful to the noble Lord, Lord Kerr of Kinlochard, for following up the previous Committee discussion with his letter of 19 May, in which he outlined his concerns in more detail: namely, that Clause 6(5)(e) of the Bill might be legally defective. We have therefore taken careful legal advice. The Government have now been able to reply to that letter and a copy has been sent to those of your Lordships who participated in the Committee debates. A copy of the letter has also been deposited in the Library of the House. On the basis of that legal advice, I hope to reassure your Lordships that we do not judge there to be a risk of more than one referendum on the euro being required and that the provision does what we and noble Lords on all sides of your Lordships’ House intend it to do.

Unlike other member states, the UK is not under an obligation to adopt the euro. Protocol 15 of the consolidated treaty begins with the clear statement that the United Kingdom,

“shall not be obliged or committed to adopt the euro without a separate decision to do so by its government and Parliament”.

That protocol, which needs to be read alongside Article 140 in the British case, sets out in detail the steps that must be satisfied before the UK could adopt the euro. Paragraph 9 of the protocol states that after the UK has notified,

“the Council … of its intention to adopt the euro”,

as its currency,

“decisions in accordance with the procedure laid down in Article 140(1) and (2)”,

of the TFEU must first be taken, to which protocol 13 is also relevant.

The process starts in practice by examining convergence criteria as set out in Article 140(2). That is bound to happen before the UK formally notifies, even if it is not part of the formal procedure. It might be helpful to consider what needs to be done following notification of our intention to join the euro. It is not a matter of negotiating terms of entry but of economic criteria being satisfied in terms of the treaty. The final step of the process is to take a decision in accordance with the procedure laid down in Article 140(3) of the TFEU. Paragraph 9(c) of Protocol 15 commits the Council,

“in accordance with the procedure laid down in Article 140(3)”,

to “take all other necessary” measures to enable the UK “to adopt the euro”.

Clause 6(5)(e) is designed to catch this final step in the process, thus ensuring that as much of the complex detail as possible is available to Parliament and the public in deciding whether to join, while giving the Government of the day the flexibility to set the timetable for when to seek approval from Parliament and the British people. If I may say so, the noble Lord, Lord Kerr, might almost be old enough to remember the first applications for Britain to join what was then the European Economic Community. Before formal application was made, a number of informal negotiations established the terms for potential negotiation. We envisage something of that in this situation. It will allow the Government to seek a referendum when sufficient detail is known about the circumstances and conditions of entry, but will allow the UK to seek approval from the people before the exact point at which the exchange rate between the euro and the pound would be set. We all recognise that the exact exchange rate will have to be set at the end of the process to avoid market turmoil and speculation against the rates declared.

In contrast, the amendment proposed by the noble Lord would require the referendum to be held and approval given before the UK could notify the EU that it intended to adopt the euro. The Bill nevertheless allows for matters to be arranged in this way if the Government so wished, again providing the degree of flexibility which noble Lords, including the noble Lord, Lord Kerr, have so often called for on this Bill. It would be open to the Government of the day to undertake negotiations with the EU in line with paragraph 9 of the protocol before the UK issued its notification. This would allow draft decisions under Article 140(3) on the rate at which the euro would be substituted for sterling and other measures necessary for its introduction to be prepared—with perhaps a range of rates being negotiated—before notifying our final intention to join the euro.

On that basis, I do not consider that the Bill would lead to what we all view as an unwelcome situation in which two referendums would have to be held on the euro: the first on the UK notifying that it wished to join; the second in a rushed weekend on determining the specific question of the exact rate at which the euro is to be exchanged for the pound. Instead, it is possible under the Bill for the Government to submit the question of adopting the euro to a single referendum.

[Lord Lawson of Blaby]

My noble friend mentioned the lawyers early on and I am quite sure that the lawyers worked this out. To me, this is too redolent of lawyers. The practicalities might in fact tell the other way. The noble Lord, Lord Kerr, for whom I have a high regard as I indicated earlier, has raised a point that at least merits further thought and discussion. Quite apart from the problems that might or might not occur on the currency markets, it would be very confusing to the British people if there were no referendum on the principle of joining the euro at the first stage, when the Government of the day had decided that.

My noble friend the Minister said that this can be played either way, early or late, but we cannot know what a future Government might do. They might decide to play it late, which would not be desirable. It would be most undesirable for, and, as I say, very confusing to, the people, who would not quite understand why it was happening in that way. It might therefore be sensible if the noble Lord, Lord Kerr, could be persuaded to withdraw his amendment on an undertaking by the Government that they will give this matter further thought. That would be the right way forward.

[Lord Wallace of Saltaire]

I am very happy to give an assurance that the Government will look at this further, but we have consulted—we are dealing with legislation, so it is entirely appropriate to consult—lawyers on the implications of that legislation. The process is long by which what necessarily begins with informal exploration becomes formal notification, then, under the terms of Article 140(2), as the noble Lord, Lord Kerr, will know, entails a degree of negotiation on how far the UK meets the convergence criteria and then moves towards the final negotiation in Article 43. What we provide for under the existing arrangement is a degree of flexibility over at what stage in that process the Government put the—

[Lord Hamilton of Epsom]

Is not the other side of my noble friend Lord Lawson’s argument that if we take the decision in principle, we are put in a much weaker position in all subsequent negotiations because, in practice, the country has already voted in principle to go into the single currency and therefore we have to give way on many of the negotiations that follow?

[Lord Wallace of Saltaire]

That, of course, is partly why, in all three British applications to join the European Economic Community there were informal conversations before Britain made a formal application—we needed to know what potential terms were available before we formally declared our hand. For the reasons I have outlined, we conclude that Clause 6(5)(c) is not legally deficient and that there is no risk of the Bill requiring more than one referendum on the issue, the second referendum being on the rate at which the UK would join the single currency. I therefore urge the noble Lords to withdraw their amendment.

[Lord Kerr of Kinlochard]

I always listen very carefully to what my former bosses say and I take very seriously the advice of the noble Lord, Lord Lawson, but I did not hear from the Minister any suggestion of thinking further or looking again. I agree with the noble Lord, Lord Lamont, that there is not a great deal between the Minister and me. My language, which is the language of the existing Act plus the referendum requirement, would permit the Government to do everything that the noble Lord, Lord Wallace, has said they would wish to do. It is perfectly permissive; they could do that because the notification could be done informally and the formalisation of the notification could be saved up till the end. They could do absolutely as the noble Lord, Lord Wallace, says.

[Lord Wallace of Saltaire]

I was using the language of the consolidated treaty. The noble Lord was using the language of the Maastricht treaty, and I suggest that the current consolidated treaty might provide the more appropriate language.

[Lord Kerr of Kinlochard]

I was using the language of our Act, the Act in force in this country now. I am talking the 1993 Act language, which is replicated precisely in my amendment. I am very glad to hear the Minister agree that we must avoid a second referendum and that we must avoid the crisis weekend drama, but in a plain reading the Bill says that what should be put to Parliament and the people is the draft of the decision under Article 140(3), which sets out the rate. That is the decision that we are going to take over a weekend, and it is going to be a busy weekend if ECOFIN starts on Friday, Parliament sits on Saturday and the referendum is on Sunday. It is not going to be fun.

I agree that under my language the Government could do exactly as they want. Under their language, I believe that the country would think it very odd if they did not see the draft decision including the rate, because that is what Article 140(3) of the consolidated treaty says. It uses the rate; the rate is there in the treaty. So although I regret that I have taxed your Lordships’ patience long enough, I think that I really have to test the views of the House.

European Union Bill

Lord Wallace of Saltaire Excerpts

Monday 13th June 2011 Lords Chamber

[Lord Liddle]

My Lords, the Opposition cannot support the amendment. The reasons why many have spoken against it are very true. I agree with what the noble Baroness, Lady Brinton, had to say. I agree with the noble Lord, Lord Hamilton, that in our political culture a precise repeat referendum would be extremely unlikely. However, we should not tie our hands. As the noble Lord, Lord Deben, said, you vote under a particular set of circumstances but circumstances can change at remarkable speed. We do not need these kinds of constraints on our politics.

[Lord Wallace of Saltaire]

My Lords, this is the second time that we have examined an amendment of this nature. It did not find much sympathy around the Chamber in Committee and it has not found much more now. The amendment stipulates a lesser period of three years rather than the original five but the principle remains the same.

In Committee I set out some of the Government’s objections to an amendment of this nature and I will recapitulate some of those now. First, were the British electorate to vote no in a referendum, it is clear that the Government would have to consider their future action carefully. It would be difficult to view the result as anything other than a firm rejection of a proposal for treaty change. If the Government wanted to hold another referendum for whatever reason, under the terms of this legislation, as my noble friend Lady Brinton said, they would first need to secure parliamentary approval to do so by Act. Primary legislation would be necessary to enable the referendum, so Parliament would have to consider that request very carefully and itself be persuaded to agree, which is not necessarily a given.

Secondly, the amendment reduces flexibility, a quality that has attracted a lot of support from all Benches. We do not know what will happen in the future, and as the noble Lord, Lord Liddle, has suggested, sometimes we do know what will happen in the short term future. As noble Lords have argued on a number of occasions, and in this case following the rejection of a proposal by the British people in a referendum, circumstances could change. There are “events, dear boy” and unexpected crises whether they be security crises, financial collapse, economic recession or even crises of energy supply or surges in immigration. All might conceivably transform the situation. So there could be previously unanticipated grounds for the Government and Parliament to believe that the treaty change on the table was in the national interest of this country. As a consequence, if both the Government and Parliament were to decide that there were good reasons for putting a question to the British people in a further referendum, Parliament should be able to do so without having to disapply an inflexible provision.

I have to say to the noble Lord that I would be surprised if any Government in the future would wish to hold a referendum in the hope that the people would be somehow persuaded to change their minds merely by the Government cajoling them rather than in response to a substantial change in circumstances. I agree with what the noble Lord, Lord Triesman, said in Committee. He pointed out that the people of Denmark, Ireland, France and the Netherlands,

“were perfectly capable of settling the first propositions put in front of them and they were perfectly capable of assessing the changes”.—[Official Report, 23/5/11; col. 1621.]

Those changes were any changes that had taken place or had been made to the treaty before them between the holding of the first and second referendums. People are clear in their own mind and will not easily be browbeaten into giving a different answer just because the Government—any Government—would like one. As the Minister for Europe made clear in the other place, it is a recipe not only for the public to say no again, just as firmly if not even more so, but also an invitation to be voted out of government at the next election for treating the public with contempt. But I reiterate that there might be circumstances where a repeat referendum may be in order before the three years suggested by the noble Lord had elapsed.

We were running through a most wonderful boom at the end of 2007. The recession hit us rapidly and sharply thereafter, with the financial collapse of a number of banks. We face a potential crisis in energy supply. At the moment there is a range of possibilities where crises might erupt that would affect us and our European partners. Therefore I see no reason for reducing flexibility, as this amendment would, and I urge the noble Lord to withdraw it.

European Union Bill

Lord Wallace of Saltaire Excerpts

Wednesday 8th June 2011 Lords Chamber

Moved by

[Lord Wallace of Saltaire]

4: Clause 2, page 2, line 18, after “treaty” insert “also”

[Lord Wallace of Saltaire]

My Lords, I shall speak also to Amendment 7. I hope that the noble Lord, Lord Liddle, will regard this too as a major concession by the Government. These two amendments are intended to address a point raised by a number of Peers during our debate on the first day in Committee some weeks ago on what the noble Baroness, Lady Symons of Vernham Dean, described as a probing amendment. The noble Baroness, along with the noble Lord, Lord Davies of Stamford, and the noble and learned Baroness, Lady Butler-Sloss, raised the question of the correct interpretation of Clauses 2 and 3 with respect to the application of the referendum provision to Gibraltar. They raised the concern that the provisions as drafted could result in the need to hold a referendum in the UK even if the proposed treaty change happened to apply solely to Gibraltar and not to the United Kingdom. They said that this would be nonsensical. I agree that in such unlikely circumstances it would be nonsensical.

As your Lordships’ House is aware, the Bill concerns only the future transfer of competence or power from the UK to the EU. As I promised at the end of that debate, we have reflected further on this issue. Our view remains that the requirement for a referendum to be held in Gibraltar under the provisions of the EU Bill is not self-standing but is dependent on three things: first, that there is a treaty change which applies both to the UK and Gibraltar and, secondly, that the treaty change would result in a transfer of competence or power from the UK to the EU. Then and only then does the third condition arise; namely, whether the treaty change would also represent a transfer of competence or power from Gibraltar to the EU.

That said, we recognise that it is important to be as transparent and clear as possible. That is the Government’s intention. Consequently, we have tabled these two simple amendments to Clauses 2 and 3 to make sure that the meaning is clear beyond doubt. The amendment makes explicit that only if a treaty change were to apply to both the UK and Gibraltar, and the referendum is to be held in the UK, would that referendum also be held in Gibraltar. I beg to move.

[Lord Davies of Stamford]

I hoped to intervene before the Minister sat down but I missed my cue. I shall be very brief. As the noble Lord and his colleague, the noble Lord, Lord Howell, have been courteous enough to mention me in the context of our debates on these matters in Committee, it would be wrong of me not to say that we on this side appreciate that the Government have genuinely reflected on the Committee stage debate on these two matters, relatively minor though they may be. That is encouraging for us and the hope that we can all take part in improving this legislation and that the result of our labours will not be entirely nil. Does the noble Lord have in mind any specific contingency in which there might be a proposal involving the transfer of powers from Gibraltar to the EU, or is this whole subject merely theoretical? Have the Government provided for it as a purely theoretical possibility, or do they have any issue in mind that might be triggered by this clause?

[Lord Triesman]

My Lords, I appreciate the tabling of these two amendments by the Government. I share the view of the noble Lord, Lord Wallace, that they will probably not be thought of as huge concessions almost anywhere. He put that rather generously and he is quite right—they will not. More to the point, they are wise amendments. It may well be that on some future occasion he will wish to land in Gibraltar. He would not want to receive the sort of frosty reception that he would receive if he had done anything to the people of Gibraltar other than what appears as a result of these two amendments. It is a helpful clarification. We are satisfied with it and thank him.

[Lord Wallace of Saltaire]

If no one else wishes to intervene, I ought to answer the point raised by the noble Lord, Lord Davies of Stamford. I find it difficult to imagine circumstances in which there would be proposals that would represent a transfer of powers or competences from Gibraltar to the EU. However, I have not looked back at Protocol 3 of the 1972 Act which ratified the treaty of accession and the extremely complicated circumstances in which Gibraltar is treated as a member of the EU but does not take part in all aspects of EU policy. For example, it does not take part in the common agricultural policy, but it takes part in the freedom of movement.

[Baroness Nicholson of Winterbourne]

Would the Minister recommend to other European Union member states that have territories that are not specifically part of their geographical parameters—such as Spain and the Canary Islands, and France and her piece of territory in north Africa—that they follow the lead of the United Kingdom in drawing more fully into their embrace the territories that belong to them?

[Lord Wallace of Saltaire]

My Lords, I shall not detain the House very long. The question of the different relationships between the Crown dependencies and the EU, and Gibraltar and the EU, is a deeply arcane subject. I read an extremely long report from the Government of Jersey some 18 months ago about the relationship between Jersey and the EU. It is very good bedtime reading for anyone who does not wish to go to sleep. These are very complicated areas. However, I and our advisers cannot at the moment envisage the likelihood of a referendum. We nevertheless hope that this amendment clarifies the situation.

Amendment 4 agreed.

European Union Bill

Lord Wallace of Saltaire Excerpts

Wednesday 8th June 2011 Lords Chamber

[Lord Kerr of Kinlochard]

The noble Lord, Lord Stoddart, will be very upset. I accuse myself of being nerdish, and I hope that the noble Lord will agree that I can be considered in the same class as Mr William Cash.

We are talking about an amendment to Clause 3. Clause 3 is about the accelerated, simplified procedure. I do not know why we have Clause 3 separate from Clause 2, but we do, and we are debating it. The simplified procedure cannot be used for the transfer of competences. That is what the treaty states. Article 48(6) states that the decisions referred to in the second paragraph,

“shall not increase the competences conferred on the Union in the Treaties”.

We are talking about urgency and the use of the competences that the treaties have conferred. We are talking about urgency because that is the nature of the simplified procedure. It was invented to move fast in situations where we might want to. It avoids the convention, it avoids the full paraphernalia after Parliament—you still have to consult Parliament under Article 48(6), but that can be quite quick.

This is a modest amendment, unlike the previous amendment on which we voted, which was bigger. This is a modest amendment because it simply suggests that the urgency condition might be written into Clause 3, on the simplified treaty revision procedure, which is about urgent treaty revision and not about competence. It cannot be used to confer competences on the Union from the member states.

It seems to me appropriate and modest to say that, when we are dealing with treaty revisions or decisions taken under Article 48(6)—which, by definition, will happen only in a hurry—we should be able to have an accelerated procedure here in this country. We might accept that the general view was correct: this was an emergency and we needed to move fast. Of course, if you did not accept that, you would have said “No” in Brussels and the accelerated procedure would have stopped, because it still requires unanimity. By definition, you are in a situation where people have thought, “We haven’t got the time to do the whole shooting match”. This is important. The Government think it is in the UK interest—they voted for it. Who would decide whether the urgency consideration applied? It is a question asked in this debate. The House would decide. Parliament would decide. If this provision was in the Bill, the Government would have to explain whether the urgency procedure, in their view, applied. Parliament would vote on that. This is a parliamentary democracy—that is where the decision should be made.

I do not see anything wrong with this amendment. It seems to me that it is appropriate—particularly appropriate—to this clause. I supported the previous amendment—the bigger amendment—which would have written it also into Clause 2, alongside the significance condition, which sadly is still missing in Clause 2, for reasons that I do not understand. Putting it in Clause 3, which the amendment of the noble Lord, Lord Triesman, proposes, is absolutely appropriate and I support the amendment.

The Minister commented with approval, as would I, on the evidence that Sir John Grant gave to the Commons committee. Sir John Grant made two points that the Minister quoted with approval. I approve of them too—although, as the Minister delicately pointed out, Sir John is a more recent permanent representative in Brussels than me. There may have been a faint connotation in the Minister’s remark that I might be a bit fuddy-duddy or out of date. I accept that; it is perfectly possible, and Sir John Grant is a very brilliant man.

Sir John said that he saw no chance of serious treaty amendment in the next few years. I agree with him for a whole lot of reasons. Nobody in Brussels wants it; the UK Government have said that they are not going to have it; and it is in a coalition agreement. That seems to me to be fairly conclusive, so I think Sir John Grant was on pretty safe ground with that prediction. He also spoke of the unlikelihood—and the Minister quoted him—of the passerelles being used in the near future. I agree. That seems to me to be implausible too.

What the Minister did not mention—I cannot remember whether Sir John Grant did—is the much more likely scenario in which, some time in the next decade, something will cause people to say, “Jeepers, we are going to have to change something. This is clearly a case for the accelerated procedure”. Things do happen in the world, things change, and the chances are—I do not think this is very likely in the near future, though the monetary example is fresh in our minds—that some time in the next decade there will be a need seen by most people, possibly by us as well, for a change, and if it is to be done quickly then the chances are that people will use Article 48(6) procedure.

[Lord Wallace of Saltaire]

May I, with apologies, ask a nerdish question of the noble Lord? If I understand Article 48(7) correctly, it suggests that urgency can be carried through at the fastest in six months. Is that correct?

[Lord Kerr of Kinlochard]

I do not think that is what the treaty says, but yes, it is likely that that is the case. Of course, any treaty amendment requires ratification by whatever the national procedures are. I am talking about an emergency situation in which most people think, “We have to do this pretty fast”.

We could still have our referendum. If the amendment in the name of the noble Lord, Lord Triesman, were accepted, there is nothing to stop the Government of the day saying to Parliament, “Despite all the risks of delay, we actually think this is a sufficiently serious matter to justify having a referendum”. That is entirely open to them, if the amendment of the noble Lord, Lord Triesman, is accepted. However, that amendment would remove the present danger in the text, which is that there would be an absolute requirement to have a referendum because there is no potential let-out for an emergency, even though that is the most plausible scenario for a treaty amendment and everyone, including us, would have agreed that it was an emergency and therefore justified the accelerated procedure. That is why I support the amendment of the noble Lord, Lord Triesman.

--- Later in debate ---

[Lord Wallace of Saltaire]

My Lords, we all understand that events happen—although I believe that what Harold Macmillan said was, “Events, dear boy, events.” We also understand that in a crisis Governments get together and take the necessary decisions to deal with that crisis. The noble Lord, Lord Triesman, rightly said that we cannot envisage what sort of crisis we might be facing in five to 10 years’ time or even in two years’ time. The G20 is a very good example of the sort of body which has come to operate relatively effectively, as a form of consultation about a number of global problems. However, the G20 is of an entirely different quality from the European Union. If there were a crisis, the relevant Governments would necessarily get together and have to act, but they would undoubtedly act by consensus. That would be different from agreeing to change the structures and competences of a European Union, which is not simply an international organisation but a structure of law, a semi-confederal institution of which we have become a co-operative member.

Having had some informal conversations across the table with the noble Lord, Lord Kerr, I note that Article 48(6) states—

[Lord Davies of Stamford]

I thank the Minister for giving way. Is not the argument that he is adducing one that entirely excludes even the theoretical possibility that the European Union might turn out to be the best instrument for addressing the crisis that we are talking about? If the crisis can be dealt with by consensus with other Governments—the G20 or whatever—that is well and good, but what the Government are doing in the Bill is excluding the possibility that the European Union may be the most effective instrument for solving the problem and might need additional powers for that emergency.

[Lord Wallace of Saltaire]

My Lords, the Bill in no way excludes the European Union from being the appropriate body to respond. It is entirely appropriate that bodies such as the European Council and the Council of Ministers in its various forms should take decisions. How those decisions are taken, and what their legal implications will be, are matters probably best not dealt with in an emergency. Where there might be a transfer of competences, one should consider it not under emergency conditions but rather more coolly.

I was about to quote Article 48(6), which states that the decision under the simplified procedure,

“shall not enter into force until it is approved by the Member States in accordance with their respective constitutional requirements”.

That is why urgent decisions will take 18 to 24 months to get through the various constitutional requirements, and why the question of what we mean by urgency does not limit the British Government.

It is of course very difficult to foresee what sort of crises we might face, or how and in what framework we and others would respond. The European Union exists as a framework and therefore may very often be used as such, and we and others would work through it. It has plenty of competences and the ability to take decisions by consensus in response to a crisis. However, that does not transfer powers and competences. That is the difference between taking urgent decisions and changing the nature of procedures, structures, powers and competences. With respect, I say that the urgency question is not an important part of the Bill. There would be sufficient time to complete the processes set out by the Bill, by an Act of Parliament and, where required, a referendum of the British people.

The second part of the condition is that the treaty change should be in the national interest. My noble friend Lord Howell said, when debating a previous amendment, that the national interest is not an entirely objective concept. I am sure that the noble Lord, Lord Triesman, agrees that the coalition has come together in the national interest and is acting in what we think is the national interest—although he may have a different view of the national interest from members of the coalition. Politics revolves around our contesting views of Britain's best national interests. Therefore, the concept is not an entirely objective one that we can usefully write into the Bill. No Government would agree to any treaty change at EU level if they were not of the firm belief that such a move was consistent with the national interest. No Administration would ever agree to a treaty change if they considered that it would be against the interests of the United Kingdom. Therefore, I assure noble Lords that the national interest, as we see it, is at the heart of every major decision that this Government take on EU matters—as I assume was the case with the previous Government and will be for any subsequent Government.

Having answered those questions, I urge noble Lords to withdraw the amendment. We have had a useful but general debate about what might happen in a hypothetical crisis that none of us can yet quite envisage, let alone consider what immediate changes in powers or competences it would require.

[Lord Triesman]

My Lords, just to take any possible lingering tension out of the highly charged environment of this Chamber—I would hate to wind up everybody inappropriately—I will tell you now that, in a few minutes, I will withdraw the amendment. Before I do so, I have to say that, from an intellectual point of view, these have been some of the more depressing arguments that I have heard. I do not mean to say that in order to be rude. I just think that we must allow ourselves the courtesy of being a great deal more rigorous.

As the noble Lord, Lord Kerr, pointed out, it is plainly the intention of the amendment to provide a means whereby, in circumstances which are very pressing and where we need potentially to adjust our capacity to act—this is about our capacity to act and the mechanisms that we can use to act—we do not deny ourselves the opportunity to do something if it is in the national interest.

I cannot imagine that it really needed any presentation to us, but I readily accept that what constitutes the national interest will not be determined by some objective basis, as would a demonstration of Boyle’s law of gaseous volumes. This is not a point that I have ever attempted to make. The national interest will be defined by the Government of the day, whether a single party or a coalition. We may or may not all agree with one another, but it is in the nature of our parliamentary democracy that the power to arrive at a conclusion about what the national interest is is vested in a Government that enjoy the confidence of the House of Commons and can proceed on that basis. In that sense, from a political point of view, it is a completely objective test. I know whether the Government of the day enjoy the confidence of the House of Commons precisely because I know what would happen if they did not. It is a very simple matter.

Let us not deal with this kind of discussion as though it were incumbent upon us to do something like Boyle did, in showing the way in which the volumes of gases under pressure react to it, which can then be set out in a textbook to be tested to kingdom come in any laboratory in the land. Let us deal with it as political people—I was going to say, if the noble Lord, Lord Pearson, was in his place, as humble members of the political class. Let us deal with it as political people—with a small p—who understand perfectly well the convention which decides what the national interest is at any time. I am sorry, but I cannot buy that kind of argument. I do not think it treats us credibly.

I say to the noble Lord, Lord Flight, that it was never my intention in moving this amendment that the Bill should be watered down. I do not like that interpretation being ascribed to what I have said. I have always tried in the House, whether on the government Benches or on these Benches, to be very candid and very frank—it does not always win you friends—about what I am doing and why I am doing it, because it seems to me that life is a lot easier if you try to do it that way. The reason is not to water it down but to make certain that Ministers in any Government have the kind of authority and ability to act in circumstances which come along that we cannot predict.

I am not omniscient, and I cannot say any more than anybody else in the House what I know will happen or what kinds of competence we may require at a particular time to deal with those issues. I will be candid with the House: I did not expect the collapse of Lehman Brothers; I was astonished to know that we were within two hours of the Royal Bank of Scotland collapsing; and I notice that sovereign debt crises are occurring more rapidly and are likely to occur more rapidly. I just say to the House no more than that it is extremely likely that we will face more such circumstances. I do not want to feel that we do not have all the levers at our disposal in order to deal with them.

European Union Bill

Lord Wallace of Saltaire Excerpts

Wednesday 25th May 2011 Lords Chamber

[Lord Davies of Stamford]

Noble Lords may laugh, but it is an absurd idea that the answer regarding the British interest is always going to be no. But if the British answer is not always going to be no and we need to think about it intelligently, and sometimes it might be yes, then does it make any sense to paralyse ourselves, to tie ourselves up, to put handcuffs on ourselves? I do not think it can. That is my fourth proposition: that the way that the Government are going forward with the Bill is profoundly not in the national interest.

At the end of the Committee stage, a lot of us on both sides of the House evidently feel very strongly that serious damage could be done to the national interest. It can make no sense whatever to say that, for the rest of time, the British answer to everything must be no; or that the British answer to everything must be a referendum, because there will not be referenda so that comes back to saying no. The Government say, “No, in fact, if we have this lock on ourselves, the compensation will be that the British public will have greater confidence in the European idea”. The implication of that argument, which we have heard several times from the noble Lords, Lord Howell and Lord Wallace, is that at some point in the future we will not want these handcuffs on us. We will want to revert to normality and be able to take a pragmatic view as issues come up of where our interests lie and whether we should go ahead with colleagues in a greater degree of integration, have the normal arguments, use our veto when we want to, change the procedures and set up QMV where we think that that is in our interests, and so on. The implication of the Government’s argument is that we do not want to tie ourselves in for ever; we do not need to; it is a temporary problem, which they think will be resolved by the passage of the Bill. That is a matter of judgment; I will not go back over that; it is obvious to the Government that most of us are not persuaded by that argument, but they could be right.

As, sadly, I do not think that we will be able to defeat the Bill—I would like to; I do not disguise that fact; I have never disguised that fact from anyone—is not the sensible solution simply to say, “Let the Government have the Bill for this Parliament. Let them have it for four or five years. Let us see whether they are right and that there is some improvement in national sentiment towards the EU as a result of the Bill being enacted and being part of the law of the land”? Let us hope that over just a few years no cataclysmic damage is done to the national interest by preventing us from taking rational decisions in the way that I just described. Is that not a sensible compromise? I think it is. At this stage of the proceedings, it is probably one that we could all bring ourselves to live with, coming from different points on the spectrum and different parts of the argument.

I commend noble Lords—the noble Lord, Lord Taverne, in particular—on the amendments and I hope that they end up enshrining the solution which this House brings to this complicated problem.

[Lord Wallace of Saltaire]

Does the noble Lord accept that there is a clear distinction between changes in the rules of the EU and decisions in the EU? The Government's case is that extensive competences are provided within the Lisbon treaty. There is already extensive QMV within the treaties. The Government’s case is that there is plenty of opportunity for us to say yes, as we have done on a number of opt-ins and day-to-day decisions. We do not always have to say no in Brussels, nor do we always say no in Brussels. The question is one of competences. There is plenty of room for competences. At some point, there may be a need for further treaty change. That will have to be negotiated. But the time for further treaty change is not now or in the foreseeable future.

[Lord Davies of Stamford]

I was invited to comment before I sat down, so I shall. I am grateful for the Minister’s intervention and, in particular, for his comment, which is now on the record and which many of us will be pleased to hear, that he does not exclude treaty change in future. As he knows, the drift of my argument this morning has been that it is wrong to make the distinction between changes in decisions and changes in voting procedures. Often the best way to get the right decision will be via a change in the voting method. That is exactly the argument that I was making. I do not need to repeat myself, because I know that the noble Lord always listens to my comments with the greatest attention.

European Union Bill

Lord Wallace of Saltaire Excerpts

Monday 23rd May 2011 Lords Chamber

[Lord Bowness]

My Lords, I should hate to delay the Committee, bearing in mind that this clause stand part debate has been introduced so briefly. I have not spoken in these proceedings since Second Reading when I expressed my concern about certain aspects of the Bill, which I have to say remains. As chairman of the Justice and Institutions Sub-Committee of the European Committee—although I am not speaking for the sub-committee—I am concerned as to the effect that the provisions will have on matters relating to judicial and police co-operation. I fear that our ability to act flexibly will be compromised.

I have a question for my noble friends on the Front Bench, of which I have given notice to my noble friend Lord Wallace of Saltaire. This sub-committee has just had before it a proposal for a Council regulation under Article 352, the subject of this clause. It is about a matter as mundane as the publication of the Official Journal, which noble Lords will know is the source of the authentic versions of EU legislation and other documents. At the moment, Article 297 provides that the authentic version is the published and printed version. The proposal for this regulation is that the electronic version should become the authentic version.

I am advised that if this regulation does not become law before the passing of this Bill—if that is what should happen—an Act of the United Kingdom Parliament will be required to implement it. I have read very carefully Clause 8 and the various proposals and clauses with which this clause would comply. One such is the Act of Parliament and the other is if it is a matter of urgency, which would probably be stretching a point—my noble friends would be accused of stretching a point if they were to say that—or an exempt purpose. I do not read it as an exempt purpose, although I am open to be corrected. Do we really propose to have an Act of Parliament to implement matters as mundane as this?

[Lord Wallace of Saltaire]

My Lords, those of us who have been around the European communities are familiar with all the problems of Article 352 in its previous formations—Article 308 and even Article 235. It was the competence creep article that the forebears of the noble Lord, Lord Pearson of Rannoch, complained of many years ago. The ECJ and this article were the basic problems of the competence creep about which they so often complained, which is why Clause 8 is in the Bill.

On the specific question asked by my noble friend Lord Bowness, it is not yet clear whether the process of Article 352 will be used to switch the Official Journal from written to only electronic form. But if it were used, both in the German Bundestag and the British Parliament, there would have to be parliamentary approval. As noble Lords will know, when the clause says an Act of Parliament, it may be a clause within another Act of Parliament but it would have to be subject to parliamentary approval. This is a hard, technical case and I suspect that when it comes to it, other means will be found of approving this measure than Article 352.

Article 352 will now be used a great deal less often than its predecessors, again because the Lisbon treaty provides in so much more detail for so many other competences which the EU now has. Although during the period 2004-09, the predecessors to Article 352 were used a good many times, most of the purposes for which it was used during that period would now be covered by specific articles in the treaty. I hope that I have satisfied noble Lords with that.

[Lord Liddle]

Whatever the specifics of the point raised by the noble Lord, Lord Bowness, does it not illustrate the need to include in this clause some equivalent of the significance test provided in Clause 6? I wonder whether, in the spirit of co-operation and willingness to consider things in a flexible way, the Government might take away and consider—for all of these later clauses that require an Act of Parliament rather than a referendum—some flexibility that would allow a significance test to be applied by a Minister. That would require a lower level of parliamentary approval in cases where we are dealing with technicalities rather than important issues of policy.

[Lord Wallace of Saltaire]

Of course we will reflect on that, but I remind noble Lords that the purpose of this Act is to improve parliamentary scrutiny and oversight of the procedures of the EU.

[Lord Stoddart of Swindon]

Did I understand the noble Lord correctly when he said that the proposal is that the Official Journal of the European Union should only be published online? If so, that is quite a serious proposal because not everyone has online access.

--- Later in debate ---

[Lord Kerr of Kinlochard]

Clause 9(4), second line: “or otherwise support”.

[Lord Wallace of Saltaire]

Noted.

[Lord Pearson of Rannoch]

My Lords, the question of whether this clause should stand part of the Bill gives us an opportunity to keep up to date with the Government’s present intentions regarding Article 3 of Protocol 21 of the Lisbon treaty. Perhaps I may remind the Government of their great leader’s statement made in late 2009:

“We will want to prevent EU judges gaining steadily greater control over our criminal justice system by negotiating an arrangement which would protect it. That will mean limiting the European Court of Justice’s jurisdiction over criminal law”.

That is from the Prime Minister before he became so. The other quote I give the Government in probing this matter is from Mr David Lidington, made on 20 January this year:

“The UK has until 31 May 2014 to choose whether to accept the application of the Commission’s infringement powers and jurisdiction of the ECJ over this body of instruments or to opt out of them entirely, in which case they will cease to apply to the UK on 1 December 2014”.

More importantly—this is what I want to check up on—Mr Lidington went on to say that:

“Parliament should have the right to give its view on a decision of such importance. The Government therefore commit to a vote in both Houses of Parliament before they make a formal decision on whether they wish to opt-out”.

As I understand it, the provision in Protocol 21 allows the Government to opt out entirely from the whole justice and home affairs proceedings in Lisbon. It is true that if they accept an amendment to any of those provisions in the mean time, that provision then stands. Further, if in the mean time they opt in to anything, the 2014 deadline might not apply. I hope that your Lordships will feel it is helpful if the Government bring us up to date on how their decision is moving on opting out of the whole of the JHA provision. The last time I raised the matter was in Oral Questions, when I was told from the Front Bench by the noble Lord, Lord McNally, that this was all very difficult and sensitive and that the Government had not made up their mind. Have they made any progress?

[Lord Triesman]

My Lords, I shall not repeat the speech of the noble Lord, Lord Kerr, because it would have gone by so fast that what I have to say would not register.

We understand that, broadly speaking, the Government have up till now opted in rather than opted out of the arrangements made under this clause. Is there anything that they identify on the horizon which might lead them in the opposite direction to that which they have taken thus far?

[Lord Wallace of Saltaire]

My Lords, I have just spent the weekend in a part of France, the Dordogne, where English seemed to be spoken rather more often than French. I am conscious that the national interest in terms of co-operation in matters of civil and criminal law is a complex area given that there are now nearly 2 million British citizens living in other states of the European Union—in Spain, France, Portugal, Cyprus and elsewhere. I have to say in answer to the noble Lord, Lord Pearson of Rannoch, that we have not yet come to the point where we must take a final decision on opt-in and opt-out. I have say to the noble Lord, Lord Triesman, that Her Majesty's Government have opted in to the majority of measures which have come up since the last election, but perhaps I may quote holy writ, otherwise known as the coalition agreement, which states:

“We will approach forthcoming legislation in the area of criminal justice on a case-by-case basis, with a view to maximising our country’s security, protecting Britain’s civil liberties and preserving the integrity of our criminal justice system”.

That is what we are doing.

Clause 9 deals in particular with the use of three passerelles specific to the area of justice and home affairs. These are in addition to the Government’s recent commitments to enhance current parliamentary scrutiny arrangements on the use of JHA Title V opt-in and Schengen opt-out decisions following the Written Ministerial Statement of my noble friend Lord Howell and that of the Minister for Europe on 20 January this year. As your Lordships' House will be aware, the details are subject to continuing discussions between Parliament and the Government, which is part of our commitment to enhancing parliamentary control over three key EU decisions.

I remind your Lordships that the passerelles are: Article 81(3) of the TFEU, which permits measures concerning family law with cross-border implications to be subject to the ordinary legislative procedure and therefore qualified majority voting; Article 82(2)(d) of the TFEU, which enables the Council to add to the list of criminal law procedures that can be subject to subsequent EU legislation under the ordinary legislative procedure; and Article 83(1) of the TFEU, which allows for additions to the list of criminal offences and sanctions in the areas of serious cross-border crime on which the EU can set minimum standards. These are considered to be sufficiently serious and significant moves for this clause to stand part.

The parliamentary approval process for the three passerelles comprises two stages rather than one. This reflects the operation of our opt-in protocol on the area of freedom, security and justice annexed to the treaties and, more specifically, the arrangements governing our opt-in. It requires two decisions to be taken: first, the initial opt-in to negotiations and, secondly, the adoption of the final negotiated measure. Clause 9 affords Parliament control over both these decisions by requiring a positive vote in both Houses to approve the Government’s proposal to opt in to the negotiation, and then parliamentary approval through primary legislation once the UK has opted into the negotiation and that negotiation is complete.

Having said that, the clause helps to fulfil pledges made in the The Coalition: Our Programme for Government, in that the use of any passerelle clause will be subject to approval through an Act of Parliament and represents an enhanced level of control afforded to Parliament. Having reassured the Committee on that, I hope that it will accept that this clause stand part of the Bill.

[Lord Pearson of Rannoch]

My Lords, will the Minister clarify something? I think he said that the Government are opting into some of these things as we go along. Will those opt-ins eventually be subject to parliamentary approval, or maybe when we come to the end of May 2014 there will not be much left to opt into because it has all been done? In that case, what would be the force of a vote in both Houses of Parliament?

[Lord Wallace of Saltaire]

My Lords, I am sure that the noble Lord reads all the reports that come from the parliamentary scrutiny committees of both Houses, which I assure him follow these questions very closely and which are reported to both Houses.

Clause 9 agreed.

--- Later in debate ---

[Baroness Williams of Crosby]

My Lords, my point is even briefer. Can the Minister give a little explanation of the Motion being “without amendment”? For example, if there were to be a relatively small, technical amendment, would it in fact mean that parliamentary approval was withheld? Perhaps the Minister could say a little more on that point: why the stress on “without amendment”?

[Lord Wallace of Saltaire]

My Lords, perhaps I may start by answering the noble Baroness, Lady Williams. If I am correct—I am not an expert on parliamentary procedure—I think that on SIs we have to approve a Motion without amendment. I will take advice and write to her on that subject but I do not think it is a major issue.

Clause 10 is a proposal for light-touch parliamentary scrutiny of decisions taken in the European Union. The requirement for each House to pass a Motion is either an invitation for each House to accept that this is not significant, or so clearly in Britain's national interest that we should let it go by, or it is an invitation for the scrutiny committees to pay some attention and then bring a Motion to each House.

On the question of proposals for judges and Advocates-General, these matters have been covered by an excellent report from the House of Lords Scrutiny Committee, to which Her Majesty's Government will reply in good time. We do not see that this in any sense provides a greater obstacle to a decision one way or another; it merely underlines the desirability of Parliament being aware of what is happening and being required to say either, “Yes, this is fine”, or, “We’re not entirely sure and we require an explanation on each of these various administrative and other issues”.

Having I hope reassured the House on that, I hope that the House will accept that Clause 10 should stand part.

Clause 10 agreed.

--- Later in debate ---

[Lord Triesman]

My Lords, anybody who looks at the difficulties that have been experienced in many mature economies, whether or not they are in the euro, will recognise that the financial problems created by property speculation and, in particular, by funding sub-prime derivatives in the property market have nothing whatever to do with the euro in most cases. It was a wave of mad speculation—it can only be described as madness—because it was possible to do it under the interest-rate conditions that obtained generally around the world. They are not so varied between countries in either hemisphere.

Of course it is true that in the referenda conducted in the countries that we are discussing, they concluded, as they were perfectly entitled to do, that what was being put in front of them was not good enough. We know, however, in part from the noble Lord, Lord Empey, in terms of the role of the Commissioner in Ireland, and the issues that came up in Denmark on whether the people would be compelled into defence propositions that they did not like, or whether people in Ireland would be compelled to change the abortion law or consider NATO membership, that all of those things produced circumstances in which there was a no vote. Those Governments negotiated again and got those terms changed. Protocols were introduced in almost every incidence to get those terms changed. They then went back and asked the people of their countries whether the changes in terms were sufficient to merit a change in the view that they had taken.

That seems to me to be completely legitimate. I cannot for the life of me understand why someone would say that it is a legitimate outcome if you vote no by, say, 52.5 per cent—that is plainly a no vote; I understand that completely—but when it is put again it is completely illegitimate if something like 65 per cent of the people in that vote say yes. What is the point of a sovereign decision by people when they are asked to take a vote if you do not accept the outcome in either direction—like it or dislike it; it is irrelevant? It is their decision and they have taken it. The idea that any country, least of all this one, should feel that it is bound to be strong-armed into taking a different decision if the first decision does not accord with perhaps the general sentiment in Europe is completely fanciful. It is disrespectful to the people of this country and this debate has been disrespectful to peoples of other countries, too.

[Lord Wallace of Saltaire]

My Lords, this debate has ranged a little wider than the amendment. We have had accusations of the European elite forcing the holding of second referendums. I wondered whether we were going to be told by the noble Lord, Lord Willoughby de Broke, that the European gendarmerie would be used to force second referendums. I recall him previously raising the question of what the European gendarmerie was for. We talked about EU bullying as if somehow Brussels is different and imposes itself on national governments. I simply remind noble Lords that the European Union is an association of states and that Brussels operates on behalf of those member states. It is the member states which agree on proposals of the sort likely to be put to referendums.

On Ireland, I would simply say that the situation may or may not have been to some extent associated with Irish membership of the euro. The situation in Iceland was an even greater financial bubble and can in no sense be blamed on Iceland’s membership of the euro since Iceland is neither a member of the euro nor of the European Union. We need to get away from that. On the question of financing the Irish referendums, I am not aware of how the second referendum was financed beyond the fact that I have three very good friends in Dublin who took out substantial loans on their houses to guarantee the basic funding for a second referendum. When my wife and I had dinner with them some months after the referendum, they were still very heavily in debt. That suggests to me that there were no sugar daddies, let alone external forces, providing funding.

--- Later in debate ---

[Lord Pearson of Rannoch]

My Lords, I am not sure that I heard the noble Lord answer a question put by the noble Lord, Lord Stoddart of Swindon. It may be that the noble Lord would prefer to answer it in a debate on Clause 13 stand part. I am happy to do that, provided that we have a brief debate on it. The question was: would the European Commission, Parliament or whatever be allowed to contribute to any referendum in this country, presumably on the side of the continuing advance of the Brussels juggernaut?

[Lord Wallace of Saltaire]

I am happy to answer that now: perhaps it will enable us to avoid having a debate on Clause 13, which is largely technical. The Political Parties, Elections and Referendums Act makes it entirely clear that there are tight controls on the funding of referendums by political parties and other actors, including those outside the European Union. My understanding of the clause is that the European Commission would not be allowed to spend more than £10,000 in the course of a referendum. I hope that that provides the answer that the noble Lord needs. If any further details are required, I will of course write to him. However, I am sure that he is an expert on PPERA and all the details that the Electoral Commission now oversees.

[Lord Stoddart of Swindon]

I asked about the new rules which would allow European political parties to campaign in any country on referendums. Does the existing legislation cover expenditure by MEPs in any country, including our own, in case of a referendum? We need to know that.

[Lord Wallace of Saltaire]

I seem to remember that in both the Danish and the Irish referendums there was substantial assistance from Eurosceptic groups in this country in terms of finance and people—but perhaps I am wrong about that. Perhaps my memory is at fault. Perhaps we should consider whether there should be an amendment at a later stage to ensure that such British groups are prevented from intervening in other countries’ referendums. I will have to take advice on that and on some other matters.

[Lord Stoddart of Swindon]

I am most obliged to the Minister for giving way again, but the point about MEPs is that they will be able to use their expenses to campaign, and that is taxpayers’ money. If people give voluntarily, that is a matter for them, within the election rules, but if MEPs are spending taxpayers’ money, that is another business. I appreciate that the Minister cannot reply now, but when he considers the matter further he will perhaps take that into consideration.

[Lord Wallace of Saltaire]

I will refer back to the Political Parties, Elections and Referendums Act.

[Lord Willoughby de Broke]

I am grateful to all noble Lords who have spoken, particularly to those noble Lords who supported this amendment, and even for the qualified support of the noble Lord, Lord Flight. I say to him that this is entirely to do with this Bill and is not to do with a Bill on an “in or out” referendum, when it may well be appropriate to shorten the term between referendums. However, that is a matter for another day and is certainly not part of this debate, which has ranged a little more widely than I wished. I pick up what the noble Lord, Lord Triesman, said. I certainly did not insult anybody. I was simply quoting what some of the European elite said about their own electorates. They were the people who were insulting them, not me. For the moment, I beg leave to withdraw the amendment, but I will probably bring it back on Report.

European Union Bill

Lord Wallace of Saltaire Excerpts

Tuesday 17th May 2011 Lords Chamber

[Lord Triesman]

My Lords, I entirely understand the difference. I truly had appreciated it. My point is that in a popular sense, putting to people the opportunity to vote on whether more money should be taken from them will almost invariably lead to them saying no. I do not think there is much doubt about that. It is precisely why, for example, in the run-up to general elections—which are a vote on policies, including future financial policies—most of the serious parties will say that they are going to do absolutely nothing to anybody’s taxation or financial well-being. They will make a point either of saying nothing or pledging to do only what the last Government had put in train. This whole proposition is a significant distortion of the character of the debate that we should have.

At the end of the speech of the noble Lord, Lord Pearson of Rannoch, having said most of the things that I have already tried to cover, he dealt with what his amendment asks in one sentence. We have no objection to a wider discussion on money or greater clarity, particularly in relation to the European Union. That can only benefit us and our democratic practice. However, the notion that we should embark on a process of this kind in this, or any other Bill, is a recipe for trying to make sure that there is no progress whatever in a European context.

[Lord Wallace of Saltaire]

My Lords, I start with an apology to the noble Lord, Lord Stoddart, and other noble Lords that we have started much later than we had hoped today. There were two Statements, one of which was a good deal longer than intended and that pushed us back. I assure noble Lords that on Monday this will be the first and only business for that day. If we require more time, I remind the noble Lord, Lord Stoddart, that the House will meet at 10 o’clock on Wednesday and that will allow us a good deal of time during the morning. The purpose of a Committee stage on a Bill is to discuss the amendments—

[Lord Willoughby de Broke]

Briefly, and on a point of order: will there be an adjournment for those Members who have been lucky enough to secure places to listen to President Obama’s address in Westminster Hall?

[Lord Wallace of Saltaire]

If needed and if we are still discussing the Bill, there will of course be an adjournment. Some of us hope that we might possibly—if we manage to stick to the subject of the amendments—have finished the Committee stage by then. I want to address the amendments, I do not wish to divert into fish and—

[Lord Stoddart of Swindon]

After the apology the Minister has made for the late start and the Bill being put on again on Wednesday, the eve of the Whitsun Recess, why on earth do the Government have to do that? It has been pointed out time and again by the Government themselves that the provisions of this Bill will not take effect until the end of this Parliament. We also have a Session which goes through until next May. So what on earth is the hurry? I could understand it if the Government were short of time and had a lot of Bills to get through quickly, but this is a Bill that does not have to get through so quickly. There is no reason why they should inconvenience Members as they have been doing.

[Lord Wallace of Saltaire]

My Lords, I shall resist going down that great sideline. We have a certain amount of time remaining in this Committee stage if we manage to keep to the subject and avoid talking about great trucks, fish, rifles, minarets and Britain standing alone in 1940 before the United States and the Soviet Union came in—and I think those countries had a little to do with the United Kingdom’s victory over Nazism. I want to address myself to the amendment.

The noble Lord, Lord Pearson, suggested that the total cost may amount to £100 billion a year. I thought that was rather modest. Daniel Hannan MEP, who I know the noble Lord knows well, suggested in his blog the other week—I had heard him say it previously—that withholding our contribution to the EU would enable us to cancel every spending cut and still knock a third off council tax. That must be an estimate of around £160 billion a year. The Treasury estimate is that the UK’s net contribution to the EU budget will be £7.7 billion in 2012-13, rising to £8.9 billion in 2014-15, and then falling to £8.2 billion in 2015-16. These are unavoidably estimates, partly because, as noble Lords will be aware, a surplus is routinely entered into the EU budget each year that serves to reduce member states’ contributions the following year. The initial estimate of the British contribution might therefore be rather higher than the net result declared the following year. As the noble Lord, Lord Pearson, demonstrated in the figures that he so dazzlingly threw out, the exact calculation of how much each member state gives is itself a matter of some controversy.

[Lord Pearson of Rannoch]

My Lords, perhaps it would be helpful if I intervened. As I mentioned in my earlier remarks, there seems to be quite a difference between the Treasury figures and the Pink Book figures, which include items that are not included by the Treasury. That is why the noble Lord, Lord Sassoon, in response to the noble Lord, Lord Vinson, yesterday gave a figure of £4.7 billion for the current year, whereas the Pink Book puts it at £8.3 billion. I agree that there is considerable confusion in this area. The Office for National Statistics, for instance, has suggested that the figure is £9 billion already. I come back to the same boring old point: we would solve all this if we had a proper cost-benefit analysis. We would know where we were.

[Lord Wallace of Saltaire]

I recognise the familiar themes of the noble Lord’s argument. I will say just a little about the EU budget, which remains in many ways unbalanced to the disadvantage of the United Kingdom. It was, in the late 1970s and early 1980s, a very sore issue in the United Kingdom’s relations with the other member states of the EEC. Things have changed a good deal since then. I was encouraged to see that agriculture spending has now fallen to 40 per cent of the EU budget. I was appalled to note that, in terms of net contributors and net beneficiaries, Luxembourg and Belgium are still listed among very substantial net recipients, while the UK has now been joined by Sweden, the Netherlands, Germany—the largest single contributor—France and Italy as a net contributor. We now find ourselves as part of a bloc that is pushing for economy and a restrained approach to EU spending.

We contribute to EU spending for shared purposes. The Foreign Secretary made a speech in which he talked about increased European contributions to democratic transition across the Mediterranean. The most useful dimension of the EU budget in many ways has gone to that investment in security and development in eastern Europe through the structural funds which has helped to consolidate democracy and build a market economy in Poland, the Czech Republic, Slovakia, Bulgaria, Romania and elsewhere. We want to achieve a decade of spending restraint in Europe and we have partners—France, Germany, Sweden and others—that are also committed to that.

--- Later in debate ---

[Lord Radice]

Will the noble Lord confirm that the countries outside the EU that are contributing to the EU budget are not able to influence decisions about the budget in the way that the bloc he has mentioned, and, of course, all the other members, can? That is a great disadvantage for them.

[Lord Wallace of Saltaire]

The noble Lord is, of course, correct. One trades the purity of complete sovereignty for the lack of influence over shared decisions. I was about to close by saying that this seems to us to be outside the purposes of the Bill. Indeed, much of the discussion has been outside the theme of this amendment. I encourage the noble Lord to withdraw the amendment.

[Lord Pearson of Rannoch]

My Lords, I am grateful to all noble Lords who have supported the amendment and to those who have been good enough to speak to it. I said right at the start of my remarks that the amendment was designed to give the British people a referendum on the economic cost of our EU membership. That may not be strictly within the terms of the Bill, as some noble Lords who find that prospect uncomfortable might wish. However, I merely say that I was advised on the amendment by the staff at the Public Bill Office, and they were content with it. If it is not perfect, I apologise, but it has served its purpose.

Both the noble Baroness, Lady Nicholson, and the noble Lord, Lord Risby, for some of whose remarks I was very grateful, suggested that money is not a power. It may not be technically a power within the terms of this Bill, but money is energy and power and is something that the British people mind about very much. The noble Baroness, Lady Nicholson, also chided my noble friend Lord Stoddart about Churchill’s position in these matters. One can cite many sayings of Churchill, but the one that I and other Eurosceptics prefer is:

“We are with Europe, but not of it”.

I think he said that rather more often than he said some of the other more ambivalent things about the European Union.

The noble Lord, Lord Triesman, was good enough to query some of my figures. I think he said that I got one of them 400 per cent wrong. We do not need to go through that now but I will read Hansard and, if necessary, come back to that. An overall cost—however you come at it—to the United Kingdom from our EU membership of around £100 billion is probably not far out.

--- Later in debate ---

My appeal to noble Lords opposite is this: it would be helpful to address the arguments that we put. It may be easier, and it may indeed be tempting, to stand up a complete fiction of an argument because it is easier to knock it over. I seem to remember that that was the style of debating societies in schools for 13 year- olds, but it was scarcely the way in which we got a serious discussion. We mostly learned that you did not get a serious discussion that way, and we matured out of it. I hope, as we pursue this discussion in Committee, and later at Report, that we do each other the courtesy of addressing the points that we are actually making, rather than some fictional point that is easy to destroy. That will not carry this Bill any further whatsoever. That is why so many issues around this clause—and indeed the issues that are likely to come up around the schedule—are so telling.

[Lord Wallace of Saltaire]

My Lords, I think we all understand that Clause 6 is at the heart of the Bill. We have spent considerable time on Clause 6 and we will return to it on Report. No doubt we will have discussions between Committee and Report on aspects of it.

I will just say a few things on Clause 6, how it fits in the Bill, and where it fits in the coalition agreement and so on. The coalition agreement was, of course, a headline agreement, and on that basis the coalition partners negotiated the detail that came out of it. We have seen this evening—and those of you who read the debates in another place will be well aware—that this Bill is a compromise between incompatible positions. It is doing its utmost to draw a line underneath the long argument about keeping competence and centralisation in Brussels, which has run through British and other national politics for a long time.

It is our case, in putting forward this Bill, that the Lisbon treaty provides extensive competencies that we can use. I say to the noble Lord, Lord Lea of Crondall, that this is not in any sense an attempt to destroy the Lisbon treaty by the back door. It is based on the understanding that the Lisbon treaty does indeed provide a great deal of headroom for us all to achieve the objectives that we seek. As the noble Baroness, Lady Williams, was speaking, I had a quick look at Articles 191 and 192 of the Treaty on the European Union, because I wanted to check how much headroom the Lisbon treaty gives us on environmental policy. It is quite clear that EU carbon emissions targets are agreed under existing competencies, and largely under qualified majority voting. All the Bill does is to say that if the UK wants to give up its veto over the environmental matters listed in Article 192(2), including fiscal matters, town planning and the structure of our energy supply—that is to say, if we wish to move from unanimity to qualified majority voting—then we have to bring it back to Parliament, and, if necessary, for a referendum.

We are now going to move on to Articles 7 to 10, which will deal with a range of issues that will not be subject to referendums, where parliamentary scrutiny— parliamentary approval—is set down. That is very much an indication that we have done our utmost to distinguish between sensitive and significant issues and other issues on which we can move. However, I am not persuaded that we need endless flexibility, which we do not have, to be able to achieve the objectives which we as a constructive member of the Union wish to pursue over the next few years. The Lisbon treaty gives us that flexibility.

[Lord Liddle]

The Minister mentioned the coalition agreement, which is obviously a compromise between parties that have different views on Europe, but did not the Liberal Democrat party conceive of what it was signing up for in the coalition agreement in the following way? The Lisbon treaty had gone through and been ratified; the Liberal Democrats had supported that in Parliament. That is why the coalition agreement clearly states that the passerelles should be subject to proper parliamentary approval but not to referenda. The Liberal Democrat view was that the flexibilities contained within the Lisbon treaty should be subject to proper parliamentary scrutiny but not to referenda. New treaties of the conventional type were a different matter where the Liberal Democrats were prepared to accept a case for referenda. I am not speaking for the Liberal Democrats, but it seems to me on any objective reading of the coalition agreement that that is what was intended. However, that is not what this Bill says; this Bill is not what was agreed.

[Lord Wallace of Saltaire]

My Lords, I do not wish to get into a lengthy disquisition either of passerelle or of the coalition agreement. We attempted to negotiate also with the Labour Party. I have no doubt that those negotiations, had they been pursued further, would also have led to a very carefully and painfully crafted coalition agreement with a party which itself has some divisions within it about Europe. I saw a Bruges Group advertisement last week which had Kelvin Hopkins, Mark Seddon and a number of other people speaking on the case for leaving the European Union. Let us all be a little realistic about the political circumstances under which we are all operating. Having answered some of the questions, I encourage the noble Lord, Lord Tomlinson, not to oppose the clause standing part.

European Union Bill

Lord Wallace of Saltaire Excerpts

Monday 9th May 2011 Lords Chamber

[Lord Davies of Stamford]

My Lords, for the purposes of this very narrow amendment, we accept that the Minister of the Crown cannot agree anything without a draft decision being approved by an Act of Parliament and the referendum condition being met. That means that in the case provided for in Clause 4 there is a referendum if necessary and the referendum result is positive. Most of us on this side of the House think that that is a monstrous situation to put the country in. Nevertheless, for the purposes of the amendment, we accept that and that the Government will not be able to agree to any of those decisions without a referendum or an Act of Parliament, and in many cases both.

The amendment is designed to question the words “or otherwise support”. That is why I am just as shocked as my noble friend Lord Liddle that the Government cannot accept it. What is the purpose of including “or otherwise support”? Surely, throughout the Bill the Government have been arguing to prevent this country acceding to or being party to any decision on constitutional change, such as the introduction of qualified majority voting, without going over these thresholds of Acts of Parliament and a referendum. The words “or otherwise support”, as in the text, imply that it is an additional restriction. What does that mean? We would like specific answers from the noble Lord, Lord Wallace, if he is summing up the debate on the behalf of the Government. Does it mean that a Minister would not be able to say, “I personally support this but I need the agreement of my colleagues before I can go along with it.”? Is the text designed to prevent that sort of conversation taking place? Is it designed to prevent the Minister saying, “The British Government support this, amazingly, but we’ll have to have a referendum because we have imposed this Act on ourselves”? Is that what “or otherwise support” means? Does the Minister want to intervene and perhaps answer my questions?

[Lord Wallace of Saltaire]

My Lords, perhaps it will help the House if I read the wording in Section 6 of the European Union (Amendment) Act 2008. It states:

“A Minister of the Crown may not vote in favour of or otherwise support a decision under any of the following unless Parliamentary approval has been given in accordance with this section”.

In addressing that clause and in resisting the amendment of the MP for Wells, Mr Jim Murphy said:

“If the European Council sought to come to a decision based on consensus, the provision in clause 6 would mean that we would have to vote to break that consensus by not abstaining. That is the important protection contained in clause 6(1)”.—[Official Report, Commons, 4/3/08; col. 1669.]

All that we are doing is repeating what the previous Government put in the Act that ratified the Lisbon treaty.

Perhaps it will help if I go on to explain that this does not in any way mean that a Minister or their officials cannot express support for a decision in principle, pending the completion of the process of approval provided in Clause 6.

[Lord Davies of Stamford]

I am grateful for that intervention, but I must say to the noble Lord—I think that he will agree in principle—that it is a very bad excuse for a Government, when bringing forward legislation, to say, “This may be bad legislation with bad wording, but we copied it from a previous Government”. That is not the way that legislation should be brought forward in this or any other House. All proposed legislation should be justified on its own merits and on its own text; the Government of the day should be prepared to defend the texts that they bring forward and should not say simply that they are reproducing what may well be the errors of the past.

I move to the text before us. It would be useful to have on the record a clear statement from the Government of what this is intended to mean to Ministers. If the Act is passed, Ministers will need to know what scope they have for taking part in discussions. If the noble Lord says that they will be allowed to say, in the example that I quoted, “I personally am in favour of this, but I do not have support yet from my colleagues so I will take it back to them”, that would be useful to know. If they will be allowed to say, “The British Government are in favour of this in principle, but we need an Act of Parliament and a referendum”, that would be a very reasonable thing to say if this Act was passed. However, it is extremely important that we get this clear.

I will explain to the noble Lord why it is so important. There is an issue of good faith. We are parties to the treaty of Lisbon. The noble Lord probably voted for the treaty, and his noble friend Lord Howell probably did not. Nevertheless, we as a country are committed to the treaty of Lisbon, and we are therefore committed to the clauses of the treaty—including Article 31(3) of the TEU, which we will debate in a moment—which provide in certain circumstances for a decision by the Council to go to qualified majority voting to reach a decision. The treaty of Lisbon provides for these possibilities, but we are coming along with a proposed Act of Parliament—a Bill—that is designed to prevent Great Britain from ever being a party to mechanisms that we signed up to when we agreed to the treaty of Lisbon. If it appears that we are going to be censoring Ministers and saying, “You cannot take part in good faith in debates and discussion, you cannot have a normal exchange of views, you cannot make statements that you are in support of things and so forth”, this would constitute a determination to make sure that our contribution in the Council will be extremely negative and unproductive.

This is a matter of good faith and is about whether the Government—we had this discussion in another context during the debate on the Bill—want to bring about deliberately a degradation in the good relations between this country and our EU partners. I trust that they do not. The noble Lord, Lord Wallace, said on a number of occasions that they do not and that it was quite wrong for me to harbour that black suspicion. I hope that it is quite wrong of me, but it is therefore very important to see what kind of constraint will be imposed on Ministers. I am grateful for the noble Lord's intervention, which has gone some way to explaining the practical effect on a Minister of the Crown who takes part in the Council of Ministers. Anything further that he can add would be of great practical importance when Ministers find themselves in difficult situations in future discussions where they have to have regard to the Act, if it is an Act by that point.

--- Later in debate ---

[Lord Pearson of Rannoch]

I have a slightly more general question to put about a thread which is running through all our amendments and proceedings. It concerns the Government’s attitude to enhanced co-operation. We have heard much about the general position of Ministers who would find themselves isolated in the Council of Ministers because, although they might support a proposal, they would have to take it to a referendum that they might lose. That is why I ask: how serious is that, really? If nine or more countries wanted to go ahead with a proposal—it used to be eight, but I think it is now nine under the Lisbon treaty—what would be the Government’s attitude to it? How worrying is enhanced co-operation? I imagine that the Government may say that they do not particularly want a two-speed Europe. Of course, some of us would prefer a third speed or gear—a reverse gear. But it would be nice at some point during our proceedings to understand how the Government view enhanced co-operation generally.

[Lord Wallace of Saltaire]

My Lords, I shall respond to the spirit of the probing amendment that the noble Lord, Lord Liddle, rightly moved. It is useful to probe on this. I do not think that I can respond to all the points that the noble Lord, Lord Davies of Stamford, raised, because they seem to me to stem from a deep conspiratorial assumption about the implicit plot behind the Bill, and I suspect that reasoned argument cannot reach that deep.

I should point out that Articles 235(1) and 238(2) of the Treaty on the Functioning of the European Union make it clear that abstaining in a decision requiring unanimity is effectively counted as a supportive vote, and so an abstention could be classed as supporting a decision. Those of us who have been involved in any way in Brussels decisions will know that formal voting is not the most common form of decision-making in Brussels. A great many are taken by consensus and the chair taking the sense of the meeting. That is no doubt part of the reason why the previous Government, in their wisdom—I am not saying that they were always wrong, let alone that they pursued conspiracies of their own—put in this phrase “or otherwise support”. That does not mean that a Minister cannot indicate support in principle for a decision if the Minister also gives notice that a vote in favour is subject to approval by Act of Parliament and to the referendum condition being met, if that is required by the decision.

The noble Lord, Lord Pearson of Rannoch, was determined to get enhanced co-operation into the discussion even though we are not discussing that amendment. Enhanced co-operation is under way. The British Government are indeed involved in the process of enhanced co-operation on patent law. We do not believe that Britain will become more marginal because enhanced co-operation takes place among others. After all, if one looks at what is happening with European co-operation in defence, one will see that the United Kingdom and France are, in effect, leading in defining practical co-operation in that regard. The myth behind the Bill—that we will somehow be pushed to the margin, which the noble Lord thinks is a good thing but the noble Lord, Lord Davies, thinks is a wicked thing—is not the case. In an EU of 27, which is about to be an EU of 28, 29 or 30, it is likely that there will be a number of issues on which smaller groups—which will often including the United Kingdom, though sometimes not—will move ahead on their own through enhanced co-operation. In most cases that will not require treaty change. They will merely be moving ahead because it is not possible for all 27, 28, 29 or 30 to agree. Therefore, that will not be caught by the Bill.

[Lord Liddle]

If Britain agreed to enhanced co-operation but the member states participating in enhanced co-operation then decided under the provisions of the Lisbon treaty to change the decision-making process to qualified majority voting, would the Bill cover the situation?

[Lord Wallace of Saltaire]

As a hypothetical situation, at that point it would because it would be a change in power and competence. The enhanced co-operation itself would not. That is the distinction. Let me reiterate: a Minister can make very clear that the Government support a decision but that they must also seek the necessary approval of Parliament and the public first. Britain is not alone in this respect. This is the way in which national Governments very often have to proceed.

[Lord Hannay of Chiswick]

Now that Minister has dealt with enhanced co-operation, can he go back to the chicken and the egg? It would be quite nice to know how he thinks the Council will conduct itself in taking decisions in this matter. This is nothing whatever to do with absence from the Council, which is a complete red herring. This is about what you do in a matter that requires unanimity. Without unanimity, there is no decision in any of the matters that we are talking about. I think that that is common to the understanding of everyone in the House. How is that unanimity achieved so that the British Government can submit the matter to their Parliament or to the public through a referendum if they have not expressed a view, because then there is no unanimity? There is a serious chicken and egg problem here.

This is a probing matter. There are, for example, very well known procedures in Brussels, which I suspect the Government would take advantage of in circumstances such as this, whereby the Council would indicate that it could only reach political agreement on this occasion and that legal force could not be given to it through an A-point in the Council, or whatever, until the British Government had passed legislation, had a referendum, or whatever. If that is what the noble Lord is getting at, I have to say that the wording, including the wording that he quoted from Lisbon, is a long way adrift from that and will cause Ministers considerable difficulties if this becomes law. I hope very much that he will now be able to clarify whether we are talking about political agreement, which of course involves support—you cannot have political agreement without support—or legal agreement, because the British Government would be prevented from giving their legal agreement to the matter.

[Lord Wallace of Saltaire]

My Lords, this is not entirely new. We all understand that Her Majesty's Government have often said in Brussels that they can make only partial agreements, subject to a parliamentary scrutiny reserve. That is the normal way in which we proceed. The noble Lord is very experienced in this regard and will recall a number of instances in which decisions have had to be taken with parliamentary scrutiny reserves on board.

On the requirements of Clause 6, we are, after all, talking about the consequences of joining in with unanimity decisions that will involve the transfer of power and competences. That is the “added” part. Otherwise, the complex negotiating processes of Brussels, in which a number of noble Lords here are extremely expert, will continue with Her Majesty's Government and the Governments of a number of other member states saying that they can agree to something only subject to later parliamentary approval. That is the established practice of the Germans, the Danes, us, the Finns and others. The Bill might not be as elegant as the noble Lord, Lord Hannay, would like, but it merely restates the familiar circumstances from the Lisbon treaty ratification Act.

[Lord Tomlinson]

I am grateful to the Minister for giving way, but he leaves me rather confused. I try to think of the big picture all the time. Here we are trying to inspire the British people, to eliminate their scepticism about Europe, and to get them to love Europe and to feel connected to it. How on earth do some of the things that the Minister is talking about make a single contribution towards that process? He makes the British Parliament sound more bureaucratic than the worst European bureaucrat.

[Lord Wallace of Saltaire]

I simply do not accept what the noble Lord has said. I have been quoting from an Act from the last Government—his Government and that of the noble Lord, Lord Davies of Stamford, who was a Minister in it and who has now rubbished it. The Bill restates established practice, which in no way means that the British national media will—

[Lord Kerr of Kinlochard]

I suggest that the reference to a scrutiny reserve is not quite right. A scrutiny reserve prevents a decision being taken, so the decision is not taken until the scrutiny reserve is lifted or the Minister goes into the statistics of the noble Lord, Lord Pearson of Rannoch, and decides that he will override the reserve and does not apply it any more. There is no decision until the scrutiny reserve has been dealt with, so the chicken and egg point made by the noble Lord, Lord Hannay of Chiswick, is real. I hope that we do not need to pursue it much further tonight, but it does need to be thought about.

[Lord Wallace of Saltaire]

My Lords, I am very willing to reflect on this point and see whether we can return to the House with any words of comfort, but I fear that we are chasing headless chickens around the yard a little. I will leave it to others to decide whether the eggs are headless as well.

To conclude, we are not the only Government who—I will give way once more to the noble Lord, Lord Davies of Stamford.

[Lord Davies of Stamford]

I am very grateful to the noble Lord, Lord Wallace, but I hope that if he wants to criticise me in future, which he is very welcome to do, he will do so on the basis of what I actually said and not on what I have not said. I did not rubbish the Government of whom I was proud to be a member; I said that this was a general principle that applies to the Minister today and that applied to me when I was a Minister. If you bring forward a Bill in this House or the other House, you must be expected to defend the text on its own merits. It is no excuse to say simply that you are replicating text from the past. That was the point that I made. I made no normative statement about the text at all in that context; I simply made that general principle clear.

[Lord Wallace of Saltaire]

I thank the noble Lord for making that so wonderfully clear.

I hope I have managed to persuade your Lordships that there is no sinister intent behind these words. They are not part of a dreadful right-wing Conservative plot, so there is no need to add the qualification that Amendment 32A would require. May I also say, since the Daily Express has been running a range of quite absurd stories—the latest being that government buildings are being forced to fly the EU flag—that we must recognise that we are operating in a world in which, for many years, previous Governments have failed to stand up to some of the complete nonsense that has spread through the British press. Unfortunately, we now find more and more nonsense spreading, and part of what this coalition Government intend to do is to spell out the advantages to Britain of being in the European Union in order to get back at some of the nonsense put out by the Daily Express, which unfortunately, as noble Lords will know, is no longer part of the Press Complaints Commission process and so the commission has very few controls over what it puts out, but that is another matter.

We will take this matter away and look at it again. However, as I say, the words used in the Lisbon treaty amendment Act were there for a good reason, and the words used here are also here for a good reason. On that basis, I hope that the noble Lord will be willing to withdraw his amendment.

[Lord Pearson of Rannoch]

Before the Minister sits down, may I be allowed to put in a word on behalf of the Daily Express, about which he has not been wholly polite? Millions of people in this country actually welcome the campaign to leave the European Union which the Daily Express has started—it is the first national newspaper to have done so. Whatever noble and Europhile Lords might feel about the Daily Express, I would at least like to put in a word on behalf of the rest of us.

[Lord Tomlinson]

Before the noble Lord sits down, is he aware that these millions of people who follow the Daily Express campaign with such avidity brought such success to UKIP in the local elections?

[Lord Wallace of Saltaire]

I apologise for introducing this tangential issue into the debate on the amendment, and I really do think it is time for the noble Lord, Lord Liddle, to respond.

--- Later in debate ---

[Lord Radice]

I should like to raise a matter of pure curiosity. Did the previous Government’s Bill refer to a referendum, as does this clause?

[Lord Wallace of Saltaire]

I suspect that the noble Lord may know the answer to that. As I have made clear, when we are not discussing questions of the transfer of power and competence, these questions do not apply. As for the parliamentary scrutiny reserve, these questions occasionally do apply. As the noble Lord will be aware, the thrust of this Bill is partly to respond to those who fear that the European Union much prefers to talk about process, competences and institutions than about policy and outcomes. We want a European Union which focuses on policy and constructive outcomes and does not spend too much time focusing on institutions.

[Lord Liddle]

My Lords, of course this side of the House will not pursue this amendment and we will withdraw it. Before I withdraw it formally, I should say that I am very glad that we have put forward this amendment because it has raised some interesting points. The point made by the noble Lord, Lord Hannay, has not been adequately answered by the Government. In this discussion, we also have had a first: it is the first time since we started Committee stage that the Government have said that they might go away and look at something, which is quite remarkable. We have been passing rather like ships in the night.

The government Benches on the one hand and the Opposition and opinion generally throughout the House on the other hand have been talking, although not really engaging. This is the first time that the Government have said that they will consider the wording. I should have thought that if the need is to find a form of words to cover the agreement on a consensus without a vote one could find more specific words than “or otherwise support”. I see no objection to adding something on the lines of what is suggested in Amendment 32A in order to make clear that this is not intended to be a restraint on Ministers.

--- Later in debate ---

[Lord Dykes]

As I hope my noble friend will agree, I have put my name to the amendments and wish briefly to address the House on them, following the remarks of the noble Lord, Lord Hannay. Although the noble Lord is no longer in the Chamber, he should receive the thanks of the House for revealing the shocking irony that Clause 6 is in many ways more obnoxious than Clauses 2, 3 and 4 in terms of what it does to weaken Parliament and, ironically, government and ministerial decision-making in European meetings which would take place as a result of the clauses.

Amendments 32, 33, 34, 35 and so on, including my noble friend’s amendments on the EPPO, try again to appeal to the Government to respond reasonably. There has already been a hint, to which the Labour spokesman referred, that the Government were beginning to listen to deep and genuine arguments from all parts of the House against the details of the Bill.

Amendment 32 and subsequent amendments remove the referendum condition from the beginning of Clause 6, to deal with items not covered in Clauses 2, 3 and 4. These are specified decisions postulated in the TEU or the TFEU that do not need a new treaty or Article 48(6) treatment, because the two categories listed mirror the list set out in earlier clauses; and the second category relates to the so-called one-way decisions that are by definition irreversible. Similarly to the previous clauses, especially Clauses 3 and 4, it would greatly improve the efficacy and good faith of the Bill if those subsections were either eliminated altogether or substantially amended to soften the harsh impact of the provisions.

The subsequent amendments in this cluster, under the names of the same promoters, would remove the referendum condition in other areas of decision-making. I will not go into great detail, but Amendment 33 omits the whole of Clause 6(2) to (6) and cancels the need for referenda on QMV, EPPO, social policy items, the environment and so on. Those are all worthy of consideration by the Government once again to reinforce and return power to the British Parliament, which has been seriously undermined by the constant nagging by the anti-Europeans that Parliament has somehow let down the British people about Europe. That is not the case in any evidential way, and we now need to restore the balance to the British Parliament—both Houses—in future. Incidentally, it is interesting to muse that according to page 9 of the Constitution Committee's report, if change in the House of Lords were covered by the definition covering abolition of either House of Parliament, then change in a fully elected House of Lords also should be the subject of a referendum. I bet that it will not be, bearing in mind what happened last Thursday.

Under the clause, no ministerial judgment is exercised on the transfer of power argument, because the primary legislation and referendum are automatic. There are no exemptions. Hence, on Europe Day, I am wearing the Europe tie in honour of the Schuman day. There is one European flag in Parliament Square—that is because it is Europe Day—and the member state flags as well, but Britain is the only leading member state where the European flag does not routinely fly on any government building. Perhaps my noble friend Lord Wallace would try to do something about that in future for the coalition Government.

[Lord Wallace of Saltaire]

I intervene to say that the Daily Express said that the British Government were being forced to fly the European flag on government buildings. The noble Lord has just demonstrated that that is a slight exaggeration.

[Lord Dykes]

I entirely accept that. Indeed, no member state is forced to fly the flag. It is interesting that in Germany, France, Italy and other countries, routinely, all or most government buildings fly the European flag as well as the national flag. We know that President Sarkozy, when he has a television interview, always has, alongside the tricolour, the European flag.

European Union Bill

Lord Wallace of Saltaire Excerpts

Tuesday 3rd May 2011 Lords Chamber

[Lord Tomlinson]

Perhaps the noble Lord can help me. He explained that in a number of areas power had gone to Brussels by what he described as fairly dubious means. I have not had the benefit of 20 minutes’ thought about that, but I cannot, offhand, think of any such example. Can he give me a couple of examples of what is worrying him about the dubious means?

[Lord Wallace of Saltaire]

The noble Lord is speaking from the Gangway and is therefore not in order.

[Lord Lamont of Lerwick]

I would say that the setting up of the European financial stability mechanism using Article 122 of the TFEU is extremely questionable. I am deeply puzzled how that can be regarded as in accordance with the treaty, but I am sure that that matter will be raised at some point later during our proceedings.

--- Later in debate ---

[Lord Wallace of Saltaire]

My Lords, we have had a series of rather general debates, some of which relate to the amendment under consideration. However, I fear that several speeches have not referred at all to the amendment that we are discussing.

I first answer the broad and appropriate question that the noble Lord, Lord Williamson, posed. The Government’s case is that, under the terms of the Lisbon treaty, we now have considerable flexibility to do a great deal more within the current competencies of the European Union, some of which will be of definite advantage to this country, without needing further treaty change. The amendment seems to be based on an assumption that there is very little flexibility in the treaties, and that Britain is being pushed to the margins, stands alone, and will somehow be trapped by this. The coalition Government are making the case that we wish to make the best of our position in the European Union, but there is now a good deal of headroom and we are not cramped by current conditions. We are, as we will come to later, taking part in at least one exercise in what might become enhanced co-operation on the EU patent. The EU and Britain can work together within existing competencies for some considerable time to come.

On the previous day in Committee, I quoted David Miliband as saying clearly that, with the acceptance of the Lisbon treaty, we should now be entering a stage of consolidation in which we do not need further treaty change for some five to 10 years. If that turns out not to be the case, we will all have to deal with the situation as it then comes.

[Lord Lea of Crondall]

This is the most important point in the Bill. Are the Government now saying that if the Lisbon treaty says X, Y and Z, none of these clauses can in any way undermine it?

[Lord Wallace of Saltaire]

I was not aware that any of these clauses in any way undermined the Lisbon treaty. The noble Lord, Lord Kerr, who was much involved in the EU convention, is not here. Those of us who have read, as I have, a certain amount on the EU convention and the Lisbon treaty, which followed it, are well aware that the clauses on the emergency brake and passerelle were agreed after hard negotiations, in which it was not the United Kingdom versus all the others. Several member Governments in this now rather large and complex European Union wanted some reassurance that, as they touched on such sensitive areas as national sovereignty, law, finance and welfare provision—some of the issues covered by these emergency brake provisions—they would have, at the back, the ability to say, “No, we are not happy with what is proceeding”. That is what the emergency brake is about. It is not the case that Britain stands alone against 26 other member states that are determined to integrate further and sweep more powers into Brussels.

The United Kingdom and several others are pushing for further co-operation in a range of areas. Coalitions across the European Union differ according to each subject on which we negotiate. The noble Lord, Lord Liddle, knows better than me what it looks like once you are inside government. The emergency brakes are there to reassure member states—their public and their Governments—and those who care not just about the peculiarities of English criminal law and justice but about those of Polish and Romanian criminal law and justice. I have read what the then Foreign Secretary, Jack Straw, said about this when he gave evidence to the House of Commons European Scrutiny Committee on the Lisbon treaty. He said that the Government hoped that the emergency brake would never have to be used, but that it was there as a reassurance to national Governments. I emphasise “Governments”; this was not just about the British.

Jack Straw went on to say to the House of Lords European Union Committee:

“So it is an additional protection and I think really rather an important one”.

Perhaps the noble Lord, Lord Liddle, drafted this. Jack Straw then said:

“Again, it is quite a paradoxical point but I think the effect of it may be to provide greater confidence to British Government to get involved in opting into instruments, which is actually in principle what we want to do, and having done that then some additional surety which will get a satisfactory answer so that we do not have to apply the emergency brake”.

The noble Lord, Lord Liddle, said that sometimes the arguments around all this are arcane and of mind-boggling complexity. That sentence was not the easiest to read. However, the whole purpose of the emergency brakes is precisely to reassure national Governments on sensitive issues. It is not intended that they should be regularly used. It is highly unlikely that any Government will wish to remove them in the foreseeable future. Therefore, I suggest humbly that this amendment is one of the least useful that we have to consider.

[Lord Liddle]

I think the noble Lord, Lord Wallace, is trying to distort the position that I have put forward. I am not in favour of removing the emergency brakes. I am saying that the flexibility is there in the Lisbon treaty to do this. Those of us who have doubts about the Government’s Bill are saying that since this flexibility could be exercised only by Act of Parliament, why does it have to be done through a referendum? That is fundamentally the point. We heard the argument about what the former Foreign Secretary, David Miliband, said about the Lisbon treaty late at night in the previous session of the Committee. The point is that David Miliband recommended the Lisbon treaty to the other place on the basis of the flexibilities that it contains. However, the problem with the Bill is that it tries to tie up all those flexibilities with its wretched referendum lock.

The noble Lord, Lord Wallace, is trying to cover up the fact that his party is allowing the Conservative Party a second bite at the cherry on the referendum on the Lisbon treaty that it failed to secure. That is what much of the Bill is about. It is to my great regret that the British party that has been the strongest supporter of Britain’s membership of the European Union has gone along with what the Conservatives are asking for in this case. They are after a re-run of Lisbon. The amendments that we on this side of the Committee have put forward say, “Let us take the Lisbon treaty as it is and accept that the flexibilities within it do not require referenda”.

[Lord Wallace of Saltaire]

It is my great regret that for 13 years under the previous Labour Government the balance of public opinion in this country became steadily more sceptical about the European Union and that the Government of Tony Blair and then of Gordon Brown failed to make a positive case for European Union engagement. That has left us with a very sceptical public and a deeply sceptical and antagonistic press. That is the problem with which this Bill deals. It is another problem that we have inherited from a succession of previous Governments. The noble Lord, Lord Liddle, might well have tried to do something about that at the time from inside government, but unfortunately he did not succeed.

[Lord Liddle]

We can have academic debates about these questions in other places, and I do not want to delay the Committee. However, on the facts, there has been no great swing of British public opinion against the European Union over the past 15 years or so. It has fluctuated with circumstances over time. The Eurosceptic press was not created by the previous Government; unfortunately, it has been with us for a lot longer than that.

We on this side fundamentally object to the idea that plebiscitary democracy is the way to restore public trust. I am surprised that the noble Lord, Lord Wallace, is going along with this. I do not know what the noble Lord’s views are on the current referendum campaign, but there does not seem to be a high quality of public debate on referenda, given the way in which some of the people involved in the referendum campaign have argued that we are missing out by not having these issues decided in Parliament, where there would at least be a more balanced consideration of them.

I will, of course, withdraw this amendment. However, we on this side have moved several amendments on these lines, and we see no give whatever on the Government’s part. On subsequent Committee days I will refer to the question asked by the noble Lord, Lord Williamson, to which the Government must face up: namely, if they think that something has to be done in the national interest, would it still require a referendum, and what would be their position on that? That question is highly relevant.

--- Later in debate ---

[Baroness Williams of Crosby]

My Lords, my noble friend Lord Taverne and I have a difficulty. A number of speeches addressing this group of amendments have moved somewhat between the groups. There have been references to later amendments. We are not quite sure whether this debate is meant to comprise the list of things being put forward by the Front Bench of the Labour Party, including this amendment as well as the others that fall within the same general area, or whether we are supposed to limit ourselves entirely to the single market. In that case, a great many speeches have been rather close to being out of order. Perhaps the Government will indicate whether they wish this debate to be limited to the single market or to take a number of these amendments together, in which case my noble friend Lord Taverne and I both wish to say something.

[Lord Wallace of Saltaire]

As the noble Lord, Lord Triesman, recognised, and perhaps I may suggest, as this group and the groups that follow cover similar themes one might talk about this group and those that follow, which will save time later when we get to the others.

[Baroness Williams of Crosby]

I am grateful for that, which is exactly my view. Perhaps I might refer to what the noble Lord, Lord Triesman, said. I also associate those concepts with some of the later amendments. I will not keep the House for long. The noble Lord’s good argument was made strongly on the basis of the need in some cases for urgent decisions to be made. He pointed out that the formal procedures are long-winded and slow and that therefore in some cases it would be irrelevant to the issue that had come up because it would take so long to deal with the procedures.

I now refer to a second group of amendments, which is what I might call the Canute group. What is the Canute group? Those of us who remember the early history of Britain will remember that the king at the time ordered the tide to turn back. In other words, he insisted on not seeing the world as it is. The amendments in this group are about insisting—

--- Later in debate ---

[Lord Wallace of Saltaire]

I understood the noble Lord, Lord Triesman, to say that as this group and the following group of amendments cover a number of similar issues he had touched on some of the broader issues behind them. It was not my intention to go into the detail on all of them as the noble Baroness has just done.

[Lord Taverne]

My Lords, some very important issues are raised by these amendments. If they are now to be considered and debated, I do not see how we can possibly break for dinner.

[Lord Triesman]

My Lords, we have been urged by the usual channels to make sure that the business is handled as effectively as possible. For those reasons I spoke to group three, which has broadly related economics based arguments. I spoke to nothing else. I was kindly reminded that I would need to move the amendment at the end and, in due course, formally move the next two amendments. However, I spoke to the economic group, group three. I hope I have now made it clear.

[Lord Wallace of Saltaire]

My Lords, in that case, perhaps I may give the Government’s response on this group. We will then be able to break for dinner and return to the others later. All afternoon this has been a rather untidy debate. I almost congratulate the noble Lord, Lord Pearson of Rannoch, on actually mentioning in his speech the amendment under discussion. In the previous debate he did not mention the amendment we were supposed to be discussing. We are in a Committee stage debate at the moment in which one is supposed to address one’s remarks to the Bill under discussion rather than to the state of the world, the wickedness of the EU as such and all the other things he touched on in his interventions.

The noble Lord, Lord Triesman, raised large questions about global markets and global governance. As we address these amendments, we all recognise that what the EU does in competition policy, in negotiating on world trade and so on is part of a rather complex system of different intergovernmental organisations, of which the EU is one. I remind the noble Baroness, Lady Williams, that money laundering is largely dealt with, for example, under the financial action task force, which is more closely associated with the OECD than with the EU. It does it rather well. Indeed, I have read a volume by one of the noble Baroness’s close relatives which refers to how well the financial action task force does in this respect. The EU is not responsible for all of the issues involved in managing a global market. However, it has a number of extensive powers, some of which have been discussed on this occasion.

This group of amendments and the ones that follow seem, in general, to contain a number of assumptions about the Bill, the EU and what the Government think about the EU which, I repeat, are erroneous. First, the EU has competencies in all of these areas. We are not talking about extending competencies. Opting in to the human trafficking directive does not extend competences; it merely uses the available competencies in a more effective way. The treaty of Lisbon provides ample scope for EU action in the areas cited in the amendments tabled under this group and the group that follows. The assumption that the United Kingdom is tying itself up in knots and is thus unable to act and that we are the only Government who wish to go through constitutional procedures of the kinds listed in the Bill is also erroneous. As we have said, the UK Government are in the forefront of pushing for new policies in a number of areas. As the noble Baroness said, we have just signed up to the human trafficking directive.

On the Doha round, it is not the EU that is causing the problem, as the noble Lord, Lord Triesman, knows. Incidentally, when Britain first joined the European Community as it then was, one of the first things that I and many others learnt about it was Article 113 and the 113 committee, and the exclusive competence of the European Community in external trade. I am not sure what one can provide more than exclusive competence —perhaps super-exclusive competence is needed next.

We are now negotiating on services as well. The assumption that the EU is unable to act in all of this is part of the misunderstandings that others are raising. There is also the question that if the European Union suddenly found that it lacked these powers then it could rush through a treaty change in two months. Actually, we have discovered that urgent treaty changes take somewhere between 18 and 24 months. That is part of the process we have gone through. The noble Lord, Lord Empey, rightly pointed out that in a crisis you are better off negotiating rapidly in an ad hoc framework, as we often find ourselves having to on a global level—G20 has emerged as part of this—rather than attempting to go through all of these very complicated programmes.

On competition policy, the European Union has now emerged as one of the two most important forums for competition policy in managing global multinationals. Until the EU developed its competition competence, the United States effectively managed the competition policy of multinational companies and operated through extra-territorial jurisdiction in imposing its judgments on multinationals operating elsewhere. The record of the EU in competition policy has on the whole been very good. The noble Lord, Lord Triesman, is quite right to point out that innovation constantly raises new problems. That is true for all jurisdictions and there is a constant race between one international organisation and another. So far, the EU has managed as well as the federal United States in that respect.

On the lack of competences, I have looked at what used to be Article 113 and is now Articles 206 and 207. There are two areas of reserved competence in Article 207. One is on audio-visual and cultural relations—not inserted by the British but by the French—and the other is on limitations on negotiations in health, welfare and social services—not inserted by the British but by the Germans. We are not always the ones who are hesitant about giving way on sovereignty; it is often others. On the single market and global trade agreements, the EU is well supplied with competence.

On financial regulation, the EU is one among many actors. The Bank for International Settlements, the financial action task force and the range of other bodies to which the United Kingdom belongs and in which the UK is a full participant also play a role in this area. Our EU partners play a large role as well. The Government want to see—we will stress this on all these amendments—the European Union using the tools it has under existing treaties and its now very extensive competence more effectively, bringing about the benefits that we want to see the EU delivering for the British people and everyone across the European Union. The noble Lord, Lord Mandelson, made an excellent speech on our previous Committee day precisely expressing those sentiments. Those are sentiments that the Government share. Having said all that, I hope that the noble Lord, Lord Triesman, will be willing to withdraw his amendment. Then we will return to the next group on similar arguments after dinner.

[Lord Davies of Stamford]

I did not want to interrupt the noble Lord’s flow while he was speaking, but I have a rather important question. He referred to Article 207 and the derogation in that from the usual procedures on the common foreign policy that the council needs to act unanimously in these two matters involving, first, trade in cultural and audio-visual services, which he said was a provision put in at the demand of the French, and secondly, the field of social, education and health services, which he said was put in at the demand of the Germans. The noble Lord was really saying that here was a case when the treaty needed to be amended to accommodate the particular requirements of those two countries. They were not our requirements and we would rather have had no derogation in the common foreign trade policy. Let us suppose that the French and German were prepared to remove those two derogations or obstacles to freer international trade. Is it the case that under the Bill we would then require a referendum to allow the Germans and the French to agree to give up concessions which they had previously obtained?

[Lord Wallace of Saltaire]

I have spent a good deal of my adult life studying and teaching on the European Union. I struggle to imagine a situation in which the French Government would suddenly decide, on their own and as a single action without asking for any concessions in any other area, to give up that. Hypothetically, in a parallel universe inhabited by the noble Lord, Lord Pearson of Rannoch, and a number of other people, it is always possible that these things might happen. In the practical life of the way that the European Union works, that seems completely inconceivable.

[Lord Davies of Stamford]

I am grateful for that response which seems to reveal that there is potential for a complete absurdity, which must also exist elsewhere in the treaty. We would force a referendum on ourselves simply because some other member state was prepared to adopt more communautaire policies in the future and to withdraw concessions that previously they had insisted upon.

European Union Bill

Lord Wallace of Saltaire Excerpts

Tuesday 3rd May 2011 Lords Chamber

[Lord Liddle]

The noble Lord, Lord Deben, has made an apposite intervention. I do not know what the relevant question would be but this is something in the real world that Ministers might have to address. It could enormously strengthen the Union’s capacity to deal with climate change and energy issues.

Amendments 23J and 23L are further examples. Amendment 23L is on piracy. We know that there is a growing problem of piracy, particularly in the Red Sea and the Indian Ocean. We know that an EU force is attempting to deal with this problem but that its efforts are inadequate. What is the reason for that? Is it a lack of resources or commitment on the part of the member states? That is possible, but another explanation is that the basis on which the force is patrolling this area does not match the tough circumstances that need to be dealt with. There is no agreement between the member states on the terms of engagement between the EU force and the pirates. There is no agreement on the circumstances in which force can legitimately be used.

These are difficult issues to tackle within the European Union because they touch on terribly sensitive issues to do with defence and armies, areas where the European Union has rightly been cautious in getting involved. I am not in favour of a European army, nor is the Labour Party, so do not try to say that this is trying to open the door to that.

[Lord Wallace of Saltaire]

It would be a European navy.

[Lord Liddle]

Yes, the noble Lord, Lord Wallace, is right about that.

We are not talking about that but it could be, if we are going to have an effective force for this purpose, that we need to have a much more integrated force posture with common rules of engagement. That is a possibility that member states in these particular circumstances ought to be prepared to consider.

Look at north Africa, where the events occurring mean that the European neighbourhood policy and the Union for the Mediterranean require a complete rethink in their light. We need, as a European Union, to develop a coherent policy which particularly offers those countries in north Africa which are going down the path of strengthening democracy and human rights incentives for going further in that direction. I was interested in a piece that I read—I think it was yesterday—by Peter Sutherland about what might be necessary in order to make that policy happen. It involves tackling very sensitive and difficult issues, such as the need to have more flexible rules on immigration for people from those countries so that they can come and study in Europe, spend time here and then go back there. It requires having more flexible rules on trade so that trade with the European Union can boost their economies and jobs. That would do something about the appalling problems of youth unemployment in those countries. It may require a more common approach to asylum. We are potentially facing having 400,000 people in refugee camps in north Africa, so I read in a newspaper article the other day. These are issues that cannot be addressed in 10 years’ time but on which the European Union needs to develop credible policies, in its own interests, in the next year or two.

Most of the time, we obviously want Europe to use its existing powers under the existing treaties. Yet are we saying that we would not contemplate any change at all? This is the Williamson question which was asked earlier. The Government are getting themselves into a trap here. The coalition has pursued a positive approach to the European Union so far in its negotiations, but if they really believe that they are pursuing a pro-European policy, we urge them to be flexible on these issues and to recognise that we do not want to tie ourselves down with referendum requirements in areas where there is cross-party agreement and a general consensus that we need a stronger and more effective European Union. I beg to move.

--- Later in debate ---

[Lord Wallace of Saltaire]

My Lords, I apologise if the noble Lord thought I was scowling at him. I was looking at him in some confusion. The question of how one deals with piracy off the coast of east Africa is rather different from how one might deal with piracy within the territorial waters of the European Union. Among the ships dealing with the anti-piracy patrols off the east coast of Africa are some very effective Chinese and Indian ships. The complications in co-ordinating ships from a large number of countries are considerable. How one should treat pirates whom one captures off the east coast of Africa is a large question in international law, but not under EU law since the EU does not extend to the Indian Ocean.

I was delighted to hear the noble Lord, Lord Davies of Stamford, spell out his conspiracy theory. It is useful to know which conspiracy theories underlie different views. I encourage him to compare his conspiracy theory with that of the noble Lord, Lord Pearson of Rannoch. They run in opposite directions. The noble Lord, Lord Davies, thinks that we are working secretly to undermine Britain’s membership of the European Union, while the noble Lord, Lord Pearson of Rannoch, thinks that we are not working hard enough by half to undermine it. The two of them could have a very enjoyable dinner together.

[Lord Davies of Stamford]

I am grateful for the noble Lord’s contribution. I said that it was how some people felt. That was the formula I used; I did not myself endorse the conspiracy theory. The implication was that the conduct of the Government was such as to make it possible for constituents to develop that conspiracy theory. In relation to his most recent remarks to me, I accept that piracy is a matter for international law. Piracy has always been against international law. There should not be a problem there. His implication was that we needed to co-ordinate with the Indians and the Chinese, which we do to some extent. We might need to co-ordinate with them more. That is true and I acknowledged it explicitly in my recent remarks. I said that in this context, as in others—I suspect the noble Lord used to teach this to his students—it is much more effective, if we want international agreement and consensus on a matter, to act as the European Union rather than as one country or as 27 different countries. That is the point I was making.

However, there is a third point that I must make in relation to the noble Lord’s comments to me, which is that I was specifically addressing the need for powers to make it an offence to make ransom payments. I think that he, and anyone with any knowledge of the world, will agree that the chances of getting 150 or 193 countries to legislate identically for anything are virtually zero; that is not going to happen. If you wish to make it a criminal offence to transfer such payments, to collect money for the purpose of paying ransoms, to provide money for the purpose of paying ransoms, to make ransom payments, and to enforce those criminal offences, you need to obtain agreement throughout the European Union as an essential starting point. That is not a matter of international law; it is very much a matter of European law. If we do not have the powers to do that at present, it is very desirable that we should develop them. However, if we needed to develop them, we would run into the issue that, if the Government succeeded in passing this Bill, Article 48 would no longer be usable in that context if Great Britain were to be included.

--- Later in debate ---

[Lord Deben]

Very simply, the EU does not have powers to insist that we improve the electricity transfer between countries, yet that will be an essential part of our future energy needs.

[Lord Wallace of Saltaire]

My Lords, Article 170 says:

“To help achieve the objectives referred to in Articles 26 and 174”,

et cetera,

“the Union shall contribute to the establishment and development of trans-European networks in the areas of transport, telecommunications and energy infrastructures”.

That seems to me very much to give the competences needed.

[Baroness Brinton]

I am grateful for that intervention from my noble friend Lord Wallace, which was much more informed than I could possibly have given.