European Union Bill

Baroness Williams of Crosby Excerpts

Monday 13th June 2011 Lords Chamber

[Baroness Williams of Crosby]

My Lords, from these Benches I support the view that most of us believed that these amendments were taken together for the convenience of the House. We had a very long debate, which ranged over the whole group of amendments. I have to say to the Chief Whip, for whom I have great admiration—she is a person of great ability—that most of us took that vote to be about the whole group of amendments taken together. I find it difficult to see how we can explain to the world outside that this group of amendments has now somehow got lost when it seemed clear that, admittedly by a relatively small majority, the House chose to support these amendments.

[Lord Elton]

My Lords—

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[Lord Howe of Aberavon]

With great respect to my noble friend, who always has a more ruthless and intellectual analysis of these questions than I do, it is broadly speaking the same thing. It was important, while that was the question, whether or not we joined the monetary exchange system; it is even more important whether we join the euro. Either way, we have reached the point where there has been a general acceptance of the need for a referendum on our accession to that currency. That arises not within the context of this Bill or this debate alone but has been on the agenda for a long time. The only question that we are actually debating now is the rather technical one of when precisely it should be required in the context.

I see my noble friend Lord Howell looking at me. When I reflect on his wisdom over many years, I am sure when he comes to wind up that he will recognise that is the flavour of the decision. Perhaps he is not winding up—he may be too nervous to handle this issue.

I am more than content to follow the wisdom and enlightenment of that splendid retired principal private secretary sitting over there. It was quite fun when we were together and I was presiding over the realignment of the European monetary system. It was quite nerve-wracking. We had one marvellously exciting day when it was agreed between the Germans and the French that there should be a 9 per cent realignment between those two currencies—2 per cent up and 7 down, or 3 per cent and 6 per cent down. That question, unhappily, for the first and only time, ran into a time when the currency markets were open on a Monday morning. That was our only failure. Apart from that, I am confident to give my backing to the noble Lord, Lord Kerr of—I can never remember the other half.

[Baroness Williams of Crosby]

My Lords, I am reluctant to intervene, even briefly, in this marvellous ballet of Chancellors, which has taught us all a very great deal. I apologise for having stepped in before the noble Lord, Lord Lamont, because I am sure he too will have a major contribution to make.

I want to raise one other issue before we move on to what one hopes will be the final remarkable occasion of this ballet, which we will all appreciate much. I want to talk for a moment, if I may, about being straightforward about the implications of this amendment. The noble Lord, Lord Kerr, talked with a degree of technicality I am incapable of following, and I am sure that he is probably right. It looks as if his former Chancellors, all of whom he managed to be a mentor to, will give him the full support that he needs on this amendment.

My point reflects more on our debate up to this point. We are showing an inclination to look more at the ways in which we can escape from some of the consequences of the growing interdependency of the world economy of which we are part. Quite simply, we all know that it is highly unlikely that there will be movement under this Government towards the eurozone or the euro. It will be important to take account in the future of the amendment of the noble Lord, Lord Kerr.

We will not be able to escape the presence and the problems of the euro by not joining it. I recognise that most people in this Parliament and probably most people in the country at the moment would not wish to join the euro. However, I also recognise that the euro’s future and its strength are of crucial importance to this country whether we join or not. We now do something like half our trade with the eurozone. The positions taken by the eurozone are of major influence in global financial meetings. Therefore, although we may not belong to it we do not escape all the consequences of it. We should make it quite clear as we continue to discuss this part of the Bill that time and again we will be caught in the gradually increasing interdependency of the economic world whether or not we happen to already belong to some of its institutions.

Why did we help to support the Irish in the desperate situation that they encountered last year? Quite simply because there were so many British interests—banking interests, shareholder interests—affected by what happened to the banks of the Republic of Ireland that we felt it irresponsible and unwise to stay out of the discussions about it. In just the same way, we will find it irresponsible and unwise to regard the possibility of a major crack in the eurozone between its richer and poorer nations as if it did not in any way affect us.

We know already how close this is. Already there is much closer investigation of the European stability pact, with the possibility of mounting greater surveillance on those who are within it as well as the possibility of moving towards some degree of control over the group of countries within the eurozone. I will not go into all that now because there is not time and it is not appropriate, except to say very directly that this is bound to have implications for Britain as well. We simply cannot stay wholly outside these things.

When my noble friend Lord Goodhart was talking earlier about the European prosecutor’s office, one of the things he might well have pointed out, though he was too nice to do so, was that already we in this country had been caught up in the OECD’s Financial Action Task Force very directly on the issue of when we moved and finally passed the bribery convention. We cannot escape from some of the massive international institutions—the G20, the OECD and many more—which are bound to affect our sovereign right to do as we will. To pretend that we do not live in such a world, that it is not becoming more and more that kind of world, is to live in a world of illusion which we cannot possibly afford to. I simply make the point on this discussion on the euro that we have to look all the way through at how the United Kingdom will survive, strengthen and prosper in a world which, like it or not, is becoming increasingly global, increasingly interdependent and increasingly without room for people taking pure sovereign attitudes because those are no longer possible, whether you live in China, the United States or anywhere else.

[Lord Martin of Springburn]

I thank the noble Baroness. I have listened to her not only here but in the other place and I have always had great respect for what she has to say.

I recall when we spoke here about the help that we would give Ireland, a country of which I am very fond, and everyone in this House, to their credit, supported that move. However, there is a big difference between helping out a friend and neighbour and taking on the same currency as that neighbour. The men and women, particularly in the west of Scotland, which I know well and which is so near Ireland, hear the stories of how difficult things became for Ireland when they entered the euro and gave up their punt. Those stories will have a big impact on any decision. I do not think that anyone, any Member of Parliament in the House of Commons, would want to join the euro at this particular stage.

[Baroness Williams of Crosby]

I agree with the noble Lord, Lord Martin, but I think he misunderstood my point. I was not advocating that we join the euro—indeed, I went so far as to say that I saw no possibility in the near future of our doing so or even wishing to do so. My point was that we cannot walk away from the plight of Ireland because we do not happen to belong to the euro. We have to address those issues whether or not we belong to the euro, and that is an issue on which I would have thought the noble Lord and I would find ourselves sharing a very strong sense of agreement.

[Lord Lamont of Lerwick]

My Lords, I hope the noble Baroness, Lady Williams, will forgive me if I do not entirely follow her down the road of her argument and her thoughts. Of course I agree that what happens to the euro has a profound impact on us and I certainly want to see the crisis resolved in as orderly a manner as possible.

I shall be extremely brief. I am not intervening in this debate simply because two other Chancellors have spoken, although I did feel under a certain obligation, like both of them, to speak when the noble Lord, Lord Kerr, had tabled this amendment—not only tabled this amendment but talked to me, dare I say it, incessantly in the bars about it and written me a letter about it. I have the greatest respect for the noble Lord, Lord Kerr. In fact, he, I and, above all, the Prime Minister, John Major, all worked hard over the piece of paper that we are debating now: Protocol 15 of the Maastricht treaty. Although I spent a large part of my life poring over this, I have spent what seems an eternity this afternoon poring over it again trying to work out what on earth it means and trying to work out how some parts that seem to contradict it actually come together. Of course I owe it to the noble Lord to consider very seriously what he said, because he gave me great support when I was Chancellor, although when I knew that the noble Lord was putting forward this amendment, the story of Talleyrand came to mind—having been told that someone had died, he asked whatever had he done that for.

I confess that even having thought about this a little, I am not entirely convinced that there is a massive difference between the way that the noble Lord, Lord Kerr, wants to tackle it and the way that my noble and learned friend Lord Howe wants to tackle it. My noble and learned friend said that he was quite sure that I and my noble friend Lord Lawson needed no reminding that joining the ERM was in our manifesto in 1979. I confess that it was only when I became Chancellor that I expressed exasperation about the whole thing and the Permanent Secretary at the Treasury reminded me that it had been in our manifesto. It did not come quite so easily to my memory as to that of my noble and learned friend Lord Howe.

I turn to the subject of the debate. An extremely important point is that the referendum should not be about the exchange rate. Anxiety has been caused by whether Article 143 would give rise to a situation in which the actual exchange rate at which we joined the euro—perish the thought that we ever did—would be on the ballot. It is my understanding, and I hope that the noble Lord will be able to confirm this, that it does not follow that it will have to be on the ballot paper. It is an option but not essential. As I understand it, the Government are proposing a package approach. They are intending that the negotiation of the draft content of the Article 143 decision should take place before the Government formally notify the Council that it intends to adopt the euro; that is, that the negotiations should take place first. I do not see that as a great problem and I think it can be done that way. This is something which, as I understand it, has happened before.