European Union Bill

Lord Dykes Excerpts

Wednesday 8th June 2011 Lords Chamber

[Lord Liddle]

My Lords, I hope not to detain the House long on this. In a sense, with this amendment we are trying to skin the same cat in a different way. It is designed to extend the scope of the significance clause in order precisely to give our Government, because we want to support them and make them effective in the European Union, the flexibility to cope with the unforeseen. We have made this point many times in these debates. Basically, the Government point-blank refuse to accept its validity. They argue, first, that all the red lines and every issue in the Bill is of constitutional significance, including the full list of issues in Schedule 1, and that therefore any move on these issues should require a referendum. That is the Government’s position on my first point.

Secondly, they would argue that the EU has plenty of competences to act already in most situations, which is true, but that does not cover any potential new situations which we cannot foresee, to which my noble friend Lord Triesman referred. Thirdly, they argue that when we talk about circumstances that might occur which would require action, we cannot name any of these circumstances and that it is all hypothetical and nonsensical.

This amendment is on the assumption that it is not hypothetical and nonsensical. We can already see brewing in the European Union the makings of another big step forward towards fiscal federalism being considered at a senior level within the Union. One just has to read the—in many ways wonderful—parting speech made by Jean-Claude Trichet last week when he received the Karlspreis in Aachen. It was about the achievements of the European Union and all Members of the House should read it. He said that as a result of the present crisis, not today but the day after tomorrow, there would be a need for the creation of a European finance ministry and for member states to concede sovereignty over economic questions, particularly when they were in difficulties and failing to conform to European rules. I can understand his frustration in dealing with the situations in Greece, Portugal and Ireland.

If I was still an adviser in No. 10 Downing Street, my reaction would be to say, “Gosh, there’s something potentially quite big here coming down the track. We may well have changes of Government in France and Germany in the next couple of years. We have got to do some hard thinking ourselves about how we anticipate the situation”. I would say to the British Prime Minister that if he wants to avoid another big treaty, he has to think about how, on all the relevant issues—economic governance, supervision of the banks, the structural reforms necessary to make the European economy competitive and the advance of the single market—we can make Europe more effective. If necessary we have to be prepared to look at small changes in the treaties which we could make under the simplified revision procedure that would convince our partners that serious action could be taken that would not require another big leap forward. Therefore, that is what I would be doing.

These issues are likely to be right at the top of the agenda in the next two or three years. On page 14 of this wretched Bill, in Schedule 1, we see how it would inhibit any British Government from considering even the slightest change in decision-making processes in these crucial areas. In Schedule 1(2) we see that referenda would be required on any changes in the approximation of national laws affecting the internal market, any changes in the broad guidelines of economic policies, any changes in the adoption of provisions replacing the protocol on the excessive deficit procedure and any changes in the role of the European Central Bank on prudential supervision. These are precisely the issues that are going to be at the top of the agenda in European Union policy-making in the next few years, yet we are putting a ball and chain around the feet of our Ministers, because we know that Ministers are not going to put forward anything that would require a referendum, and we are preventing Britain from playing the role it should be playing in the next few years on these issues.

Some noble Lords may argue that these issues are nothing to do with Britain because we are not in the euro. I think that that is completely wrong. Although we are not in the euro, the success of the Government’s economic and political strategy very largely depends on the success of the euro area to which a huge proportion of our exports goes. If we are going to get a rebalancing of the British economy into exports and investment, we have to put forward policies for the success of the euro area, because we will not succeed in those ambitions unless we engage constructively in that debate. Yet we are hampered completely from engaging constructively in it because of the conditions of this Bill. So let us be pragmatic. Let us give ourselves the ability to act in our national interests.

[Lord Dykes]

I am most grateful to the noble Lord for giving way. Is not that point even more relevant when one thinks of the very helpful and positive Answer of the noble Lord, Lord Sassoon, answering Questions on Monday, when he said how important it was to maintain the solidarity of the UK with the eurozone through all the common work that we are doing together? Is that not even more important now that we are going to have the pan-European financial supervisory agency based in London? What if a crisis emerges that needs to be dealt with precipitately by all national Governments together?

[Lord Liddle]

The noble Lord, Lord Dykes, is so right. I actually congratulate the Government in many respects on their attitude. The Chancellor of the Exchequer made a speech in Paris earlier this year in which he said, “We are not in the euro but by gosh we want the euro to succeed. It is absolutely essential to our interests”. This was what Mr Osborne said. Some Members on the Conservative Benches may not recognise that point but that is where Britain’s national interests lie and we have to have the flexibility to deal with these situations. I do not know what precise flexibilities would be required but we have to have that.

In terms of historical parallels, I am reminded of Harold Macmillan’s wonderful quote, “Events, dear boy, events”. Of course it was Harold Macmillan as Chancellor of the Exchequer who had failed to realise the significance of what was happening at Messina and then woke up later to the reality of the treaty of Rome and the threat that this presented to Britain’s position in the European Union.

Harold Macmillan wrote in his diary—using the language of a man who had fought in the First World War and lived through those experiences in a different age from that in which, thankfully, we are living in—that, “If we were to allow the French and the Germans together to create a united Europe with Britain not being a part of it, we would be sacrificing everything that our men had fought for in two world wars”. That was his view in the 1950s. Our view today should be decided on the basis of a proper calculation of our national interest. We need to be fully engaged in all the questions affecting the European Union. We ought not to have this ball and chain, and we should have some flexibility. That is why I urge the Government, even at this late stage in the consideration of the Bill, to think about how it could be amended to give Ministers the pragmatic flexibility they need in order to represent our national interests effectively in Brussels and in order that Britain can live up to its role as one of the leading partners in the European Union. I beg to move.