European Union Membership (Economic Implications) Bill [HL]

Lord Empey Excerpts

Friday 25th November 2011 Lords Chamber

[Lord Empey]

My Lords, since I came to your Lordships' House the issue that seems to get everybody’s blood up more than anything else is Europe. It is hard to plot a middle course but it seems that we have not resolved the arguments of the 1970s, which continue apace. I have no doubt that after his gruelling visit to the Gulf states this week, the Minister looked forward to nothing as much as three or four hours of us going on about Europe. I knew that that would bring his week to a perfect end.

I hope that I will be able to stay for the wind-up but I should say at the outset that the European Union has benefited my region to an extent. Indeed, I pay tribute to it for the money it gave to the fund for the peace and reconciliation process in Northern Ireland. It gave that money on exceptional terms and it was greatly appreciated. However, I hear people continuously complaining about this or that European regulation, and in many cases rightly so. The question one has to ask is why and how these regulations and directives are being made. They are being made because the successive Governments we have sent to negotiate in Brussels have put their hands up for all these directives and regulations. The Commission does not manufacture them. It is taking these decisions because we have agreed in principle to allow it to do so. That is where I believe the core of the problem lies. We can demonise the Commission, and rightly so in many regards, but it is taking those decisions because we agreed to the treaties that allow it to do so. The Commission is not acting irregularly; it has the authority to take those decisions. That authority—in many cases, regrettably—has been given by successive Governments and Parliaments because we are in the European Union as the result of a referendum.

I agree with the noble Lord, Lord Bilimoria, that the essence of this Bill is about providing a cost-benefit analysis. Like him, I had assumed that that would be an ongoing piece of work. If you are a member of any organisation, whether that be a golf club or whatever, every year you weigh up the balances of remaining a member. I had assumed that the Government were doing that consistently. I have no doubt that the Minister will confirm that when he winds up. How did we get to the present position? The idea of a wide, powerful, large single market is very attractive; there are geopolitical, emotional and other good reasons for having it. I have no objection to any of those things but I increasingly object to the suffocation of our initiative and enterprise by a plethora of rules and regulations which are being imposed on us.

As regards the single currency, people are focusing on Germany. The Germans connived and conspired with the European Commission to fiddle the books when the euro was introduced. It was perfectly obvious to everybody that the Greek, and perhaps the Irish, Portuguese and Spanish economies, were not on a par with those of northern Europe, but the Germans fiddled the books for political reasons. That is what is poisoning the whole system, which is dominated not by economics but ultimately by the politics of a small elite who believe—they are perfectly entitled to do so—that we are aping the United States and effectively becoming a single state in all but name. That fiddling of the books by the Germans in particular has been done for political reasons. One hears Angela Merkel complaining but the fact is that she and her predecessors have created this situation even against the advice of their own central bank, which made it clear that the other economies were not at the stage of development that allowed them to have a single currency. I know from our neighbours in the Irish Republic that the single interest rate led it into the mess that it got into because it caused a flood of cheap money. The interest rate was kept low to allow the Germans to rebuild their industry and become more competitive but at the same time it destroyed the weaker economies that should not have been in the eurozone in the first place. We can see that the generally good idea of co-operation with one’s neighbours, which I fully support, has become corrupted.

The whole question of investment has been raised by a number of noble Lords. I have tried to seek investment in other places. The single market is an attractive proposition but having the right labour force and cost base are far more attractive. However, our membership of the European Union pushes against us in those regards as it is raising our energy costs and other regulatory costs. Therefore, the costs and benefits are very hard to judge.

Trade imbalances are the other reason for this fundamental difficulty with the eurozone. If you keep on selling less than you are buying, sooner or later there is a problem. We have that problem now. We should be developing our economies and developing stronger relations with the Commonwealth, with its balance of developed and underdeveloped economies. We should be looking outwards and seeking trade in a much more aggressive manner. Despite our efforts in Iraq, we are already being outtraded by other countries which did not lift a finger to help it. The same will happen in Libya.

I hope that the Government will look more rigorously at how we can promote our trade because the fundamental imbalances in our trade are causing the instability in Europe. As long as you are a debtor, you will always find the person to whom you owe money will follow you up and demand proper payment in due course. I have little sympathy for the Germans because I believe that they have brought this on themselves; and brought it on us.