European Union Bill

Lord Hamilton of Epsom Excerpts

Monday 13th June 2011 Lords Chamber

[Baroness Nicholson of Winterbourne]

I accept that the noble Lord, Lord Hannay, wishes to exemplify the argument that the noble Lord, Lord Davies of Stamford, has already put forward—in which case it must be rather weak. I cannot see why bringing in QMV is a better option than the veto, which I prefer. I cannot see how the proposal will strengthen the hand of the United Kingdom. Although I have a long and personal friendship—and indeed a good neighbourliness—with the noble Lord, Lord Davies of Stamford, and a high regard for his massive intellect and his knowledge of the defence industry, none the less he has failed to convince me.

[Lord Hamilton of Epsom]

Does my noble friend not feel that if the argument of the noble Lord, Lord Davies of Stamford, is so compelling, he would probably win it in a referendum?

[Baroness Nicholson of Winterbourne]

I must admit that this is a very compelling argument from this side of the House. I am sure that the noble Lords, Lord Davies and Lord Hannay, will attempt to knock it down, but I suspect that they will not succeed.

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[Lord Davies of Stamford]

My Lords, I am deeply grateful for the consideration which the House has given to my amendment and for the warm and supportive words of the noble Lords, Lord Hannay and Lord Triesman, and the noble Lord, Lord Kerr, who seized on an argument that I was about to deploy myself in response to the noble Lord, Lord Howell. I will address the points of the noble Lord, Lord Howell, in a moment and bring my remarks to a conclusion by addressing the Government’s response. I am grateful too for the contribution of the noble Baroness, Lady Nicholson. Frankly, I did not understand her argument that somehow possession of veto was going to help us in any circumstance in advancing the cause of reform of Article 346. I shall correct her on a practical point: she says that since I was involved with defence there have been a lot of changes in the world, including the end of the Cold War. I think she is going back to the time when I was a defence spokesman in the Conservative Party. My experience of defence in government ended 13 months ago, in May last year.

I always enjoy the contribution of the noble Lord, Lord Hamilton, to these debates. He deployed an argument today which I have heard him deploy in other contexts. It is, “If it is such a good idea, why not have a referendum and you will win it? The public will support you”. I am not sitting close enough to see whether he has a twinkle in his eye when he says it but I think he has. He knows as well as I do that there is no prospect of having a referendum on a subject as esoteric as Article 346. If we have a serious opportunity to change it, it is no use saying to our partners, “For once we have got the chemistry right—there is an opportunity to go for QMV on this, and then maybe there will be a consensus and we’ll get some reform. But sorry, chaps, you’ve got to wait for two, three, four, five or six years, when it is particularly convenient for us to have a referendum with a whole package of measures”. Even then, as I have said before in these debates, it would be quite unsatisfactory for the British electorate to do their homework on a whole series of rather technical matters. It is just not practical politics. The noble Lord, Lord Hamilton, knows more about politics than I do; he has been involved in politics longer than I have, and I am quite certain that he had his tongue in his cheek when he said those things.

I move to the points made by the noble Lord, Lord Howell, on behalf of the Government. He started off by saying that Article 346 had been in the treaties in one form or another—of course, it had different numbers—since 1957. What is new is the idea of having a referendum on a change. That is brand new. It has not come in yet—it is in the Bill before us. That is what I want to change. It is not an argument against changing this new measure that the instrument that we might want to use to reform Article 346 is now under threat from a new provision in this Bill, so it would be sensible for us to remove that threat. I do not think that there is a logical argument there against my proposal.

Like the noble Lord, Lord Kerr, I really wondered how serious the noble Lord, Lord Howell, was when he said that it may be in our interests to prevent protectionism to have a veto, because then we could stop our partners from being even worse protectionists than they were before. As the noble Lord, Lord Kerr, pointed out, in that case the noble Lord, Lord Howell, would have logically opposed the whole single market programme. It would not have made any sense at all. So the noble Baroness, Lady Thatcher, and Lord Cockfield were actually doing something very dangerous in threatening greater protectionism by agreeing to have qualified majority voting in the Single European Act.

The noble Lord, Lord Howell, tried to justify that approach with the distinctly implausible suggestion that different rules applied to defence. I do not think that different rules applied to defence; I think that the argument is rather different from that. That is why, for two reasons, I think there might be an opportunity to achieve QMV, if only the British Government have not deprived us of that opportunity in advance, ab initio. First, there is a positive incentive on Governments to reduce the costs of their defence procurement—and protectionism, as we know, is extremely expensive. If they opened their markets they would be able to purchase more cheaply, given a measure of defence capability. When I was the Defence Procurement Minister—and I was very proud of this, because I did it for the first time—I introduced a unilateral open market in the EU. I said, “Sorry, we’re going to buy the cheapest and the best, wherever it is. We’re not going to be protectionist”. It is only when there is inequality of quality and price between the British supplier and non-British supplier that I will favour the British supplier. I made that absolutely public, and it was what I operated on. For example, I bought the 42-millimetre cannon for the Scout vehicle and potentially for the Warrior upgrade from France. Why? Because it was the best. The French were obviously delighted. There was no quid pro quo. I said to my French colleague, Laurent Collet-Billon, “You know, you and I must do something”. He said, “Of course, mon cher collègue, we will see what we can do”. But of course nothing has come through. Unless we do something about this protectionism, it will probably not.

[Lord Hamilton of Epsom]

As the noble Lord was responsible for the posting of the aircraft carrier orders, why were they not submitted to bids from all round Europe? Why were the bids all placed with British shipyards in this country?

[Lord Davies of Stamford]

As a matter of fact, I would be very proud to take credit for those particular contracts, but that contract was let before I came into my job in the MoD. However, I did manage to save that project when it was under very severe threat, in similar circumstances as last year. But unfortunately the new Government decided to throw in the project and deny us carrier strike capabilities for at least the next 10 years—disastrously so. Let me answer the question hypothetically, therefore, and say what I would have done had I been there at the time. Undoubtedly, I would have been delighted to have had those carriers procured on the best bid from within the European Union basis, as long as it was reciprocal and we had some chance of getting an order for a French frigate from a British shipyard. It has to be reciprocal. That was a particularly big order, and the protectionism the French afford to their shipyard, the Chantiers de l’Atlantique, is particularly great, so there would have been a situation in which competition would have been completely false.

I would have been delighted to have had the opportunity to procure on a common EU basis because that would have enabled us to bring the costs down further and it would have meant that our yards, over time, would have done very well. If you just look at two—the Type 45 destroyer and our submarine-building capability in Barrow—I am convinced that they are the best in the world, including the United States, when it comes to building very sophisticated warships. We would have done very well with that solution.

As I said, there are two reasons why there is a chance of Article 346 being reformed. It is particularly unfortunate, therefore, that we should be about to make it much more difficult for that to be achieved through QMV, if that seems the most likely way forward, which I think it is. The second argument is that, unlike us, our continental partners always have a sense of guilt in acting in a non-communautaire fashion. They are signed up to the principle of the single market. They find it very difficult and embarrassing to argue for derogations, though of course they do so when they are under great political pressure. Therefore, it is the sort of situation when agreeing to the intermediate stage of going to a QMV decision-making process has some hope—I do not put it more strongly than that—of achieving the substantive change that we all want.

I put to the Government, in my last comment on the subject, that when you have some realistic hope of something—it does not matter whether it is 20 per cent or 50 per cent or 70 per cent or even 10 per cent—but there is no downside, logically you do it. In this case there is a real hope of moving forward. There is no possibility whatsoever of extending the list under Article 346. The list is already far too great, as somebody has already said in the debate. Nothing that could conceivably be argued to be military materiel is not currently included, and this clause has been used to cover things like trucks, notably in the case of the Italians—I do not mind embarrassing them by mentioning this now—who claimed that because they were military trucks they were military materiel. There is no chance; I am quite convinced that the European Court of Justice would rule out any further use of Article 346 because such a use would no longer be consistent with the description in the article itself.

There is no downside. I ask the Government to look at that point again. There is a potential upside through using QMV, and the stake is important. This is a major national industrial interest for one of the major British industries in which we have a worldwide capability. There is a direct benefit to us—the taxpayer—as well, because if we can expand the sales which carry the overheads, including R&D, of the British defence industry, it will mean that we can achieve given levels of military capability from that industry when we procure from them at lower cost. It will be a win-win situation if we can break through here and we would be very foolish to deny ourselves any opportunity or instrument which made it even slightly more likely that we would achieve that.

On the basis of that, you would expect me to put my amendment to a vote. However, I am conscious that we are after dinner and that the Whip has been withdrawn, so there may be an uncharacteristic result from any particular vote, and I am also anxious not to take up too much time. We have already had a very good debate. I think I have said enough and colleagues have said enough. I trust to persuade the Government to look at this again. The noble Lord, Lord Howell—I am very grateful for this—was kind in his remarks about my intervention and he said that there were strong arguments on my side, though he said there were strong arguments on the other side as well. I understand that. That indicates to me that despite what is in the Bill the Government are a little bit more open-minded, perhaps, than one might have thought at the beginning of this debate. On that basis, I beg leave to withdraw my amendment.

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[Baroness Brinton]

My Lords, I cannot really follow the points of the noble Lord, Lord Deben, on referenda. I disagree with his initial argument, but I support the principle about the people having their say, whether one agrees with it or not. I find it understandable that the noble Lord, Lord Willoughby de Broke, proposed the amendment, given the frustrations that he and his colleagues clearly feel about both the Irish and Danish referendums on treaties in the past, but it seems to me that there are two reasons to oppose the amendment.

In Committee, the Minister made the valid point that it would be very unlikely that two successive referendums would be called, not least for the important political reason that it would be likely to cost the Government of the day dear—assuming that it were the same Government—with a cynical public punishing them for so doing. Secondly, the Bill is not a crystal ball attempting to predict the future, no matter how much the noble Lord would wish it so. The Bill must allow for flexibility for a future Government and this amendment would tie their hands.

There are checks and balances within the Bill: a second referendum would require a second Act of Parliament with the detailed and appropriate scrutiny that comes with that—and that is before the Government of the day would have to start convincing the public of the need for that second referendum. There might be rare circumstances in which a second referendum were relevant—the checks and balances that I have outlined will force politicians and the public to think carefully about returning down the road of another referendum. To ban it completely for three years, or even five, as we looked at in Committee, removes that option for those circumstances which, though rare, are not impossible. There might be changes to the treaty that significantly benefited our country and other member states, which it might therefore be appropriate to consider. Or there might be a financial crisis in the eurozone—as there has been recently—in which the circumstances have so substantially changed that it might be appropriate to go back for a second referendum.

To conclude, the amendment seeks to remove the flexibility and the voice of Parliament and the people should there be a rare but necessary need to consider a second referendum.

[Lord Hamilton of Epsom]

My Lords, I very much sympathise with my noble friend Lady Brinton because it is unlikely that any Government would be brave enough to hold another referendum on the same subject when the country had made it quite clear that it did not want the measure put forward originally. However, to turn to the distaste of referenda generally expressed by my noble friend Lord Deben, presumably that distaste is slightly tempered by the referendum confirming our membership of the European Union. Let us face it, this referendum was put forward by Harold Wilson to solve a problem that he had within his own Labour party and settle the issue for good. Many people—I am one of them—voted in favour of our remaining in the European Union and it seemed to settle the issue for some time after that.

[Lord Deben]

I was opposed to that referendum, as I have always been opposed to referenda. I am absolutely consistent on that matter, whether they were favourable or unfavourable.

[Lord Hamilton of Epsom]

My noble friend prides himself on his consistency, but that decision put the issue to bed at the time. That would seem to have certain advantages that he does not acknowledge in any way.

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[Lord Risby]

If a Government have got that far and want to test public opinion, it is very unlikely that they would behave as the noble Lord suggests. It is not likely that a Government would embark on a referendum if they thought that they were going to lose it. That is not the natural course of political events, but perhaps the noble Lord—

[Lord Hamilton of Epsom]

Surely it goes somewhat further than that; if the Government put forward a referendum that they are trying to win and they lose it, that damages their credibility.

[Lord Risby]

That would certainly be the case; I entirely agree with my noble friend. The way to change people’s view of the desirability of EU membership is simply to prevent them believing that we have been on a conveyor belt to greater integration without their assent. That is the real point; it is better than any publicity campaign. The real reason for negative attitudes is because over the years when there have been European Council meetings or discussions over treaties such as at Nice, Amsterdam or Lisbon, we have had the whole “Grand Old Duke of York” activity on the part of successive Governments. Statements have been issued by Downing Street, particularly more latterly, that indicated that great victories had been won for Britain, which no other European nation would recognise as being the truth at all. The good thing about the coalition Government is that all the spinning and posturing that characterised our relationship with the European Union has stopped. Where has anyone seen it in the past year? That is an admirable change for us all. The Bill will give us a better chance of restarting our relationship with the EU by addressing public attitudes than any publicity campaign could possibly do.

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[Lord Dykes]

My Lords, I agree very much with the earlier utterances and express regret that I cannot agree with what the noble Viscount, Lord Trenchard, said. I do not think that there is any evidence that Ministers have become less enthusiastic about our membership of the European Union. That is irrespective of the colour of the Government. That applies to both parties in power in recent times and, as far as I can detect, definitely applies to the coalition—very positively so in respect of the first part of the coalition statement about their aspirations on Europe.

I am sure that it is because of what the noble Lord, Lord Radice, mentioned and what the noble Lord, Lord Triesman, hinted at less directly: because of what the British press say. It is mainly the tabloids—the comics that masquerade as newspapers in Britain. They are more and more like magazines rather than newspapers. That is affecting the broadsheets as well, particularly those with owners living in tax havens overseas, not normally living in the UK and not paying UK direct taxes themselves, mainly the Murdoch press, but all of them anti-European and attacking our membership of the European Union in a most extraordinary and vicious way, which has not been seen in any other member state that I can think of.

I have to declare an interest as I also live regularly in France at weekends whenever possible. The French press are not at all like that. My colleagues in politics in Paris express astonishment that we allow the overseas-based owners of the press here who do not pay UK direct taxes themselves to attack our fundamental membership of the European Union in such a way. That has been the reason.

The most astonishing contrast that I noticed was just at the moment of the IMAX launch by the new Prime Minister Blair, with his new Government, still very, very popular, not quite walking on water but pretty close to it in those early days and causing a lot of inspiration and enthusiasm among the British public for the new Labour Government. That launch was the beginning of the decline in the new Labour Government's support for Europe in atmospheric and psychological terms. That was tragic. Britain in Europe was destroyed by it. So was the European Movement—although it still exists, it is struggling along as a very truncated body doing noble work but very much at the fringes of British life.

It is a tragedy for this country that we have had this nonsense for so long: politicians refusing to stand up bravely and correctly for the benefits of our membership of the European Union. Therefore, I very much welcome the proposed new clause. It was debated in Committee and therefore we need not go into all the arguments now. We particularly thank the noble Lord, Lord Howell, for repeating that the purpose of the Bill is to oblige Ministers to promote the cause of our membership of Europe in what he would describe as a more correctly balanced sense because the public would have much greater participation through the referendum mechanism. Like the noble Lord, Lord Deben, I do not agree with that because I am against referendumitis and the populism that comes from it, but I can see his arguments. The proposed new clause would be a good thing, as we would return to promoting our membership—not in a propagandistic sense but in the practical sense of reassuring the public, explaining in detail many of the complicated matters and getting away from the dreadful xenophobia that is being allowed to develop because of the insouciance, nervousness, recalcitrance and hesitation of British politicians. There is a danger that that will start to affect the coalition if it continues, and I hope very much that it does not.

I do not want to take up too much of the House’s time but I conclude with an issue that may seem small, although it is very important. I refer to the display of flags—one of my favourite subjects. There is only one European flag within the vicinity of Westminster. It is on the Slovenian embassy building and we thank the Slovenians for their courage in daring to show it. It is the only one, apart from the one displayed on Europe Day in Parliament Square each year. All other major countries, together with some of the new ones, routinely proudly display the European flag alongside their patriotic national flag. Our national flag should be alongside the European flag on government buildings, as is routinely the case in France. When President Sarkozy makes a television broadcast, he always has the European flag alongside the tricolor. Why have all parties in this country been so hesitant and pathetic about this in the past? It is now time for the matter to be corrected. I have been encouraged by the words of the noble Lord, Lord Howell, on previous occasions in these debates and believe that the Government should accept this imaginative new clause.

[Lord Hamilton of Epsom]

My Lords, I have heard my noble friend Lord Dykes say on previous occasions that the only cause of Euroscepticism in this country is the Murdoch press, but I find that very difficult to go along with. I always reckon that to some degree the press has to reflect the national mood and, if it does not, it does not sell any newspapers. I also have a slight problem with the fact that Euroscepticism is growing at a pace in Germany, where I am not aware of the Murdoch press owning any newspapers. Therefore, I think that it is a little too simple to blame the whole thing on the Murdoch press.

However, let us get to the basis of the amendment and, for the sake of argument, start at the beginning, which seems to be a useful place to start. The Government will bring forward a measure to be put to a referendum of the people of this country only if they think they will win it. I do not accept the view of my noble friend Lord Trenchard that the Government might put something forward to be addressed by the country in a referendum if they want to lose, as I think that they can only possibly want to win it. If they do want to win it and if, as I think the noble Lord, Lord Triesman, said, this is an opportunity for UKIP to say, “Ah, we don’t want anything to do with the European Union at all. We must pull out”, then of course the Government will be compelled to argue the virtues of remaining in the European Union, and all his problems will be answered by the referendum. For that reason, the amendment is completely otiose and I shall not support it.

[Lord Willoughby de Broke]

My Lords, I think that this is rather a sad amendment. It demonstrates the Europhiles’ lack of confidence in their case in trying to put into the Bill a requirement for Ministers, frankly, to propagandise. I know that the noble Lord, Lord Radice, says that it is not propaganda but let us look at the words of the amendment. It says,

“must have regard to the desirability of promoting the United Kingdom’s membership of the EU”.

That sounds exactly like a recipe for propaganda to me. There is no balance there whatever—it requires Ministers to promote our membership of the EU. Like the noble Lord, Lord Hamilton, I find it extraordinary that the noble Lord, Lord Dykes, should keep saying that the only reason for Euroscepticism is the Murdoch press or the Barclay press or whatever. They have absolutely nothing to do with the rise of the new Finn party, for example, or of Euroscepticism in France, Germany or Hungary. I am afraid that there is a growing realisation that Europe is going the wrong way and that the desire for more and more integration is not what people in member states want. To put this amendment in the Bill would be absolutely contrary to what people in this country think is right.

The noble Lord, Lord Dykes, said that the noble Lord, Lord Howell, had encouraged him in some of the things that he had said. I have listened to many speeches by the noble Lord, Lord Howell. He is extremely balanced in his view of the EU. He takes a critical but on the whole positive approach, which is right; Ministers in the Government will always do that. There is absolutely no need to put this sort of demand for propaganda in the Bill, and I hope that the Government will reject the amendment.