European Union Bill

Lord Hannay of Chiswick Excerpts

Tuesday 17th May 2011 Lords Chamber

[Lord Pearson of Rannoch]

As a matter of fact, it is real. We have £10 billion that are only loans at the moment; we have £10 billion for the cash we hand over, going up; we have £26 billion for food; we have £18 billion for climate change; and we have £60 billion for overregulation. These are the figures.

[Lord Hannay of Chiswick]

I hesitate to intrude into the noble Lord’s game of tiddlywinks with statistics, which he has been playing for the past hour or so. Can he settle on one set of measurements, rather than playing around between net contributions, gross contributions—both to the budget—trade effects, and loans to the investment bank? He plays around with these all the time. Would it not be a bit simpler if he stuck to the net contribution per capita in each country? We would then come to quite startling results, one of which is that Britain is by no means the highest net contributor per capita to the EU budget any longer, and that other countries are more so. It would be simpler if he stuck to one lot of statistics and stopped playing tiddlywinks at this late hour of the evening.

[Lord Pearson of Rannoch]

I do not know whether the British people would agree with the noble Lord, Lord Hannay, that the figures I have mentioned are tiddlywinks. I am aware that Holland pays a greater per capita ransom to the European Union than we do, but that is not the point. I am trying to look at this from the point of view of the United Kingdom. I am not looking at it from the point of view of the corrupt octopus in Brussels.

I was about to conclude by commenting on the remarks of the noble Lord, Lord Wallace, when he mentioned the figures paid into the budget by these other countries which are in the European economic area. I should just mention that the countries in the European economic area are not afflicted with the common fisheries and agricultural policies. They are not part of the customs union; they are not afflicted by the common trade policy; they are not in the common foreign and security policy. They are not worried about justice and home affairs being overtaken by Brussels, and of course they are not in EMU, so they are in a very different position from us. They can negotiate all their own foreign trade arrangements. There is a recent report from the Swiss Government comparing their present bilateral arrangements from outside the European Union with what the costs would have been had they been in the European Union. It is not a wild Eurosceptic making these suggestions; it is the Swiss Government who said that membership of the European Union would have cost eight times what their bilateral arrangements cost.

As to the IMF, I did not bring it in. Of course, I agree that we are also supporting problems in the European Union—the eurozone—through the IMF. I think that the tally, if we take it through the financial facility, the loans to Ireland and others, comes to around £4 billion a year. I was good enough not to mention that because I was not suggesting that we leave the International Monetary Fund. I was merely trying to concentrate on our costs as members of the European Union. This was a probing amendment, as I wanted to discuss the prospect of the British people getting a say on the cost of European Union membership. I am very grateful to all noble Lords who have spoken, and I beg leave to withdraw the amendment.

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[Lord Hannay of Chiswick]

The Minister explained very patiently that the Bill was a compromise. He admits that it was not provided for in the coalition agreement, which provides only for referendums on treaty change. I shall not gainsay that. It was a compromise between the Government and a noisy minority of one of the two parties in the Government who made all the running in the House of Commons. We are just waiting for the compromise with the rather large majority of those who have spoken in this House—I think it was 35 at Second Reading—of which there has been from the government Bench no sign whatever.

[Lord Tomlinson]

I shall not oppose the clause standing part, but have one slight comment to the Minister. He referred to compromise, but I remind him that he said earlier that the Bill was a compromise between incompatible policies. We shall come back to this later, because there is incompatibility. At the moment, I can see it being removed only by the withdrawal of Clause 6. However, I am content to accept his advice.

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[Lord Flight]

My Lords, I congratulate the noble Lord, Lord Williamson, on his summing up of Schedule 1 from where he stands. As noble Lords will be aware, there are very much opposing amendments within the amendments that have been grouped together for Schedule 1. I have tabled Amendment 47A, which is really at the other side of the table from Amendments 45, 46 and 47, which I do not support.

Amendments 45 and 47 seek to remove JHA vetoes, including on police co-operation and the EPP and the veto on the appointment of judges, which I would argue are precisely the type of treaty changes that would extend competence from the UK to the EU in sensitive areas and which actually warrant a referendum. Amendment 46 removes all vetoes in TFEU from the referendum lock covering sensitive areas such as social security, social policy, employment policy, justice, home affairs and some tax and defence issues.

Amendment 47A, to which I am speaking, raises a further area of potential transfer of powers from the UK to the EU and proposes the requirement for a referendum which has not been included in the Bill. This is really an illustration that the Bill has not, as some have argued, covered every conceivable territory of transfer of powers but aims to pitch the requirement for a referendum on what the Government perceive as major red line areas.

As noble Lords will be aware, few aspects of trade agreements are now subject to unanimity post-Lisbon. The norm is now a majority. Amendment 47A would subject to a referendum an amending treaty or Article 48(7) TEU ratchet decision, which abolished the veto over negotiation and conclusion of EU trade agreements with non-EU countries and international organisations in the three main areas that were exemptions in Lisbon and covered sensitive issues and thus remained subject to unanimity. First there are the agreements which cover trade in services, the commercial aspects of intellectual property or foreign direct investment, where the agreements include provisions for which unanimity would be required for the adoption of equivalent internal EU rules. That is the most important of the three. Secondly, there are the agreements covering trade in cultural or audiovisual services that,

“risk prejudicing the Union’s cultural and linguistic diversity”.

Thirdly, there are agreements covering trade and social, education or health services that risk seriously disrupting the national organisation of such services and prejudicing the responsibility of member states to deliver them.

EU international trade agreements are binding on member states. The removal of the national veto in some or all of these areas would represent a transfer of power from the UK to the EU in politically sensitive and economically important territories.

[Lord Hannay of Chiswick]

My Lords, I thank the noble Lord for giving way. I wonder whether he is conscious of two matters. First, the placing of these articles in the TFEU was done expressly at the sole insistence of the Government of France and that successive British Governments, both the Government of Mrs Thatcher and Mr Major and the Government of Mr Blair, in successive treaty negotiations, tried to remove these obstacles to making change through negotiations on a reciprocal basis. They concluded—and I concur—that it was in Britain’s interest that these matters should be negotiable without a French veto. I wonder whether the noble Lord is aware of that. Secondly, is he also aware that the provision for majority voting on trade matters was in the treaty that was signed in the 1960s, which was in force when we joined the European Community? At the moment, he is speaking as though he might have landed from Mars.

[Lord Flight]

I thank the noble Lord for his, as ever, instructive intervention. The noble Lord, Lord Kerr, who is sadly not here today, was very involved in the convention on the constitutional treaty and therefore, I believe, is the best informed Member of this House about how these issues were left as exemptions qualifying for unanimity in the Lisbon negotiations.

Secondly, with regard to the position of past UK Governments, those were the positions at that time. The point that I am seeking to make is that we have three areas that, whatever the position of past Governments, could result in transfers of power from the UK to the EU. The point of my amendment is, as I said at the beginning, to illustrate that the Bill does not cover every potential transfer of power; it has been limited to that which the Government consider to be the major issues. However, I believe that the noble Lord, having educated us in the history of this, would not deny that the situation is such that, in these three areas, there could be transfers of power without any treaty so requiring them. As I have already said, this amendment is illustrative and I am sure that there are many other areas where this Bill does not put forward requirements for a referendum on matters that potentially transfer powers because those matters are not deemed to be of prime importance.

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[Lord Howell of Guildford]

It becomes a matter of hypothesis and judgment. This is an area where, somehow, one has to have solidarity and consensus. Given that it requires unanimity to go to QMV, it would be a pretty odd action by the country that did not want to go to QMV to act totally against its interest. It is an inconceivable situation. However, if a country did so, it would be a very bad basis for supporting the independence and overall quality of the EU judiciary and of the key figures like the advocates-general and judges. It remains the view of this Government that to move away from a consensus and concord of agreement and support for these kinds of appointments would be very unfortunate. I think this would be the view of future Governments, too. I do not regard this as binding; I simply regard it as common sense.

Neither under this amendment nor under Amendment 47—which I also want to speak to because the noble Lord, Lord Goodhart, put his point so keenly and strongly—is there any question of not being able to operate or contribute to the election and appointment of advocates-general or anything else under any of these articles. The issue is simply whether it is right that we surrender the veto, so that in a future situation it might be possible that we would not be able to resist measures and proposals that were directly against our own national interest and judgment.

Let me turn to Amendment 47, which would remove key justice and home affairs provisions from Schedule 1 and therefore from the referendum lock. I know that the noble Lord is a keen expert in this area. As I said before, Schedule 1 does not prevent the use of these articles. This is a narrow exposition of a much broader point which I would urge many noble Lords who have spoken to comprehend. The noble Lord, Lord Liddle, talked about a meeting of minds, and I would love to see one, but it is difficult if it is not understood that the central point is about whether we abandon vetoes, not whether we use the articles and competences that are already there.

[Lord Hannay of Chiswick]

Perhaps the Minister would not mind going back about one minute to what he was saying about advocates-general and members of the European Court of Justice. I think that sometimes the Government seem not to be very aware of the chemistry of decision-making in the European Union. The fact of the matter is that so long as you need unanimity to appoint these judges, we will never block one because we will be terrified that somebody will block ours. The chemistry is that so long as there is unanimity, nobody blocks anything and everyone goes through on the nod. That has been true ever since the European Union was set up. If you have QMV for this, and I am not saying that we should move to it immediately, there would be no such “see no evil, hear no evil” approach because you would be terrified that if you tried to block someone on abusive grounds, you would be overridden.

I think that some of the arguments that the Minister used about—

[Baroness Anelay of St Johns]

My Lords, the Minister is winding. Obviously it is for noble Lords to intervene to ask a question, but not to make a speech. If the noble Lord, Lord Hannay, wishes to make a further speech in Committee—of course I am not inviting him to do so as I am not going to test the patience of the Chamber—I would indicate that he is able to make a further speech, but at the moment, if he has a question to put, he may put it.

[Lord Hannay of Chiswick]

I will now await the answer.

[Lord Howell of Guildford]

I am longing to get on. I have taken too much time already and not met in sufficient detail some of the very profound arguments that have been made. We may perhaps have opportunities later.

On Amendment 47, by including the relevant item in Schedule 1, we are ensuring that the British people would have a say before the UK gave up the current practice of voting by unanimity on these particular areas. We, as well as the previous Government, and several partners in the member states—I would suspect the majority—would view that with very great sensitivity indeed. That is all I have time to say on these vital issues, but that indicates that these are not chance items that were just bunged into Schedule 1, but very serious issues on which there would be a very serious situation, should it come to giving up the veto, that would certainly demand the referendum lock.

I will say a word on Amendment 46 and then I will try to close because there is a great deal more to say, particularly on Amendment 47A, tabled by my noble friend Lord Flight. Amendment 46 refers to the Treaty on the Functioning of the European Union, which is the engine room of the EU. As we know, the Treaty on European Union sets out provisions of principle in a number of sensitive areas, such as common foreign and security policy, and the TFEU sets out the bulk of policy areas and the extent of the competence in which the EU can act. It has considerable read-across to areas on which we in Parliament would otherwise legislate and which are of vital importance, such as social policy, criminal policy, tax policy, police matters and other things that the British people rightly regard as very intimate domestic issues. Some of the articles in the TFEU have been moved over to QMV. We have previously made clear that this Government have no intention of giving up any veto in the EU treaties, and nor have several other member states.

I reiterate that, for many member states and perhaps for ourselves, Lisbon was passed and is a fact, but it took a great slice of the issues into QMV and a great slice of them was also preserved. They were preserved because member states did not wish to give them up. Some vetoes are plainly not within the bracket that will be a vital issue at all—for example, Article 219(1) of TFEU on the setting of the Euro exchange rates with third countries. A number of vetoes fall within the sensitive policy areas defined by the last Government and successive administrations as so-called “red lines”. Those vetoes should be subject to a referendum lock, if ever there was a proposal to give these up in the future.

Finally, I must say a word on Amendment 47A, which my noble friend moved. The provisions here, in respect of Article 207(4), are narrowly defined types of EU trade agreements, requiring unanimity. I considered this amendment very carefully, as did my right honourable friend the Minister for Europe. The conclusion was that it did not make sense—and this, I hope it will be recognised, is evidence of some flexibility—to include this in Schedule 1. That does not mean that we intend to agree to give up this veto in the future, but the treaty base is not of as great a level of sensitivity for the United Kingdom, as it is for some other Member States, for whom it certainly is sensitive. An Act of Parliament would therefore be sufficient here, rather than the referendum lock.

I hope that I have given some evidence that we are looking at these matters very carefully, and that we are acting in a proportionate way. There is a scale here. The vital issues are in Schedule 1, and the less vital issues are not in Schedule 1 or would not attract the referendum lock. We have sought to increase ministerial accountability. We have not sought—contrary to the views of some noble Lords—to squander money and time by seeking to legislate for a string of referendums on matters of relative insignificance. Those matters are not in the schedule. Instead, we ask for the British people's agreement when transferring further powers from the UK to the EU in areas which define who we are as a nation and as a people.

These transfers are unlikely ever to be proposed on an individual basis—whatever noble Lords may argue—and only in the context of a package, given the opposition from several member states to moves to qualified majority voting in these areas. Indeed, articles in Schedule 1, where unanimity needs to be safeguarded, are there precisely because member states—including ourselves—have resisted going to QMV to protect our national interest. That is why they are there.

In conclusion, Schedule 1 provides clarity in the Bill, not confusion. It is a definitive and unambiguous list of treaty articles that we believe should concern the British people, if ever there is a proposal to give up a veto in those areas. Under the provisions of the Bill, the Government are obliged to seek the approval of both Parliament and the people before they can agree to the removal of the vetoes present in each of these articles in Schedule 1.

It is Schedule 1 that gives Parliament and the people assurance and therefore is a key element in rebuilding trust. That underlines why the contents of Schedule 1 are the right ones and why we argue strongly against moving from these areas towards what the Opposition call flexibility. To do so would allow a number of areas to generate the kind of doubt and distrust that we have seen in the past, which is now widespread quite a lot in this country and throughout Europe.

The declining popularity for the great European Union, which many of us have worked for and in for decades, is a bad development. Sensible Europeans need to recognise that and take moves to shore up and reassure the public support for the European Union project in the 21^st century. That is what this Bill is about. That is what we are trying to do. To begin picking little exemptions and holes in the Bill is the way to undermine its central purpose. I therefore ask the noble Lords to withdraw their amendments.