EU Referendum: Assessing the Reform Process (EUC Report)

Lord Howell of Guildford Excerpts

Tuesday 3rd November 2015 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, this is a good report from a very able chairman, my noble friend Lord Boswell; I congratulate him. When we consider the colossal implications for the whole future of our nation for years ahead, quite why we should be debating this matter late in the evening, in the dinner hour, puzzles me. Sometimes the arrangements for business in this House baffle me, and this is one of those times.

For me, the last paragraph of the report, to which the noble Lord, Lord Boswell, has already referred, is the most important, because it emphasises the fact that reform,

“should be for the benefit of every nation and citizen of the EU”.

That suggests that one gigantic piece of the whole jigsaw of the negotiation process, and the policy behind it, is still missing. The missing bit is what I call the deep reform agenda—the careful unpacking of the old 20th-century EU model, which everyone knows is obsolete—that is the view of the vast majority throughout Europe—and its reassembly in a form fit for the digital age. Some people call that the “somewhat looser Europe” model.

The challenge is not actually a British problem: it is to create a modern and resilient European Union. That is what millions of people throughout Europe want—and all the blogs and all the airwaves we see and hear every day are full of new ideas along those lines. Even the most ardent Europeans know that the European Union’s core institutions and procedures must be revisited. That is the essential context for the negotiations.

My question, which is prompted by the excellence of the report, is simply: where is the British contribution to this deeper debate? If we are against ever-closer union, what kind of union, or co-operative structure, do we want to work for Europe, both in Europe’s best interests and in our own, assuming that we want to see Europe enjoying stability and prosperity, never again to be destroyed by the horrors of the 20th century?

There are answers to that question, and I hope they are ones that the committee, under my noble friend Lord Boswell, will address in the future. I shall give your Lordships a brief list. First, the nature and scope of the competences—the powers—of the European Union, and the allocation of powers at different levels between the Union and nation states, need the most thoroughgoing review. The balance of competences exercise conducted by the Foreign and Commonwealth Office was not thoroughgoing. It did not look at the essential point that many of the competences, the boxes into which they were put 20 and 30 years ago, and the definitions, are simply out of date, or muddled. They do not match the nature and shape of the modern economy at all. Energy policy is a classic example of that.

Secondly, the nature of the single market itself needs total re-examination. The single market today is something quite different from what it was even 10 years ago. There are entirely new supply chains, a whole new pattern of trade agreements around the world surrounding the European Union—what has been called a spaghetti bowl of global trade agreements—and new world markets which hardly existed 10 or 15 years ago. There is far more ambiguity in the rules of origin of any product or service. One could elaborate on that but that is the reality now.

Thirdly, the doctrines of standardisation of rules and integration, which were economically fashionable in the 20th century and which argued for more and more cohesion, size and scale, no longer apply in the digital age. The opposite is now the reality.

Fourthly, the whole subsidiarity process needs vastly expanding and applying rigorously to existing overcentralised and outdated acquis. This is acknowledged by everybody privately but somehow does not come into the negotiating scene.

Fifthly, fewer central powers for the European Union would mean a more limited area for EU laws and the European Court of Justice. There have to be laws governing the good conduct of trade but they should cover far fewer areas than they do. EU legislation anyway, as every lawyer will tell you, is full of problems that need uncovering and reforming. In that context, we also need context to look at not just the relations between the European Parliament and our national parliaments but at the role of the European Parliament itself, which also needs reform and which many people are very uncomfortable with.

Then there is the euro currency’s problems which, of course, are chronic and insoluble. As even the Financial Times, the great cheerleader for these things, warns, there will be unending crises. Any day of the week you can see a profound pro-European commentary in the Financial Times warning us of that. My own view is that modern Europe should leave the whole eurozone system to wither on the vine.

The great principle of freedom of movement in Europe is, of course, crumbling before our eyes. Again, it is not just, or even mainly, a British problem. Recent weeks have shown that very clearly.

Obviously there must be treaty change eventually. I think that is mentioned in the report. Ministers keep admitting it. The Prime Minister has conceded it in the past and, indeed, has argued for it. Clearly, there is no time to do that between now and 2017, or whenever the referendum comes, but the process should be set in motion for another intergovernmental conference to bring forward the reforms that are wanted by everyone throughout Europe, not just by Britain and one or two other countries.

Reform must come before, or at least alongside, renegotiation. That is the essential framework without which just negotiating a list of demands makes no sense at all. The Prime Minister has said that the EU is an organisation in peril, and so it is. It is riddled with crises, of which the refugee and migrant issue is only the latest. There will be many more and there have been many more. Negotiating with an unreformed European Union is negotiating with yesterday. Our focus should be on negotiating with tomorrow.