Queen’s Speech

Lord Kerr of Kinlochard Excerpts

Monday 23rd May 2016 Lords Chamber

[Lord Owen (Ind SD)]

My Lords, I congratulate the noble Baroness, Lady Jowell, on an extremely moving maiden speech. I shall listen to her future contributions with great respect.

A Transatlantic Trade and Investment Partnership Bill—TTIP, as it is commonly called—is vital for this country as the Government have only to sign this treaty and we lose all chance of amendment. The problem with the treaty is not that it is a trade treaty—I have supported every trade treaty in my political life—but it binds into a trade agreement a regulatory activity which could have very profound implications for many of us. It is this aspect to which I particularly wish to draw attention.

First, I pay tribute to the UNITE union, which put the money forward to ask Michael Bowsher QC to make a fully detailed analysis of the treaty. Without this, we would still not have the clarity that is needed. I will quote from what he has said. He is the ex-chairman of the EU Law Committee of the Bar Council and I am told—I do not know whether it is true—that he wishes to remain. So, this is not an issue between remainers and leavers, it is a pretty important issue about how we use treaties to avoid parliamentary scrutiny in both Houses. It does not, therefore, surprise me that a similar Motion is being moved in the other place.

The conclusions of the Bowsher report are as follows:

“For the reasons set out in this advice, our conclusion is that TTIP poses a real and serious risk to future UKG decision-making in respect of the NHS”,

in England. We must remember that it is rather different these days in Scotland, Wales and Northern Ireland. He has seen the most recent statements of Commissioner Malmström and remains of the opinion that:

“The content of the draft texts are such that they do not provide a bar to suit against UKG for substantial compensation—either domestically or within the arbitral Tribunal”,

itself a very new procedure,

“for regulatory changes to the NHS. We do not consider that the new ‘right to regulate’ changes this position”.

The second conclusion is that:

“The circumstances in which a viable claim for compensation will arise, and the extent and level of that compensation, is inherently uncertain under a multi-lateral treaty agreement such as TTIP. This is evidenced by the case-law in the Tribunal, as referred to below. Furthermore, remedies under TTIP may exceed those available under domestic contract law, human rights law and European Union law”.

Thirdly:

“It is the uncertainty referred to in (ii) above which we consider will have a direct ‘chilling’ effect on future action by UKG with respect to the NHS.

We consider that the solution to the problems which TTIP poses to the NHS—and which is likely to provide the greatest protection—is for the NHS to be excluded from the agreement, by way of a blanket exception contained within the main text of TTIP”.

That cannot be done by a Bill, but it could be done by an instruction to the Commissioner, who at times has sounded as if she wants some stern guidance from the member states.

“In the event that this cannot be achieved, we consider that the NHS should be the subject of a carefully worded reservation contained within Annexes II and III of TTIP”.

Much reference has been made in dismissing the concerns that are now beginning to be expressed from all parties and all views. In particular, it reposes on evidence given to the House of Commons Select Committee on 16 October.

“The issue here is whether the new right to regulate affords UKG greater protection were it to seek to make major structural changes, to the detriment of foreign investors, to the NHS … However, despite the new right and the statements from the Commission, as set out above, our view is that the new right is very unlikely to afford UKG any greater protection. This is essentially for three key reasons: the ‘right to regulate’ is not new. Its substance has, in effect, already been recognised in arbitral case-law. The new right in Article 2 therefore adds very little”.

Bowsher traces this whole question:

“The Article 2 right itself is vague. Recognition of the state’s right to regulate and to make changes in fields affecting the welfare of persons, including healthcare, is subject to the inherent uncertainty in the interpretation of that right by the proposed Tribunal”.

Bowsher goes through various international cases and concludes:

“It follows, therefore, that the right to regulate provided for under Article 2 is unlikely to provide additional protection to UKG. Were the matter to proceed to a dispute in the future Tribunal the real issue would remain: is the effect of UKG’s measures such that the investor should be compensated? The right to regulate does not provide a bar to compensation”.

He asks whether an incoming Government would be able to make changes to the Health and Social Care Act 2012, which brought into force the National Health Service (Procurement, Patient Choice and Competition) (No.2) Regulations 2013, or amend the regulations themselves. He concludes that it would not be possible, saying that,

“we are of the view that the new right to regulate does not provide sufficient protection to UKG to ensure that no future government or Parliament will have its ability to increase the public sector provision of services limited”.

A lot of what we are going to debate, and the questions of whether or not the EU should be our partner and whether or not we should leave, relate to the way in which over successive years but particularly the past 10 years the EU has crept into the nooks and crannies of all aspects of our lives, including now the NHS. I am not going to make the arguments that are different between the political parties about what we should do with the NHS, but I will argue to my dying day the right of a new Parliament to change the legislation of a previous Parliament under a previous Government. Forfeit that right on an issue as important to us as the National Health Service and the tolerances of society start to break down. This is the great advantage of our system of government.

I will say no more about this and will now make a more partisan but short speech about what I think is—

[Lord Kerr of Kinlochard (CB)]

My Lords—

[Lord Owen]

No, I am not going to give way to the noble Lord. I have taken seven minutes and I have two more.

I believe that the choice this country faces now has come about because of a grotesquely mistaken decision that you can introduce a common currency without a common country. It was opposed by the Bundesbank; it was opposed by the Conservative Government under John Major. We got an opt-out but once you get 19 or 20 countries in the eurozone in an EU of 28, it has effectively become an EU-eurozone grouping, and we should stop this belief that we are protected. We will be affected, as the former Governor of the Bank of England said, if the euro crisis continues and there is a euro collapse. The Prime Minister has accepted this. He gave away in his negotiation our treaty amendment rights to protect ourselves over euro changes. He said that we would not use those in order to get euro reform. It is understandable why he said that because it is of very great interest to this country that we get euro reform and an end to this stagnant euro crisis of the past six years.

It is important also to recognise that behind the wish for a single currency is the wish for a single country. It is quite a noble objective. It has been pursued for many decades. It is summed up by federalism or the “United States of Europe”. But in the development of the European Union—and I have watched it very closely since 1962—there will come a point that is not possible to come back from. You will be faced with a decision that you have to join and people will argue why that is. It may be 10 or 20 years down the track. The answer to this is: this is a once in a generation, once in a lifetime choice, just as it was in Scotland. You cannot have referendums repeatedly and we have to make a choice.

Can we really say to ourselves as we vote on 23 June that we are protecting this country from being sucked into a United States of Europe? I believe we cannot say that and for that reason, as well as the changes in Europe that came after the treaty of Maastricht, it is the right moment to say: go and have whatever you can get agreement on—a single state with a single currency in Europe—and good luck to you. But we in this country should not kid ourselves. This is decision time. Failing to take it will find future generations ending up in whatever looks like a European Union. I beg to move.

--- Later in debate ---

[Lord Kerr of Kinlochard]

My Lords, I want to follow precisely the argument of the noble Lord, Lord Ashdown. The Foreign Office that I joined 50 years ago was taught by the Suez disaster to give up some of our imperial pretensions that had been rebuffed in our ambitions by General de Gaulle. The FCO that I left 15 years ago had learned that being influential in the EU strengthened our voice in Washington, in the UN and in the Commonwealth. The British at last felt at home in Brussels, where English had become the common language, where the Brittans, Kinnocks and Pattens held the key portfolios, where we had more senior jobs in the institutions than any other member state, where the Thatcher single market programme was slowly but steadily becoming reality, and where the wider-world expertise of the British and French was seen as an EU asset. In Washington, we were regarded as good guides to EU outcomes because we were thought capable of delivering on our predictions. Our access reflected respect for our leading role on EU external issues. Some of this has already faded with disaster in the Middle East, cuts in defence and diplomacy, and a certain self-isolation in Europe. But much more is now at risk. We are at a watershed moment and need to be clear about what the referendum fallout effects for foreign policy might be.

Modern British foreign policy rests on four pillars. Fundamental is the link with Washington. The values set out in Philadelphia in 1787 were those of the English and Scottish Enlightenment—Franklin lived in Johnson’s London and knew Hume’s Edinburgh. That will not change: Britain at its best will always be in step with America at its, and trumpery on both sides will not stop that. However, influence on American policy is a function not just of sentiment but of perceived power. We are useful to the Americans to the extent that we can convince or cajole our other friends to adopt common, or at least congruent, policy. We cut ice in Washington when we are seen to cut ice over here. To cut ourselves off from our continent would see us cut down to size—50 million and no longer 600 million—when we talk in the States; no wonder the transatlantic foreign policy community overwhelmingly hopes that we will vote to stay.

The second pillar is the Washington treaty, or NATO; the common defence structure to which we would commit all our forces and pool all our sovereignty in time of war. Our defence cuts have gone deep, and lower economic growth post-Brexit could mean that they go deeper still. However, the damage to effective western soft power is more certain. German reticence about armed deployment and French unease about US-led command structures have meant, as the noble Lord, Lord Collins, said, that it has often fallen to this country to forge the link between NATO and soft-power decisions in the Council of EU Governments.

The key multilateral actors have often been British—we have heard from some of them today: Robertson, Owen and Ashdown. One could also mention Carrington, Patten and Ashton. In the Council that I knew best it was to Douglas Hurd that the Juppés and the Genschers turned at key moments; it was John Major who in a morning swung the whole EU behind his 1991 initiative on safe havens for the Kurds. That cannot happen if we are not there. There would be a growing risk of the North Atlantic Council and the European Council drifting apart. Of course, the EU would still talk to us, but its decisions would be taken in its EU formation with us excluded. No wonder the defence establishments, on both sides of the Atlantic, hope we stay.

Pillar 3 is built on the lessons of history. Chamberlain was wrong in 1938; it is not in our interests to regard neighbouring states as far-off countries of which we know nothing. Distracted by Suez, we did nothing for Hungary in 1956. We did nothing for the Czechs in 1968. So, later, I was very proud to serve Governments, of both parties, who successfully championed EU enlargement, delivering on the Thatcher 1988 Bruges call for an opening to the east. I am sad that some in her party now seem to have forgotten that stability and prosperity in central Europe are a vital UK interest.

And I am shocked that a Minister of the Crown, serving in the Ministry of Defence, should this week insult a vital NATO ally, Turkey, claiming that, unless we leave, this country will be overrun by 2020 with Turkish criminals. This is absurd. Surely she must know, as does everyone else, that Turkish accession to the EU is—in my view, sadly—many decades away, depends on Turkey solving myriad internal problems and can be vetoed by any single member state. Why tell such lies? It demeans the debate and it damages NATO.

But the key point is that an EU without us, or at least without a Britain true to itself, would be less open, less liberal, less secure, less aligned with British values and interests, properly defined. No wonder our true friends in Europe hope we will stay.

Pillar 4 is the belief that a rules-based, multilateral order built on the rule of law, on the United Nations and Bretton Woods institutions, on aid and trade structures optimised to support economic development, serves us best. If we left the EU, its aid programmes would be smaller and probably less focused on our friends. More importantly, developing-country access to EU markets would probably grow more slowly, particularly for those with closest ties to us. The free trade agreement with South Africa was negotiated by a British Commission official, backed by London but resisted by much of southern Europe.

Looking beyond trade, our ability to help defuse threats of conflict, whether on Iran’s nuclear programmes, Indus waters or the South China Sea, would decline. Why should Iran, India, China or the Security Council listen to us if our influence on both sides of the Atlantic had shrunk? No wonder our Asian friends and our Commonwealth friends, most recently Prime Minister Trudeau last week, have said they firmly hope we stay.

My thesis is that the four pillars of our foreign policy are mutually reinforcing. If one goes, all are weakened. That is why next month’s vote is so crucial, and not just for our prosperity. Our influence across the world would shrink and our friends and allies believe that their interests would suffer with ours if we were to find ourselves with, in Stephen Wall’s phrase,

“our noses pressed to the European glass, gesticulating, unheard, to those inside”.

To quote another historian, perhaps more widely known but less authoritative:

“Suppose Britain voted … to come out: what would actually happen? We’d still have huge numbers of staff trying to monitor what was going on in the community, only … we wouldn’t have any vote at all. Now I don’t think that’s a prospect that’s likely to appeal”.

For foreign policy as well as other reasons, I sincerely hope that you are right, Boris. Yes, that was Mr Johnson, but it was in November 2012. Consistency is the hallmark of small minds, and vaulting ambition can o’erleap itself.