European Union Referendum (Date of Referendum etc.) Regulations 2016

Lord Lamont of Lerwick Excerpts

Wednesday 2nd March 2016 Lords Chamber

[Lord Mandelson (Lab)]

My Lords, I support what the Prime Minister negotiated in Brussels, and I hope that others on both sides of this House will do so. However we got to this point, we have to realise that it is a national fight that we have on our hands now, not a party one, and for the country’s sake we have all of us got to make sure that the right side wins. We simply cannot allow British business and their employees to take such a hit for the sake of the political aims and whims of those who simply cannot understand the difference between taking back control of our country and the modern means of exercising influence in the 21st century—those who simply cannot understand how, yes, you can diminish your sovereignty when you enter a transnational treaty or institution, but then you get back in return a real increase in your power to affect public policy, big events and important challenges, which all of us face in our neighbourhood.

Noble Lords should be under no illusion that the coming referendum presents us with a profound moment in the life of our country—and once the die is cast, there will be no turning back. We cannot leave the European Union and for economic and trade purposes be treated as if we are still in it; that is the unescapable fact that we are facing. Let us be clear about what that means. Unless we want to become a bigger version of Norway, accepting all the laws and rules of the single market without having any say over them whatever—and, by the way, paying quite a healthy sum into the EU budget for the privilege of doing so—or if we want to become some variation of Switzerland, which by the way has no passporting rights for its financial services into the European Union, leaving would mean no more unhindered or unfettered access to Europe’s single market by Britain, our businesses or exporters. It would mean continuing to accept European norms and standards as a condition for the market access that we are granted, and it would mean that once the divorce is promulgated, after the two-year Article 50 process, we would face a return to paying EU tariffs while whatever deal was finally negotiated and struck between us. That means that we would pay EU tariffs on our exports and imports, which means higher prices in our shops.

[Lord Lamont of Lerwick (Con)]

My Lords—

[Lord Mandelson]

If the noble Lord does not mind, I shall continue. It would mean losing the EU’s preferential trading benefits in foreign markets until such time—and it would be a long time—before we were able to renegotiate them back. It would also potentially mean having to raise our own tariffs on imports for those markets, as they would no longer be covered by WTO-compliant agreements.

[Lord Lamont of Lerwick]

My Lords—

[Lord Mandelson]

Is this my time or the noble Lord’s time that he is eating in to?

[Lord Lamont of Lerwick]

I am most grateful to the noble Lord for giving way, somewhat reluctantly. He has talked about access to the internal market and the additional costs, as he sees it. If this is so catastrophic, will he explain how it is that in the invisible trade in goods since 2011, the United States, without being part of the single market, has managed to sell considerably more than we have to that market? Even in terms of services, the United States sells more than $200 billion worth a year.

[Lord Mandelson]

I am sorry—I am not just talking about invisible services. I am talking about British exports and British jobs and what we would pay in addition to get our goods, and all we contribute to supply chains and value chains, into the single market.

I am not going to dwell further on the trade implications of leaving, except to say that anyone who thinks that, freed from the so-called protectionist shackles of Brussels, we could somehow beetle around the world bagging major new free trade agreements like low-hanging fruit needs a reality check. This is not the 1970s, which is when Britain last attempted to negotiate an international free trade agreement. We have no people. We have no negotiating capacity left in Whitehall. We would have to rebuild it from scratch before we began that process. More to the point, there are not the countries queuing up to negotiate with countries like us. We are a mid-sized, mature, already open, advanced, western economy. Others are seeking trade agreements either with large blocks of countries or with larger, younger, faster-growing, relatively closed economies with a lot more to bargain into a negotiation than we have to offer. That is the reality of international trade, and we have to grasp it.

I shall finish by going back to my original point about what the Prime Minister negotiated in Brussels. This package is not everything, but nor is it nothing. In particular, the renegotiation in the package reassures those members of the public with doubts—people with genuinely sceptical minds—that they can support UK membership again by making it clear that the EU’s talk of ever-closer union is not a catch-all provision driving continuous political integration, by removing the right of EU nationals to unconditional and immediate welfare benefits and by giving appropriate protection to our economy from the operation of Europe’s single currency, which we should not join and from which our businesses should not suffer any discrimination as a result of our being outside it.

This is not the end of reform in Europe. It is a start. Reform is a process; it is not an event. This package is, in effect, a bridge. It is a bridge that people with genuine doubts can walk back across in order to support the European Union in good faith, and I hope they will do so on 23 June.

--- Later in debate ---

[Lord Lamont of Lerwick]

My Lords, I am delighted to follow the noble Lord, Lord Kerr. We worked together extremely closely in Brussels. He was never my Private Secretary, and I think I am a bit relieved that he was not. We were on the same side—at least I think we were, most of the time. I always used to rely on the noble Lord, Lord Kerr, to tell me what the mind-set was of those against whom I was negotiating and he had very good judgment. However, I was rather surprised today when he whispered in my ear, “I am very pleased you haven’t made up your mind about whether we should remain in the European Union”.

He had a bit of a point in that I have found this quite a difficult decision. Some people may not believe that, but it is a very momentous decision. It is a great change in British policy over 40 years and, of course, it is an extremely difficult decision to be in argument with colleagues and close friends.

I have never before argued that we should leave the European Union. I have been accused of arguing that. I know that one should never refer to one’s own speeches, but in 1994 I made a speech in which I was accused of advocating withdrawal. What I actually said in 1994—and it caused a bit of a storm at the time—was that the EU was becoming such a political union that the time would come when we would have to choose between being part of that political union or going on our own way. I think that was, probably quite by chance, what happened subsequently. Europe integrated more and more and had a different vision of its future from what we had.

Taking a longer view of our relationship with Europe; it has never been a comfortable one. It has been awkward all along. We had to get out of Schengen; it was not comfortable for us. We had to get out of the single currency; it did not fit our ambitions for Europe. Our great contribution to Europe was supposed to be the single market and the acceptance of qualified majority voting. Well, yes, up to a point, although there has been an awful lot of argument over whether Lady Thatcher would have been in favour of remaining in the EU or coming out. The one thing I do know about Mrs Thatcher is that she bitterly regretted the introduction of qualified majority voting. She felt she was misled and that it was a great step in the wrong direction.

Some people think we have not been constructive enough in our attitude to Europe. I know Tony Blair would not object to my revealing a private conversation. I remember having a conversation with him on a train going to Darlington. We were discussing his approach to Europe. He said, “The answer to Europe is to be constructive. Get in there, be positive, agree with them and they will all come round to our way of thinking”. I am afraid I said to him, “I have seen that movie several times and it always had the same ending”. It did not work for Tony Blair either.

We have heard today arguments about the pooling of sovereignty—there is nothing at stake, it is just the pooling of sovereignty and this is very similar to NATO. NATO is a military alliance, which is quite different from transferring law-making powers to a body whose law is superior to your own domestic law. Not for nothing did Elmar Brok, a leading member of the European Parliament and a close ally of Mrs Merkel, describe the European Union as “a state under construction”.

I think many people have become disillusioned in Britain because of the sleight of hand with which that objective has been concealed; the way in which the constitutional treaty became the treaty of Lisbon; the way in which countries have been asked to vote several times when they voted the wrong way in referenda. It is for all those reasons that disillusionment has set in in Britain. Many people such as myself believe that it would be far better to have a relationship based on economics alone.

Many people have argued in this debate that for us to sell to the single market of Europe we have to be part of it. I put it to the noble Lord, Lord Mandelson—I agree I did not put it very well or clearly but I think it is an important point—that the United States has Europe as its main trading partner. Since 2011, the United States has sold more in goods than the UK has. It is not a member and it does not have any say in the rules, but it does not find that a huge obstacle. Services are also extremely important, because people say the future is services. They say that the British economy is strong in services and indeed it is, but the United States exported to the European Union over $200 billion worth of services whereas the United Kingdom only exported less than £100 million of services. That, I suggest, makes a very strong dent in the argument. The noble Baroness, Lady Smith of Basildon, can deal with that in her reply. She did not reply very well before, but we will listen to her when she replies to that argument.

My noble friends Lady Byford and Lord Tugendhat asked the question that is asked all the time. They say that we who are sympathetic to departure from the EU never spell out the exact terms on which we would have a trade relationship with Europe. I am not sure exactly what detail they want us to go into. Obviously nobody can say what the tariff on this or that, on shoes or clothes, will be. The question ought to be: is there a deal available or is there not? Is there a negotiated free trade deal available or not? My noble friend Lord Howard quoted what Jacques Delors said—that the British are probably interested only in an economic relationship with the European Union and, therefore, if they wish to leave, we should give them an economic relationship and a free trade area.

[Lord Kerr of Kinlochard]

I must counter the noble Lord. I think that the quotation by the noble Lord, Lord Howard, was completely accurate. What Delors said was that you can have an EEA, which is what the Norwegians have, or you can have a free trade agreement, which is what a lot of countries round the world have, but you cannot have access to the single market.

[Lord Lamont of Lerwick]

That was not what Delors said at all. I am sure that my noble friend Lord Howard will not mind me revealing that he took the quotation from material that I supplied to him. That was not remotely what Delors said. I further inform the noble Lord, Lord Kerr, if I may, that Jacques Delors said it several years ago, and, much more recently, Mr Schauble, the German Finance Minister, and, I believe, the Economic Minister of Germany, both stated that a free trade agreement with Britain would be not just desirable but, from a German point of view, necessary. That is a very important point. However, my noble friend Lord Garel-Jones poured cold water on the argument that it matters enormously to the people in Europe to have an agreement. It matters to them as much as it matters to us. It is not a question of surpluses or deficits; the German manufacturers want to know exactly on what terms they could sell into the UK market just as we would need to know on what terms we could sell into the German market. It is a question of mutual need.

[Lord Ashdown of Norton-sub-Hamdon]

My Lords—

[Lord Garel-Jones]

My Lords—

[Lord Lamont of Lerwick]

I am happy to give way, but I have already taken eight minutes. I will let the House judge who should intervene.

[Lord Ashdown of Norton-sub-Hamdon]

I am so grateful to the noble Lord, and I am sorry if I test the patience of the House. Of course it is the case that the deal will be available; the question is at what price and for how long. Of course it is the case that some countries in Europe would want that deal, and Germany is one of them, for the reasons that the noble Lord has very appropriately expressed. However, the point is that that deal has to be agreed by all 27, and that is where the difficulty is going to come. The difficulty will be not be with Germany, which has an interest, but with the many others that do not. I am sure that the noble Lord understands that.

[Lord Lamont of Lerwick]

I understand what the noble Lord is saying but I do not accept that other countries are necessarily going to object. If Germany, the most important country in Europe, finds it overwhelmingly in its interest to have a trade deal with Britain, and has declared well in advance of this happening or being a possibility that it thinks it would be necessary and desirable, then I think we can assume that many other countries in Europe would follow. What I did not understand was the point made by my noble friend Lord Garel-Jones that somehow people would be less willing to have a trade agreement because we had shown contempt for the European Union by deciding to withdraw. Surely if a country makes a democratic decision simply that it does not want to be part of a political agreement with another group of countries, that is not a cause for anger or resentment; that would be completely against the ideals that the European Union is meant to stand for.

I have spoken too long. I believe that there are important areas where we have lost control of our own affairs in the development of the political union in Europe. It is quite true that the Prime Minister has achieved some worthwhile and notable concessions.

I believe that he has achieved as much as any person could have achieved, but that will still leave us open to the need that always exists in the political bodies of Europe—the European Parliament and the European Court of Justice—to have another leap forward. Just look how they undermined our opt-out from the charter of fundamental rights that Tony Blair thought he had achieved.

It is wrong to say that there is a status quo option on the ballot paper in the referendum. There is no status quo. Europe will continue to develop and integrate. When people cast their votes they must think not just of the present but of what Europe and Britain will look like in 40 years. That is the question.