European Union Bill

Lord Liddle Excerpts

Monday 13th June 2011 Lords Chamber

[Lord Waddington]

My Lords, the noble Lord, Lord Rowlands, was very eloquent, and I can well understand how he has reached the position that he has. Looking at just one of the amendments that we are considering, I must say that I find the wording of Amendment 15 really rather odd. It seems that, taken at its face value, all sorts of decisions could be made on a common European defence and no referendum would be required unless the intention was to permit a single, integrated military force. We could integrate our Navy with every other country’s navy and still be well short of creating a single, integrated military force, so there would not have to be a referendum. That seems very odd if you are going down the route of having referendums at all.

The noble Lord, Lord Hannay, was again rather beguiling. At one stage he said that he was putting forward these amendments in a spirit of compromise. It might look like an exercise in compromise to some people, but to others it might well look like part of a general strategy to whittle down the protection that the Bill is designed to afford. That is what I find so terribly depressing: that having gone all through Committee, and now on Report, not a word is spoken by the opponents of the Bill to suggest that they have a clue as to how disillusioned people feel and how necessary it is to give them some reassurance, or how necessary it is to show them that their views are not going to continue to be overridden and that we are not going to go on continually conceding powers so that eventually we finish up being no longer a sovereign, independent state. Never a word comes from opponents of the Bill to show that they have any realisation of the difficulties that we face at the present time.

In these debates we are constantly told that the right to a referendum can be safely whittled down here, there and everywhere. We are constantly told that referendums are an affront to parliamentary democracy, but I am bound to say that people are asking me what Parliament has done so far to guarantee our independence and to protect our fundamental freedoms. They point to what happened over the Lisbon and all the rest of it, and, as I say, they are thoroughly disillusioned. I think that they, like me, will not be at all impressed by the suggestion that somehow or other we can meet most of these problems by making sure that Parliament does its work properly.

I remind my noble friends and noble Lords of some of the history. The noble Baroness, Lady Quin, said in a speech the other day that it was made clear in the 1975 referendum that we were joining not just a common market but an EEC. Let us leave aside for a moment the fact that the question on the ballot paper was:

“Do you think the UK should stay in the European Community (Common Market)?”.

Let us leave aside for a moment the fact that there was no mention of the EEC at all. In fact, Harold Wilson, as he then was, made a great speech in which he recommended a yes vote because the threat of monetary union had gone away. I distinctly remember him saying that. That is all part of the dismal history. “Stop worrying, it is not going to happen”. Then it happens. “Well, it is not so important after all and it certainly will not happen again. This is the end of the road”.

I came back from Bermuda in 1997 having looked somewhat askance at some of the developments during the years when I was away. The first thing that happened to me was that I was invited to a rather grand dinner party at which every other guest was a Whitehall mandarin. There were three ambassadors and one or two permanent officials from the Foreign Office, and they said, “Oh, what are you banging on about, David? Stop worrying”. These are the exact words that were used to me that night: “The high-water mark of European integration has been reached”. That is what they told me. Well, the next day the tide continued to come in and it has been coming in ever since.

We are constantly told that it is safe to leave all these matters in the hands of our elected politicians. We might not have much to thank Mr Gordon Brown for, but let us give credit when credit is due; but for Brown, Tony Blair might well have used his vast majority to take us into the euro at the end of the 1990s, and a fine mess we would be in now. Remember, he dreamt up the idea of a referendum only to get him through the 2001 election. There was no question of the need for a referendum on the euro prior to that.

[Lord Liddle]

If I am correct, Mr Blair made his referendum commitment in 1996.

[Lord Waddington]

I am sorry, will you please repeat that?

[Lord Liddle]

Mr Blair made a commitment to have a referendum on the euro well in advance of the 1997 general election, in 1996. Some of us thought that that was a mistake at the time, I hasten to add.

[Lord Waddington]

That had escaped my notice. By the end of the 1990s, he was certainly sending out messages that he thought the time might well be right to think about going into the euro. If Mr Blair were in office now—this would have been relevant on one of the amendments that was not moved—he would no doubt be advocating the need to have elections for a European president, which he would urge upon us as a not very significant matter that would only increase the powers of the people and was a thoroughly good idea, when we all know perfectly well that if a European president were elected that would be a dramatic step towards a United States of Europe. In fact, from the moment of such an election, the international community, whatever the constitutional niceties of the matter, would consider that Britain had turned itself into a United States of Europe.

--- Later in debate ---

[Lord Liddle]

My Lords, we have had a long debate on this set of amendments. We on the opposition Front Bench strongly support this group of amendments, spoken to by the noble Lord, Lord Hannay. I shall focus our debate on Report on the essence of these amendments, which is to reduce the 56 varieties of referendum lock that the Bill contains to referenda on new treaties and three major issues: joining the euro, joining Schengen and the setting up of a single European army or force, as my noble friend Lady Symons mentioned.

What people who accuse us of proposing a set of wrecking amendments have to take into account is that the Bill as amended would be a substantial step forward in public accountability as far as the European Union is concerned. There could be no major new treaties containing the kind of proposal that former Prime Minister Tony Blair floated last week—for an elected president of the European Union—without a referendum. We could not join the euro, which clearly might now mean significant steps towards a fiscal union, under the amendments in this group. We could not join Schengen, which would certainly mean abolishing our own border controls and replacing them with border controls at the EU frontier, a common set of asylum rules, burden sharing and so on. Under the amendments that we are proposing, that would be subject to a referendum, as would a major step towards common defence.

Therefore, these amendments do not wreck this Bill; they just make it more sensible and get rid of the huge number of referenda in it. That is wholly in line with the spirit of your Lordships’ Constitution Committee’s recommendation that referenda should be confined to matters of major constitutional significance. One of the curiosities of the many days of debate that we have had is that we have never heard why the Government think they can set aside in this way the recommendations of your Lordships’ committee on these specific matters when it comes to the European Union. On all these other matters—on which, if this amendment were passed, there would be no need for a referendum—there would still be a need for an Act of Parliament. That is an enormous change from the position that we are in now. We are not wrecking this Bill; we are trying to improve it. I hope that on that basis the Government might be prepared to show a flexibility that they have so far lacked in these debates.

One of the very wise contributions to this discussion was made by my noble friend Lord Rowlands. In a distinguished career in another place, he was a sceptic in the proper sense of the word and had to be convinced about the case for Britain’s membership of the European Union and the pooling of sovereignty that it involved. However, as he said, we are setting up a far too overcomplicated process of accountability with the plethora of referendums proposed. What I find difficult about this is why the presumed lack of legitimacy of the European Union is seen as being so peculiar and special compared with the huge problems that our democracy as a whole faces in today’s world.

I looked at the Eurobarometer opinion poll for October 2010—that poll asks people questions about trust on a regular basis—and found that a very depressing 64 per cent of the British people do not trust the European Union. That is why we accept that there is a legitimacy problem. However, it seems that 66 per cent do not trust the British Parliament, 67 per cent do not trust the UK Government and 82 per cent do not trust political parties in Britain, so what is so peculiar about the lack of legitimacy of the European Union compared with the rest of our democracy?

It is argued either that confidence in Europe has been destroyed by so-called competence creep or that we face lots of threats to our sovereignty in future. As my noble friend Lord Triesman has said many times, if you are in government and do not want to do something, you just say no. The noble Lord, Lord Lamont, made a very interesting speech in which he pointed out that there is a very distinctive issue about the irreversible nature of the surrenders of sovereignty that take place in the European Union and the problems of a Union that moves by a process of intergovernmental compromise. Many of us who are pro-Europeans have been worried about this issue for many years and have wanted to think of ways of closing that democratic deficit. Certainly, we should have a debate about the role of the European Parliament, which plays a much bigger role now than it did 15 years ago, largely because of the treaties that the noble Baroness, Lady Symons, when she was leading for the Government, put through this House. However, I presume that the noble Lord, Lord Lamont, would not regard those treaties or the strengthening of the European Parliament as being good things. I agree with him that we have to think of ways of addressing that democratic deficit, but I suspect that he is not prepared to accept these kinds of remedies.

There is a problem of legitimacy vis-à-vis Europe that is particular to Britain, because over decades we have failed to establish a cross-party consensus about our membership of the European Union and failed to argue the case for British membership with a united voice. Amendment 31—which we shall discuss later; the noble Lord, Lord Radice, moved it in Committee—will try to address that problem in part. However, there is another explanation of why the EU has run into problems. The explanation is, as I said at Second Reading, that there are two ways of looking at legitimacy. One is to think about it in terms of how decisions are approved, but the other is to think about whether the institution is effective at doing the job that it is supposed to do. One of the problems with Europe is that it is not as effective as it could be, and this causes public disillusion.

I looked at a poll carried out last November about attitudes to the European Union. If you ask a general question—do people think that we should co-operate more or do they want us to loosen the links with the European Union?—only 21 per cent want us to co-operate more, but 49 per cent would have us loosen the links. However, when you ask people questions about specific areas such as climate change, attacking terrorism and crime, regulating banks, minimum rights for workers, or minimum levels of tax on business, a strong majority in Britain want the European Union to do more. I therefore argue that it is not a question just of how decisions are taken, but of how we make Europe effective. That is what we ought to focus on in our debate.

Finally, in support of the amendment, perhaps I may say that we have had a good and long debate, but one of the depressing things about it is a tendency to be historical, to look back to the past, to take trips down memory lane, and to look at the debates in the 1950s, 1960s and 1970s. I am very prone to that tendency, and this is therefore a self-criticism. When we think about Europe, we really should remember that the world of which the European Union is part is transforming itself at enormous speed. Since the Maastricht treaty, communism has fallen and that aspect of the world has changed enormously, the Arab world is in revolution, China has risen enormously as a power, and the weight of the European Union in the world is decreasing at a rapid rate. Our weight in the world as the United Kingdom is decreasing at an even more rapid rate.

Yet, in response to these extraordinary developments of the past 20 years, this Government have come forward with a policy on Europe that is essentially, “Thus far and no further”. In other words, “We have no imagination about how the European Union might develop. We are saying there should be no change without a referendum”. This is a depressing attitude that destroys the flexibility that a British Government should have to respond to an unpredictable and unknowable future. I urge the House to support these amendments because they confine referendums to the really big issues on which the people ought to decide.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, we have had a rather amazing debate in which I found all kinds of echoes of agreement that did not seem to be there in the darker days of May when your Lordships first went into Committee to examine the details of the Bill. We have come a long way since then and there seems to be a greater appreciation—not necessarily combined with agreement—about some of the issues that the Bill seeks to address.

We have of course been down memory lane with the various comments by noble Lords who have been extremely experienced in European affairs over almost half a century. Edmund Burke featured again, although I must say that the more I think about that great man, the more I hear in my mind his remark, “Show me the man; show me the things”. In other words, he was interested in the situation as it actually was, rather than in the high theory of how it ought to be. I did not agree with the final remarks of the noble Lord, Lord Liddle. He should not be depressed because the possibilities for our leading in European reform are much greater than he accepts, although he is an expert in these matters. He is entirely right to say that the landscape has changed and that we are dealing with an entirely new situation.

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In all honesty I do not really see the exchange rate and market uncertainty as an issue, given that we have a floating rate and that we would be proposing, if this ever happened, to move from a floating rate to a fixed rate. Even if it were known what the terms were, it could be within a range. I always listen to the noble Lord, Lord Kerr, but this could be done either way around. However, as I have said, the one thing that should not be on the ballot paper in the referendum, if there were ever to be one, is the actual exchange rate.

[Lord Liddle]

My Lords, from the Opposition’s point of view, exotic as it may seem that we should at this moment be debating the circumstances in which we might join the euro, this Bill is intended to bind future Parliaments for a long time. Indeed, that is one of our major difficulties with it, which is why we will be moving the sunset amendments on Wednesday. However, given that it is a Bill that is intended to bind Parliaments for the future, it is important to get this right. We have listened to our colleague the noble Lord, Lord Kerr, at great length on this subject and are persuaded that he is right. The Opposition will therefore be supporting his amendment.

[Lord Wallace of Saltaire]

My Lords, no Parliament can bind its successors. That is one of the principles of parliamentary sovereignty. I am grateful to the noble Lord, Lord Kerr of Kinlochard, for following up the previous Committee discussion with his letter of 19 May, in which he outlined his concerns in more detail: namely, that Clause 6(5)(e) of the Bill might be legally defective. We have therefore taken careful legal advice. The Government have now been able to reply to that letter and a copy has been sent to those of your Lordships who participated in the Committee debates. A copy of the letter has also been deposited in the Library of the House. On the basis of that legal advice, I hope to reassure your Lordships that we do not judge there to be a risk of more than one referendum on the euro being required and that the provision does what we and noble Lords on all sides of your Lordships’ House intend it to do.

Unlike other member states, the UK is not under an obligation to adopt the euro. Protocol 15 of the consolidated treaty begins with the clear statement that the United Kingdom,

“shall not be obliged or committed to adopt the euro without a separate decision to do so by its government and Parliament”.

That protocol, which needs to be read alongside Article 140 in the British case, sets out in detail the steps that must be satisfied before the UK could adopt the euro. Paragraph 9 of the protocol states that after the UK has notified,

“the Council … of its intention to adopt the euro”,

as its currency,

“decisions in accordance with the procedure laid down in Article 140(1) and (2)”,

of the TFEU must first be taken, to which protocol 13 is also relevant.

The process starts in practice by examining convergence criteria as set out in Article 140(2). That is bound to happen before the UK formally notifies, even if it is not part of the formal procedure. It might be helpful to consider what needs to be done following notification of our intention to join the euro. It is not a matter of negotiating terms of entry but of economic criteria being satisfied in terms of the treaty. The final step of the process is to take a decision in accordance with the procedure laid down in Article 140(3) of the TFEU. Paragraph 9(c) of Protocol 15 commits the Council,

“in accordance with the procedure laid down in Article 140(3)”,

to “take all other necessary” measures to enable the UK “to adopt the euro”.

Clause 6(5)(e) is designed to catch this final step in the process, thus ensuring that as much of the complex detail as possible is available to Parliament and the public in deciding whether to join, while giving the Government of the day the flexibility to set the timetable for when to seek approval from Parliament and the British people. If I may say so, the noble Lord, Lord Kerr, might almost be old enough to remember the first applications for Britain to join what was then the European Economic Community. Before formal application was made, a number of informal negotiations established the terms for potential negotiation. We envisage something of that in this situation. It will allow the Government to seek a referendum when sufficient detail is known about the circumstances and conditions of entry, but will allow the UK to seek approval from the people before the exact point at which the exchange rate between the euro and the pound would be set. We all recognise that the exact exchange rate will have to be set at the end of the process to avoid market turmoil and speculation against the rates declared.

In contrast, the amendment proposed by the noble Lord would require the referendum to be held and approval given before the UK could notify the EU that it intended to adopt the euro. The Bill nevertheless allows for matters to be arranged in this way if the Government so wished, again providing the degree of flexibility which noble Lords, including the noble Lord, Lord Kerr, have so often called for on this Bill. It would be open to the Government of the day to undertake negotiations with the EU in line with paragraph 9 of the protocol before the UK issued its notification. This would allow draft decisions under Article 140(3) on the rate at which the euro would be substituted for sterling and other measures necessary for its introduction to be prepared—with perhaps a range of rates being negotiated—before notifying our final intention to join the euro.

On that basis, I do not consider that the Bill would lead to what we all view as an unwelcome situation in which two referendums would have to be held on the euro: the first on the UK notifying that it wished to join; the second in a rushed weekend on determining the specific question of the exact rate at which the euro is to be exchanged for the pound. Instead, it is possible under the Bill for the Government to submit the question of adopting the euro to a single referendum.