European Union Referendum Bill

Lord Liddle Excerpts

Monday 23rd November 2015 Lords Chamber

[Lord Liddle (Lab)]

I will make two quick points in support of the amendment in the name of the noble Lord, Lord Kerr. The speech of the noble Lord, Lord Forsyth, was rhetorically brilliant, as his contributions in this House so often are. However, his brilliance displayed a weakness on the part of those who want to leave the EU: they are frightened of the argument about what the alternatives to membership really are. That is why he is so reluctant to support the amendment.

There are two points which have not been made in this debate about the wrong assumption, made by many people who favour leaving the EU, that the UK would be able to retain most of the advantages of EU membership without actually being a member of it. That is what one hears from UKIP and the leave campaign. I question this on two grounds. The first ground is the politics of us voting to leave. In the Prime Minister’s renegotiation, which I want to succeed, many member states will make concessions to Britain that they do not actually want but make because they want to keep Britain in the EU. The politics of this is that there will be a great deal of bitterness if they have gone a mile to help the UK and we then vote to leave.

What is more, there is a significant—20% to 30%—anti-European element in the politics of many EU countries today. The last thing in the world that the leaders of other EU countries are going to want to see is Britain able to negotiate a good deal from being out, because that will just strengthen the voices of the right and left populists in their own countries who are arguing to get out of the EU. So the politics will be extremely difficult for us if we vote to leave.

My second point is about free trade. I agree with all the arguments that our bargaining position is not as strong as is often claimed. However, a lot of this debate ignores the modern facts of free trade. It is not about tariffs and access, as it used to be. It is about sharing the same rules as the people with whom you are trading. That is why most banks in the City of London want to remain in the EU: if they do not share the rulebook with people on the continent, they will not be able to trade in euro business. I do not know how big an element of their business that is, but it is certainly substantial. A friend of mine in Brussels told me what happened in the recent fracas about Volkswagen. The initial proposals to deal with the problem of diesel engines, which the French and Germans had cooked up together, would actually have meant that half of Ford engines could not have been exported to the continent because the British methods of production would not have been compliant. It was only because we were in the room and making the arguments that we could do a deal with our partners to make sure that the rules would not disadvantage British-based manufacturing.

So it is about rules and, if we want to trade with the EU, either we have got to stick with their rules and all the talk about repealing regulations is complete nonsense, or we abandon the rules and we do not get the trade. That fundamental point is why the British public need to have it objectively explained what the consequences of leaving the EU would be, and what the nature of our future relationship with the EU would be.

[Lord Willoughby de Broke]

I pick up the noble Lord, Lord Liddle, for saying that to export to the EU we would have to meet the rules it imposed. Of course we would. It is the same position as America, India, Australia, New Zealand, Brazil or any other country that is not in the EU—or, for that matter, Switzerland, which manages to export more per head to the EU than we do and it is not in the EU. It is not a convincing argument at all. We already meet the rules now with our motor car exports. Why should that change? If change is required we will, of course, have to change—and so will other manufacturers who are outside the EU.

[Lord Liddle]

I am glad that the noble Lord, Lord Willoughby de Broke, defines British sovereignty as simply having to accept whatever changes in the rules the EU makes without our participation.

[Lord Tugendhat (Con)]

My Lords, I do not normally find myself in close agreement with the noble Lord, Lord Stoddart of Swindon, but on this occasion what he said was absolutely correct. If the British people speak in a referendum, Parliament must follow and the United Kingdom will inevitably, in the circumstances which he envisaged, be leaving the European Union. I would very much regret that: it would be contrary to the interests of this country. However, were the electorate to make that decision I would hope, as would others who campaign for Britain to stay in, that we would negotiate the most favourable deal possible with the European Union. Our loyalty to this country would be unaffected by the result and would remain a primary consideration.

However, it is absurd to suppose that we will not enter into a period of very considerable uncertainty. Anybody who knows anything at all—and noble Lords know a great deal—knows that the worst possible thing for an economy and investment is uncertainty. It may be that we would negotiate a favourable agreement in the end, but there would be a period when a great deal would be unknown and people would be very reluctant to invest. I hesitate to talk about the Scottish referendum in the presence of my noble friend Lord Forsyth, but there was evidence in Scotland, as there was in Canada on an earlier occasion, that a referendum casts a shadow ahead of it which deters investment. If there was a period of considerable uncertainty at the end of the referendum before the outcome was known, the economy would suffer, even if one was optimistic about the outcome.