EU: United Kingdom
Debate between Lord Liddle and Lord Pearson of Rannoch(12 years, 1 month ago)
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The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, we have time. Perhaps we should hear the noble Lord, Lord Liddle, and then the noble Lord, Lord Pearson?
EU: Recent Developments
Debate between Lord Liddle and Lord Pearson of Rannoch(12 years, 10 months ago)
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Lord Liddle
My Lords, this has been a mammoth debate and a serious one, without any partisanship. In that spirit, I congratulate the noble Lord, Lord Howell, on his efforts to give a positive view of the Government’s European policy. I also thank my noble and learned friend Lord Davidson of Glen Clova for his analysis of that policy’s weaknesses. We have heard many excellent contributions and it is a privilege to listen to noble Lords with their vast experience as former commissioners, former diplomats and even as former Chancellors of the Exchequer, with their different perspectives from my own.
In particular, I pay tribute to the noble Lords who spoke up in favour of European unity. The noble Lord, Lord Bates, made an excellent argument for Europe. The noble Earl, Lord Sandwich, on the Cross Benches talked about his belief in a Europe of the peoples. From my own Benches, the noble Lord, Lord Grenfell, spoke about a federal Europe and the noble Lord, Lord Radice, said that it was not time to give up on the euro. The noble Lord, Lord Judd, talked about a social Europe, as did the noble Lords, Lord Monks and Lord Lea. These were inspiring contributions. Obviously, I cannot commit the Labour Party to every detail of what they said; none the less this is the case for Europe that needs to be made.
There have been two big themes in this debate: first, the trials of the eurozone; and, secondly, Britain’s position in Europe. On the trials of the eurozone, I think we have heard rather too much of a flavour from the Benches opposite of how the euro is doomed, and too much of the view that it is impossible to restore competitiveness without the recreation of depreciating national currencies. An internal devaluation is, of course, painful but it can be done. You only have to look at what Germany has achieved from the mid-1990s until the middle of the previous decade to know that adjustments in competitiveness can be made within a fixed currency arrangement. Therefore, that can be done, but obviously I would like to see a stronger plan for growth. Like the IMF, I would like to see countries that have room for manoeuvre to expand their economies taking advantage of it. We would like to see—as the noble Lord, Lord Newby, proposed—a greater emphasis on the single market and trade to create more job opportunities. However, we also agree with the noble Lord, Lord Giddens, that that has to be done in the context of a much wider reform strategy to which we all need to give much deeper thought.
The noble Lord, Lord Tugendhat, made an excellent speech in which he expressed fears about German policy. I did not entirely agree with that aspect. I read an excellent speech that Helmut Schmidt made to the SPD congress in December in which, at the age of 93, he spoke to 2,000 people. It was a most inspiring speech about Germany’s role in Europe which I recommend to all Members of the House. Like the noble Lord, Lord Monks, my own view is that we should never underestimate the political commitment to make the euro succeed. I suspect that the new Franco-German arrangements that come out of the French elections in May will result in a better balanced policy.
However, on the more significant point of Britain’s position in Europe, we on this side understand the inability of the noble Lords, Lord Kerr and Lord Hannay, to understand what the Government did in December, and why they did it. The noble Lord, Lord Howell, tried to explain that to us but I thought there was a fundamental contradiction in what he said between our objection to a fiscal union, which is a matter of principle, and the question of whether we would have signed up if certain safeguards had been met. However, I think that looking ahead is far more important. If we look ahead, there is a choice to be made for Britain between the view expressed by the noble Lord, Lord Lamont, that 20 years ago we made the choice not to be in the euro and we have to live with it, and the view expressed by my noble friend Lord Mandelson that in fact to make the euro work—which is going to happen—there is going to be a euro mark 2, which will have deep implications for the United Kingdom and its policies, and that we have to think through what those implications are. The noble Lord, Lord Brittan, made an excellent point in saying that he was not sure how deep integration had to go in fiscal terms to make the euro work. We need to think much more about these issues in our future discussions and debates.
I also agree with the noble Lord, Lord Cormack, that what the coalition seems to lack is a bigger-picture view of Britain’s place in Europe and the world. The Churchill view on this at the end of the Second World War was of three circles: the maintenance of the British Empire, with the US relationship and Europe overlapping it, half a century later we know that the empire has become a Commonwealth. We know that there are a lot of good things about the Commonwealth but that it is not a trade bloc or a guarantee of economic benefits. We had a painful lesson on that with the Indian air force contract in the past few weeks.
As for our relationship with the United States, President Obama flattered us when he came to Westminster last year and talked about the special relationship. That was an easy compliment but the reality is rather different. It is of an America that is increasingly inward-focused, Pacific-facing, and cutting back on global engagement, and a Britain that, however much we may will the ends, can no longer financially bear the means of that kind of global role.
That leaves us with the third of Churchill’s three circles: Europe. To rework inelegantly Dean Acheson’s famous quote from the early 1960s, Great Britain exchanged an empire for a Commonwealth half a century ago, its relationship with America is no longer so special, but it has yet to find its confident European role. The idea of the European role has always been anathema to the anti-Europeans in this House such as the noble Lords, Lord Pearson and Lord Willoughby de Broke, but what I find worrying is the half-heartedness on the Benches opposite about the European commitment. It is the people who say, “Yes, we are in favour of political—”.
Lord Pearson of Rannoch
My Lords, does the noble Lord accept that we Eurosceptics are not anti-European; we are merely against the ill-fated project of European integration?
EU: Financial Stability and Economic Growth
Debate between Lord Liddle and Lord Pearson of Rannoch(13 years, 1 month ago)
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Lord Liddle
My Lords, as many noble Lords have said, the noble Lord, Lord Newby, was very timely in choosing the topic for debate today. I agreed with virtually everything he said in his speech, although for the sake of the record I ought to say that I disagreed with his description of the previous Labour Government as an awkward partner in Europe. He should go to Brussels and ask what people today think of the coalition. We should remember the influence the previous Labour Government had over the Lisbon strategy, European defence and climate change policy. There were three new treaties. We greatly increased British influence in Europe. Our problem was that we did not make a strong enough case for Europe in Britain. This is what we now have to do.
The central issue in the debate is how Britain should keep its place among the adults, as my noble friend Lord Harrison said, at the European dining table. Some people think that Europe is irrelevant. The noble Baroness, Lady Noakes, is among those who think that the single market is relatively unimportant. For the noble Lord, Lord Pearson of Rannoch, it is a complete waste of time. I will give one example of something good that the Government did this week in my home town of Carlisle. They gave a grant to Pirelli tyres, which employs 1,500 people in Carlisle, to develop innovation in new tyres. Why is Pirelli in Carlisle? Because it gives access to the European single market. People such as the noble Lord, Lord Pearson of Rannoch, would destroy those jobs.
Lord Liddle
I am not giving way. The single market is a difficult bargain. The Government say that they want to promote it, but when a lot of people are worried about its social effects, how will they be effective in promoting it at the same time as they are trying to withdraw the United Kingdom from our social and employment obligations? This is a fundamental issue for the coalition and a fundamental contradiction in its policy.
I agree with right reverend Prelate the Bishop of Bath and Wells and with other noble Lords who said that the single market in itself is not enough. We need a European plan for growth. It is not difficult to put that together. Hundreds of millions of pounds lie unused in structural funds, many in the United Kingdom. What will the Minister do about that? The European Investment Bank already does far more to support small businesses in Britain than anything the British Government do. We could expand that role very considerably.
Several noble Lords have said they think devaluation is needed as part of growth. May I draw their attention to an article in this morning’s Financial Times? Its respected economics editor, Mr Chris Giles, points to some striking figures, comparing the net trade contribution to GDP since 2008 for the UK and Spain, both hit badly by the banking crisis. For the UK, with 30 per cent devaluation, trade has improved our GDP by 2.5 per cent; for Spain, stuck in the eurozone single currency, its trade contribution to GDP has improved by 6.3 per cent. Devaluation is not the cure.
I said that this debate was timely and serious. It really is serious, because as the eurozone hovers on the brink of an existential crisis, we should recall the words of the German Chancellor Angela Merkel, that if the euro fails, Europe fails. For Germany, that would be unthinkable. Such an outcome should be unthinkable for the United Kingdom, too.
Let us recall that the euro was not conceived as a foolish political venture that took priority over the single market, as some noble Lords appear to think. Instead, it was the only practical means to sustain the single market once capital movements were liberalised under the 1992 programme that was so strongly advocated by the Government of the noble Baroness, Lady Thatcher. Free capital movement made it impossible to continue with the system of managed exchange rates under the ERM. At the end of the 1980s, Europe faced a simple choice between reverting to free-floating exchange rates, which risked competitive devaluations and a return to protectionism—destroying the single market in its wake—or going for a single currency. Europe chose the single currency.
The noble Lord, Lord Teverson, mentioned Bretton Woods, where Keynes’s essential argument was that free trade and open markets are far more important to economic dynamism than flexible exchange rates; and it is very difficult to have both at the same time. That is why the present situation is such a threat to Britain’s vital interests. Let us not kid ourselves: if the euro fails, we will not see a return to the status quo ante. I do not agree on this point with the argument of the noble Lord, Lord Bilimoria, for whom I have the most wonderful respect and admiration. The likelihood is that if the euro broke up, the single market would break up as well, in a new Europe of competing currencies. Member states would take protectionist measures against each other to prevent what they see as unfair competition.
For Britain, which conducts so much of its trade and which has so much investment dependant on the single market, this would truly be an economic catastrophe. It would not be just an economic catastrophe. The collapse of the euro would, as Mrs Merkel said, put the European Union itself at risk. I believe that the single market is the foundation stone of the European Union and, as I have argued, the euro is its essential cement. Pull that away and in place of the remarkable unity that we have seen in Europe since the Second World War, we retreat to a Europe of fractious nation states.
This is what it would be: we in Europe decide to become Westphalian pygmies at the moment that Brazil, India and China become globalisation giants. What hope would there be for our ability to promote the values that we share, with Europe and not with the United States, to back international development, reduce world poverty, tackle climate change, advance democracy and human rights and help to solve the problem of failing states? What would happen then in that disastrous situation to the ideals of the founding fathers of the European Union who fought for a Europe whole and free, at peace in a co-operative partnership of nations where elements of sovereignty were pooled in the cause of democracy, freedom, prosperity and social justice?
Britain will be an enormous loser if the European project founders. It must not happen. We must strain every sinew as a Government and as a Parliament to avoid that terrible catastrophe. In doing so, I say to the noble Lord, Lord Pearson of Rannoch, that we are not traitors to our national interests but are giving a practical expression to modern patriotism.
European Union Bill
Debate between Lord Liddle and Lord Pearson of Rannoch(13 years, 5 months ago)
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Lord Liddle
Yes, I heard that John Major had said that. It is a great concern, which will grow as a result of this policy.
Lord Pearson of Rannoch
The noble Lord was telling the House how frightful it would be if the United Kingdom were to leave the European Union. I do not know whether he has seen the latest state of public opinion in this country, which is very much at odds with your Lordships’ House. If the noble Lord cares to read a newspaper—which may not be his regular reading—in the shape of today’s Daily Mail, he will see that the public now would vote by 50 per cent to 33 per cent to leave the European Union if a referendum were held tomorrow. Your Lordships are even more out of touch with the British people of your own generation because among the over 60s the percentages are 61 per cent to leave and only 29 per cent to stay in. That is a poll carried out by YouGov@Cambridge for the political news website Dods PoliticsHome, so it is quite respectable. The noble Lord and your Lordships who do not like the Bill are completely out of touch with British public opinion.
Lord Liddle
That is because the argument for British membership of the Union has not been made forcefully. That is why we need to do that in future. However, we are not going to do that as a result of this Bill. That is where noble Lords opposite are wrong.
All our political institutions suffer from major distrust. If, again, you consider the polling evidence on trust in Parliament or trust in the Government, you will find that there is as much mistrust in the British Government, the British Parliament and the British political parties as there is in the European Union. Of course, one does not underestimate the degree of scepticism among the public, but it is ironic that we are discussing the question of Europe today when the Murdoch press is in such difficulty in its relations with the British people. I do not know how many noble Lords in this House have received mail and been approached by members of the public because of the amendments that we carried when the Bill went through the House before, but I suspect very few. The real public anger today is directed at the media—particularly at the Murdoch press and at News International, which more than other organisation has used its position to obstruct positive British policy in the European Union. By going along with this Bill we are sacrificing representative democracy and Britain’s ability to pursue an effective policy in Europe.
I do not think, as I say, that is why the proposers are putting this Bill forward. I think that the Liberal Democrats are rather embarrassed by this piece of legislation, despite what the noble Lord, Lord Wallace, has told us.
It may upset the noble Lord, Lord Pearson of Rannoch, greatly but I have a lot of friends in Brussels. One of them passed on to me a letter that Nick Clegg, the Deputy Prime Minister, had sent to Andrew Duff MEP about this piece of legislation. Towards the end, it says:
“In addition, any referendum to ratify a Treaty change covered by the EU Bill’s referendum lock must first be preceded by an Act of Parliament in order to provide Parliamentary approval and to make provisions for the holding of a referendum”.
We all agree about the Act of Parliament. He goes on to say:
“This would, for example, enable a future Parliament to decide that the provisions in the EU Bill should not apply by amending the Treaty change Bill to that effect”.
The only way I can read that statement is that the Deputy Prime Minister believes that the provisions of what would become the European Union Act 2011 would not apply if, in future legislation ratifying a European decision or a European treaty, a clause was inserted that the question was not constitutionally significant and therefore did not justify a referendum. I would very much like to know whether the Minister agrees with that interpretation of the Deputy Prime Minister’s letter; whether he agrees and accepts that in any future Act ratifying an EU decision a Minister could insert a clause rather along the lines of our amendment; and if so, why the Government refuse so adamantly to accept this sensible amendment? I beg to move.
European Union Bill
Debate between Lord Liddle and Lord Pearson of Rannoch(13 years, 7 months ago)
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Lord Pearson of Rannoch
The noble Lord seems to be saying that referendums should be held only on really important issues, such as whether we join the euro. Would he therefore agree that we should hold a referendum on something even more important: whether we stay in the European Union at all?
Lord Liddle
We all know the noble Lord’s views on this matter. The experience of the 1975 referendum was that it did not resolve the issue of whether we stayed in the European Union. We won a yes vote, but it did not resolve the fundamental issue. However, on issues such as the euro, there is a fundamental constitutional principle at stake, and it is right to have a referendum, so there are circumstances in which referenda are the right thing to do.
In the light of the AV referendum result, which I regard as the betrayal of the Liberal Democrats in the AV referendum by their partners, when I looked at the coalition agreement I was surprised by what it said. We are now told that the Liberal Democrats are going to adopt a much more muscular, robust relationship with their coalition partners. Well, on this Bill, let us have a look at what the coalition agreement says. It says:
“We will amend the 1972 European Communities Act so that any proposed future treaty that transferred areas of power, or competences, would be subject to a referendum on that treaty”.
In other words, you would have a referendum on a big treaty, but the agreement continues:
“We will amend the 1972 European Communities Act so that the use of any passerelle would require primary legislation”.
Yet every page of this Bill fully and directly contradicts that coalition agreement where the agreement says that passerelles and other matters should be subject to referenda.
European Union Bill
Debate between Lord Liddle and Lord Pearson of Rannoch
Lord Liddle
The noble Baroness has made a helpful point. My fear in all of this is that what we are doing through adopting this very restrictive position is putting British Ministers in a position where they would want to agree things that they regard as being good for Britain and they are going to have to say no because they believe that the referendum lock would apply. That is not very sensible where the issues are not of great concern to the public, where there is not real competence creep and where the benefits of change could be quite considerable.
Lord Pearson of Rannoch
My Lords, is that not one of the disadvantages of this amendment? It does nothing to prevent competence creep. If the noble Lord does not agree with that, would he care to comment on the remarks made by the noble Lord, Lord Waddington, earlier this evening and indeed by myself about the way the European Court of Justice has permitted and supported the abuse of Article 308 of the treaty of Nice, as it then was, which allowed Brussels to get involved only,
“in the course of the operation of the common market”?
That was the wording in the original treaty, which lasted right through until Lisbon when it was strengthened in the Court’s favour.
The noble Lord, Lord Waddington, mentioned aid to Outer Mongolia as being justified by the Court in this matter. There was urban renewal in Northern Ireland, the co-ordination of our social security systems—quite a big one that—the prevention and aftercare of terrorism, establishing the EU’s agency for fundamental rights and a £235 million “information campaign”, which to those of us who understand these things is of course propaganda.
The European Court has been able to abuse the treaties in these ways and there are many other clauses such as flexibility clauses which the European Union has abused. Indeed, in 1996 when the use of Article 308 was taken to the Luxembourg Court, in its judgment the Court said that the point of this article was to pursue the interests of the Union. In its judgment it did not mention the first words of the clause:
“If in the course of the operation of the common market”.
I really do not see how this amendment is going to do anything to stand up to that sort of behaviour. There is no appeal against the judgments of this so-called Court, the quality of whose judges, I repeat and I am not trying to be amusing, is extremely low and unacceptable. I really do not see why we should have anything in this Bill which enforces the powers of this particular creation. As the noble Lord said when he introduced his remarks, those of us of a Eurosceptic bent would rather they had nothing to do with us or our law at all.
European Union Bill
Debate between Lord Liddle and Lord Pearson of Rannoch(13 years, 8 months ago)
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Lord Liddle
My Lords, we have had a long debate on a series of relatively small amendments designed to improve the Bill, but it has been a very interesting one. Three weeks ago, when we had our first day in Committee, I have to say that I felt a bit sorry for the noble Lord, Lord Howell. He cut a rather lonely figure, with no one on the Benches behind him coming to his defence. I thought that he was having difficulty persuading the House that the Bill before us is essentially as he described it: a pro-European measure. In the mean time, the Government have called in their reinforcements. We have heard speeches from the noble Lords, Lord Waddington, Lord Flight, Lord Risby and Lord Hamilton of Epsom, all defending the Government’s position. I wonder if the Minister feels any better as a result of the people who have come to his aid, because my reaction to what they said is that if they—the noble Lords, Lord Waddington, Lord Flight, Lord Risby and Lord Hamilton of Epsom—truly represent balance and the moderate centre on these issues, then God help us and particularly God help Britain in Europe. The only reason that they see their position as balanced is that this Bill essentially does not contain what they really wanted. What they really wanted was an in-or-out referendum on Britain’s European membership and the repatriation of powers. I hope that the scales are beginning to fall from the eyes of some of their Lib Dem coalition partners about what really lies behind the motive for this piece of legislation. It is to appease anti-Europeanism—I was going to say Euroscepticism, but it is not scepticism, it is anti-Europeanism in this country.
Lord Pearson of Rannoch
My Lords, does the noble Lord accept that those of us who are described as Eurosceptic are not anti-European? We are against the project of European integration. We love the real Europe, the Europe of separate nations each with its glorious and distinctive past and future, if it could get out of this ill-founded and unfortunate project.
Lord Liddle
I certainly do not want to contradict what the noble Lord has said, but he ought to remember that, loving Europe’s history as I do, I know that it is also a history of bloody conflict, of massacre and genocide, which the European Union has played a major part in bringing to an end. I listened to the Minister’s supporters speaking from his Benches, and it seems that they all think that the history of the European Union is essentially one of betrayal. So when Winston Churchill called for Europe to unite, that was a betrayal, and when Harold Macmillan decided to take us into the Common Market, that was a betrayal.
European Union Bill
Debate between Lord Liddle and Lord Pearson of Rannoch(13 years, 8 months ago)
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Lord Pearson of Rannoch
My Lords, I wonder whether I could press the noble Lord to give an answer to a question that I put to other noble Lords but which they did not answer. Why does he think that the European Union, Brussels and so on, will stay within the legal confines of the treaty? Of course, Article 48(6) says that it shall not be used to increase the competences conferred on the Union in the treaties. The two examples that I gave, to which I would like the noble Lord to reply, are the European Union’s abuse of what was Article 308, which is now Article 352. I did not weary your Lordships with all the examples of where that abuse was manifest, but I shall give the reference if anybody wants to find it. In future, students of these matters may want to consult Hansard for 18 June 2008 at col. 1074. That is a clear example of where a clause designed to allow the Council to take action,
“in the course of the operation of the Common Market”,
was used to do all sorts of other things. When it came before the Luxembourg Court for judgment in 1996, those words were simply ignored by the Court. I gave noble Lords the example of Article 308 in the past. I also give noble Lords the example of Article 122, which was used in the interregnum between one Government and another. Can the noble Lord answer those points and set your Lordships’ mind at rest that Article 48(6) will be followed, unlike the way in which those articles—and there are more flexibility clauses—have not been obeyed in the past?
Lord Liddle
With the greatest respect, I think that the noble Lord is confusing two things. I am looking in the direction of the noble Lord, Lord Kerr. I think that Article 48(6) deals with cases where there is a clear competence—for instance, in the case that I was talking about of the single market in financial services and in the previous case about the euro, the establishment of economic and monetary union and of a single currency. I think that the noble Lord is talking about the general clauses which are now subject, under the Lisbon treaty, to considerable constraints. I will look into that and perhaps we can have a discussion.
European Union Bill
Debate between Lord Liddle and Lord Pearson of Rannoch
Lord Liddle
My Lords, I should open with a rare act of deference to the noble Lord, Lord Pearson of Rannoch: I worked for three years in the European Commission, and for good measure I have a wife who works for the BBC, and I am immensely proud of both. It is humbling and a bit daunting to make your debut from the opposition Front Bench on an issue and in a Chamber where so many noble Lords from all sides of the House have made such a distinguished contribution to the cause of Britain in Europe. Regrettably, the same cannot be said of the Bill before us.
We have had, as many noble Lords have said, some wonderful contributions in this debate, including that from the noble and learned Lord, Lord Howe of Aberavon—one of my pro-European heroes—who in a memorable speech destroyed the logic of the referendum locks which are central to the Bill. The noble Baroness, Lady Williams of Crosby—who probably sacrificed her chances of becoming Labour’s first woman leader and Prime Minister because of her commitment to Europe—wondered whether it would ever be possible to find the key to any of those locks. That was a wonderful speech as well, as was the speech by the noble Lord, Lord Brittan of Spennithorne, who in his 10 years as a European Commissioner built on the achievement of the Single European Act by the noble and learned Lord, Lord Howe, and drove through the single market and negotiated the Uruguay round. I thought that the end of his speech, where he said that he could find nothing in the Bill to commend to your Lordships, was a very clear and devastating statement for the Government.
There have also been excellent speeches from the noble Lords, Lord Kerr and Lord Hannay, who served as our permanent representatives in Brussels. I think that the noble Lord, Lord Kerr, used to be described in the Foreign Office as the man with the golden pen. Tonight, in a really wonderful speech, he proved that he also has a golden tongue. We have also had the benefit of a tremendously logical and crystal clear exposure of the Bill from the noble Lord, Lord Williamson of Horton, who, as a former secretary-general of the European Commission, served first and foremost the cause of Europe and, in doing so, the cause of Britain. Whatever the noble Lord, Lord Pearson of Rannoch, may think, I think, and we think, that it is possible to do both.
We have had many good speeches but I cannot mention them all. I would, however, like to mention some of the speeches from my own side—from our former Commissioners, the noble Lords, Lord Clinton-Davis and Lord Richard. The speech of the noble Lord, Lord Richard, was particularly excellent and brilliant.
I did a count as we were going through the debate. We will have 37 speakers in all, 33 of them from the Back Benches. There has been one loyal Conservative supporter, the noble Lord, Lord Sheikh, from the Conservative Back Benches. There were also four anti-European speeches which basically criticised the Bill because it is too little, too late. The noble Lord, Lord Kakkar, made a speech which I think was as much about how the European processes of legislation are inadequate as it was about the content of the Bill.
There were traces of support in three of the Liberal Democrat speeches—that is how I would assess the position. The noble Baroness, Lady Brinton, was perhaps the most enthusiastic in her support, whereas the support of the noble Baroness, Lady Nicholson, was perhaps somewhat qualified. I think that the noble Baroness, Lady Falkner, was hedging her bets as to which way the Liberal Democrats will eventually go. However, a total of 24 of the speeches, from all sides of the House, were critical of the Bill in some way. So I think that Ministers will have to go away from the debate today and think, “Never before can a government Bill on Europe have been so comprehensively rubbished by those with the most claim to understand its purpose and content”.
I do not want to be unfair to the noble Lord, Lord Howell, for whom I have genuine respect. On Europe, I see him as the epitome of the cautious pragmatist. I am always conscious of the need not to get too carried away by my own Euro-enthusiasm, so I rather warm to his pragmatism. The noble Lord is a Eurosceptic in the proper sense of the word. He is not someone for whom the misleading label of Eurosceptic is a cover for rabid anti-Europeanism, which this bad Bill was designed to propitiate, but a sceptic who is open to rational argument and persuasion. As this House’s scrutiny of this Bill proceeds, I trust that those qualities of the Minister will be allowed every opportunity to shine through by his political masters in the coalition because he will have some persuading to do. On this side of the House, we will do our best to help him.
The Government have one good point on which they attempt to build their whole case for this Bill. The EU has a serious legitimacy problem and not just in Britain. But so do our national politics, which the anti-Europeans never refer to. They have a serious legitimacy problem as well. Even accepting that the EU’s legitimacy problem is graver, it is by no means clear that the Bill’s remedies provide credible answers to the question or even that it has identified the right set of questions.
There are two schools of thought about how to address the problem of legitimacy. One is “output legitimacy”—that is, making the EU more effective so that citizens will better comprehend its purpose and its benefits. The other is “input legitimacy”—that is, improving the process of transparency and democratic accountability of European decision-making. Output legitimacy—a Europe of results, as the Commission President, Jose Manuel Barroso, once described it—has been a long-standing British goal. But to get a Europe of results requires a pragmatic attitude to the powers that the EU may need in a rapidly changing world to be effective and to achieve results. By no stretch of the imagination can that spirit of pragmatic flexibility which is necessary be on display in this Bill.
As my noble friend Lord Anderson of Swansea put it, Clause 4 puts a ball and chain around the British Government’s agreement to virtually every flexibility to improve procedures that the Lisbon treaty contains, particularly the passerelles and the simplified revision procedure. Its “significance clause” throws the whole process open to judicial review, which, in an extraordinary way, is something that the Government appear to welcome.
I thought that the key point was made by the noble Lord, Lord Williamson. There are already strict safeguards in place on the use of these flexibilities. Under the Lisbon treaty, passerelles and treaty amendments can be agreed only by the unanimous agreement of all member states, including Britain. Under our own law, which was passed in 2008, they have to be endorsed by positive resolution of both Houses of Parliament and, in the case of treaty change, by an Act of Parliament.
Given that these safeguards already exist, what is so fundamentally at fault in the status quo? Surely, in order to give the Ministers the flexibility they wish to make use of, we can amend this Bill to exclude some of the passerelles from its coverage to widen the test of significance, which would allow Ministers more room for manoeuvre when they seek the pragmatic need to improve decision-making.
Instead of widening flexibility, Clause 6 and Schedule 1 list a whole series of decisions that would automatically be the subject of many other referendums. As many noble Lords have pointed out, these go way beyond the fundamental constitutional issues, which in the judgment of your Lordships’ Select Committee on the Constitution should be where referendums are most appropriately used. Does it really make sense, for example, under Clause 6(5)(c) for the,
“participation by the United Kingdom in a European Public Prosecutor’s Office”,
to be subject to a referendum? Let us return to the real world because that is where we should be: a world of “Events, dear boy, events”, as Harold Macmillan famously put it.
Let me illustrate that with one example. In the negotiations on the Maastricht treaty in the early 1990s, the 15 member states of the European Union decided that justice and home affairs should become an EU competence, but set them apart in a separate pillar where the Commission would have a reduced role and unanimity in decision-making would apply. Within 15 years, in a Union which had then grown to 25 member states, there was unanimous agreement that in order to safeguard citizens against greatly increased threats of terrorism, cross-border crime, drugs and human trafficking, these decisions should be made subject to the normal Community method. The nation states of Europe decided this not because they are mad federalists who want a united states of Europe, but because they felt that in our porous world, this was absolutely essential for the protection and security of their citizens. We have to have the pragmatism to adjust in line with events. Yet this Bill restricts, hampers and cramps the pragmatic flexibility the European Union needs for the future.
What the Bill does offer is wonderful provisions enabling the British people to vote in a referendum on matters of supreme clarity and importance to them, such as the suspension of the emergency brake procedure and the substitution of the ordinary legislative procedure for the special legislative procedure. What the coalition does not seem to recognise—I am surprised about the Liberal Democrats here—is that qualified majority voting can be and often is in the British national interest. We had an example of that in the past few weeks when we accepted qualified majority voting on enhanced co-operation on patents to make it work. That was in our interests, but under this Bill, it could not have occurred.
I agree that the flexibility I am talking about has to be complemented by strengthening democracy and accountability in the way European decisions are taken. That is the input legitimacy side. For decades, because of its origins, Europe has suffered on this score because it was the child of diplomacy between what were very suspicious and sovereign member states. But thank God for that diplomacy, which has given us 60 years of unparalleled peace, prosperity, social justice and democracy, in contrast to the previous 60 years of great power rivalry, two world wars and unimaginable horrors. So we need to strengthen both the role of the European Parliament and the processes of accountability within member states.
The noble Baroness, Lady Nicholson, was right to say that Westminster politicians consistently underestimate the European Parliament. They tend to think of it as a talking shop, but now it has real power through the extension of co-decision. There is a point about this that is relevant to the Bill. British Eurosceptics dismiss the European Parliament, saying that its legitimacy is low, the turnout for its elections is low, few people understand the complexities of what they are voting for and media coverage is at best patchy. But these are all arguments that could equally be made about local government, and even more so about the possibility of multiple referenda on obscure EU issues with the likelihood, as my noble friend Lord Lea said, of 10 per cent to 15 per cent turnouts or less, which is the central feature of this Bill.
Lord Pearson of Rannoch
My Lords, we Eurosceptics do not say that the European Parliament lacks legitimacy just because it is a talking shop; we say it lacks democratic legitimacy because it cannot even propose legislation. All European legislation—now the majority of legislation in this country—is proposed in secret by the unelected Commission; it is negotiated in secret by the unelected COREPER; and it is decided in secret by the Council, now sometimes, as the noble Lord said, with the participation of that fraud of democracy, the European Parliament.
Lord Liddle
I am afraid the noble Lord is describing a situation which might, at a stretch, have described European decision-making 30 or 40 years ago but certainly does not describe the way in which co-decision works today.
In addition to the European Parliament, there is also a need for a stronger role for national Parliaments in European decision-making. The previous Government did a great deal to push this: the treaty of Lisbon introduced the yellow card procedure on subsidiarity; and the Act of 2008 strengthened the accountability of Ministers to Parliament for their conduct of European business. We should have a serious debate about how we can strengthen parliamentary accountability. The Commons could learn a lot from the excellent work of the European committee of your Lordships’ House under the chairmanship of the noble Lord, Lord Roper, the reports of which are listened to across the European Union.
What you get instead in this Bill is not a serious debate about these issues but an attempt to insert a sovereignty clause which has been described in the debate as irrelevant, dangerous, spurious, futile and as a grubby political compromise. What is the point of it? We look forward to the explanation of the noble Lord, Lord Wallace.
The Bill has failed to decide what it is all about; it is a fundamentally confused Bill. Is it about increasing parliamentary accountability, with the added possibility of occasional referenda on issues of fundamental constitutional importance; or is it about a powerless Parliament, with weak leadership, where the most trivial subjects are decided in multiple referenda? Is the latter really the coalition’s vision of the future direction of our democracy? It is reality TV democracy, as the noble Lord, Lord Howell, described it, as against representative democracy. If we can justify the approach to multiple referenda on Europe, why not referenda on everything from hanging to dangerous dogs? It is a fundamental constitutional point.
On the question of whether these referenda matter, the present Government clearly think that they do not because there is no likelihood, they say, that they will ever call a referendum in Parliament under their own legislation—they say that there will be no transfers of powers to Brussels in the present Parliament—so what we have here is not relevant to the present Parliament; rather, it is a crude attempt to bind future Parliaments. This is contrary to our normal constitutional practice, and that is why the Opposition will support a sunset clause in the Bill. We look forward to the unanimous support of the Liberal Democrats on this issue, which the noble Lord, Lord Taverne, promised us. I hope that that promise will be fulfilled.
The noble Lord, Lord Wallace, must know that if the Bill is accepted as permanent it would have a disastrous impact on Britain’s position in Europe. We would have no room for manoeuvre as the EU develops. We would see the gradual emergence of a two-tier Europe, a situation that the Foreign Office has fought for 30 years to prevent. This is in an age when a stronger European Union is needed.
Last week I was in Brazil, speaking at a conference on globalisation. A distinguished Brazilian ambassador told me something that is relevant to our whole thinking about the European Union. Until 1928, Britain was Brazil’s largest trading partner. From 1928 to 2009, it was the United States. In 2010, it became China. After the devastation of the Second World War, Europe, in Alan Milward’s famous phrase, came to the rescue of the European nation state but because Britain had never been occupied or defeated, it never saw quite the same need to be rescued. Now, the huge challenge for Europe is globalisation. For all the nation states of Europe, including Britain, globalisation poses the need for another European rescue of the nation state. Yet instead of thinking big about the issues and how these questions are to be addressed, the Government come forward with this miserable, pathetic little Bill. This is a coalition not of leaders but of panderers. The House has shown today why the Bill is simply not good enough.
Loans to Ireland Bill
Debate between Lord Liddle and Lord Pearson of Rannoch(14 years ago)
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Lord Liddle
My Lords, first I apologise most sincerely to the Minister for not being in the House for the start of his speech. I was trying to catch what his ministerial colleague Mr Lidington was saying to us in evidence in the EU Committee about the permanent mechanism.
I support very strongly the principle of helping Ireland in its hour of need. The case seems self-evident given the interconnectedness of our economies, with 5 per cent of our exports going to the Republic, and the consequences for us of a collapse of its economy, which would be serious, not least for British banks.
No simple solution such as coming out of the euro is available for Ireland, as a lot of people who opposed the legislation seemed to think. It is worth bearing in mind that, were a member state to try to come out of the euro, there would be a very big devaluation. That would cause a collapse in living standards and purchasing power, which would have knock-on economic consequences particularly, in Ireland’s case, for Britain. Moreover, its debt would continue to be denominated in euro. As the new currency had depreciated, there would almost certainly be a default that required a restructuring of that debt, again with very severe consequences for the British financial system.
However, while I fully support the objectives of the Bill, I dislike it considerably. I dislike it because of its bilateral nature. The Government are profoundly wrong in the working assumptions that lie behind this bilateral Bill: that the euro problem is a problem for the eurozone, that it is for the eurozone to sort itself out, and that it is none of our business. That is profoundly misguided and not in the UK’s national interest.
It is wrong for three reasons. First, as we in Britain seek the necessary rebalancing of our economy towards exports and investment, it is absolutely clear that we are dependent on very strong growth in the euro area, which is our biggest market. I know that the rest of the world is growing much more strongly and Asia is growing very strongly indeed, but Germany, more than the United Kingdom and other members of the European Union, is getting the most benefit out of that global expansion. We will be the beneficiaries of that German growth in the eurozone. We live in Britain today in an economy that is deeply integrated into the rest of Europe. Our fortunes are dependent on the rest of Europe. It is completely misleading to talk about their problems over there and think that we can sort out our problems over here as though they are completely separate questions.
Secondly, our banks are extremely interconnected. I was reading the Bank of England’s report on financial stability, which was published last week. It states:
“UK banks’ holdings of sovereign debt issued by countries under heightened strain are relatively small. But total claims on these economies, including lending to households and businesses, are larger ... Losses on such lending could increase were heightened sovereign concerns to be accompanied by weakening economic conditions. Credit risk could also be amplified by the interconnectedness of European banking systems. UK banks have claims of almost £300 billion on France and Germany, whose banking systems are more heavily exposed to the most affected economies”.
The Bank of England argues that there is strong interconnectedness, and we must think in those terms, not that we are something separate and apart.
Thirdly, when there is a crisis, we will end up paying for it just as if we were in the eurozone. I looked at the Hansard report of the debate in the other place on this subject and at what the Chancellor of the Exchequer had to say about it. He said that,
“our contribution has been calculated on the basis of what we would have paid if we had been part of the facility”.—[Official Report, Commons, 15/12/10; col. 946.]
In other words, it is a bilateral contribution but it is based on a calculation of what we would have paid if we had joined. Mr George Osborne goes on to say:
“We are paying pretty much exactly what we would have paid if we had been a member of the euro”.—[Official Report, Commons, 15/12/10; col. 948.]
We cannot avoid our obligations to the rest of the European Union by pretending that this is something apart from us.
What is going on here is that UK politics is taking priority over the national interest. Clearly, we in Britain are in this up to our necks. Our banks are in it up to their necks and our prospects for growth are dependent on the euro area. Instead of the Prime Minister saying, “This is nothing to do with us”, he should be doing today what Gordon Brown did in October 2008; he should go to the summit of the eurozone countries and say, “Here is the plan to rescue the banks in the area. Britain has a vital interest in being part of this”. Instead, we get a washing of the hands of Britain's role. It is clear that this policy will not last. I looked at what various economic experts were saying about the likely pattern of what was likely to happen in the eurozone. It is difficult for the Government to comment on this because no Government can forecast that there will be defaults.
I looked at an article by the one professor who forecast the crash of 2007 and 2008—Professor Roubini. In his view, what he describes as the current strategy of kicking the can down the road will soon reach its limits. He goes on to argue that,
“Europe must … implement early orderly restructurings of distressed sovereigns’ public debt”.
The consequence of the orderly restructuring of distressed foreign debt would be the necessity also to carry out another restructuring of the European banking system, in which Britain’s banks are intimately involved. Instead of doing these bilateral things, we should be putting ourselves at the heart of Europe and of the argument about what needs to be done in order to rescue the European economy. What we are seeing here is a policy for marginalising Britain that is profoundly against our national interests. We will pay a very high price for it in future, because when the new mechanism is set up the key economic decisions will be taken by the eurozone, which will go along to ECOFIN, and Britain will be forced to agree with what the eurozone has decided because decisions are taken by qualified majority voting.
This principle of staying out and doing bilateral deals is a very bad policy for Britain. It is putting playing the politics of the Daily Mail and Rupert Murdoch before a real, patriotic sense of where our national interest lies.
Lord Pearson of Rannoch
My Lords, during the noble Lord’s remarks I think that I heard him say that British prospects for growth depend on the eurozone. Could he enlighten us as to his views on the prospects for trade in the rest of the world?
Lord Liddle
I touched on that subject, because I said that Germany was taking far better advantage of global growth than we are at present. The Prime Minister is absolutely right to try to expand our exports in India, China and other countries, but the fact is that German export success benefits us in the growth in the eurozone, which accounts for half our exports.