European Union Bill

Lord Stoddart of Swindon Excerpts

Tuesday 17th May 2011 Lords Chamber

[Lord Risby]

My Lords, I apologise for arriving in your Lordships’ Chamber a few minutes late; I was unavoidably detained. I think that the Committee should be grateful to the noble Lord, Lord Pearson of Rannoch, who has underscored something which causes huge concern to the people of this country; that is, the spending patterns within the European Union and the lack of accountability. In that sense, he is entirely correct.

The Bill sets out that a referendum would be necessary if there was a proposal for the veto which covers the multiannual budget—the seven-year budget—to be removed. That financial perspective is crucially important given all the various spending envelopes contained in it. Of course, the previous Government gave up the veto on the annual budget.

It is right that people have been concerned about the proposal recently for a 4.9 per cent increase by the Commission, which is absurd. It has got nothing to do with irrational newspaper headlines; it is a fact that there is austerity in all parts of the European Union and this has to be reflected in what is proposed by the European Commission. It has led the Prime Minister of our country to make this point clearly and I hope that, in due course, as it is further examined by the Commission and the European Parliament, it will be dealt with.

We can all be grateful for underscoring the importance of the necessity for frugality. However, the Bill deals with transfers of power and competence, a point made by my noble friend Lady Nicholson. Funding of the EU is not part of the Bill and therefore the amendment is irrelevant.

On the point about fixing the sum of £10 billion, the noble Lord, Lord Pearson, asked what the benefits were from membership of the European Union. Over the years, the Commission has been able to drive reform in many member countries which, for domestic reasons, found it very difficult to improve competition and undertake privatisation of their nationalised industries, and it has done so very effectively. It has been useful for national Governments to have that force available to enable them to do so and the Commission has driven forward the single market in that respect effectively—not perfectly but effectively. For us, as a trading nation, that has been a significant contribution to our own prosperity.

For many reasons the European Commission needs a budget—frugal and sensible, but a budget it certainly needs to carry out its functions.

[Lord Stoddart of Swindon]

My Lords, like the noble Lord, Lord Tomlinson, I welcome this modest amendment from the noble Lord, Lord Pearson. He is seeking a referendum—or at least to discuss the possibility of one —at the appropriate time, which falls within the competence of the Bill, on the amount of money the people are paying to the European Union and what they get for it. It is about time the people of this country were consulted in a far greater manner about the money which they have to pay, one way or another, across the exchanges to the benefit of other countries. After all, the taxes levied in this country are now high and are going higher. People cannot understand why on earth they are being squeezed to the extent of about £20 billion a year when we are paying over to the European Union £10 billion a year. Indeed, if we also take into account the loans, it is more than £22 billion a year.

We should understand that that money does not belong to the Government but to the taxpayers, the people who are being asked to pay more and more out of their own pockets while we pay more and more across the exchanges to other people who, in some cases, may very well be better off than ourselves. It is therefore about time the people of this country were consulted about the money they pay—not the Government—to the European Union, which, quite frankly, is not popular in this country. According to the latest opinion polls, a majority of people would be happy to come out, which is why I would like them to be consulted. The people of this country are not against referendums—indeed, they would still like a referendum on the Lisbon treaty. They showed in the AV referendum that they can respond to argument and give a proper and positive decision.

The noble Baroness, Lady Nicholson, said that this is a small country and that its influence is improved and increased by being a member of the European Union. She implied that this country really could not go it alone. It is very odd that this little country built an empire with far fewer than 60 million people; that it has now established a great Commonwealth which unfortunately it does not make enough use of; and that it stood alone against the forces of Nazism during the last war and therefore saved the world from the ravages of Hitler. That is not a bad record.

[Baroness Nicholson of Winterbourne]

I am very grateful indeed to the noble Lord. It is most courteous and gallant of him to allow me to make a brief comment. Would he not agree that our great leader who led us in that battle and standalone fight, Winston Churchill, was in fact a supporter of the Treaty of Brussels, which in 1947 would have greatly enlarged our integration into what has now become the European Union with far wider and deeper social clauses, for example, than the Treaty of Rome created?

[Lord Stoddart of Swindon]

Yes, there is only one problem about that—he believed in a united Europe, but not including this country. Winston Churchill never believed that we would be part of a European union, particularly of the sort we have now. So I do not think the point made by the noble Baroness is at all valid.

The noble Lord, Lord Tomlinson, was dismissive of the arguments used by the noble Lord, Lord Pearson. The noble Lord, Lord Pearson, has repeatedly asked for a cost-benefit analysis. That has always been refused. However, the expenditure by the European Union is very often not the sort of expenditure that we would want in this country. Indeed, the Prime Minister is currently concerned about some of the spending within the European Union and wishes to bring it down, particularly when the next negotiation takes place on the septennial outcome from 2014. Therefore, it is not only the noble Lord, Lord Pearson, and people like me who are concerned about the amount of money we are paying. The Prime Minister and perhaps other people, too, are beginning to understand that the whole idea of the European Union is expensive and it is not conducive to good government.

As to whether we receive any benefit, it is very difficult to see any but we are always told that we have the benefits of trade. Yesterday, when the Minister was answering the noble Lord, Lord Vinson, he did not seem to know whether the percentage of our trade was 40 per cent or 50 per cent, so that is quite uncertain. What is absolutely certain is that we trade in permanent deficit with the European Union. People say that our trade is profitable with Europe, but that is by no means certain because of this endemic deficit. Since trade is claimed as the great benefit, I think we really ought to reassess our position.

I do not know whether the noble Lord, Lord Pearson, is going to put his amendment to the vote tonight. I imagine not—not at this time of night, which is similar to the time we entered into debate on this Bill last night. I was very tempted this evening to speak to the Motion that this Bill goes into Committee, as I did yesterday, and actually vote on it. That would have been the nuclear option and I do not like nuclear options. But neither do I like embarrassing Governments, and this Government are embarrassing themselves and this Committee. It is going to be even worse because they intend, as I understand it, to bring the Bill back not only next Monday, but on Wednesday as well when we have a very important visitor to the Palace of Westminster. They have the idea that we should be discussing this Bill when many Members—I shall not be here—will wish to go to see our very distinguished visitor, President Obama. What on earth are this Government thinking about? What are the Chief Whip and the Leader of the House thinking about in doing that sort of thing?

I hope that the message will get back to them that this Committee is not in favour of the way in which the Government are conducting this Bill, because the Members who are taking an interest in it are being messed about. They have other things to do, and the Government should be considering not only their convenience but that of the Members of this Committee who have been good enough to take part in the debates to try to improve the Bill.

[Lord Grenfell]

I apologise for intervening at this point, but I think we have strayed rather far in the latter remarks of the noble Lord, Lord Stoddart. I go back to the position taken by the noble Lord, Lord Pearson of Rannoch, and his supporters, on a referendum on what we are required to pay into the European Union. I understand their principle to be that if the British taxpayers are to provide this money, the British taxpayers should be allowed to say whether they approve of it being done. The further logic of that is that this would normally then apply to any case in which the British taxpayers are required to pay an assessment into international institutions. Are noble Lords who are supporting the amendment saying that the European Union is an exception and that it is because we do not like it that we want a referendum? Would they not be more honest in saying that if the principle is that the British taxpayer has a right to vote on what money we pay to international institutions, why are we not having a referendum on our assessment to the United Nations, the FAO or UNESCO or the money that we put into the International Development Association arm of the World Bank? You could go on for ever. If you added up everything that we are putting into all international institutions, it would come to more than what is being paid into the European Union. So why not have a referendum on all of it?

[Lord Stoddart of Swindon]

The noble Lord has raised a very important point. It would be very useful to know exactly in total how much we are paying not only to the EU but to all the other institutions and more that he has just mentioned. The British people would be very interested in that.

[Lord Grenfell]

Perhaps we could finish on that point. It would be very interesting, if we made just a little more publicity about the value that we derive from the assessments that we pay to many international institutions. The noble Lord has talked about the importance of trade. If we were not paying our way with many of the international institutions that are enabling developing countries to develop their ability to trade with us, we would be the losers. There is always a benefit to be had from this, but what I find extraordinary is that the noble Lords should limit this to one institution, and our membership in it, which they do not happen to like. It does not make a great deal of sense.

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[Lord Triesman]

My Lords, I, too, start by thanking the noble Lord, Lord Pearson of Rannoch. He has provided me with an object lesson about looking at amendments in Committee. I confess that I have been wasting my time poring over figures and the economic prospects of the EU, looking very carefully through the Treasury figures. I now appreciate that I should have been looking at fish, at pollution of the sea bed, at the visual image of 40-ton lorries in this Chamber, at various issues of climate change, renewable energy, the desirability of pumping carbon into the atmosphere from coal-fired power stations and so on. I have to tell the House that I have not looked at any of those things. I have been focusing on the EU budget, so I hope noble Lords will forgive me if I return to that and to the amendment itself.

May I say to the noble Baroness, Lady Nicholson, I realise that some of the figures may have appeared daunting? Incidentally, I am not going to join her in saying anything disobliging about the Burkina Faso economy or its exchange rate; I leave that to one side. However, looking at the financial details, I am confounded by some of the figures produced by the noble Lord, Lord Pearson, not because they are complicated or big or there were a lot of them but because fairly elementary mathematics leads to rather different conclusions to those that he presented. For example, he suggested that the £10 billion that is being spent on trying to induce some stability in other economies is 50 per cent of the spending cuts, which run at £80 billion. In short, it is not 50 per cent but 12.5 per cent; but he is only 400 per cent wrong. I guess that is within the levels of tolerance that anybody should allow in a debate of this kind.

I, too, went over the Treasury figures and I do not know that there is very much alternative but to look through the detailed figures that it produces, which are cross-referenced to other studies that have been done not only in the EU but in the World Bank and so on. They are not regarded as peculiar or anomalous in that sense but are well cross-referenced. The fact of the matter is that at 2004 prices, the contribution to the EU budget was £3 billion. I shall work in pounds, not euros, so that there is no question about what I am saying. It was £3 billion in 2008-09 and is expected to be £4.7 billion in 2009-10. These contributions, particularly in 2009, were relatively low—particularly low, the Treasury said. The contributions would rise in future years and it is not the Treasury but the Office for Budget Responsibility that is forecasting a net contribution of £7.7 billion in 2010-11—but that is at 2004 prices.

That is why I come back to the point that the noble Baroness, Lady Nicholson, made because it is extremely important to find out whether we are talking about anything in these figures that is indexed. Because of movements in these indices, you can so easily end up with a completely fictional figure when you look at it in relation to the original baseline calculation. The date mentioned by my noble friend Lord Tomlinson, 2004, is particularly relevant as that figure has been used to deal with the whole of the financial perspective from 2007 to 2013. When the Committee looks at how this Bill has been framed, the idea that there is to be a change during the course of this perspective—particularly as there is no strong belief that we are in fact going to have referenda on anything—seems to me to make the proposal all the more fanciful.

It is absolutely true, as a couple of noble Lords have said, that this is nothing to do with competences. I went back and read Article 311 again, in the rather fanciful way that one does when trying to address the amendment, and it is completely clear that the competences are already there. They are set out absolutely and plainly. The Council is acting in accordance with the special legislative procedure and it would require a unanimous decision in relation to changes across a financial perspective. There is no change at all in the competences covered by this amendment. The amendment is not about whether the EU is spendthrift, as some noble Lords including the noble Lord, Lord Pearson, have suggested. It is not to do with failures about timely or robust reports on budgets. It has nothing to do with any of those things but is about whether the EU has the competence in this area. It plainly does, so that is a straightforward matter.

I have also been looking at other referenda, particularly Californian referenda, where they have touched on budgets. What you can guarantee, because the populist character of this is so plain—I do not mean popular; I mean populist—is that if you put any increase in any budget to anybody in a referendum, or even spending the same budget, the odds are that the people who do not want to spend it will win that referendum. That is a fairly straightforward matter. On the basis of what we have heard this evening, it would be sensible to put any proposals in the Budget of the United Kingdom to a referendum, whichever Government were in power and whatever their majority might be, to see whether they would get warm acclaim through a referendum for any changes they made which took a penny piece out of people's pockets. Maybe on occasions they might, but I doubt that it would be frequent. If California and some other referenda are anything to go by, I suspect that nobody in general will vote for increases—whatever the data on the proportionality of the sum or in any other matter.

[Lord Stoddart of Swindon]

The noble Lord quotes California but the Californians had referendums about their internal taxation and expenditure. What we are talking about in this amendment is taxpayers’ money not being used within the taxpaying area but being exported outside that area, so I hope he will agree that there is a difference.

[Lord Triesman]

My Lords, I entirely understand the difference. I truly had appreciated it. My point is that in a popular sense, putting to people the opportunity to vote on whether more money should be taken from them will almost invariably lead to them saying no. I do not think there is much doubt about that. It is precisely why, for example, in the run-up to general elections—which are a vote on policies, including future financial policies—most of the serious parties will say that they are going to do absolutely nothing to anybody’s taxation or financial well-being. They will make a point either of saying nothing or pledging to do only what the last Government had put in train. This whole proposition is a significant distortion of the character of the debate that we should have.

At the end of the speech of the noble Lord, Lord Pearson of Rannoch, having said most of the things that I have already tried to cover, he dealt with what his amendment asks in one sentence. We have no objection to a wider discussion on money or greater clarity, particularly in relation to the European Union. That can only benefit us and our democratic practice. However, the notion that we should embark on a process of this kind in this, or any other Bill, is a recipe for trying to make sure that there is no progress whatever in a European context.

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[Lord Wallace of Saltaire]

If needed and if we are still discussing the Bill, there will of course be an adjournment. Some of us hope that we might possibly—if we manage to stick to the subject of the amendments—have finished the Committee stage by then. I want to address the amendments, I do not wish to divert into fish and—

[Lord Stoddart of Swindon]

After the apology the Minister has made for the late start and the Bill being put on again on Wednesday, the eve of the Whitsun Recess, why on earth do the Government have to do that? It has been pointed out time and again by the Government themselves that the provisions of this Bill will not take effect until the end of this Parliament. We also have a Session which goes through until next May. So what on earth is the hurry? I could understand it if the Government were short of time and had a lot of Bills to get through quickly, but this is a Bill that does not have to get through so quickly. There is no reason why they should inconvenience Members as they have been doing.

[Lord Wallace of Saltaire]

My Lords, I shall resist going down that great sideline. We have a certain amount of time remaining in this Committee stage if we manage to keep to the subject and avoid talking about great trucks, fish, rifles, minarets and Britain standing alone in 1940 before the United States and the Soviet Union came in—and I think those countries had a little to do with the United Kingdom’s victory over Nazism. I want to address myself to the amendment.

The noble Lord, Lord Pearson, suggested that the total cost may amount to £100 billion a year. I thought that was rather modest. Daniel Hannan MEP, who I know the noble Lord knows well, suggested in his blog the other week—I had heard him say it previously—that withholding our contribution to the EU would enable us to cancel every spending cut and still knock a third off council tax. That must be an estimate of around £160 billion a year. The Treasury estimate is that the UK’s net contribution to the EU budget will be £7.7 billion in 2012-13, rising to £8.9 billion in 2014-15, and then falling to £8.2 billion in 2015-16. These are unavoidably estimates, partly because, as noble Lords will be aware, a surplus is routinely entered into the EU budget each year that serves to reduce member states’ contributions the following year. The initial estimate of the British contribution might therefore be rather higher than the net result declared the following year. As the noble Lord, Lord Pearson, demonstrated in the figures that he so dazzlingly threw out, the exact calculation of how much each member state gives is itself a matter of some controversy.

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[Baroness Williams of Crosby]

I will not be lured very far by the noble Lord, who is always very polite in the way that he attempts to broaden out the debate in Committee. I do not think that is what most people want to do. I will simply say that we have clean beaches in Britain. We have clean rivers. We have cleaner air. The first two of these owe a very great deal to the European Union’s requirements, which we should meet.

[Lord Stoddart of Swindon]

I understand exactly what the noble Baroness, Lady Williams, is saying and I can understand the reasons why she is saying it. However, the reason we have this Bill is because of the betrayal—if I might use that strong word—of promises which have been made and not kept.

I refer first to the promises that were made by the Government and, indeed, by the Opposition about having a referendum on the constitution, later to be known as the Lisbon treaty. There is very little difference. Even Giscard d’Estaing says that there is very little difference. However, I do not want to get into that argument. I want to try to explain why I believe we have reached this point where such detail has been put into a Bill. It is because people join political parties and have an influence on them. So many times promises have been made, such as on the five red lines that were all crossed, and not kept. Increasingly, people in this country have lost trust in the Government’s promises that we are not, ratchet by ratchet, going into a federal European state.

[Lord Lea of Crondall]

Is the noble Lord not giving the game away that this is an exercise in trying to destroy the Lisbon treaty by the back door when in fact the country has signed the treaty? He thinks that this is an opportunity to take, bit by bit. He wants a referendum on everything they have tried to do under Lisbon and it can be blocked because we do not want to have a referendum or because it can be defeated in a referendum. Is that the point he is now making?

[Lord Stoddart of Swindon]

The noble Lord has misunderstood what I am trying to say. The Lisbon treaty is in operation, and I am not suggesting that that can be reversed. I am trying to explain why this Bill has come about. It is because people have lost trust in the leadership. I think the reason why it is so detailed is probably because this coalition Government—it is not a Tory Government, but a coalition Government—have been trying to set out their red lines that can be crossed only if the people of this country agree to it. I hope people will reflect on that and realise that, out there, ordinary people are very unhappy about the way the European Union is proceeding. I think they have already said, “So far and no further”. This Bill is complicated because the red lines that have previously been put forward have not been kept to, and perhaps this Government are trying to put them into an order where they cannot lightly be set aside.

[Lord Triesman]

My Lords, I want to express very real appreciation for what the noble Lord, Lord Taverne, and the noble Baroness, Lady Williams, said and to say how strongly we agree with that. We greatly appreciated the comments about what we were attempting to do yesterday. The aim was not to make life impossible in the terms of the Bill but to try to inject some rationality and proportionality so that it would have a genuine sense of balance about giving people the opportunity to deal with major issues in the way that the Bill describes and not to mix into that so much detail that it could not conceivably achieve that objective.

I want to add one further thought because I think it bears very strongly on the style of work that we try to achieve in the House. The noble Lord, Lord Hannay—and I am going to be very cautious about putting words into his mouth—said, I think it was yesterday, although the days begin to blur into one after a while, that when he is making a proposition he prefers it to be in his own words rather than in words that are put into his mouth.

I felt very strongly that that was absolutely the right and correct way of dealing with things that were being put to him. Some of the things that we are supposed to believe—or rights of the people of the United Kingdom we are alleged to be prepared to give up—have been a travesty. In no circumstances were we making propositions of that kind.