European Union: Recent Developments

Lord Willoughby de Broke Excerpts

Monday 17th December 2012 Lords Chamber

[Baroness Falkner of Margravine]

My Lords, I support the European Union (Croatian Accession and Irish Protocol) Bill, which is anticipated to be uncontroversial and a welcome measure of the progress made by Croatia in getting to this point.

The past few years have seen a consolidation of democratic norms and political stability in that country. My only concern is about the rule of law and the backlog in dealing with cases related to war crimes, but I note that the Government remain confident that this will be resolved by the expected accession date.

On the Irish protocol, again there is nothing exceptional about this being given legal form through attachment to the treaty on the European Union and the treaty on the functioning of the European Union. What is nevertheless alarming, however, is that some Members in the other place believe that the negotiation of the Irish protocol somehow serves as a model for what the UK might wish to do in future. They do not seem to notice that its extremely limited guarantees, as they see them, are in no way comparable to what they might wish to seek in a much changed EU after 2008, when that protocol was negotiated.

I am pleased to have an opportunity to discuss developments in the EU, particularly as there have been significant changes since our debate in February this year. Two of those developments stand out. There has been progress within the eurozone countries in reducing debts and stabilising the banking systems. The architecture of a new regulatory regime is emerging, as we have just heard in the Statement on the European Council, albeit very slowly indeed.

The other development has been here in this country—the speed with which we have embarked on a new tone in the debate about our relationship with the European Union. We now have a situation where opinion polling on the EU, always a minority interest in the past, is carried out regularly in our media and shows significant support for a referendum on Britain’s relationship with the EU. That is a marked change over the past decade.

I do not find this particularly surprising. Developments in the eurozone are bound to impact on our own calculations. When 17 or a smaller number of countries move to a full fiscal and budgetary union with strong political underpinnings, it is inevitable that we will be affected. For an outward-looking, open-trading nation such as Britain, if there is a fundamental change to the architecture governing finance, capital, investment and labour, we certainly have skin in that fight.

A cursory glance at the figures reveals a lot. Since the 1980s, the UK’s bilateral trade with EU members has more than trebled. More than 45% of UK exports are to the EU. The single market, one of the more remarkable achievements of the past few decades, has given us access to a market of more than 500 million consumers. The UK attracts one-fifth of all foreign direct investment in Europe—mainly because of our membership, one assumes. While these arguments about protecting our national interests are familiar to all those across the House who clearly see what is at stake in the calls for an “in or out” referendum, I will explain where the opponents of proactive participation are coming from.

We have on the one hand those who believe that they are enhancing the UK’s negotiating position by threatening a referendum. In their book is the naive proposition that other European countries will be so cowed by the mere prospect of the UK departing that they will put up no resistance whatever in granting the UK exceptions, and that will undermine their own countries’ interests. Hence these people strike impossible bargaining positions and votes in the other place, confident that triangulation will work. This is a cynical and dangerous game and prone to failure, which is why it is so sad to see the Labour Party on the Benches opposite legitimising that position in the other place as recently as the Budget negotiations.

The second group are those who genuinely believe that we should leave the EU, and that the consequences will merely place us alongside Norway or Switzerland. This group are not just naïve; they are simply deluded. To posit an equivalence with Norway, which rides on its massive US $600 billion sovereign wealth fund and vast reserves of oil and gas, which protect a population the size of Scotland, is simply not to understand the challenges that this country faces.

[Lord Willoughby de Broke]

Most of us who want to leave do not equate our position with Norway, or indeed with Switzerland. We believe that we want to run our own affairs independently, so please let us not run the canard of being like Norway or Switzerland. That is not the case for those of us who want out.

[Baroness Falkner of Margravine]

The noble Lord cannot have been listening very carefully. If he had been, he would have noticed that I did not name any particular players in this regard. They come from all sides.

Norway’s membership of EFTA and the EEA is about as close to the EU as it is possible to be without actually belonging. It is bound by most EU rules and regulations and pays a significant amount into EU coffers. Norway depends on other countries to fight its corner, not least on Britain and Sweden. As the Economist describes the relationship:

“It would be as though Britain maintained a golden fax machine linked to Brussels, which cost billions of pounds a year to run and from which regulations issued ceaselessly”.

Indeed, the Norwegian Government have carried out its own assessment, which found:

“As a result Norway has implemented nearly three quarters of all EU legislation, 99.6% of all single market legislation (some 1,700 EU directives), and is ranked 4th best performing country”.

That also includes the working time directive, the supposed cause of so much frustration in the UK.

The Swiss model would probably not be available, as the EU would be unlikely to extend EFTA privileges to as large and significant a country as the UK without requiring convergence across a range of areas. Switzerland is implementing most EU financial services legislation to avoid being locked out of the single market. With 50% of British trade within the EU, and single-market access so essential for attracting foreign investment, the UK would end up in the same position: implementing EU laws but with no say over them. No British votes, no British Commissioner, no British MEPs—a substantial democratic deficit.

It is instructive that even Open Europe, whose lack of enthusiasm for the EU is well known, has found that:

“EU membership remains the best option for the UK.”

All the alternatives come with major drawbacks and would all, except the WTO option, require negotiation with the agreement of the other member states, which would come with unpredictable political and economic risks. This means that negotiating a new UK relationship with Europe outside the EU treaties—that is, leaving the EU—would present similar difficulties as renegotiating membership terms while remaining a member of the EU.

The position of both camps, along with elements of the Labour Party, assumes that there is the possibility of cherry picking items for removal from the UK’s obligations. This unilateralism is wrong-headed and was clearly identified as such by Mr Damian Green just last week, when he said:

“There is a fantastic vision of an EU which remains a single market, including the UK, but which in all other respects allows the UK to be outside … This is a fantastic vision precisely because it is a fantasy. What is in this for those on the other side of the negotiation?”.

If one read the French, Italian or indeed the Polish newspapers, one would find that the answer to Mr Green’s question might be, “Nothing”, accompanied with the word “Goodbye”.

If ever there was a time for serious reflection and for all political sides to weigh carefully where these calls will take us, it is now. We need to be clear-headed about a call for a referendum, which, if necessary at all, will be so only after a future treaty change that significantly shifts competences to the EU institutions at some date in the future. An abstract discussion on whether Britain is in or out does service neither to democracy nor to the national interest. One can either be clear that there is something substantive on the table, with readily understood pros and cons, or one can play the Alex Salmond card, which is to act first and fill in the blanks later, with resulting confusion and obfuscation.

For our part, the Liberal Democrats are entirely clear. In the coalition agreement, we have agreed to hold a referendum only when there is a treaty change. However, we are clear too that the United Kingdom’s best interests lie in being an active participant in the EU, being at the table, championing our cause, making common cause with others who are like-minded, building alliances where we can and standing firm when we must—well grounded, secure and well placed in the club of 27.

--- Later in debate ---

[Lord Willoughby de Broke]

My Lords, I prepared a very interesting and rather long speech for today’s debate but I decided to tear it up while reading the Times this morning on the train here. In it was a reference to an article in Saturday’s Times that was written by Matthew Parris, and which I was pointed to, about,

“the spittle-flecked obsessive reactionaries of UKIP”,

so I looked that article up. I got it out of the Library and I have it here. Its title is:

“Stamp on the grasshoppers of the Rabid Right”,

and is subtitled,

“These spittle-flecked, obsessive reactionaries belong in UKIP. Don’t let them shelter under the Conservative fern”.

I thought that it was the New Zealanders who had the fern and that the Conservatives had an oak tree, but let that rest.

The detail of this article gives offence to me and many of my friends. Matthew Parris says, talking about Conservative MPs, that,

“the local MP has spent a career repelling from party membership anyone under 70 who isn’t a spittle-flecked, obsessively anti-European, immigrant-hating social and cultural reactionary”.

That really is not terribly helpful, nor is the Prime Minister’s refusal to retract his insult that UKIP is largely composed of fruitcakes, cranks and closet racists.

In the Times today I saw the results of a ComRes poll over the weekend conducted for the Independent on Sunday and the Sunday Mirror. It showed that 14% of voters would vote for UKIP and only 9% for the Liberal Democrats; 28% would vote for the Conservatives, by the way, so we are catching them up.

A lot of Conservative MPs want to leave the EU, many more want to renegotiate their positions within the EU and at least three members of the current Cabinet have said they would be happy to leave the EU. All opinion polls in the past two years have found that about 50% of the people in this country would be happy to leave the EU. I know that polls vary and will change from month to month and year to year but, nonetheless, they are definitely straws in the wind.

Are all these people who are polled, the MPs and the members of the Cabinet, all spittle-flecked, immigrant-hating, fruitcakes and racists? Of course they are not. Of course we are not. We want to get our country back. I do not think that is a crime and I do not think we should be treated in this extraordinary way by the leader of the Conservative Party or by a time-worn columnist on the Times.

I do not agree with anything that the Europhiles have said. They have been wrong all along and I think where they are trying to lead us now is very dangerous but I do not insult them—I do not have to, because I just look at the facts. I was grateful to the noble Lord, Lord Dobbs, for mentioning Greece, which has been, as he said, singularly absent in our debates this evening. The Europhiles have skated over the results of what the euro has caused in Europe.

In Greece there is now a bitter hatred of the troika and the misery, poverty and unemployment that it has caused; the noble Lord, Lord Dobbs, is absolutely right about that. The programme of forced austerity has brought misery to Greece, as the noble Lord said very clearly. The German Chancellor is routinely caricatured cruelly in full Nazi regalia. In Greece, unemployment is 26%; youth unemployment is a shocking 55%. The Greeks are run by the troika now; they have no fiscal independence at all.

The noble Lord, Lord Owen—he is not in his place to answer the question I want to ask him—said that the Germans will pay for the Greeks and for the “Club Med” in future as long as they obey the German-imposed rules. What happens if they cannot hack it, or if they are unable or unwilling to do so? What happens if the disaster scenario occurs that the noble Lord, Lord Dobbs, mentioned at the end of his speech?

We have a bit of an answer from, I think, someone in the German Ministry of Finance—it may have been Herr Schäuble—who promised that they will have,

“more intense, compulsory employment of external technical assistance”.

What does that mean? Does it mean the European Gendarmerie Force? No, I think it just means that when the EU says “Jump!”, the Greeks can only say, “How high?”. I think that that is what is called pooling sovereignty in the EU.

The same thing is happening in Spain, of course. The EU’s vanity political project, the euro, is causing unemployment, unrest, riots and even talk of secession in Catalonia and Andalucía. Your Lordships want to know what the unemployment rate in Spain is. I will tell you: it is 26%, according to Eurostat. Youth unemployment is 49%. In Italy, Beppe Grillo’s out-of-euro party is making enormous inroads. The much derided Berlusconi, when he announced his possible candidacy—he was probably teasing the Italians a little—got it right when he said,

“I can’t allow my country to plunge into an endless recessionary spiral”.

I would have thought that was a pretty good electoral programme on which to run in Italy.

In France, we could soon hear the time-honoured cry: “Aux barricades!” when President Hollande comes up against what he believes is a world without bond markets, globalisation and the internet. When that collides with reality, where is he going to be then? France’s exports are already crashing. Unemployment is rising. The reality is that the EU is impaled on a Morton’s fork of its own making. On the one hand, there is permanent stagnation while the euro staggers along on the German support system; on the other, there is a deep economic depression as the eurozone breaks up. Those are the only two alternatives in front of us at the moment.

The ice is cracking under the European Union, however unpalatable that may be to the Europhiles in and outside this House. We do not know who is going to make it to the shore and who is going to fall in. However, what has happened is not the Eurosceptics’ fault. It is entirely down to the arrogance, conceit and distaste for democracy of the EU elite. As my noble friend Lord Pearson has asked, when are they going to apologise?

--- Later in debate ---

[Lord Lea of Crondall]

My Lords, we read that the Prime Minister is thinking about making a speech about Europe but cannot decide what to say, so I have written him a draft and I can give the House advance hearing of it today. It is as follows.

“I was eight years old when Harold Wilson called the referendum in 1975 and advocated a yes vote. I was able to knock on doors to urge a yes vote on the basis of the 1971 White Paper visualising ever closer union. That, of course, was under Ted Heath’s Government. In doing this in 1975, I gave my support to our recently elected and most distinguished leader, Margaret Thatcher, following in the trailblazing footsteps of Ted Heath.

“Friends, we are often accused of being dishonest about the European project, so let me be brutally frank or else we will all have a nervous breakdown”—I think that the absence of Members on the Conservative Benches this evening probably suggests that most of them have had a nervous breakdown already. “The noble Baroness, Lady Thatcher, never claimed that the British people were misled in 1975”. Well, she could not, having been leader of the yes campaign for the Conservative Party in 1975 on the basis of that White Paper and the Act of 1973.

“I say all that because nothing is gained”—and this is David Cameron speaking, just to remind people who have just walked in—“by playing around with the word ‘sovereignty’. It is bandied around as if it has a unique and unambiguous meaning. We are members of NATO, are we not?” Can I ask UKIP Members whether they are happy that we are members of NATO?

[Lord Willoughby de Broke]

Yes, I can answer that—

[Lord Lea of Crondall]

“Yes” is a sufficient answer.

[Lord Willoughby de Broke]

Because NATO does not make our laws.

[Lord Lea of Crondall]

NATO has majority voting in its own way. What about the UN? Is there any comment from UKIP about that?