European Union Referendum Bill

Viscount Trenchard Excerpts

Tuesday 13th October 2015 Lords Chamber

[Viscount Trenchard (Con)]

My Lords, I, too, am grateful to my noble friend the Minister for introducing this debate. It is a great honour to follow the noble Lord, Lord Davies, who has, unfortunately for me, already attempted to demolish all the arguments I was about to put forward. My experience of having worked as a banker in Japan for 11 years leads me to believe that it is not as simple as he makes out. I am utterly convinced that I was seen primarily as a British person and only secondarily as a European. Although I was privileged to serve as a vice-chairman of the European Business Council in Tokyo, the other Europeans wanted me to do that job because I was British and because, as an Englishman, I would have more influence. The British Chamber of Commerce as a body was probably more influential than the European Business Council. So I have rather a different interpretation of how Europeanness and Britishness mix and complement each other.

Since 1975, the British people have had no opportunity to approve or reject the EU’s relentless march from being the Common Market—principally a free trade area that we joined in 1973—to something approaching a superstate: the European Union of today. In common with most noble Lords who have spoken, I welcome the Prime Minister’s decision to allow the British people a vote on whether they wish to stay in a reformed EU. But we do not yet know how significant the reforms will be. The reforms most British people want involve the restoration of powers to this Parliament and a reduction in the number and reach of EU tentacles, which permeate every area of our national life and every arm of national and local administration.

At the same time, to avoid a further—perhaps fatal—euro crisis, many in Brussels and some of our EU partners, are also seeking to reform the EU, but the reforms they seek involve moving in the opposite direction. They want more fiscal integration and tax harmonisation—basically, the establishment of a single finance ministry for the eurozone. It seems to me that we will therefore become increasingly uncomfortable in remaining a member of the EU on the same basis as the integrating eurozone economies. It is not clear how the interests of the UK and other countries outside the eurozone can be protected. I look forward to the publication of the Chancellor’s document detailing how this can work, as reported in the Sunday Times. This will surely require a new structure for the EU itself, which ideally should recognise the reality of the current situation: that the UK is already a semi-detached member of the EU, as a non-participant in the most important aspect of the European project, the common currency, and also a non-participant in the Schengen agreement.

The Bill before us commits the Government to a referendum on what is still an unknown package of reforms. Is it not customary to publish a White Paper well in advance of a referendum, providing the voters with a clear explanation of what exactly they are voting on? Is it the Government’s intention to publish such a White Paper? Does the Minister agree that it should contain a section explaining in an impartial way the consequences of remaining in the EU and one explaining the consequences of leaving?

While I am still open to the possibility that our European partners will change their minds and allow us to retain our membership but withdraw from the political and judicial structures, it is most unlikely that the commitment to the necessary treaty changes can be obtained in time. Does the Minister agree that, if the leave campaign should prevail, the Government should negotiate a new trading and collaborative relationship with the EU which would preserve the single market and our free trade with the bloc? I am not sure whether this should be defined as a reconstituted EEA or EFTA, or even as a new class of associate trading member of the EU—in which case, does leave really mean leave? It is manifestly in the interests of our European partners to retain our open trade relationship with them even if we can no longer be part of their political project.

It is claimed by those who would advocate remaining a full member of the EU at all costs that our interests would be adversely affected if we no longer had a voice in the institutions of the EU that make the rules. But our voice has not been strong enough to prevent our being outvoted every single time we have objected to a proposal being considered in the European Council. With only 9.7% of the votes in the European Parliament, it is not surprising either that the United Kingdom MEPs, even if they could sometimes agree on anything, are powerless to protect British interests. In these circumstances, fundamental reform of the EU must provide a basis for the UK and other non-eurozone member states to escape the strictures and costs of the political and judicial institutions which are being expanded and developed to bring about ever-closer union, while remaining free trading partners on a basis similar to the current customs union.

There are many other areas where we must and will continue to collaborate with our European partners, but I believe that, in the global world that exists, we will be more successful and retain more influence in the world as a sovereign state. I also believe that our own financial sector regulators—the PRA, part of the Bank of England, and the FCA—should be restored to the position of sovereign regulators, no longer subject to the EBA, ESMA and EIOPA. This is essential in order to prevent further damage to our financial services industry. For example, the alternative asset management industry is already suffering from the application of the harmful and pointless Alternative Investment Fund Managers Directive. It is difficult to see how changes as fundamental as are needed can be obtained without treaty change. If the negotiated changes on which the referendum will be fought involve merely a promise of future treaty change, how can the EU and our European partners be trusted to deliver the promised changes in future?

I welcome the Government’s agreement that the purdah rules will apply during the campaign, but ask the Minister to tell the House what measures the Government are taking to ensure that the European Commission and the European political parties are similarly restricted. I would also like to hear the Minister’s answer to the question asked by my noble friend Lord Lamont in his excellent speech as to why the Government still insist on obtaining a partial exemption from the Section 125 rules. Will she also inform the House when the Government intend to publish the draft regulations?

My noble friend Lord Norton raised the question of a threshold. There was a 40% threshold requirement in the 1979 Scottish devolution referendum, but the problem is that if you have a threshold and only 39% of people vote, it does not settle anything. What happens next? You have to have another referendum, I suppose.

I have to agree with my noble friend Lord Lawson that the EU is a political project rather more than a trade project. I do not think that membership of the EU, or a different kind of trade-based relationship with it, will make much difference to our trade with the EU. However, escaping from the bureaucratic burdens placed on us by full EU membership, will, in my view, help us develop better and closer trading relationships across the world in this global age.