Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Beloff: My Lords, I omitted the fact that the most notable example of federation was the United States of America. That federation did not prevent the bloodiest war of the 19th century. I ask my noble friend why a federal system in Europe should do any better.

Lord Kennet: My Lords, one may take that view that that federation was itself established by a bloody war between the smaller federation of the North and the confederation of the South. We will come to that.

Such a majestic ambition--to put an end to war in Europe, the will to wrench history aside into peace after war, into calm after hatred and into reason after black horror--will succeed only at the pace of the slowest unit. The slowest will be a nation whose experience and circumstances most differ from those of the others. Our country is the only island in the Union except Ireland, which by its position as the little island beyond the big one will normally go the opposite way from us. Subject to that, we are the only island and, except for Ireland and Sweden, the only state to have escaped armed occupation by nazism or fascism. I believe it is only natural that we should be rather behindhand in

15 Apr 1996 : Column 501

understanding the settled determination of the others to come together once and for all and put an end to a nightmare past which we islanders can only imagine. We should not be for ever trying to trip up the others and claw this or that back from the others. We should be grateful to the others for being patient with us, and we should be far more sensitive to the structures of memory and commitment which underlie their impulses. We should even dare to exercise intuition, put ourselves in their shoes, and begin to move with the geopolitical current in our part of the world, whose interests we share in every field and in every way.

I am among those who believe that in time there will be a European confederation, and perhaps later a federation. There is no reason for anyone to worry about it. It will happen only when the very last country wants it to happen, which, after all, may not be us. It cannot happen before.

Two practical matters arise in the IGC which may go wrong but are less likely to go wrong if the British Government take the long view; that is, the neighbourly and historical view. The first is the single currency and the institutional ways of looking at it. Pessimistic xenophobia looks at the strong national currencies involved, traditionally the German, and thinks what havoc their owners could wreak on our weaker currency if they wanted to. Well, for one thing it so happens that, not being xenophobic, they do not want to do that. For another, they could not if they did; that is what a single currency is about. For yet another thing, it is seldom noticed that our weaker currency will benefit from the strength of those that are stronger--Germany now and whoever it may be in the future.

We cannot expect the offer to carry us to remain open for ever. We should accept it now and look forward to the day when our national economy is strong enough to undertake part of the duty of helping the weaker economies in the Union. After all, the principle is very familiar to us and all other states in their domestic affairs: rich regions help poor regions.

The other notion in the Government's White Paper which does not seem quite right is related to the single figure who is to do something about developing and presenting the common foreign and security policy. The Government have agreed with the bold proposal that such a person should exist, but want him or her to be not in the Commission but in the secretariat of the Council of Ministers. The Labour Party has so far endorsed that location. Nevertheless, I believe that it is a mistake for two reasons. First, it would be one large step further in the tendency for the secretariat of the Council of Ministers to develop into a second European Union civil service, reduplicating and competing with the original European civil service; that is, the European Commission itself. It would also isolate the new official from Union policy-making in all other fields, which are and must remain in the Commission, so that the common foreign and security policy would be devised at an unnecessary distance from, say, trade and industry policy, environment policy, fisheries policy and all the rest. That way lie confusion and inertia.

15 Apr 1996 : Column 502

The other reason to think it a mistake is that making that all-important new person the servant of the body which has to handle the often divergent positions of numerous sovereign states will condemn him or her to cautious reaction--indeed, he will probably be chosen for his well-proven caution in the first place. If on the other hand he were to be part of the Commission, he would be free to present original syntheses and new policy proposals. Everything would always be subject to approval by the Council, just as all initiatives from the Commission are subject to the approval of the Council.

Now, to stand back: we, Britain, can never again be independent. No country can. The world is being materially unified by technology, and we know that we can no longer fend for ourselves one by one. But we must and do make regional as well as global arrangements. Two such regional arrangements appear to be open to us: the transatlantic and the European. Up to now we have been straddling and mugwumping. But we cannot for ever have them both.

It has long been clear to most of the countries in Western Europe that their own company is the company they desire, and it is time for it to be clear to us too. We should be strengthened in this understanding by the increasingly obvious fact that to the United States we are nowadays important only as part of Europe.

Why do I make such a point of this, and assert so often that the time has come for us to choose? Consider these things: it is not through any European country that our intelligence services have lost a very large part of their entire skills and knowledge to Russia, and it is not any European country which has refused even to let us know how much we have lost. All this our new Intelligence Oversight Committee forcefully pointed out in its first report. It is not any European country which threatens to prosecute our traders next time they step on its soil if they also trade with Cuba. It is not any European country which has made Israel a nuclear super-power in the Middle East and has funded it over the decades so that it can now once more destroy the Lebanon, slaughter its civilian population and drive 400,000 people from their homes. Nor has any European participant in the UN force in Bosnia arranged Iranian and Turkish arms and military training for the Moslem government there and is now setting up a network of military bases in Central and Eastern Europe without the agreement of NATO.

No, on grounds of justice and interest alike, our future must lie in and with the Europe of which we are geographically and historically a part. Neither individuals nor nations can achieve coherent thought and action if they cannot recognise their own identity.

7.26 p.m.

Lord Skidelsky: My Lords, the Government's White Paper A Partnership of Nations rightly sets the IGC in the context of enlargement: 13 states, including nine former communist countries, have applied, or are about to apply, for membership of the EU. I take the central message of the White Paper to be very simple--that is, that specific arrangements which suited a small group of similar and contiguous countries in 1957, and which

15 Apr 1996 : Column 503

never suited us that well when we joined in 1972, cannot be applied wholesale to a continent-wide group of 27 countries. I would emphasise the sheer number of new applicants as a crucially different factor in the situation. That makes for a contradiction between widening and deepening.

Variable geometry is merely the White Paper's language for dealing with, and trying to overcome, that contradiction. The noble Lord, Lord Ezra, said that he did not understand what it meant, and that, in any case, his party was opposed to it. I believe that he is a bit behind the EU itself in this matter. At the Turin Council of 29th March the heads of government asked the IGC to examine:

    "whether or how to introduce rules ... in order to enable a certain number of Member States to develop a strengthened co-operation".
That is variable geometry.

My noble and learned friend Lord Howe of Aberavon, my noble friend Lord Cockfield, and the noble Lord, Lord Taverne, reject the concept. Yet variable geometry is surely just a recognition of the fact that not all interests will be common in a Community of 27 countries, and that realistic variations are far preferable to artificial uniformity. It is also profoundly misleading to think of a single core in such a grouping of 27 nations. There will be a number of cores, as there always have been in the historic continent of Europe. Britain will certainly be at the centre of one of them.

Let me turn to another implication of variable geometry. The Verona Conference of Finance Ministers started to face up to the fact that the EMU will be confined to a minority of EU members for the foreseeable future. The question of the relationship therefore between the single currency area and the non-single currency members becomes of great significance. It is useful to have the issue out in the open, as the attempt to make a monetary union of the whole Community has been the most enormous waste of intellectual and political energy--the greatest single waste of such energy for the past 10 years.

If it is accepted, as it now is, that some members of the Community will not be in the single currency area, one can start to think sensibly about the design of a new monetary system for the whole world--for a much larger area than the EU--perhaps a new Bretton Woods which aims for general stability of exchange rates, which everyone recognises to be for the general advantage.

It is no more desirable, after all, that the USA, Japan, or China should manipulate their exchange rates to gain competitive advantages against the single currency area than that Britain and Spain should do so. Of course, the damage caused by those great trading nations doing so would be far more serious.

On enlargement, we need to distinguish between economic enlargement and security enlargement. The problems of enlarging the single market have been greatly exaggerated. Virtually all industrial imports from central and eastern European countries now enter the EU free of duty and quota restrictions. In textiles and

15 Apr 1996 : Column 504

clothing, duties will be abolished on 1st January 1997, and quotas liberalised a year later. Trade in agricultural commodities is much more difficult owing to the CAP. But preferential quotas for agricultural exports from the former communist countries (now associated members) are to be raised steadily over the next five years. I expect--noble Lords may think that I am being too optimistic--that the CAP will wither away gradually as the number of farmers in western European countries continues to decline.

That problem of enlargement is not particularly intractable. Much more intractable is the problem of security enlargement. Estonia, Latvia and Lithuania have applied for membership of the EU. Is the EU really proposing to defend those countries against Russia when they become members? I suspect that a great deal of variable geometry will be needed to deal with that particular conundrum; not only variable geometry within the EU but between the EU, the WEU and NATO, all of which have fingers in the European defence pie. I suggest that we should consider letting exposed countries into the European Community but not into the European Union, at least until a pan-European security system has been established.

One of the most valuable contributions of the White Paper is the reminder that the European Union is simply an umbrella term for the old EEC plus common foreign and security policy, plus justice and home affairs. We can regard those as three pillars of a yet unfinished building but there is no need to do so. In fact, when it comes to defence and foreign policy, it is very important to be clear about which part of the Union is being expanded at any particular time if we are not to land ourselves with dangerous and unsustainable commitments.

Thinking about Europe draws one all too readily into philosophical speculation. The noble Lord, Lord Richard, who is not in his seat, failed to see any difference between Britain's interests and those of our continental partners. I doubt whether he would be so blind if he were in government. The truth is that we in this country accept the idea of a single market but we are most unhappy about the idea of political union, which the leading continental powers are determined should underpin it. That goes against our traditions and economic interests.

However, there are two arguments on the other side which Euro-sceptics should take seriously. First, history shows that free trade plus the balance of power is not enough to secure European peace. We had a single market--Russia was part of it--before 1914 but that did not stop the First World War. Therefore, a permanent confederacy of the main European nations must be in our long-term interests, even more so as the United States disengages gradually from the affairs of our continent as it is bound to do.

Secondly, Euro-sceptics need to ask whether we would have achieved even the degree of free trade we have achieved in Europe had the European Community not existed. It is all very well for them to argue that a continental-wide free trade area in which all nations can

15 Apr 1996 : Column 505

compete according to their full comparative advantages is all that is needed, but does anyone believe that such an offer was ever realistically before us?

We have had to accept a large dose of dirigisme as the price of free trade. In the actual Europe in which we live there has been no alternative to that. However, would not my noble friend Lord Beloff agree that the European Union offers an arena in which differences of interest which are historical and will always continue can be threshed out through politics rather than through war? It seems to me that that is the main political innovation which the European Union represents.

Next Section Back to Table of Contents Lords Hansard Home Page