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Lord Tebbit: My Lords, I am most grateful to the noble Lord for giving way. Why does he feel that the inconsistency of Mr. Cash and indeed of those like me who supported the Single European Act is any greater or any more worthy of castigation than the inconsistency of the leader of his party?

Lord Whitty: My Lords, I have already said that both major parties have changed their views on Europe. However, we are talking about a situation where only this Wednesday the honourable member for Stafford made it clear that he not only supported the Single European Act in 1986 but still supported the Single European Act today. That is the inconsistency.

We have not had from any speaker today a viable alternative to our constructive engagement in Europe. Perhaps in the 1960s there was a strong argument for developing Commonwealth links and Commonwealth preference. But now even New Zealand has less than 5 per cent. of its trade with the United Kingdom. There may have been a case--I doubt it--for a more constructive North Atlantic arrangement, whereby Britain would somehow become an honorary 51st state or, more likely, an honorary Puerto Rico. Even if we thought we could have a more constructive and positive relationship with North America, it must be evident from the trend of American policy that, whether it is in 10 or 30 years, America is gradually disengaging from Europe, politically, financially and militarily, and Europe must stand on its own two feet and co-operate among its member countries in order to replace what has been a valuable American presence.

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The Earl of Onslow: My Lords, those of us who take a different view from the noble Lord are not anti-European. We just think that the organisation is rotten and incompetent.

Lord Whitty: My Lords, the noble Earl brings me exactly to the point. While there are some who advocate an analogy with Switzerland and Norway, it is quite clear that Britain is not the same as Switzerland and Norway. We are a large trading nation and still a medium-sized power. What I think the noble Earl's intervention indicated is a renegotiation of our relationship with Europe. I cannot understand how in international relations any more than in any other walk of life one can expect to get a better deal if one is half a member of a club than if one is a full member of a club. There is a basic inconsistency on the part of those who castigate our partners in France and Germany for giving us such a hard time within the EU. They think that once we declare our intention to leave or half leave, our partners will suddenly turn into benign negotiators and give us more than we had while we were inside. That is not human nature and it is not international relations.

Much has been made of the issue of sovereignty. Sovereignty is indeed an issue. But we have pooled our sovereignty in the European institutions in the same way as we have pooled our sovereignty in other international organisations. By pooling one's sovereignty, one is always engaged in a process of negotiations. Negotiations always make for a bumpy ride. For example, sovereignty over our currency has not necessarily brought us great benefit. We have been subject to market forces. When I first went to Germany as a teenager in the 1950s I got 12 deutschmarks to the pound, but I am now lucky to get 2.5. There are many good arguments against the single currency both in principle and in detail as regards the timetable and the conditions, but advocacy of the self-fulfilling right to devalue is not a good argument against the single currency.

Britain has always engaged in Europe and we have done so principally to restore the balance of power or on behalf of the democratisation of Europe. Our friends there want us to do the same again. Even if we accept that the European agenda is over-dominated by Germany and that there is massive democratisation necessary in the European institutions, the answer is not isolationism, but to engage with our allies--those in the new democracies of Spain, Portugal and Greece, for whom the European institutions provided the support to emerge from the totalitarianism of fascism, and the old democracies of Scandinavia and the Low Countries, who all want to see Britain engaging, in part to dilute the Franco-German axis and in part to democratise the institutions of Europe.

At the beginning of the debate the noble Lord, Lord Pearson, referred to Clause 2 of the Bill as a "Moses" clause. My knowledge of scripture may not be as great as that of some noble Lords present, but my recollection is that Moses led the children of Israel into the desert

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for 40 years. My fear is that if the noble Lord's Bill is passed here today, he will be leading us in exactly the same direction.

3.52 p.m.

Baroness Elles: My Lords, it is indeed a pleasure to follow the noble Lord, Lord Whitty. In fact, I was wondering whether there are any more Members of your Lordships' House who were going to say anything in favour of membership of the European Union. So it was a great relief to hear what he had to say and to recognise that he was the fourth out of 24 Members of the House who spoke in favour of our continued membership and gave us much courage. Many noble Lords will disagree categorically with everything that he said, but I totally agree with all that he said.

I would like to take this opportunity to thank my noble friend Lord Pearson for giving us the chance to debate this particular subject, which has not been debated for some time in your Lordships' House. It has given us the opportunity to get the views of Members of your Lordships' House. Luckily, they do not represent at all a large percentage of the British population. They are either hereditary Peers or appointed by the Queen so they cannot claim, luckily, to be representative of the general totality of the British people, although some of them would obviously like to think so. I do not doubt that they do that on a perfectly good and sound personal basis.

However, thanks to my noble friend Lord Pearson, we are debating a matter which is very important to us and to the future of this country. It is a matter which needs very considerable thought and discussion. Our membership of the European Union is more than just a policy, as the noble Lord states in an article in today's The Times. We are bound by a treaty, which has no concluding date, to membership of the European Union. Nevertheless, I agree with him that we could leave the European Union if that is what the majority of the British people so decide. If that is what they wish, we could come out of the European Union. But that is the bottom line and, as far as I am aware, there is absolutely no evidence, except in your Lordships' House, to show that that is the case and that is what people generally want.

It is worth looking briefly at the evidence of the benefits brought by membership. As regards the economy, according to recent figures our average income is as high as it has ever been. A report in the yesterday's The Times shows that even the lowest one-fifth of the population have seen a good increase in their incomes. The United Kingdom is now a country where the increase of annual expenditure has never been so low, which is of benefit to all our citizens. The United Kingdom takes a very commendable position among the member states of the Community. We are half-way between the lowest and the highest, which is about 7 per cent. or 8 per cent.

Our exports to other EU countries amount to 60 per cent. of the total value of goods exported. I believe that my noble friend Lord Willoughby de Broke gave a completely different figure. We all have statistics

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available, which are based on different parameters. I am reminded of the famous statement about statistics: "If you have your head in the oven and your feet in the fridge, you are averagely comfortable". I believe that is about where we are on the figures. But I believe that one must accept that a large proportion of our exports go to other member states, whatever argument one has about 55 per cent. or 60 per cent., or whatever it is.

If we were to come out of the Community, exports would be subject to import duties and VAT. The free movement of people within the EU would no longer be available to us as it is today. Unemployment is another area in which the United Kingdom, under the present Government, has made vast improvements, with a continued decrease, month on month, in unemployment. We are the country with the lowest percentage unemployment figure among our major allies in the European Union.

There is no evidence to support that these figures would not change for the worse if we were no longer members of the EU. It would be idle speculation based on idle wishful thinking. That is something that I have noticed in all the speeches so far. I can understand the deep reasons why noble Lords do not want to be members of the EU, but they have not explained to us where the alternative outlets will be for our exports which at the moment have a very high standing in the world and in the European Union.

Lord Tebbit: My Lords, I am grateful to my noble friend for giving way. There is simply no reason to believe that, if we left the European Union, the Germans would be so upset that they would refuse to send us motor cars or refrigerators, that the French would not want to send us cheese, milk or apples. By the same token, if they wish to continue trading with us, they will have to allow us to trade with them. Of course we can go on selling things to them.

Baroness Elles: My Lords, I am afraid that my noble friend has not convinced me. That is a matter which has to be decided in the future. At the moment there is no guarantee that countries which export within the Community to the United Kingdom would wish to continue to do so or to do so in the same totality that we are currently exporting to other members of the European Community.

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