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Lord Pearson of Rannoch: My Lords, before my noble friend leaves this point and further to the intervention of my noble friend Lord Tebbit, does she agree that we trade in deficit with the other countries of Europe and that they trade in surplus with us? Therefore, does she further agree that they are most unlikely to want to abandon that trading relationship? Does she not agree that, at the very least, they would have to think about the effect on their fancy new currency--if it comes into being--if they were to cut off their noses to spite their faces in that way?

Baroness Elles: My Lords, my noble friend brings up a very good point. If a new currency is introduced it might be very difficult for the countries of the European

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Union to export to us because, if we do not have a single currency, how will we pay for the goods? What will be the relationship between the pound and the single currency? We do not know. I am not saying that it may not be marvellous and wonderful; we may do extremely well. But there is no proof which I or anyone else in this House can provide to say, "We will come out and all these countries with their surplus products will flood us with cheap goods". There is no evidence for that and, therefore, it is a question mark over our future.

If one looks at other opportunities which we have at the moment--

Lord Stoddart of Swindon: My Lords, I am much obliged to the noble Baroness for giving way. I have great respect for her commitment and intellect. She is asking for proof of what will happen if we come out of the European Union. Perhaps I may remind her that before we went into the Community we traded with it on the basis of a surplus. The truth is that since we joined the Community we now trade with it at a deficit, which has amounted to £100,000 million since we joined and in 1995 it was £6,000 million.

Baroness Elles: My Lords, that does not alter my argument. The fact that we trade with other member states but sell less than we buy is our fault, not theirs. It is up to us to be able to increase production. As far as I understand it, the argument still exists that we are trading with countries in the European Community, but I wonder whether that would continue on the same basis if we were to come out of the Community.

I should like to talk for a moment about the opportunities which are now available to so many of our undergraduates, students and young people generally. Under the ERASMUS scheme, young students can take part of their university course at a university in another member state. I suppose that that is quite a small point among the many major points that have been made by noble Lords today, but the fact is that the advantage to those young people is enormous. They can make friends and have contacts which, even on their return to college in this country, can last throughout life. Opportunities are available to our young people to learn, to earn, to travel and to study abroad--if they wish to take advantage of them. Would those opportunities be available to our young people if we left the European Union? I do not know, but that is a question that we must face. We do not know whether our young people would be able to continue to benefit from opportunities that are available at the moment to all students in the European Union. I do not know whether that door would be closed to them if we were to leave the Community. I am not saying that it is of vital importance, but I am saying that it is a matter of some importance to young people generally who want to be able to mix as equals with their peers throughout 14 other countries.

I should like to mention other more important issues. There is the question of the very existence of NATO. Other noble Lords have rightly said that NATO has guaranteed the peace in our area of the world for the past 50 years. I do not think that anybody would deny

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that. You do not have to be pro or anti-Europe--or whatever the current phrase is--to say that NATO is our bulwark against any threat from any other part of the world. However, it is also true to say that without the close links that exist between European Union member states, there could well have been strife. It is not one denying the value of the other, but the one is of additional value to the basic standing of NATO. It is only necessary to see where severe fighting and massacres have occurred in recent years--in Bosnia, for instance--to recognise that there is more peril for those outside the EU even on our own continent than for those who live within the safe boundaries of the European Union.

If there is one matter for which we can be thankful, it is that the existence of the EU has guaranteed peace in the region for so many years. It is generally accepted-- I have heard this on all sides in all member states which I have had the pleasure (or not) of visiting--that war is no longer a threat to the member states--

Lord Bruce of Donington: My Lords, I am most grateful to the noble Baroness for giving way, but before she leaves her point about peace in that area of the world, would she not agree that the unilateral intervention of Herr Kohl in recognising Croatia without any consultation with his allies in the European Community was to some extent a destabilising action in the area which precipitated the grave events that happened thereafter?

Baroness Elles: My Lords, I agree absolutely with the noble Lord. One does not have to be totally pro-European (or whatever is the phrase that one likes to attach to somebody who makes such statements) to accept that mistakes are made. I agree that it was a serious error. It was due to the German Foreign Minister of the day that that particular issue was resolved on their own account without discussing the matter with other member states of the Union. It was regrettable. I totally agree with the noble Lord--

Lord Taylor of Gryfe: My Lords, I am sorry to intervene, but I should like to point out that the noble Baroness has been interrupted four times now by Members of this House who have already spoken in the debate. Is it not time that we introduced a little order into the matter and prevented the continued interruption of speakers by noble Lords who have already spoken?

Baroness Trumpington: My Lords, I would submit that the noble Lord is taking up even more time.

Lord Taylor of Gryfe: My Lords, of course I am, but so far I have not taken part in the debate. I have listened with great patience and I hope to vote at some stage, but this cannot go on indefinitely--

Lord Graham of Edmonton: Oh yes it can!

Baroness Elles: My Lords, I am just following the procedures of the House. If noble Lords choose to intervene, I have no option but to give them that

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opportunity and right. I am grateful to the noble Lord, Lord Taylor, for his intervention, but if noble Lords wish to intervene when I say something that upsets them, they have the right to come back at me and I have the right to reply. However, I am grateful for that intervention.

As I have said, there is one issue for which we can be thankful--and that is that the existence of the EU has guaranteed peace in the region for so many years. It is generally accepted that war is no longer a threat within the European Union among its members. This is a vital point. As a history student--having read not only from the Middle Ages onwards, but earlier than that--as far as I know this country has never lived with such a situation in its history. We have had peace for 50 years. We have been members for the past 20 years and I believe that we can now sit back and believe that our children will not be involved in a local war within what are now the 15 member states. We must be grateful for that. Whatever one's views about the European Union, I do not think that one can deny or overlook that fact and say that it is irrelevant to our future. It is very important indeed.

Membership of the Union does not mean renouncing our nationality. I do not believe that that is in question; on the contrary. The Maastricht Treaty is not anybody's favourite reading. Indeed, we have been reminded that one of our Cabinet Ministers said at the time that he had not read the Maastricht Treaty--I cannot believe that he has not read it now. However, the fact is that even the Maastricht Treaty, with its faults, states clearly in Article F:

    "The Union shall respect the national identities of its Member States, whose systems of government are founded on the principles of democracy".
That means that the nationalities of member states are fundamental to the status of those countries within the Community. There has been much talk about us ending up with a United States of Europe, but I believe that even Chancellor Kohl--and many criticisms have been made of him today and of his statements going back to, perhaps, 1990 or 1991--has said recently that he does not intend there to be a United States of Europe. It is a pity that some of my noble friends did not also use that quotation.

Lord Pearson of Rannoch: My Lords, I apologise if I irritate the noble Lord, Lord Taylor, but the quotation that I gave from Chancellor Kohl, whose statement,

    "European integration is in reality a question of war or peace in the 21st century",
was made at the University of Louvain a year ago.

Baroness Elles: My Lords, that is a question of war and peace, not a United States of Europe. I accept what my noble friend has said with regard to that quotation.

My next point is that the benefits from this period of peaceful existence are there because we enjoy the system of parliamentary democracy that all other member states enjoy. It is precisely because new applicants for membership have recently acquired or reacquired their parliamentary methods that they look to membership of the EU to ensure that those methods survive and are

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maintained. That must be of fundamental importance to the future of Europe as a whole. Whether or not we are a member of the EU, surely this is something that no one wishes to see denigrated or not put into effect. Other states outside the Union are working towards a firm and consistent form of parliamentary democracy which, through membership of the European Union, will be sustained and maintained.

Finally, our country, with its individual approach to production management and other skills, has--as of today, I understand--drawn inward investment from Japan alone to the extent of 60 per cent. of all inward investment to the EU. Many noble Lords have referred to the statements by Toyota. Clearly, like statistics, they can be quoted in whatever way one wishes. However, these investments would almost certainly not be made in future in the United Kingdom if we were no longer members of the EU. I do not believe anyone would deny that the Japanese would not be the only investors to hold that view. Exactly what the president or chief executive of Toyota said is irrelevant, but that was made clear to all concerned.

There are many valid and fundamental reasons why membership of the EU remains crucial to the financial and economic standing of the United Kingdom. As many noble Lords have said, it is easy to demand withdrawal, cut ourselves off and lose our friends and allies, but that is not a wise or fair decision to take for our present and future. It will be time to evaluate the proposals of the Intergovernmental Conference and take part in the decisions which set out the future course of the EU when that conference terminates. I do not believe that it is sensible to try to evaluate now what those decisions will be. It is for us to state our position as we see it and to see how far that is followed by the results of the IGC.

There is no evidence to guarantee that the future of our country will be safe. I refer particularly to the poorer people here. Only yesterday in The Times there was a statement that the income of even the lowest quintile--which I believe is the correct word--had greatly increased and that those people were comparatively better off, to put it bluntly. If we came out of the Union, what guarantee could be given by noble Lords who were concerned about the depression apparent in so many parts of the country 20 or 30 years ago that people could be led out of that terrible situation and guaranteed a firm future? I do not know of any noble Lord of any party or view who could provide to the poorer people of this country a guarantee that their quality of life would be maintained in the face of the economic situation in which this country would find itself.

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