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Lord Graham of Edmonton: My Lords, perhaps the noble Baroness will allow me to intervene. As always, she holds the attention of the House, but the Companion quite clearly states that speeches beyond 15 minutes are undesirable. Even allowing for injury time, which she is entitled to claim, bearing in mind that we have already heard 20 speakers and there are another 15, perhaps the noble Baroness will consider and reflect.

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Baroness Elles: My Lords, I am most grateful to the noble Lord. I apologise to the House if I have carried on for too long, but I have been interrupted several times. I have three more lines. I do not know what my noble friend Lord Pearson has in mind as to the progress of this Bill, but it will do nothing to contribute to the world standing of the United Kingdom, nor to its future economic prospects, nor to the moral and social standing of its people.

4.13 p.m.

Lord Vinson: My Lords, I too am deeply indebted to my courageous and noble friend Lord Pearson for introducing this Bill. Those of us who expressed doubts about the long-term benefits of European Community membership are often accused of being little Englanders or lacking in vision through an inability to see the benefits that others see from the grand redesign of Europe. But one does not have to be over 50 to realise that, as so often in politics, the law of unintended consequences manifests itself. Of course, all of us want to see continuing peace in Europe and welcome the benefits that can come from a common market, but I venture to suggest that it is precisely because we seek peace and prosperity that we are fearful of the consequences of a fully federated Europe. We believe that it will bring political and social instability.

I was a member of the CBI Grand Council for many years and on the President's committee but, when I listen to its debates on Europe, I am struck by the total absence of regard to the political rather than the economic dimension. Like many--it forgets that the one depends on the other. Man does not live by bread alone.

Our democratic system is no doubt imperfect, but we simply cannot take it for granted that, if we alter it on a major scale--which is precisely what Maastricht followed by European monetary union will do--the system will hold. Our democracy just works. People do feel that they can, to some extent, affect their future and right wrongs through the present system.

We are currently represented by one MP to approximately 75,000 voters. In the European Parliament there is one MP to approximately 500,000 voters. So there is little chance of the elector seeing his elected at surgery on a Saturday morning. There is little chance that his MP can nobble some Brussels official to put right a wrong; there is little chance indeed that the MP will have sufficient time to answer his enormous correspondence; and there is little chance that he himself can affect the issues as part of a small minority in the European Parliament. Without serious debate, we shall have stretched the democratic elastic by a factor of seven to the extent that it will surely snap. Of course, as was said earlier, Belgium, Greece, Italy and others who have near unworkable democratic systems can see advantages in joining an apparently more stable whole. But their existing political tensions will be exacerbated. Trying to get things done through the democratic system will be near impossible; like punching a jelly, it will wobble to no effect. Increasingly people will become frustrated and localised anarchy will inevitably break out as people take the law into their own hands.

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The recent French lorry drivers' strike demanding to retire at 55 (which they got) is a manifest example, as was the strike that followed it in Greece.

Noble Lords will remember how the American War of Independence triggered. It did so on the slogan, "No taxation without representation". That is precisely the condition that full European monetary union will bring about. It is well said that those who ignore the lessons of history are forced to re-learn them. We should take note.

When a nation cannot control its fiscal and monetary policy, it is effectively no longer self-governing. There will be little left for the House of Commons to do, except acting out the make belief of power--debating the price of dog licences. More seriously, the only mechanism that Brussels will have for adjusting the inevitable national economic tensions is the use of convergence funds--throwing money at the problem.

It has been well said that economic regional disparities are really exchange rate problems writ small. If Liverpool could have operated with a devalued pound some 15 per cent. cheaper than the rest of the United Kingdom, it would have attracted inward investment without the need for government aid. In the past, nations adjusted their trading disparities by valuing or revaluing their currencies. With fixed exchange rates under EMU, it will not just be regions like Liverpool that will become economically out of line, but whole nations will come out of line. Robbing Peter to pay Paul through the use of convergence funds to try to adjust this would not only be wholly counter-productive; it would be quite impossible for it to be in any way effective at national scale. Major social tensions will arise.

We are bombarded with statistics on the likely economic advantages of ever closer union. But there is almost a conspiracy of silence about the fraud, waste and inefficiencies that the system brings with it. For example, at this very moment, the Government are authorising the expenditure of a quarter of a billion pounds to slaughter perfectly healthy cattle prematurely, none of which is destined to come into the food chain. All done as a token political gesture--like medieval witch burning--so that other members of the committee controlling our exports can feel that our guilt has been expiated. Like naughty children we are not even allowed to export gelatin-based wine gums. And all this is before we are even fully federalised.

At this moment, billions of ecu are also being spent in building unnecessary roads and superstructure in the remotest parts of Ireland, Portugal and Greece in an effort to stimulate their economies: modern pyramid building on a massive scale, but seldom criticised because it is all part of the grand design of Europe.

Increasingly many of our legislators, both in this country and abroad, are professional politicians. They are not personally involved, hurt or affected by being in front-line contact with waste, over-regulation and inefficiency. Their eyes are half closed while they contemplate their visionary designs for Europe. Where you stand depends on where you sit--and they are sitting very comfortably, thank you.

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Meanwhile, lower down in the anthill, the population begins to seethe with anger. It seethes over the way in which our fishermen have been treated. It seethes over the inefficiencies of the common agricultural policy. It seethes when excessive regulation from Brussels prevents perfectly rational and normal economic activity. Above all, it begins to seethe when our laws are second-guessed by a bunch of second-rate judges over whom our democratic system has no control. That is a manifest example of our loss of sovereignty.

EMU, and with it the inability to control our monetary and fiscal policy, will blow the lid off the democratic kettle. I fear for Europe. Those who call for ever greater political and monetary union in Europe subconsciously predicate those advantages against a background of political stability. But that is unlikely. The democratic deficit is too great.

The grand design for a federated Europe sows within itself the seeds of its own destruction. It is a future which does not work. It is for that reason that I join with others today in saying that Britain must renegotiate its position and repatriate many of the powers that it has given to Brussels. If it is unable to do so, it would be quite wrong to remain a reluctant member of a club in which we shall feel increasingly uncomfortable. The visionary design for Europe is fatally flawed: like the "Titanic", it is heading for disaster. If we cannot change its direction, we should make timely plans to disembark.

4.21 p.m.

Lord Milne: My Lords, at this point in the debate almost everything has been said which can be said. Therefore, I am sure that the House will be relieved to hear that I shall be very brief.

Liberty of action is very dear to me. I was a PoW during the war and I do not relish a Europe which Germany will lead. It will be led by Germany for Germany. Unless we are prepared to take a stand soon, our citizens will find that more and more of their MPs cannot help them or help the Government to take correct decisions. We have experienced that already in a small way in relation to the export of live cattle. Questions will be asked as to how all that was allowed to happen.

It follows that we should not surrender liberty of action unless we are absolutely certain that what we receive in exchange is much more valuable. To my mind, that has not been demonstrated. Our pattern of trade and circumstances are different from those in Europe. Regulations for one country do not necessarily suit another. The government of a sovereign country must have the authority to act in the very best interests of their country.

On that aspect, we have always been half-hearted about Europe. We joined under world conditions which have since changed. The late Lord Keynes said, "When circumstances change, I change my mind". We should now reassess our position. Costly decisions are looming as the federal tide sweeps on. A single currency is politically motivated and it is irreversible. As has been shown, opt-outs are fragile. The longer we delay, the more difficult it will become.

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Extension of the EU to the agricultural east, which is now on the agenda, would surely expose the cost and near impossibility of applying a unified structure across the board. In each country, as unemployment soars, people are questioning the need for EMU. That must be the moment at which to press for a flexible approach. We cannot be excluded from the Council and we shall very likely receive support.

Europe will be much better served by contented partners than by unwilling subjects. That is something on which, surely, we can all agree. With those brief comments, I support the Bill.

4.25 p.m.

Lord Bowness: My Lords, I, too, pay tribute to my noble friend Lord Pearson for putting the issue so starkly and clearly in order that there is no doubt that we are discussing the precursor to leaving the European Union. However, I must say to him that it is with regret that, not being a natural rebel, I am at odds with most of my noble friends on this side who have spoken. It is perhaps with greater regret that one year to the day since I was introduced in your Lordships' House I find myself in a position that I had not wished to be in perhaps so quickly. To some extent, I am comforted by the knowledge that I am not at odds with Her Majesty's Government on the issue.

It is a matter of extraordinary regret that after 20 years of membership of what is now referred to as the European Union--I do not propose now to distinguish between the Union and the Communities--we in the United Kingdom should still ponder on whether our destiny rests with our neighbours and our Continental partners, with whom we share the Continent of Europe and, despite what has been said, a common culture. We share a culture and a commonality with our partner states which is considerably greater than with other countries.

I wish that our membership would cease to be an issue and that we could start to share the hopes and ambitions of our European partners and those who founded the Union. Of course it is appropriate that we should discuss how much or how little should be done at a European level. Of course we should discuss what the functions and powers of the European institutions should be. Of course we should discuss and argue the policies which we follow in regard to what is done at a European level. Indeed, how many of those policies should be changed? Many of us are unhappy about them.

In connection with domestic policies, we address the role of government and of distant institutions within our own countries. However, in the context of Europe, if such debates are to take place rationally there must be a recognition that the European Union is not and never was, even as the old European Economic Community, merely a trading bloc, with rather elaborate rules and means of enforcing them. It is and was always intended to be an organisation with not only a trade but a political agenda. I am not one who believes that we in the United Kingdom were in some way misled. I can call no better witness in that than Sir Teddy Taylor, who, writing in the Telegraph about Sir Edward Heath, said:

    "I can confirm he made it abundantly clear that membership would lead to further Euro-integration".

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Sir Teddy Taylor's statement must be unimpeachable evidence in that regard.

The problem is that, for whatever reason, many people in this country have chosen largely to ignore the political imperatives which drive our partners and have not given much consideration to the vision which many of them have of a united, peaceful and prosperous Europe. The hopes of a peaceful and prosperous Europe can surely be shared by everyone. Of course I understand that there are questions about the practicality and there may be questions about the desirability of some of the measures which from time to time are proposed to achieve that end. However, I do not believe that that invalidates the objectives.

The desire for peace and stability requires more than merely a trading bloc. Economic union was always going to be a means to an end. The driving force was that Europe should not be torn apart again by war. I know that reference to peace may irritate some noble Lords who have spoken today. However, I believe that the potential instability in eastern and central Europe on the eastern borders of Germany still makes that a valid point.

My direct involvement with the European Union over the past two-and-a-half years has been as a member of the United Kingdom Delegation to the Committees of the Regions. Perhaps I may say to my noble friend Lord Pearson that that does not make one a member of the European political elite; nor does it mean that one is sharing in an elaborate gravy train. The gravy is very thin, as at least three other Members of your Lordships' House who are members of the United Kingdom delegation can testify.

Moreover, in connection with the Committee of the Regions, I should point out to my noble friend that we are not mounting a propaganda war for Europe, financed and funded through local authorities. One of the Commissioners has suggested that, because members of the committee hold locally elected offices, they are people who are well equipped to take to the population the message of Europe and what Europe is about. I must stress to my noble friend that no funds have come with that. Therefore, it is for the likes of the noble Lord, Lord Tope, and myself merely to advocate, if that is our wish, what Europe is about. But we do so with no funds whatever.

Membership of the Committee of the Regions has taught me, first, that the vision of a peaceful and prosperous Europe can be spoken about in other member states without embarrassment. I fear that the mere articulation of the words brings about shivers of embarrassment in the United Kingdom. Secondly, even those who would willingly accept a definition of "federalist" do not suggest institutions or a model remotely similar to the governmental institutions of the United States of America or of other federal states. Perhaps no one knows the precise form in which those developments would take place--if, indeed, they do take place. Of course I accept that such development would need the support of the peoples of the individual member states. But if you accept that there is a political

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dimension, however much or however little is done at European level, there must be rules, laws or a democratic element and institutions responsible to the Union, the member states and their citizens.

Unless we try to share the vision that other member states have, our time in Europe will be troubled. It is unfortunate, to say the least, to try to equate what the Union seeks to achieve with what was set out to be achieved by empire or by force of arms. It is also perhaps unfortunate to criticise member states which have been unfortunate enough to be invaded or which suffered from undemocratic peace in their history. From my experience with ordinary people who are working in ordinary organisations and very close to the people, I know that they have a deep belief in democracy and in the European concept.

It is difficult for us to say that we have no part to play. Sacrifices--as referred to in the House today--made by many thousands of our citizens in Europe are a testimony to the price that we have paid for instability and war in Europe in this century alone. It seems to me to be inconceivable, when Europe is changing so fast and when the old certainties of the cold war period have broken up, that we are anything other than intimately involved with the rest of our partners in the Union in confronting the issues of enlargement and ensuring that the new freedoms of the East do not lead to instability in parts of the Continent that would spill over and would have affected us even when we were a major power with a major empire.

We cannot deal with all that through a trading agreement, a trade area, as something that we can pick up and put down at will. Our European future is the same as the future for the other European states. So let us try to see what motivates them in their desire to make the Union work and try to share their vision. Of course, let us argue our case; indeed, it would be unwise to do anything else. However, with great respect, I must tell my noble friend that, if at the time of Maastricht the weight of opposition to the concept of Europe and the European Union had been as great as it was post-Maastricht, it is at least a fair question to ask whether we would have been able to negotiate, with the agreement of our partners, the kind of opt-outs that we did.

I believe that if a major part of the British Parliament were to support this Bill today, it would do irreparable harm to the negotiations that my right honourable friend the Prime Minister and other Ministers in the Government will try to carry on on behalf of and for the benefit of Britain. Our position must be firmly to be in and of Europe. We should not accept without question everything that comes forward by way of policies and proposals, but we need to be there; it is an integral part of all that we have worked for to achieve peace and prosperity in Europe.

Finally, we should not believe that everything which is done is wrong. I noted in a paper published by the Economist--therefore it was not an organ of the European Commission or of the European Parliament--three brief items which I should have thought would commend the Union and some at least of what it does

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to some of my noble friends. In connection with the French post office, the competition commissioner has decided to publish the long-awaited notice on the obligations of post offices under the Union's founding treaty, against the wishes of the French Government.

The Commission has ruled against the Belgian telephone operator, Belgacom, which has been told to scrap its loyalty card because it is anti-competitive. I remind my noble friends that the Committee of the Regions might also obtain their support as regards some of the things that it wants to do. Representatives of the German Lander have rejected a tourist policy on the basis that they believe that should be done by member states, and in their case the German Lander. Therefore not all that comes from Brussels is about large centralising government. Much of it concerns competition and taking functions to the places and levels where they belong.

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