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Viscount Montgomery of Alamein: My Lords, before my noble friend sits down, does he think that we will continue to enjoy the trading advantages that we

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currently enjoy if we withdraw from the European Union? Furthermore, does he consider that our influence on matters to which he referred earlier in his speech would not be enormously diminished if we withdrew? In those circumstances we would have very little influence at all.

Lord Monson: My Lords, we would still be members automatically of the European Economic Area and also retain the advantages of the GATT negotiations. There would be few difficulties, for reasons explained by other noble Lords--I do not want to go into them again--and we would have the same advantages as Norway and Switzerland. My point in regard to influence is that it would act as a stimulus to other countries who are also dissatisfied with the obsessive harmonisation and over-regulation. It might cause them to exert pressure to make a change.

Lord Pearson of Rannoch: My Lords, perhaps I can put it to my noble friend who intervened--

Noble Lords: Order!

Lord Pearson of Rannoch: My Lords, before the noble Lord, Lord Monson, sits down, perhaps I can put it to my noble friend--

Noble Lords: Order! Order!

4.56 p.m.

Lord Hindlip: My Lords, this is perhaps a difficult moment to come in. I suspect that everybody is getting tired and slightly fractious.

I take issue with one thing said by my noble friend Lady Elles--who I am sad to see is not in her seat--who said that she did not feel that the EU in its present form was unpopular. The reason we are all still here so late is that it is unpopular. I take issue with her also when she says that noble Lords do not have a sense of public opinion. I believe we do. That is why we are here. Still, I shall try to be brief and come in in the middle of what I had intended to say. That is appropriate because once again I must address the question raised by the noble Baroness, Lady Ramsay of Cartvale, concerning English auctioneers.

As chairman of Christie's I should perhaps declare an interest in the question of English auctioneers operating in Europe. The noble Baroness was quite right in saying that it was the intention that we should be allowed to operate in Europe by the beginning of 1998. That may sound slightly odd, given that we have now been members of the EU for 24 years and are still barred from operating there. In fact, that date has now been pushed back to 1999 at the earliest because the enabling legislation which was to have gone before the French Parliament this autumn has not done so. In effect, therefore, General de Gaulle's veto lives on for us.

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On looking back--the noble Lord, Lord Wyatt, mentioned this--General de Gaulle, who was a brilliant man, may have been right. Since the Norman conquest Britain has had an uneasy relationship with continental Europe. It has different priorities and different preoccupations. France and what was to become Germany have always been preoccupied with internal European politics. France has pursued its own interests vigorously and skilfully, and still does but in a bureaucratic and centrist way.

I suggest that historically, and still, Britain's trade and ambitions lay outside Europe. We pursued them with equal vigour but in a laissez faire fashion. We have been at our most successful when we have avoided European politics and European wars. We have suffered most when we have become too closely involved, even when we appeared to win.

In the 1950s there appeared to be a convergence between our historical perspective and Europe. But after 25 years of European experience it appears that nothing has changed. Europe still looks inward and we must still look outwards from Europe to achieve our own goals and prosperity.

If anything, Europe is more bureaucratic than it ever was. It is blinded by dogmas like harmonisation and the pursuit of the elusive--and probably illusory--level playing field, and blighted, as many noble Lords have pointed out, by petty disputes about beef, chocolate, olive oil and now airlines. It is also weighed down by the huge expense of the common agricultural policy and by a parliament which is, as other noble Lords have said, overhoused, elected by few and understood and listened to by fewer still.

If this is the destination of the train to which my noble and learned friend Lord Howe of Aberavon was referring when he made his famous speech attacking our greatest Prime Minister, I would prefer to wait at the station. My right honourable friend the Prime Minister is still urging us to do that. But we cannot wait for ever and it may be that the time has come for Britain, with its strong economy and strong inward investment, notwithstanding what we heard from Toyota, to distance itself from Europe.

I have to say also that, in the business I work in, it costs 50 per cent. more to employ someone in France to do the same job as someone in England and his take home pay is less. We know the reason. It is the Social Chapter which the Front Bench opposite is so keen to implement here. What is worse is that in most European countries, as my noble friend Lord Bradford pointed out, state pensions are unfunded. They will eventually break down and impose appalling burdens on those states.

The time has clearly come to rethink our relationship with Europe. We have heard much talk about being at the heart of Europe. We have failed to be at the heart of

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Europe, and it is by no means all the fault of our partners that we are not. Our diplomacy has been unequal to the task of breaking down the historical differences. Europe still needs us, as other noble Lords have said, and we still need Europe. Few would want Britain to stand wholly apart from the continent, but if we are always to be the odd man out we will be in an equally bad position.

There is a painting in the Tate Gallery of the professors of the Royal College of Art, painted in the 1950s by someone I was lucky enough to know, Rodrigo Moynihan. He depicted himself and his colleagues in a group with one man standing apart. That was the painter John Minton. He was a good painter and a clever man but he stood apart from his colleagues. As he grew more isolated, he grew more depressed and in the end he killed himself. If we stand for ever part of a group, but not a part of it, we will probably kill ourselves too.

Our relationship with Europe at the moment is like that of an engaged couple who had known each other since childhood. They thought they loved each other. They got engaged, they promised to marry but they kept on putting off their wedding because, as they really got to know each other, they knew they would never really be happy. But because they could see no way out, they married. Legally bound and with all the responsibilities of parenthood, they fought more and more and they finally and acrimoniously divorced. They would have been much better off breaking off the engagement, not marrying but remaining friends. But they lacked the courage to admit they had made an honest mistake.

With sadness and not a little foreboding, I have come to the conclusion that this is where we are in our relationship with our European friends--and friends they are. I shall therefore vote for my noble friend's Bill and would urge other noble Lords to think very carefully about what has been said in the debate before they oppose it.

5.5 p.m.

The Earl of Onslow: My Lords, it is extremely interesting that this House is sitting at five o'clock on a Friday afternoon. It is interesting because I genuinely believe that this debate is very representative of the debates which arise whenever politics are discussed in pubs, clubs, dinner parties or wherever it may be. That is reflected in the balance of the speeches made in your Lordships' House today.

In Scind in the 1860s there was a dashing cavalry subaltern called Jacob. He was regarded in the bazaars of Scind as a brave protector of the poor. Sixty years later, Jacob Sahib had become a fat, bloated tyrant--in other words, the bazaaris of Scind had changed their mind.

I came to this House just after my father died and just before the European Communities Bill was introduced. I wanted to make my maiden speech on that Bill, but I was sat upon by the Earl of St. Aldwyn and the noble Earl, Lord Jellicoe. I was told that I was to wind my trunk in; that I was a young man; I was not to be arrogant and I was to keep quiet. It is the only time that I have ever taken that advice, for which I apologise.

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I was going to say that I saw the future of Europe as a federal state and as the successor to the Holy Roman Empire or to the old western Roman Empire. I thought that that was a good thing, so I do not believe that we can be told that we did not believe that federalism was on the menu. However, I have come to change my mind totally. I am a Euro-fanatic. My civilisation is Europe. I am moved by the sufferings and the greatness of European art, of politics, philosophy and music. No other continent has ever contributed so much to world civilisation. Therefore, I am a Euro-fanatic.

But that does not stop me from believing that the present arrangements for the governance of Europe are extremely silly. It is ridiculous to expect that von Bredow's Uhlans are going to charge up the hill at Marly-la-Tour or that Louvois is going to sack the Palatinate; or that the Italians are going to beat up some other Italian in the neighbouring village and that Europe is going to go to war in that sense. We are now grown up. The Black Prince is not going to shoot up Poitiers with bows and arrows. We are grown up and have grown out of that. We have grown tired of it.

But what we have to do is to make sure that we trade and sell each other widgets. "Unless you have the spice trade you cannot have Tintoretto". The only way to enrich ourselves is by the buying and selling of widgets.

So we put in place a thing called the common agricultural policy, which is about the most widget-distorting thing that has ever been invented by the wit of mankind. I have a cousin who is a young Member of your Lordships' House. He has approximately 8,000 acres of good agricultural land in Suffolk in hand. His area and set-aside cheque, on any normal calculation, would be about £1 million. His forebear had a nice brewery outside Dublin, so it does not take a lot to guess who he was. On the other hand, if one is an unmarried mother in a high-rise flat in Scunthorpe and one treats one's children to margarine because it is cheaper than butter, one pays £2,000 per tonne as a tax on the import of margarine.

Can there be anything worse than that? One taxes the poor and increases the price of food at that level to pay the noble Earl, Lord Iveagh, or the noble Lord, Lord De Ramsey, who is another big farmer, and, to a lesser extent, myself. I love that cheque when it arrives, so do not think that I blame them for taking it because I do not. But is it right that the tax on the poor is increased so that we get those cheques? It has not done the farming industry any good. It has not helped the villagers in the Massif Central. There are deserted villages in Burgundy. The CAP has not solved social problems; it has simply resulted in arrangements which distort world trade.

I served on the committee of your Lordships' House which looked into the effects on the CAP of the arrival in the Union of Eastern European countries. It was concluded unanimously that it was impossible for those countries to join with the CAP as it is. There is no likelihood of the CAP being changed sufficiently to

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allow them in. Because we need peace and prosperity in Eastern Europe, it is important that we buy everything that those countries can sell. We do not. The other day the Germans actually quibbled over the quota of half a lorry-load of raspberry juice--I cannot remember whether it came from Poland, Romania or Bulgaria. It was one of those sort of places. We cannot allow that sort of behaviour to determine our trade with Eastern Europe. We must import. We must buy from those countries. The EC-Polish trade agreement is full of restrictive practices. It contains provisions which enable the European Community to buy from Poland what it does not produce while ensuring that the Poles are not allowed to export to the European Community those things that it can produce more cheaply. Furthermore, the fisheries policy is a bad policy. The Namibians, the Canadians and, above all, the Norwegians all run much better fisheries policies.

So far, I have shown, I hope, that about 60 per cent. of the European Community's budget is spent on disastrous projects. I have not mentioned the fact that we subsidise the Greeks and the Italians to export poisonous tobacco at the same time as insisting on putting health warnings on our cigarette packets. What a silly way to behave. Indeed, what an evil way to behave. We are not allowed to use that tobacco in Europe because it is too carcinogenic, so we sell it under subsidy to other people. That cannot be right.

Unless an immense grip is taken over Europe--we have been saying for 25 years now that we can influence it from inside; I suggest that we are not influencing it from inside to as great an extent as it needs--we whose traditions are those of Locke, Adam Smith and the liberty of the subject are in conflict with those whose traditions are those of Rousseau, Nietzsche and Colbert. To end it all, I would rather be badly governed by the present Prime Minister with the prospect of being worse governed by Mr. Blair than be well governed by Bismarck, Kohl or Chirac.

5.12 p.m.

Lord Ashbourne: My Lords, I must apologise for speaking in the gap. I put down my name to speak but it somehow got lost in the system. In any event, I shall not detain your Lordships for long.

As I understand it, the Government are united in their desire to see Britain as an important member of a European Union which is a partnership of nation states. That means, in effect, an enlarged, flexible and outward looking community that concentrates on free trade, deregulation and competitiveness. Do we not want a Europe which can compete with Asia and North America--in effect, a world beater; not a Europe which is inward looking, protectionist and bogged down with job destroying social regulation? We should reject the Left-wing agenda of a federal superstate run by Brussels, as the Prime Minister made clear recently when he said:

    "I'm not going into, and have never shown any enthusiasm whatsoever for, a centralist Europe, a federalists' Europe".

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Should we not be putting British interests first and fighting in Europe for our national concerns? Indeed, the Prime Minister recently made clear his determination to defend the national interest when he said:

    "There are a lot of things in the treaty that frankly are an anathema to us, that we will not be able to accept, and I have made that absolutely clear ... if we are right I don't mind being isolated".

As I understand it, our position on economic and monetary union is also clear. Britain will take part in a single currency only if the Government decide that it is in the national interest so to do given the circumstances at the time. Our opt-out remains in place. If we do not join we will retain control of domestic economic policy and there is no question of fines or other sanctions being imposed on us. We will be affected by EMU whether we participate or not, so it is vital that we retain our position at the negotiating table.

The staunchest advocates of European integration have always acknowledged that economics is merely the handmaiden of a new political order. According to my noble friend Lord Tebbit in such a system national parliaments would become little more than rate-capped county councils, while no less a figure than Hans Titmeyer, President of the Bundesbank, has emphasised that a European currency will lead to member nations transferring their sovereignty over financial and wage policy as well as in monetary affairs. It is an illusion to think that states can hold on to their autonomy over taxation policy.

In conclusion, I believe we should remain within the European Union, negotiating vigorously for the things we believe in, while refusing to join the single European currency, as I do not believe that the British people wish to give up control of interest rates, taxation and, even more, sovereignty than they have already ceded.

Earlier this week I had an anniversary. These anniversaries were joyful occasions many years ago. In later years I find them rather less joyful. I shall soon be able to say that perhaps I am one of the more mature Members of your Lordships' House. I received my first Euro-birthday card. I thought that I should share it with your Lordships because it is a good reflection on the present debate.

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