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Lord Stoddart of Swindon: I shall not keep the Committee very long. We have not discussed Amendment No. 27, which is unfortunate. I do not know whether it can be decoupled at this stage: presumably it cannot. I am given to understand that it can. In those circumstances I wonder whether when my noble friend winds up he might indicate that that is what he wants to do.

8 p.m.

Lord Shore of Stepney: I understand that, unlike in the other place, in Committee in your Lordships' House one has the great advantage of being able to return to a subject which one has raised even if one made a speech on it only two or three hours ago--

Noble Lords: Four hours ago!

Lord Shore of Stepney: Yes, four hours ago. Time flies!

I say first to my noble friend the Minister, for whom I have warm affection, that his speech disappointed me greatly. I find it almost incomprehensible that anyone speaking seriously about these issues can deny that there is a major constitutional issue involved in the abandonment of your national currency and the subjection of yourself, your people and your government to the rules of a treaty which you did not design, and to the rule of an unelected central bank based in Frankfurt. This is a disgraceful flight from self-government and from national responsibility. I shall not judge this matter wholly on economic grounds although I believe that, simply on economic grounds, the arguments are quite overwhelming. When it comes to the debate in the country we shall have seriously to address both sides of this great question as they are of almost equal importance.

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What I liked most about my noble friend's speech was his opening sentence. When the noble Lord who spoke from the Opposition Front Bench gave his view of the matter, I thought, like my noble friend, that we might be witnessing a remarkable revolt from that Front Bench against what I had understood now to be the new policy of the Conservative Party. Right until the end of his speech, the noble Lord, Lord Mackay, put the balance of the argument so heavily in favour of Britain joining economic and monetary union and the single currency that, frankly, it was difficult to draw any other conclusion. Of course, the noble Lord rescued it right at the end and I was glad of that.

The noble Lord referred to the difficulty that Scotland has often had within the United Kingdom when economic policy has been good for the south but difficult for the north. Yes, and we have all the ability to transfer resources nationally to the assistance of Scotland when that part of the United Kingdom is in difficulty. Has the noble Lord imagined what the effects would be of having a single central interest rate for the whole of Europe? It would magnify the problem way beyond anything that we have experienced within our own country where we have command over national resources to help areas in distress.

Lord Mackay of Ardbrecknish: I am grateful to the noble Lord for giving way. Clearly, in moving from one side of the Chamber to the other I have lost some of my skills. In making that point about Scotland and about the United States, like my noble friend Lord Howell, I thought that I was illustrating what I believe to be the dangers of the euro and the other side of the argument that I had put initially. I am not one of those people in politics who think that all the arguments are inevitably on one side. There are a number of pro arguments; there are a number of con arguments, and one must then make a balanced judgment. I thought that I had made it clear what my balanced judgment was.

Lord Shore of Stepney: I am grateful to the noble Lord for that clarification--as far as it goes--but I shall rely upon my own judgment as to where his judgment tilts at present.

I must advise my noble friend the Minister that I have some further queries about the Government's position towards EMU and, above all, towards the major meeting and the decisions that have to be taken on 1st May. I shall come to that point a little later. First, however, I should like to refer to those noble Lords who have directly challenged me on one point or another. I shall then comment on those who broadly agree with me, and finally I should like to pick up on some of the major points referred to by my noble friend Lord McIntosh.

As I have said, I turn first to those who challenged me. The noble Lord, Lord Taverne, started with a challenge. I plead with the serious-minded advocates of ever-closer European union and now the single currency and economic and monetary union, "Don't dismiss the argument because it comes from a known Euro-sceptic". This is a serious argument. If I were a Euro-enthusiast-- I am not--I would be desperately worried by this particular development in the policies of the European Union. Like the noble Lord, Lord Dahrendorf, I think that

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a more serious danger is now facing the whole European construction and Europe's prosperity than at any time since 1956. I ask the noble Lord, Lord Taverne, to take this argument seriously because if he does not, and if things go wrong, he will certainly live to regret it.

When the noble Lord, Lord Taverne, replied for the Lib-Dems, he gave me the first reason for mirth that I had experienced during the debate when he said that we were overlooking the "enthusiasm" of other countries for the single currency. The "enthusiasm"? There is no enthusiasm other than within the European political elite, within the classe politique, to which the noble Lord, Lord Beloff, referred in his short remarks. That is the group that wants EMU, but they dare not put it to their own peoples in a referendum. To pretend that the people of Sweden, Denmark or even of Germany are now in favour, by a majority, of the single currency is to misread the facts.

I know that the noble Lord is a serious student of these matters so I refer him to the last issue of Eurobarometer, which regularly carries out polling throughout the European Union, in which he will find that the latest poll shows that almost for the first time since the Maastricht Treaty the majority that always used to be in favour of a single currency has now become a minority. That is remarkable when one thinks of the extraordinary pressures that have been put upon people to persuade them of the merits of a single currency. Such pressures have been applied not only by national governments, but also by the Commission in its lead in the propaganda offensive. Think of the money that has been devoted to it and all the targeting of all the higher institutions of learning throughout the Community including, I gather, in the United Kingdom shortly, to persuade the people that all their worries and concerns should be forgotten because somehow, mystically, the single currency will bring about the great benefits of political union. Well, the situation is changing--and largely because, on their merits, the arguments simply do not stand up.

In dealing with those who rebutted what I said in moving the amendment, I turn now to my good friend, the noble Lord, Lord Randall, who is not in his place at the moment. He should not take too seriously what I confess is something more than a probing amendment, but which I tabled, above all, so that we could have a major discussion about a major issue which will affect our own people. This is part of the great debate because British democracy is real. We have a democracy and we must use it. We cannot simply just accept that governments do things on our behalf and that we hand over our powers to others and to other institutions that are no longer accountable to us. As my noble friend Lord Bruce stressed, this is about democracy and accountability.

I confess to the Committee my fears because I do not see how we can make our democracy work beyond the frontiers of our own country. Like sovereignty, it is confined within the territory of the United Kingdom. Democracy belongs here with us and cannot be shared with others; even less can it be claimed that sovereignty can be shared. We know that very well the moment we consider the European Parliament. That cannot be and is not a substitute for our democracy here. We have the

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reality of a national community and the bogusness of a European Community contrived in Brussels and in its various institutions.

Lord Grenfell: I thank my noble friend for giving way. Would he include or extend his theory of internal sovereignty to our membership of NATO?

Lord Shore of Stepney: I am perfectly happy with NATO. NATO does not write the laws of my country. It is a defence organisation from which I can withdraw at will, as General de Gaulle did for France. I am willing to co-operate with other countries to the nth degree but I shall not let them write the laws of my country, decide the taxes in my land and so on. I shall not do that because I am a British citizen. I also hope that I am a world citizen. However, I have had Euro citizenship thrust upon me without my consent. It is meaningless, and I think I speak for very many who have had similar experiences.

The contribution of my noble friend Lord Grenfell on the stability pact was very direct. It must be answered, and I shall now attempt to do so. Certainly there is an area of discretion and the matter must be considered. The fines are not automatic but they are semi-automatic. Unless one can plead a convincing case why one should not be fined one will be fined. That is the law of the treaty which is enforced by the European Court of Justice.

My noble friend's other point was quite correct. One must experience a fall of 2 per cent. of GDP in a single year in order to relieve oneself of the liability to pay a fine if one has an excessive deficit, but a 2 per cent. drop in GDP in an advanced western country is a calamity. We have not had it. We have had ups and downs. Our unemployment has risen to 3 million. The French have had 3 million unemployed and the Germans have nearly 5 million unemployed. In not a single year have they or we suffered a collapse of output or GDP of 2 per cent. We have had a fall of perhaps nought to 1 per cent., or even an increase of 1 per cent., of GDP. My noble friend should be aware that advanced western countries require a growth of output, productivity and GNP of no less than 2 per cent. per annum if they are to keep employment at its existing level. If we fall below 2 per cent., unemployment begins to rise, but our rate of growth of productivity is higher than 2 per cent.

8.15 p.m.

Lord Peston: Perhaps I might interrupt my noble friend since he made two erroneous remarks. GDP in this country fell by 2.2 per cent. in 1980 and 2 per cent. in 1990. It is simply not the case that that has never happened. It happened twice in this country under the leadership of the party opposite.

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