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Baroness Williams of Crosby: My Lords, I am sure that the House is indebted particularly to the remarks of the noble Lords, Lord Renton and Lord Howell of Guildford--I shall come back to that in a moment. In the remarks of the noble Lord, Lord Renton, taken together with the noble Lord, Lord Howell, we see the difficulty of trying to put a date into an amendment of this kind.

The noble Lord, Lord Howell, pointed out that matters were moving much faster than may be implied by a date of this sort, and the noble Lord, Lord Renton, said that we had no way of knowing exactly when the next election will be; we can make an assumption about it but we may get it wrong. Clearly the Government are committed to a referendum in any event and in my view therefore the amendment is probably otiose.

In fighting a referendum, whatever view the Government take at that time, they will have to set out their case to the British people in great detail, as will those who take differing views on the matter. The crucial issue is to ensure that the British people are as fully informed as possible.

In that context one matter that I profoundly regret is that the previous government did not make available information about the European Monetary Union, which I believe they should have done, because we now have to look at a country which is less well informed than most of its neighbours in respect of the implications, or possible implications, of European Monetary Union.

The noble Lord, Lord Howell, pointed out that euro-denominated bonds are growing very fast, and perhaps I might add to that a more pedestrian thought. Last weekend I took part in a business forum in Ipswich for East Anglian business people in the presence of both a German businessman of some standing, whose company has a number of subsidiaries in this country, and a Dutch financial expert. Both of them pointed out that in their view the companies in East Anglia should move as quickly as possible to denominating prices in euros, and this is years before there is any possibility of this country joining the euro system. They felt that British companies would lose out very badly in their export markets unless they began to move very quickly in that direction.

The noble Lord, Lord Howell, did not express a particular view about when there should be a decision with regard to the European Central Bank and the single currency, but what he did do, and was absolutely right to do, was warn the House, and he gave us a very strong sense of the urgency of this issue, whether or not Britain becomes a full member. I ask that we meet at some time to discuss the point that he raised with regard to what I had to say, but in the meantime perhaps I may say this. Of course, he is absolutely correct on the legal and

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constitutional aspect, but I was not making that point; I was making a point about the de facto issue of sovereignty. The noble Lord will understand that I was a member of a government which had to accept quite specific intervention by an international monetary fund in existing government policies as a condition of receiving a loan to enable them to sustain sterling through a difficult period. Therefore, I am much scarred by an awareness that all the sovereignty that may exist in constitutional terms can be very much qualified by the harsh facts of economic and financial life.

I now turn very briefly to the clause moved by the noble Lord, Lord Mackay of Ardbrecknish.

Lord Beloff: My Lords, I am sorry to intervene, but the noble Baroness is again making a fundamental error of definition. Nobody would deny, for instance, that in 1939 the country--I will say Estonia in the presence of the noble Earl, Lord Carlisle--was a sovereign independent state. That status did not help that country when the Soviet armies approached. There is interdependence, and there are different degrees of dependence: political, military, economic. However, these are totally distinct from constitutional sovereignty, which is the right of people, unless they are impacted upon from outside, to settle their own fortunes.

So long as the noble Baroness persists in confusing interdependence--a characteristic of all forms of society--with legal constitutional independence, her argument can make no impact.

Baroness Williams of Crosby: My Lords, I appreciate the remark made by the noble Lord. I thought that it was almost exactly the point that I had made a moment or two before. I was indeed indicating that there is constitutional sovereignty. I was accepting the argument of the noble Lord, Lord Howell, on that issue and I was pointing out that in the hard world of power constitutional sovereignty does not necessarily mean that one is able to pursue the policies one believes to be right for one's own country.

I return for a moment to the argument I was making about the moving of the new clause by the noble Lord, Lord Mackay of Ardbrecknish. I did feel that he was, to say the least of it, rather ungenerous in his estimate of what has actually happened over the past two years. The truth of the matter is that if one looks back at the remarks that were made in this House, in another place, in the Financial Times and in other serious newspapers in this country, almost nobody expected the European monetary process to start on time; almost nobody expected 11 countries to be members of it and almost nobody expected the date of the European Central Bank's launching to be on exactly the date that was first opined as the earliest possible date. We did what so often in this country we have done. We underestimated the other countries of the European Union in their capacity to meet the timetable that they had set themselves. We have done that ever since the Messina Conference of 1950; we did it over the Treaty of Rome; we did it over the European defence community, and we have done it time and time again.

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I would plead with Members of this House and, indeed, with our own Government to recognise that we have to look at the actual timetable of events and not at what we might wish to be the timetable of events. That means that, inevitably, we have to deal with the reality and not with what we might wish to be so.

5.45 p.m.

Lord Stoddart of Swindon: My Lords, will the noble Baroness give way?

Baroness Williams of Crosby: My Lords, I will not give way for a moment. Allow me to complete my argument and then I will give way. The reality is that 11 countries have made an immense effort in terms of approaching and in most cases meeting the convergence criteria. That is something nobody imagined that they would do. The crucial outcome of that great effort is that they have now accepted a philosophy of stable pricing and there is acceptance of a resistance to inflation, which is something totally new, especially for some of the countries of southern Europe. I feel that it would be less than gracious of us in this House not to recognise the scale of that achievement. We may indeed wish to criticise certain elements of it. We may wish to make the point that Belgium or Italy, for example, have not wholly met the debt criteria, but we should at least recognise, whether or not we decide at the end of the day to join the European Central Bank and to accept the single currency, that this has been an astonishing and major achievement, and one about which there are almost no predictions in this House or in another place that would suggest we might actually meet it. I give way to the noble Lord.

Lord Stoddart of Swindon: My Lords, to some degree the noble Baroness has answered the point that I wish to make to her. She said that this country underestimated the commitment of other countries. I do not believe that is so at all. What we overestimated was their ability to hold to agreements that they had made through treaties, such as the Maastricht Treaty. It has actually been crucial, or it was crucial, we thought, that all countries should meet the Maastricht criteria in every sense. They have not met the Maastricht criteria in every sense--and some of them have missed it by a very long way and by creative accounting--so perhaps the British people or the British Government were a little too trusting of the other countries, rather than underestimating their commitment.

Baroness Williams of Crosby: My Lords, I merely say that creative accounting is not unknown in this country, too.

In conclusion, I turn to the situation as regards enlargement that was raised by the noble Lord, Lord Howell of Guildford. I believe him to be absolutely right. The crucial historical goal for this century and the beginning of the next century is the enlargement of Europe. I agree fully with the concern of the noble Lord, Lord Howell, as regards the possible divergence of energy. However, I must say, and say clearly, that if the United Kingdom had consistently given the lead it

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should have given in Europe and had consistently attempted to shape European goals and European policies, enlargement would, in my view, have been able to be that central priority.

I conclude with a quotation from one of the closest friends of the United Kingdom--Holland--and in particular the chairman of the Netherlands International Institute of Relations, which is the equivalent of Chatham House. It is a very recent quotation made at a special session that was held to recognise the launching of the UK presidency of the European Union. This is what Mr. Alfred Pijpers, who is not a politician, but a very distinguished expert on international affairs, said:

    "It was widely felt in the Netherlands and the rest of continental Europe that during the long period of Conservative government, Britain developed an increasingly sceptical and even negative attitude towards the European Union".

That is not a position from which it is easy to commend the central importance of enlargement. I believe it is important to say that we could have gone much closer to achieving that goal much more quickly had the United Kingdom recognised the speed at which the rest of the European Union was actually moving.

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