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Lord Hooson: My Lords, I thank the noble Lord for giving way. How does he reconcile his view with that of the president of the National Farmers Union, who said recently that membership of the EU is vital to the interests of British farmers?

Lord Stoddart of Swindon: My Lords, the National Farmers Union is traditionally wrong about everything. It was wrong when it promised the farmers of this country a good and continuing high standard of living. A great many of those farmers--in particular those who have now been forced out of farming--know how wrong the NFU was then. It is likely to be wrong now as well. I shall not go into detail on that argument because I am not sufficiently knowledgeable about farming. However, I probably know as much about the subject as does the noble Lord, Lord Hooson.

Many other matters need to be discussed. We need to discuss the effects on manufacturing industry. Since we entered the common market, our manufacturing industry, which was supposed to have benefited from our membership, has declined by 33 per cent. After Rover, it will decline even further. We must examine the effects of membership on manufacturing industry.

We also need to consider the regulatory problems that both big and small businesses have to bear as a result of regulations issued by the EU. Higher food prices would greatly help wages and business if we were not paying £1,000 more per family for our food than we need be.

We want to know, and we ought to know, whether we are getting good value for the £9.5 billion which the taxpayers of this country pay every year. Or would that money be better spent helping farming and fishing, rather than going into the European Union coffers to be laundered by the corrupt European institutions?

The committee of inquiry would also need to consider the constitutional aspects of our continued integration with Europe; for example, the reduced status of Parliament and the Union's power of decision over a wide-ranging and increasing number of issues. What is the destination for our Parliament, which has been around for almost 1,000 years? We need to consider how the law has changed and is continuing to be changed, and how the increasingly intrusive European police force will operate in the future. Those are all issues which the committee of inquiry will need to consider.

As the noble Baroness, Lady Park, said, we ought to consider our foreign policy. It is an important part of our institutions. If it were outside the EU, would it regain its dynamic influence in the world, unfettered by the shifting sands of continental interests? Will our

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Armed Forces be increasingly hampered and weakened within a European defence policy and defence force or could they develop properly outside that to defend Britain and play a proper and independent role in the world?

We need to consider the effect on political parties. They are being neutralised in their effect and in their self-government. The involvement of ordinary electors in the governance of their country is involved. We should perhaps consider within the committee of inquiry whether, as a result of our membership of the EU, people are being alienated from politics and its institutions which have been built up over a long period of time.

I believe this Bill would be a useful Bill. It would give us an opportunity really to inquire into our membership of the EU: whether it is good for us; whether it is bad for us; and whether it would be in our interests to withdraw. People should have confidence in this country. Remember, we are the fourth largest economy in the world. It is not necessary for us to become the 51st state of America, or any other country for that matter. We are just as capable as Taiwan or Japan of standing on our own two feet, making our own way in the world and making our influence felt in the world, as we have done for the past 500 years.

2.43 p.m.

Lord Williamson of Horton: My Lords, I should like to concentrate on a number of points which may seem almost self-evident, but which may be overlooked or obscured in the exchanges between Europhiles and Europhobes--I do not use the word "Euro-sceptic", which is a rather dishonest word.

First, the European Community--now the European Union--is one of the longer lasting as well as one of the most important associations of sovereign states this century. It is 43 years since the original agreement was incorporated in the Treaty of Rome, and United Kingdom membership, since the British people voted in the referendum to participate, is also long-standing. There are no children in our schools and virtually no students in our universities who have known a time when the UK was not a member of the European Union. With NATO, the Commonwealth and our friendly relations with the United States, it is the principal bulwark of our economic policy and of our role in the world. It would, indeed, be a serious matter to seek to overturn the will of the British people clearly expressed in the referendum on membership. For myself, I find it rather insulting to the British people to claim that they did not know what they were voting for.

Lord Pearson of Rannoch: My Lords, the noble Lord really cannot be allowed to get away with that one. I quoted the letter that the Prime Minister of the time sent to every household in the land. It was absolutely clear to everyone that we were voting to stay in a common market and we were not voting in 1975 for what we now see in front of us.

Lord Williamson of Horton: My Lords, I do not agree at all with what the noble Lord has said. I think

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that the British public knew quite clearly what they were doing. We were voting that the British Government should sign the Treaty of Rome. The Treaty of Rome was quite explicit and I think that this piece of rewriting of history is not satisfactory.

Lord Pearson of Rannoch: My Lords, the facts are that we were voting to stay in the Common Market; we had already signed the Treaty of Rome.

Lord Williamson of Horton: My Lords, that is true and the Treaty of Rome was quite clear about where the European Economic Community was headed.

Lord Stoddart of Swindon: My Lords, the noble Lord denies the fact that the British people were asked to go into a common market; that was all they were asked. I was very much concerned with that referendum; I took part in the referendum; and, indeed, know exactly what was said in the referendum; namely, that we were joining a common market, no more and no less. It was denied that we were going into an integrated European system.

Lord Williamson of Horton: My Lords, once again, I disagree. I have been interrupted but I repeat my point that I think that the British public knew quite clearly what they were doing on that occasion.

Secondly, we can assess how well we have done in this community of sovereign nations on the two principal counts: first of all, peace and the support for the democratic values in which we believe on our continent; and, secondly, prosperity and the growth and better distribution of wealth among our people and the improvement in consumer choice. I believe that it would be a great mistake to underrate the value of the continued peace, stability and democratic way of life that has prevailed in western Europe since the founding of the European Community. Outside the Community's frontiers we have seen violent conflict in Bosnia, Kosovo and Chechnya, but within the EU such conflict has been made unthinkable by the close working together of its members over long years.

The existence of the European Union and its attractiveness to the people of central and eastern Europe was one of the most important reasons for the ending of Soviet control over those countries and the establishment of freedom and democratic regimes there. The first choice of the 108 million people in the countries of central and eastern Europe was to apply for membership of the EU. That is known as a vote of confidence which will be implemented soon by the enlargement of the European Union to include those countries, thus extending the assurance of a peaceful and stable Continent, which is clearly in the United Kingdom's interest.

The prosperity of its members is also a principal objective of the Union. Decades of economic growth have seen a surge in the wealth of the member states and in the buying power of their citizens. You do not need to be an economist to see that; a brief visit to our neighbouring countries in western Europe will demonstrate the high standards of living and the

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quality of life, including the substantial investment that those countries have made in health, education, transport and the services which directly improve the citizen's way of life, as well as the fantastic choice of goods and services available to consumers.

Outside Europe in recent years there has been a well managed economy and strong growth in the United States, which is good for us. The UK economy itself has been well managed, although the strength of the pound outside the eurozone is a serious threat to some sectors of manufacturing industry and to British farming. However, the good performance in the USA and at home should not mistakenly lead us to believe that the EU economy as a whole is stagnant. That is, of course, quite untrue. According to the figures issued at the end of 1999, the gross product of the EU grew by 2.5 per cent in 1997; by 2.6 per cent in 1998; by 2.1 per cent in 1999; and will probably grow by 3 per cent in 2000.

Even when the tiger economies of south-east Asia were running at full tilt, in money terms the EU economy grew by more than the economies of all those member states and China together. EU businesses are clearly very competitive in export markets and inflation is at low levels. Of course unemployment is too high in some member states--not all, perhaps, because last year five member states had a lower level of unemployment than the United Kingdom--but a large number of jobs are being created in areas such as telecoms, audio-visual services, information technology and so on. This is more than off-setting the fall in jobs in the older industries.

The noble Lord, Lord Willoughby de Broke, referred to the great increase in unemployment which is occurring in Europe. That is not correct of course. Over a period of four years--including the estimate for this year--for four years in a row, continuously, unemployment fell in Germany, France, the United Kingdom, Belgium, Denmark, the Netherlands, Greece, Spain, Ireland, Austria, Portugal, Finland and Sweden. So unemployment is clearly moving down as the economies are doing relatively well.

As has been stressed, the economic performance has been underpinned by the single market--a creation of the European Community strongly supported by Britain--and this has been at a time when there has been a very difficult challenge to change towards a greater information economy. But let us recall that the good UK performance is not independent of the European Union. It is within the European Union that we are doing well.

Thirdly, it is sometimes asserted--it has been asserted here quite often today--that the European Union is moving towards a superstate. As a British parliamentarian, I do not want a European superstate, and I can be fully confident that I am not going to get it.

There are two principal reasons for this. The first reason is evident--namely, that it is not what the people of Europe want. If the people do not want it, it will not happen. In my view, those who believe in a superstate are walking with dinosaurs. The second

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reason is, of course, that there is no government structure for a superstate in Europe. Obviously the European Commission is not such a structure. It does not even have the power of decision except in some specific areas such as competition. Much of the confusion stems from a misunderstanding of the way in which decisions are taken in the European Union. All the important legislative decisions in the European Union--except, perhaps, for some relating to competition and state aids--are taken by the Ministers of the member states in the Council, increasingly in co-decision with the European Parliament.

I am quite baffled by the many references to decisions by the Commission. Of course the Commission, under delegated authority, presents quite a lot of secondary legislation, that is quite clear--too much, in my opinion--but it is not bureaucrats who take the important decisions in the Community. It is not even the commissioners. They have a role, but they certainly do not take the vital decisions; they are taken by the Ministers of the member states. I note that there are one or two former British commissioners present today.

If there were a move towards a superstate, we could expect to see that in an inter-governmental conference, when member states can of course decide, by unanimity, to change the treaty. But what is the agenda of the current IGC? It is elegantly described by our diplomats as "the left-overs from Amsterdam". It is certainly not a move towards a superstate. If it were, the UK--and no doubt other member states--would simply refuse it.

On the contrary, the trend in Europe recently has been towards inter-governmental action, as shown by the foreign policy and, under strong impulsion from Britain, the steps towards more co-operation in defence, particularly for tasks like peacekeeping. These are not of course Community policies as under the Treaty of Rome. In any event, at least in regard to defence issues, they are also subject to unanimity.

In my view, the agenda of the European Union is not hidden at all; it is on the table. It is the enlargement of the Union, supported by the UK--I agree with the noble Lord, Lord Shore, that there will be huge changes and that the European Union will look quite different some years ahead--it is the implementation of the Amsterdam Treaty to improve our position on issues such as asylum, immigration and the fight against drugs and organised crime; it is the economic and monetary union, the single currency, on which the United Kingdom has an opt out. The British people--not the grandees nor, indeed, your Lordships--will decide in a referendum whether they wish to opt into the single currency. There is plenty of time and no need to panic. If the British people decide against it, the great big world will keep on turning and the current advantages of UK membership of the Union will continue.

For myself, I think that the European Union is now at cruising speed. It does not need great initiatives; it does not need much new legislation; the volume of Commission proposals is in any event falling; the

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volume of regulations and directives enacted by the Council and Parliament, compared with last year, was also down. Between 1997 and 1999 the average number of regulations and directives enacted each year by the Council and Parliament in co-decision was 24. As regards regulations and directives enacted by the Council alone, it is often forgotten how many are repealed or which expire each year. Between 1997 and 1999 the average number of legislative Acts repealed or expired each year was 45 higher than the number of new enactments. Over the three years the number of enactments from this source was down by 135. Sometimes in Britain we could learn a little from that!

Finally, I should like to say a brief word on trade. I do not want to enter into the argument of how many jobs depend on our membership of the European Union, but of course it is true that our exports of goods and services to the rest of Europe in 1999 were worth about £135 billion, of which £117 billion went to the European Union, and our exports to the USA, an important market, were worth £36 billion. The total value of our trade in goods and services, exports and imports, to the rest of the European Union was about £240 billion. I do not know how important this is in all parts of the United Kingdom, but certainly in my region workers in factories such as those at BAe Systems in Bristol need withdrawal from Europe like a hole in the head.

I have spoken directly on the implications as defined in Clause 1 of this Bill. Of course there are matters on which we must continue to fight for a better deal for the United Kingdom. As a percentage of our GNP, we are the fifth largest net contributor, and we should try to adjust policies to bring this down. It would be even higher had we not had a brilliant negotiation by the noble Baroness, Lady Thatcher, which brought about the rebate and which was a magnificent effort. Overall, I hope that the noble Lord will actively study not the implications of withdrawal from the European Union but the implications of the possible withdrawal of this Bill.

2.57 p.m.

The Earl of Liverpool: My Lords, I join with other noble Lords in thanking my noble friend Lord Pearson of Rannoch for introducing this Bill today. In doing so, I also congratulate him on the clear way in which he explained the objectives of the Bill.

The noble Lord, Lord Monson, in a supportive speech, said that this was a modest Bill. Modest it may be but I believe that the service it will perform, if passed, cannot be overestimated. To my knowledge, no parliamentary committee has ever been charged with the task of examining the implications of withdrawal by the United Kingdom from the European Union. In itself I find that rather extraordinary, because here we are, being led along in a sort of trance towards the cementing in of the last building block of the European Union superstate ideal--namely, monetary union----from which there will be no escape if we join. We may well be asked to

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do this without having the benefit of a committee set up by Parliament to consider the implications of that withdrawal.

How can we expect to have a balanced and well-informed debate without such a report? I fully support everything that my noble friend Lord Boardman said in this regard. Not so long ago I received a fax--some of your Lordships may well have received a similar one--which invited me to vote on whether I would like to keep the pound or join the euro. There were two big boxes on this fax and your Lordships may not be surprised to know that I put my tick in the box to keep the pound. About a month later I received another fax from the same organisation, giving me the result of the poll. It showed that 90 per cent were in favour of keeping the pound and just 10 per cent were in favour of joining the euro.

Other national opinion polls that can be read in the newspapers show slightly less spectacular results, but similar ones. There can be no doubt that the public are not behind this project; so how is it that this Government, by their own admission, spent £6.3 million pounds last year, making Whitehall's computers compatible with the single currency? This year the figure will be £20 million, and goodness knows how much money will be thrown into the project next year.

The Daily Mail reported these facts on Friday, 10th March. It went on to say:

    "There is one curious omission in New Labour's plans for a brave new future in the eurozone. Not a single detailed argument has yet been advanced for abolishing the pound. No White Paper, no official analysis of the pros and cons. Indeed, on this most crucial of issues, the Government seems to have taken a trappist vow of silence. Instead, it uses our money to edge ever closer to the euro, hoping that by the time of the referendum voters will consider the whole issue a fait accompli. Welcome to democracy New Labour style".

I could not have put it better myself.

I believe that the days of a nervous and inward-looking post-war Europe are over. Almost 50 years have passed since European integration appeared to be the Continent's only salvation and a lot of things have changed in that time. I hesitate to give your Lordships even an elementary history lesson, but Germany has become an unequivocally democratic state and the Soviet Union is no longer a threat and is seeking to adopt democracy. Against that backdrop, the United States Government, or at least many members of it and of the Congress, have become rightly concerned that European integration and the development of a common foreign and security policy as well as the idea of the European security and defence initiative will undermine rather than strengthen the Western alliance. My noble friend Lord Vivian, with far greater knowledge on these matters than I, spoke most strongly on that point.

Above all, the world economy has become in the truest sense of the word global. Who would have predicted in those dark post-war days that by the end of the century business would be conducted on the Internet and money transferred around the world by the touch of a button? As has already been said, we are

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now the fourth largest economy in the world. It is absurd to say that we could not survive on our own. All our history down the years shows us that we have always been an outward-looking nation on the world stage. With the enormous opportunities which e-commerce now offers, surely this is not the moment to be tying ourselves irrevocably to the over-regulated and outdated Euroland project. Instead, we could negotiate a bilateral free trade agreement with the EU, such as those enjoyed by Switzerland and Norway. Incidentally, both countries export more per capita to the EU under these agreements than we currently do. Mexico, a NAFTA member--my noble friend Lord Pearson of Rannoch referred to that--has just negotiated a comprehensive FTA with the EU. We should bear very much in mind that the World Trade Organisation has brought average international tariffs down to 3.5 per cent and is aiming for zero.

My final point, and for me the most important, is the conveyor belt of EU-appointed committees which seem set on producing a never ending stream of unimaginative, protectionist and inward-looking papers which give birth to ever more rules and regulations. This is where we really suffer, because we have never really properly understood the rules of the club. Our European allies know that rules were made to be broken, or at least massaged in such a way as to make them more acceptable to their people. Above all, they do not set up mighty regulatory bodies to ensure that they are assiduously observed to the letter, often persecuting their own entrepreneurial countrymen. That is all too often the unfortunate result of the way we react to EU directives.

If one takes all these factors together, there must be an irresistible argument for at least looking at the possibility of withdrawing from the European Union. This is a crystallising moment in our history. We must take control of our destiny. The only way we can do this is by encouraging debate and having the facts and the arguments at our disposal. This Bill, if passed, will provide us with an invaluable source of authoritative material. That is all I am asking for. I therefore give my wholehearted support to the Bill and wish it well on its passage through Parliament and, it is to be hoped, onto to the statute book.

3.5 p.m.

Lord Watson of Richmond: My Lords, the House is indebted to the noble Lord, Lord Pearson of Rannoch, for providing the opportunity for this debate. It has been revealing. It has demonstrated clearly the depth of conviction with which people hold certain views. It has demonstrated also the range of expertise and knowledge and the particular focus that individual Members bring to the subject. It has been a debate worth having.

It has also shown a critical aspect, which has come through as a kind of leitmotiv. We are all concerned, not merely with our own attitudes towards membership of the European Union, but with the attitudes that are taken towards that membership by the United States and the attitudes that we take to the United States. It is an important background factor.

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I should like to draw to your Lordships' attention two recent statements from Americans which have caught my attention and which illustrate the depth of the argument.

Speaking in February 1998 during the Prime Minister's visit, the President of the United States said of the alliance between Britain and the United States, as it moves into the 21st century:

    "Our ... alliance embraces the idea of a Europe strong, prosperous, democratic, and undivided for the first time in history. So as Britain maintains its friendship with America, it is playing a leading role in shaping that new Europe: a healthy European Union, reaching out to new members".

That is an optimistic description of the situation. But we should be foolish indeed to ignore that perception in the White House and that standpoint of the US administration.

I should like to refer also to a remark made recently by an American, Madeleine Albright, earlier this year. She quoted another American official, who said that,

    "the relationship between the United States [the American Union] and the European Union may be the most important, influential and prosperous bilateral relationship of modern times";

and went on to say:

    "The United States and Europe enjoy the largest economic relationship in the world".

She gave the figure that it represents and expressed the position graphically by saying,

    "Half of the goods and services produced in the world are made in the US or the EU".

So, although the debate has focused on the narrower question of our membership of the European Union and whether it should be re-examined, we must all be acutely conscious that we do not examine that relationship in isolation. It must be seen in the perspective of the transatlantic alliance and, indeed, the future of the Western world.

The debate has been enlivened throughout by vivid phrases. Some particularly caught my attention. I enjoyed the attempt by the noble Lord, Lord Pearson of Rannoch, to combine the "octopus" and the "juggernaut" into a single fearsome picture. We then had the "wing mirrors of Europe", which is an enjoyable phrase, and "walking the plank into the Atlantic" from my noble friend Lord Avebury. And, interestingly, we heard from the noble Lord, Lord Williamson, speaking with all the authority of his experience, that the European Union is "cruising"--an interesting term--and that it does not require any great new initiatives. Clearly, from the perspective of the noble Lord, Lord Williamson, there is no secret agenda to the European Union, conspiratorial or beneficent. The fact is, if you want to know what is there, read it. That is still my view on the referendum in 1975. We were asked, not whether we wanted to join--that decision had been taken by Parliament--but whether we wanted to stay in Europe. I participated in some of the debates and I remember them well. From the frequency with which the opening paragraph of the Treaty of Rome was quoted, I do not think that anybody could have been in any doubt that, on its own treaty, it was at least the ambition of the European

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Union to enter into ever-closer union. What that meant, how it would be defined and what the constitutional implications would be, and are, still remain matters of great dispute. On the one hand, the noble Lord, Lord Williamson, makes it quite clear that there is no secret agenda; on the other hand, many noble Lords in this debate have indicated that they believe there is.

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