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Baroness Crawley: My Lords, I remind noble Lords about the reference in the Companion to 15 minutes maximum for speeches.

7.4 pm

Lord Blackwell: My Lords, this is a historic debate. All the tremendous speeches that we have heard have reflected the significant changes and new reality in Europe. This is an important time to have such a serious exchange.

I am someone who believes that the referendum results and the Council meeting that followed them mark a defining moment in the history of Europe. I welcome what I see as a long-needed breakdown in the fac"ade—it was a fac"ade—of a one-size-fits-all European model. After years of what has effectively been polite obfuscation, the reality has finally broken through that Europe does not have a single voice.
 
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Jean-Claude Juncker made the point that to many of the continentals it looked as though we were dealing with a confrontation between two different philosophies on the European project, or as he put it, a clash between two different views of Europe. As the noble Lord, Lord Dahrendorf, explained, there are more than two models of Europe. That is the point: we are dealing with multiple views of the way in which Europe and European nations want to organise their affairs. We have to deal with that diversity, rather than the one-size-fits-all Europe.

At the extremes, those different views range from the pursuit of economic protection, the high-cost, high-regulated, high-social-cost markets versus the UK model of recognising that we need to compete in global markets with open competitive economies. On another dimension there are the extremes of those who believe in full political integration versus those who seek a Europe of nation states. There is a contrast between those who seek to build Europe into a rival world power bloc versus those who see our future as being part of a strong Atlantic alliance.

The constitution was the high watermark of the attempt to paper over those cracks and to force us further down the road towards political integration. While we were assured in the UK, as others have said, that the constitution was simply a tidying-up exercise, the continental leaders have been more forthright in bemoaning the fact that the loss of the constitution in their view represents a severe setback to their objective of political integration.

It is not surprising that political integration has been their goal because many have seen it as the essential glue to hold together a fortress Europe vision, with a single currency, protected high-cost markets and a rival power bloc. However, the truth is that that model of an integrated Europe, however necessary it might have been to protect the vision that they had, was destined to fail sooner or later. The truth is that the economic diversity within Europe is too great for a single economic policy or a single currency. The political and cultural differences in Europe are too great to be contained within one democracy.

I say to the noble Lord, Lord Maclennan, that I believe democracy is a national event. One cannot have a democracy without a nation and Europe is not a nation. Therefore, a European democracy is a contradiction in terms. The risk is that the political elites in Europe were creating a forced vision, a forced union that was building intentions that sooner or later would explode. I for one am grateful that that has broken down sooner rather than later. I believe that the pain and cost of it breaking down further along the road would have been even greater.

The reality is that the true underlying diversity of Europe has been exposed, and the cracks are too big, I hope, and too visible to paper over again. So rather than attempting to restore a flawed status quo, we now have the opportunity to create a new and more realistic model for Europe that truly recognises and rejoices in Europe's diversity and takes away the strains and tensions of trying to force a one-size-fits-all model on the different nations.
 
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The model that I advocate at this point, a Europe of diversity, is an à la carte Europe that recognises that different nations want different relationships and have different objectives. In my view, the UK wants the benefits of a European common market and the opportunity to co-operate with other European nations on important regional issues, whether they be crime, environment, transport or, in some areas, defence. What it does not want is to be part of an integrated political union, or of a protected, high-cost social market, or to have a common currency.

However, it is unrealistic to believe that we can sell this UK vision of Europe to the French public, or, indeed, to many other publics in Europe. We have just seen that the French public are already concerned about too much competition and too much Anglo-Saxon Atlantic influence. The notion that we can take this opportunity to convince all other European countries that they should tread our route is nonsense, nor is it appropriate that we should try to do so. Instead, we can recognise that we have different endpoints and objectives.

Within an à la carte Europe, if a core group of countries—potentially the euro-zone group or a sub-set of it—wants to pursue the route to political integration, accompanied by a high-cost social market, we should let them do so, but without imposing their costs and their policies on us. We may think that they are wrong in economic terms, but we should recognise that they come with different histories, different experiences during the war and different experiences of democracy or lack of it over past centuries, so they have different perspectives on the benefits and the costs of moving into a politically integrated Europe. We also need to recognise that if they do want to perpetuate the euro-zone and it is to survive as a single currency with a single economic policy, they have to move towards political union because, so far as I am aware, no single currency zone has ever existed for long without political union.

If we allow a core group to integrate, I believe that they would welcome the opportunity to pursue their vision unencumbered by the difficulty of embracing more than 25 countries in the same tight political union. That is the reality that the French and other electorates woke up to in their referendum campaigns. The truth is that a one-size-fits-all version of Europe is no longer credible and it is no longer sensible to pretend that it is desirable or essential.

An à la carte approach to Europe would resolve those tensions. The UK and other countries that want to join us—I suspect it would be a large group of the accession countries and maybe the Scandinavians—would continue to be part of a common market. That would be our raison d'être but I use the phrase "common market" rather than "single market" because, as the noble Lord, Lord Waddington, said, we want something that is much less regulated and interventionist than the single market has become. We would seek intergovernmental co-operation and funding of programmes that we find of benefit on specific agreed policy areas. Individual countries would have the opportunity to opt in or out of them as they thought fit, in the way that the UK began to develop in the previous decade.
 
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A major benefit of this à la carte Europe is that it would make it much easier to pursue the expansion that we all desire and to welcome new members into a liberal capitalist democratic club. Those members would be much easier to accommodate in an à la carte Europe than they would in a politically integrated Europe. As the noble Lord, Lord Lawson, said, that should be a priority that overrides many other concerns.

To bring about an à la carte Europe will require significant institutional changes. That is also an opportunity. It is an opportunity to break some of the deadlocks and to cut back some of the bureaucracy that has arisen in the way the current European institutions have evolved. For a start, in an à la carte Europe where each country could pursue its own objectives there would be no single budget. There would be budgets for the common market, for the core group that wanted to pursue political integration—but for them and their programmes alone—and for individual programmes that countries could sign up to. The common agricultural policy, if we have failed to get it fully repatriated by that stage, could be a programme that countries could sign up to, or not, according to their preferences. There is no need to have a common approach across the whole of Europe.

Neither would there be a single legal acquis. The European Court of Justice could continue to move towards being, effectively, the supreme court for a core group moving towards political integration, taking the European acquis with it. There would be a much more limited role for a European treaty court to adjudicate on common market rules and intergovernmental treaties. Under that system there would no longer be a presumption that there was a body of EU law superior, in general, to national laws and constitutions in those countries that were not part of the core integrated group.

Similarly, there would no longer be a single commission. There would be a commission that was effectively the executive of the integrating core group and there would be a wider, looser commission that administered the other programmes and the common market aspects of the wider European Union as a whole.

It would also, and not before time, bring into question the role of the European Parliament and whether a European Union administering a common market and a number of intergovernmental programmes needs a European Parliament. I think that the European Parliament was brought into being to be part of the institutional and government structure of an integrated political union. It should remain that for those countries that want to be part of the core political union, but it would raise the question of a whether a European Parliament has a valid role in a Europe made of individual national democracies.

There are a number of important institutional issues that the Government, and other European governments, could usefully address in building a new model of an à la carte Europe. Until recently, with the blind adherence to an ever-closer union, such radical
 
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changes would have been unthinkable. Today the question is why not go down the à la carte route? It is clear that that is closer to what the peoples of Europe want. It would give the core group that wants to integrate politically what it wants, if it continues to wish to go in that direction. It would give us, and many other members of Europe, including new accession countries, what we want.

Let me briefly deal with the idea that the UK would be at a disadvantage if we went down this route. First, for the reasons that the noble Lord, Lord Stevens, laid out, there is no reason for the UK to be disadvantaged. The other countries are more dependent on trade with us than the other way round. They would continue to value us. Secondly, we are in the strongest negotiating position we have ever been in to put our version of Europe on the table and to have the others agree to it because they need our agreement to build the kind of Europe they want using European institutions and acquis.

I believe that the time is right to be bold, to seize this moment and to build Europe around an à la carte model. I earnestly urge the Government and this House to consider this approach.

7.19 pm

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