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Student Visas

Statement

5.31 pm

Earl Attlee: My Lords, with the leave of the House, I will now repeat a Statement made by my right honourable friend the Home Secretary in another place. The Statement is as follows.

"Mr Speaker, the UK has a worldwide reputation for providing quality education to overseas students. Britain is, rightly, the destination of choice for many people wishing to study abroad but under the last Government the student visa system became the symbol of a broken and abused immigration system. Labour claimed it had capped unskilled immigration at zero but was happy just to sit back and watch as unskilled migrants abused the student route to come here.

We had too many people coming here to work and not to study. We had too many foreign graduates staying on in the UK to work in unskilled jobs and too many institutions selling immigration, not education. We want to attract only the best and the brightest to Britain. We want high-quality international students to come here. We want them to study at genuine institutions, whose primary purpose is providing a first-class education, and we want the best of them-but only the best-to stay on and work here after their studies are complete.

That is exactly what we are doing across all the immigration routes. We are tightening up the system, tackling the abuse and supporting only the most economically beneficial migrants. I have already announced and begun to implement our plans to limit economic migration, cutting the numbers by over a fifth compared with last year. I will be returning to the House later this year with a consultation that will set out proposals that break the link between temporary migration and permanent settlement. I also intend to consult on changes to the family migration route. I will be bringing forward proposals to tackle sham marriages and other abuse, to promote integration and reduce the burdens on the British taxpayer.

We aim to reduce net migration from the hundreds of thousands back down to the tens of thousands. The most significant migrant route to Britain is the student route, so we must take action here too. Immigration by students has more than trebled in the last 10 years and is now far larger than through work or family routes. It is unsurprising that more and more overseas students are attracted by our world-renowned higher education institutions but there has also been an increase in abuse in the private further education sector. Students now make up the majority of non-EU migrants: including their dependants, they accounted for around two-thirds of the visas issued last year under the points-based system.

When Labour introduced the current system in 2009, almost a third more student visas were issued that year than in the year before, with an increase from

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230,000 to 300,000. Numbers were so high that the UK Border Agency had to suspend student applications in some parts of the world because it could not cope with the demand. Much of that demand was simply not genuine. We have so-called students turning up at Heathrow Airport who cannot answer basic questions in English or even describe what their course is about. One institution has an intake of whom 90 per cent are international students and only asks for GCSE-level qualifications to do a supposedly degree-level course. Another college's own sales agent actually helped a student to cheat in their entry exam. Legitimate colleges should still be able to recruit legitimate overseas students but we need to stop the abuse and return some common sense to our student visa system.

The current system is based on a sponsorship regime which trusts educational institutions to assess the quality and ability of students, and puts the responsibility on the institution to ensure the student is actually studying and obeying the Immigration Rules. That trust has been well placed in some sectors: universities, independent schools and publicly funded further education colleges mostly take their sponsorship duties seriously and act responsibly. Yet some, particularly in the private FE sector and parts of the English language college sector, are not exercising the due diligence that we would expect. These institutions make up the largest single group on the sponsor register. The sector is essentially unregulated: they are not subject to a statutory system of education inspection and can offer any type of course they like. Although some of these institutions are legitimate, for many their product is not an education but immigration, together with the ability to work here.

It is absolutely clear that the current regime has failed to control immigration or to protect real students from poor-quality colleges. That is why the proposals I am announcing today are unashamedly targeted at the least trustworthy institutions. Our proposals protect the interests of our world-class universities, they protect our leading independent schools and public FE colleges and, ultimately, they are in the best interests of legitimate students.

In future, all sponsors will need to have been vetted by one of the approved inspectorates-either Ofsted and its devolved equivalents, the Quality Assurance Agency or the relevant Independent Schools Inspectorate -and all must become highly trusted sponsors. Once they achieve that status, private colleges offering quality, bona fide training programmes of genuine educational value will be able to continue to recruit legitimate international students.

All current sponsors who do not meet the requirements will be allowed to stay on the register for a short period from April 2011. During that time, they will be limited in the number of students they may sponsor. They will first have to apply for highly trusted sponsor status and accreditation. They will then be required to achieve highly trusted sponsor status by no later than April 2012 and accreditation by the relevant agency by the end of 2012. As well as cracking down on bogus colleges, we will also crack down on bogus students. Students who want to come here should be able to speak English, to support themselves financially without

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taking paid employment and to show that they are coming for study and not for work, so we will toughen up the entry requirements.

First, we will strengthen the evidence that students need to demonstrate that they have the financial means to fend for themselves. Secondly, we will streamline the requirements for students from low-risk countries and prioritise resources on high-risk students. Thirdly, we will toughen up the rules on English language competence. Those coming to study at degree level will have to speak English at an upper intermediate level. Others will have to speak English at an intermediate level.

UKBA officers will be given the discretion to refuse entry to students who cannot speak English without an interpreter and who do not meet the required minimum standards. Let me be clear: you need to speak English to learn at our education establishments. If you cannot, we will not give you a visa.

If someone is coming to the UK as a student, study should be their main purpose, not work. So we will end permission to work during term time for all students other than those at university and publicly funded education colleges. Students at public sector FE colleges will be allowed to work for 10 hours per week, and students at university for 20 hours per week. We will reduce the amount of work that can be done on work placement courses for non-university students from 50:50, as now, to two-thirds study, one-third work.

At present, students on courses of six months or more can bring their dependants with them. In 2010 over 31,000 student dependants came here. We will remove this right for all but postgraduate students at universities and Government-sponsored students.

Coming to the UK to study a course should by definition be a temporary step, so we will limit the amount of time that students can spend in the UK. Too many students who originally come on short courses have been staying here for years and years by changing courses, often without showing any tangible academic progress. We will limit the overall time that can be spent on a student visa to three years at lower levels, as now, and five years at higher levels. There will be exceptions for longer courses, such as medicine and veterinary science and PhD study, but no longer will students be able to stay here and switch from course to course to course.

We want the very best international graduates to stay on and contribute to the UK economy, but the arrangements that we have been left with for students who graduate in the UK are far too generous. They are able to stay for two years, whether or not they find a job and regardless of the skill level of that job. In 2010, at a time when one in 10 UK graduates was unemployed, 39,000 non-EU students with 8,000 dependants took advantage of this generosity. So we will close the current post-study work route from April next year. In future, only those graduates who have an offer of a skilled graduate-level job from an employer that is licensed by the UK Border Agency will be allowed to stay.

Post-study migrants must be paid at least £20,000 or the appropriate rate for the occupation, as set out in the relevant code of practice, whichever is higher. This

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will prevent employers recruiting migrants into skilled occupations but paying them less than the going rate. We estimate that had that been applied last year, it would have halved the numbers staying in the UK through this route. We will not impose a limit on this group next year, but we will keep this position under review.

If the number of foreign students entering the labour market as post-study workers increases significantly and unexpectedly, we will ask the Migration Advisory Committee to look at how any abuses can best be addressed. That could potentially include the introduction of a separate temporary limit on post-study workers. As we restrict the post-study work route, we will ensure that innovative student entrepreneurs who are creating wealth are able to stay in the UK to pursue their ideas. The message to the brightest and the best students around the globe is clear: Britain's world-class universities remain open for business.

We recognise the need to implement these changes in a staged manner that minimises disruption to education providers and students. We will therefore implement the measures in three stages, starting with new rules that will be laid by the end of this month. I will publish full details shortly.

The package of measures that I have outlined today is expected to reduce the number of student visas by 70,000 to 80,000, a reduction of over 25 per cent, and it will increase the outflow of foreign students after they have concluded their studies. It will mean a proper system of accreditation to root out bogus colleges; tough new rules on the English language, financial guarantees, working rights and dependants to root out bogus students; and new restrictions on post-study work to make sure that all but the very best return home after study. This package will stop bogus students studying meaningless courses at fake colleges. It will protect our world-class institutions, it will stop the abuse that became all too common under Labour and it will restore some sanity to our student visa system. I commend it to the House".

My Lords, that concludes the Statement.

5.45 pm

Lord Hunt of Kings Heath: My Lords, I am grateful to the Minister for repeating the Statement. I say at once that I am glad that the Government have had second thoughts on this matter.

The Minister will be aware of the concerns expressed in your Lordships' House on 15 and 16 February about the impact of the original Home Office proposals on universities in the UK and the seeming conflict between his department and BIS. On the one hand we had the noble Lord, Lord Green, the Trade Minister, speaking warmly of the role of British educational institutions as export earners. On the other hand, we had the Home Office putting forward proposals that would have had a devastating impact on the finances and reputation of our universities. I remind your Lordships that Universities UK called the original proposals "damaging and dangerous", the UK Council for International Student Affairs called them,

"potentially the most damaging for a decade if not a generation",

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and the Association of MBAs, writing in The House magazine, was equally concerned about the impact on recruitment, business and growth.

Our universities are one of our crown jewels and we should cherish the esteem in which they are held internationally. No wonder other countries were lining up to take advantage of the threatened changes here and attract many thousands of bright students away from their preferred destination, the United Kingdom.

In the Statement, the Minister said that the message to the brightest and best students around the globe is that Britain's world-class universities remain open for business. Amen to that, but can the Minister assure me that the final decision of the Home Secretary has been communicated to and discussed with our universities? What has their response been?

What impact does the Minister think that the proposals will have on the income to be earned from international students? I remind him that Universities UK estimates that, in a market that is growing at about 7 per cent per year, international students offer the UK considerable growth potential and bring huge benefits to regional and national economies. Its estimate is that international students contribute more than £5 billion to the UK economy through tuition fees and off-campus expenditure as well as bringing extensive cultural and political benefits to the UK and, as a result, creating local jobs as well. Is the Minister confident that the Government's proposals will not have an impact on those benefits?

I turn to the post-study work mechanism. Although this is to be closed, the Government have decided to retain the right of international students to work for a period of time in the UK after graduation in graduate-level jobs. Again, Universities UK has said that this is critical in attracting international students to the UK. Without it we would be at a severe competitive disadvantage to countries such as Canada, the US and Australia. It is reported frequently that international students feel that it is very important when they come here to be able to deploy their skills in the workplace for a limited time before going home. This also boosts employers in the UK who are looking for trained graduates in strategically valuable disciplines. As the noble Earl described in the Statement, the rules around this mechanism are to be tightened. Can he guarantee that the overall package that will now be on offer to prospective international students, including the post-study work mechanism, will none the less be at least comparable to those of other countries, and that we will not be put at a competitive disadvantage?

I note the actions that the Government intend to take in relation to bogus colleges and bogus students. We welcome such actions and will study them with a great deal of interest. However, as the Statement made some rather pejorative points about the previous Government, I ask the noble Earl to confirm that the previous Government took action to close down many bogus colleges. Will he confirm that, as a result of that action, more than 140 colleges were closed?

I also ask the noble Earl about the capacity of the UKBA, which will have an important role to play in policing these new arrangements. The noble Earl will be aware that, as a result of cuts in his department, the UKBA is expected to lose a total of about 5,000 staff

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from its employ. Can he confirm-and reassure me-that the UKBA is in a position to manage its affairs effectively in relation to international students, alongside the many other responsibilities that the Government have given the UKBA in the past few months on the one hand, and to reduce its staff by 5,000 on the other?

Finally, the Statement said that we want high-quality international students to come here. I applaud that. Can the Minister assure me that his department will work closely with universities and Universities UK to monitor the position on a regular basis, so that the impact of these changes will be measured and adjustments made if it is apparent that there is an adverse effect on our universities?

5.52 pm

Earl Attlee: My Lords, I thank the noble Lord, Lord Hunt of Kings Heath, for his comments and the tone of his response. The UK has a worldwide reputation for providing quality education to overseas students. We want to attract only the best and the brightest, but there has been too much abuse. We need to stop such abuse and return some common sense to our student visa system. The policies I have outlined today will achieve this. A proper system of accreditation will help to root out the bogus colleges. Tougher entry requirements will ensure that only genuine students who can speak English and support themselves financially can come here. The package of measures will protect our world-class universities and stop the abuse.

The noble Lord referred to the Government's second thoughts and talked about conflict within the Government. He must understand that a balance must be struck between all the needs of different government departments and different parts of the economy. We have listened: the position of universities has been protected in many ways and we have adjusted our proposals. The noble Lord said that other countries were lining up to take our place. They will be disappointed. Our target, as I said in the Statement, is the private sector further education colleges. It is too early to report on the response from the universities sector but I strongly agree with what the noble Lord said about the economic importance of that sector.

The noble Lord talked about post-study work opportunities. I agreed with much of what he said. Yes, I am confident that we will have a good post-study work regime. An employer with a competent human resources department will be able to manage the changes and new procedures. The noble Lord referred to certain aspects of the drafting of the Statement. He will have been in exactly the same position as me; perhaps he could make a suggestion to the Procedure Committee about how drafting might best be addressed. We will certainly be monitoring implementation of this policy very carefully for the reasons that the noble Lord described.

5.55 pm

Lord Cormack: My Lords, I declare my interest as a senior associate member of St Antony's College, Oxford, and as the organiser of a scheme that brings American students to work in Parliament for a period each year.

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I greatly welcome the sensitivity of the Statement, but I urge my noble friend to ensure that the monitoring to which he referred is indeed careful, continuous and very sensitive. Does he agree with me that it is better that a few bogus students come into this country than that a single potential Nobel Prize winner is kept out?

Earl Attlee: My Lords, I agree with most of what my noble friend said-nearly everything, in fact. He touched on the parliamentary interns. I have used them in the past. I asked my officials about parliamentary interns this morning. I hope we maintain an effective system and I am sure we will monitor that very carefully.

Lord Tomlinson: Can I ask the Minister to make a number of points about the Statement quite clear? He referred in the Statement-which I am grateful to him for repeating-to private sector further education colleges. Can he make it clear that his strictures do not apply to private sector higher education colleges? In saying that, I declare my interest as the chairman of the Association of Independent Higher Education Providers and chairman of the board of the London School of Commerce, a private sector higher education college with 7,000 students. Those 7,000 students are all also registered with a state university that awards their degrees. It would do major damage to state universities-at a time when they are already being deprived of government funds and the teaching of overseas students is an income stream for them-if that sort of provision, particularly that which links the private and the public sectors, was in any way damaged.

Finally, will the noble Earl confirm that what the whole of the education sector now needs is no more consultations or big new deliberations? We have had them almost continuously now for five years. We need to let the education sector, which is going through a time of major financial crisis, get on and deliver its role. In doing that, I hope the Government will take equal note of the report of the Home Affairs Select Committee of the House of Commons, which was published last week.

Earl Attlee: My Lords, the noble Lord makes an important point about the difference between higher and further education. I would make the point that there are private sector further education colleges that are perfectly respectable. Not every single one is bogus. However, that is where most of the problems lie. The noble Lord pleaded for no more consultations. Unfortunately, that is outside my gift and that of the Home Office, on behalf of which I am speaking.

Baroness O'Neill of Bengarve: My Lords, the noble Earl described how the present situation arose through, in effect, displacement. There have been people who sought to work here but found that the only way to get a visa was to register for an FE course-preferably a bogus one that left them lots of time. I hope that the Government are considering the possibility of another displacement effect that could arise from the present regime. I suspect that once it is known that UK students can potentially borrow a substantial amount for their student loan, overseas higher education providers

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will set up franchise operations in the UK. I am sorry to say that quite a lot of these franchise operations will not have the same standards as those of the parent organisation in the home country, which may be a very respectable university. However, those operations will be here to cherry pick and provide things more cheaply. They will also make such offerings available to overseas students coming to the UK. This may seem to be merely more business, but unfortunately it may be a route by which, once again, we find that there is one way that you can head if you are looking to get a student visa without having to do any hard studying. The difference in this case is that the higher education institutions are not subject to regulation-given that they are autonomous institutions, as Ministers have frequently said-but franchised, overseas-based HE institutions might be a problem under the regime that the noble Earl described.

Earl Attlee: My Lords, the noble Baroness's first point on the problem of displacement is extremely important: you solve one problem but it reappears in another guise somewhere else. We will obviously monitor the effects of the new policy. The linked matter that the noble Baroness mentioned is also important, and I will write to her to give her any reassurance I can.

Baroness Hamwee: My Lords, does the Minister agree that we need to be confident about the numbers? At the moment, the number of incoming students is based on the number of visas applied for. Naturally, that is an overestimate; but regarding evaluation of the exit figures, unless the students say, "I have finished my studies", they are not counted as students going out. If they say, "I am going back to work", they are counted as economic migrants.

Are the restrictions on off-campus work done during the week, mentioned in the consultation paper, being relaxed? Many of us are concerned about the degree-related work that would be affected, as well as the casual work that many students undertake to keep them going. Post-study work has been referred to. What criteria for licences will the UKBA apply? Restrictions are unlikely to attract the "brightest and the best"-I use the Government's phraseology. While we are considering language, can we stop regarding student visas as immigration? Their value in a much wider context has been made clear by many Members of the House.

Earl Attlee: The noble Baroness makes a couple of important points. The first was about measuring the numbers. The international passenger survey is run by the Office for National Statistics for a number of purposes. One of the main aims is to provide information on the number of migrants entering and leaving the UK. The IPS is the foundation for the ONS figures on long-term international migration, and the survey includes adjustments to take account of migration to and from Northern Ireland from 2008 onwards as well as for asylum seekers and people whose length of stay changes from their original intentions. The ONS figures on net migration are the best available measure, have been on a consistent definition since 1991, are produced in accordance with ONS codes of practice, and are used widely across government. The ONS uses a long-standing

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UN standard definition of a migrant as someone who enters or leaves the UK for more than a year-and that obviously includes students.

The noble Baroness also asked me about post-study work. We listened to what we were told during the consultation and have changed the policy relating to work requirements. There will be no change for students studying at universities: they can work a limit of 20 hours per week during term time, but they can work full time in the vacation and will not have an on-campus restriction. Students at FE colleges will be allowed to work 10 hours a week in term time, and full time in vacation. All other students will have no permission to work. Regarding employers and post-study work, the most important issue is that they should offer graduate-calibre work-most universities in their glossy prospectuses do not state that post-study work will involve work in a burger bar.

Baroness Kennedy of The Shaws: My Lords, I also thank the noble Earl for his Statement. I endorse what has been said by others. Visiting students add so much to the life of Britain, and students who are born here benefit from the enrichment of being with students from other cultures and other parts of the world. We also make long-term friendships. When I was chair of the British Council and I travelled abroad, it was most wonderful to meet government Ministers and business partners among people who had had such a good experience here that they remained warm in their feelings about Britain. You cannot put a price on that. I hope that we do not in any way discourage many people from coming here to study.

I am president of SOAS, the School of Oriental and African Studies at London University. This issue is a source of concern to us because we are an arts and humanities university. We train people in very unusual languages, and many of those students go into the Diplomatic Service. The languages include Japanese, Chinese, and those of Africa, Asia and the Middle East. I remind this House of the impact in terms of income that the shift in policy on higher education will mean for an institution such as ours, and of the impact of that loss of income if the changes are made.

Perhaps I may highlight a number of problems. The visa system already creates problems for us-a feeling that is probably shared by many of the university chancellors who sit in this House. Students often cannot get here for the start of a term because the visa process takes such a long time, and that is because the process has become so convoluted. My first question for the noble Earl is: will there be a fast-track system for visa applications for those who are coming to the well established universities in this country? Will there be a method that somehow does not involve the current delays and investigations? Sometimes students cannot start their degree courses at the appropriate time, and they lose out.

Secondly-and I know that this is true of other universities-students who do not speak English come to us at SOAS from places such as Japan and China. They are incredibly bright and they learn the language very quickly. Not allowing anyone to come without having our language is a problem. We also run pre-entry

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courses for people to learn English and to acclimatise before going to other universities. Will we be prevented from offering those kinds of courses under this new regime?

Earl Attlee: The noble Baroness said that visiting students add so much. In effect, she talked about soft power and said that you cannot put a price on that. In your Lordships' House, I have for a long time been interested in, and have spoken about, defence. The noble Baroness could not be more right. She could not overemphasise the importance of visiting students. She also mentioned the important issue of loss of income for institutions. However, if students are genuine, there should not be a loss of income. She talked about entry clearance for students at universities. We have made some simplifications for students coming here to study at university. It will be easier for them, for instance, to show that they have the resources to support themselves. However, it will be much more difficult for those students to go to a private FE college. Visas for university courses are often prioritised at posts overseas, but we advise applicants to apply in good time.

Lord Phillips of Sudbury: My Lords, we have in this House more than 50 chancellors of universities and their equivalents. As my noble friend may know, we had a meeting not long ago at which there was a universal sense that the old proposals, if I may call them that, were an own goal of the most stupendous proportions. I seek some reassurance from the Minister. I accept that what he said today-although we will need to look at it carefully-appears to represent a major shift away from the previous proposals. However, are the Government fully aware of how much stronger the competition is in the world outside these islands for the students whom we are successful in attracting? Are they therefore aware that the assumptions about a growth of roughly 7 per cent per annum in the number of students coming to our higher education institutions may have to be reduced, not because we want that but because everybody is trying to get these students? Thirdly, are the Government aware that the universities, for perfectly understandable reasons, will be under the cosh financially in the next few years?

Finally, the Minister spoke reassuringly about treating the highly trusted higher education institutions separately from private colleges. The noble Lord, Lord Tomlinson, made a perfectly proper point, but am I right in assuming that the overwhelming concentration of the Government's anti-avoidance measures will be directed now at those private institutions? As a result, will he assure us that the estimates made by the Migration Advisory Committee, which he mentioned, that we would lose 50 per cent of our higher education intake from outside the EU over the next five years, are a statistic that we may consign to history?

Earl Attlee: My Lords, the noble Lord talked about the number of university chancellors in your Lordships' House-don't I know it-and he described our consultation proposals as an own goal. They were consultation proposals. We have fine-tuned them to meet the concerns of those who will be affected. We are aware that there is strong competition. It is difficult

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to compare the opportunities that different countries offer. Some are more generous in one respect but take it away in another. We are well aware of the financial situation of the university sector.

The noble Lord talked about highly trusted sponsor status. When he looks at the detail he will find that many institutions will have to have highly trusted sponsor status. He mentioned some alarming statistics. They are alarming, but they are not related to reality.

Baroness Warwick of Undercliffe: My Lords, I am very pleased with the way in which the Government have responded to the consultation. Although we will have to look at these proposals very carefully, it seems that they have recognised the importance of attracting international students to our higher education institutions. I was particularly taken with the point that the suspicion of immigration abuse will be linked to the type of institution rather than to the level of study.

Perhaps the Minister will say something about the impact of these proposals on pre-university pathway programmes. It is worth remembering that nearly half the students engaged in such pathways go on to higher education. This forms part of the attractiveness of our immigration system for international students. Will the Minister now ensure that the changes in the scheme and the impact on students are very widely publicised? A great deal of damage has already been done to Britain's attractiveness because it looks as though we are not open and welcoming to international students. Much work was put in over many years to ensure that Britain became and remained an attractive destination, and we have been enormously successful in attracting those students.

Finally, I am anxious about postgraduate working opportunities. They have been part of a package to keep our best students in the UK and to enhance in particular many of our science and technology industries. It would be an enormous shame if we were not able to retain those students and did not remain at least competitive with the features of other countries in their attractiveness to international students in this regard.

Earl Attlee: My Lords, first, the noble Baroness talked about pathway programmes. I fully understand their importance, but in future most of them will have to be sponsored by a university; there will have to be much more of a linkage. She talked about promulgating the changes. They will be promulgated in a wide variety of suitable media. She also talked about post-study work. We absolutely understand the need to retain that-I made a comment about the university prospectus and burger bars-and we want people to carry on doing post-study work, but at the appropriate graduate level. We definitely appreciate the importance of this.

Lord Bradley: My Lords, I declare an interest-

Baroness Rawlings: My Lords, I am afraid we are out of time.

Lord Brooke of Sutton Mandeville: My Lords, I understand about the time, but I wish to make a complaint. More noble Lords would be able to contribute if others asked only two questions and did not make long statements. At least three noble Lords have been shut out.

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European Union Bill

Second Reading (Continued)

6.16 pm

Lord Richard: My Lords, I will say nothing about the comments that have just been made, except to indicate that the experience this afternoon, not only in relation to the Statement but also in relation to the debate, has strengthened the argument that we should have a Speaker with greater powers than the Lord Speaker.

I am delighted to take part in this debate. I see that the noble Lord, Lord Pearson, has come back. With him sitting immediately behind me, my shoulder blades tend to itch a little; I am never certain what is going to happen.

This is a bad Bill. When I read it and thought about it, what came to my mind was Churchill's pudding: it has no theme. The Bill has two main thoughts, which unfortunately are mutually contradictory. There is no overarching theme into which we can slot the argument. The first half of the Bill is designed specifically to curb Parliament's ability to act on its own via the so-called referendum lock. The second part seeks to emphasise the doctrine of parliamentary sovereignty, which by definition means that Parliament should be entitled to do what it wishes. It is difficult to see the euphony between those two principles.

In order to understand the Bill, perhaps it is worth recalling the origin of this piece of legislation. It began with the Foreign Secretary making a somewhat overblown speech to the Conservative Party conference in 2009. He said, ringingly and passionately:

"If you believe in an independent Britain, then come with me, and I will give you back your country".

This apparently is what he is giving back. It is not often that I quote Mr Bernard Jenkin, but he said at Second Reading in the House of Commons the other day:

"I am bound to ask, as should we all, whether the scene that we observe in the Chamber today was really what my right hon. Friend the Foreign Secretary envisaged when he came up with the brilliant idea of a referendum lock at the Conservative conference in 2009. At that time, I think what he saw looming was the imminence of the ratification of the Lisbon treaty, and the difficulty of holding a referendum on a treaty that had already been ratified. He was looking for something to throw to the crowd, and his idea got a wonderful round of applause at the conference. Little can he have imagined, however, that that simple promise would give rise to a Bill of such byzantine complexity ... No one, with the exception of a few aficionados, can have imagined what a mess the future Government were getting themselves into by making such an apparently simple pledge".-[Official Report, Commons, 7/12/10; col. 252.]

The Bill provides for the possibility of referendums in a large number of disparate situations. The provisions of Clause 4 are comprehensive to the point of absurdity. If one then adds to it the provisions of Schedule 1, implementation of the Bill will produce a constitution in which the electorate are consulted by way of referendum to an extent as yet undreamt of even by the Swiss. Does anyone really believe that a referendum blizzard of this sort on some of the most technical issues in relation to the development of the European Union could conceivably attract public interest to the extent that the result of the referendum could be understood and expressed to be a national view? I do not think so.

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The Select Committee on the Constitution, in its 13th report, set out its view on the circumstances in which referendums could be used. It believes-and I agree-that referendums should be used to determine issues of constitutional importance. It concluded that,

"if referendums are to be used, they are most appropriately used in relation to fundamental constitutional issues. We do not believe that it is possible to provide a precise definition of what constitutes a 'fundamental constitutional issue'. Nonetheless, we would consider to fall within this definition any proposals: To abolish the Monarchy; To leave the European Union; For any of the nations of the UK to secede from the Union; To abolish either House of Parliament; To change the electoral system for the House of Commons; To adopt a written constitution; and To change the UK's system of currency".

That would seem to be a sensible and well ordered approach to the difficult and complex issues of holding referendums in a country where Parliament is meant to be sovereign.

One inevitably has to ask what the object of this exercise is. Who are the Government trying to legislate for? The answer is quite clearly the Eurosceptics inside the Conservative Party. If that is so, I can only say that the Government have been spectacularly unsuccessful. In the Second Reading debate on the Bill in another place, some extraordinarily strong-almost venomous-speeches were made against these proposals, and we have heard one here this afternoon. One said that it was,

"a mouse of a Bill ... what we need is genuine reform of the European Union so that it delivers what it should be concentrating on ... and not be passed across to shyster lawyers arguing the case in the Supreme Court".-[Official Report, Commons, 7/12/10; col. 225.]

Moderate language, my Lords! It is perfectly clear that the people whom the Government are attempting to placate with the Bill have no intention whatever of being placated by it. They do not like the concept of a referendum lock. What they want is a Bill presaging withdrawal from the EU.

It is worth noting, too, that in that Second Reading debate of 30 speakers, only one was a Liberal Democrat, and, if I may say so with respect to him, his speech was tentative, quiet and questioning. It was hardly a model of a speech strongly supportive of this legislation. I have to ask the Liberal Democrats-and I do so, I hope, in not too attacking a manner-how they can support this Bill. I know the views of a large number of people on those Benches and I have known them for years. I know their views on Europe. At one stage, they were so far in advance of me on European issues that I felt that I had to run in order to catch up with them to prove my European zeal. However, for them now to have their spokesman supporting a Bill in which referendums are proposed to be used not as they should be but as a weapon in order to weaken the functioning of the European Union, I find totally inexplicable.

We are now in a position with Part 1 of the Bill where the mechanisms designed to placate the sceptics are being rejected by them on the grounds that they do not go far enough, whereas most objective observers seem to take the view that the profusion of referendum issues in the Bill would, if implemented, produce a constitutional monstrosity.

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The other part of the Bill is in almost direct contradiction to the first. The provisions of Clause 4, re-emphasising the doctrine of parliamentary sovereignty, seem totally unnecessary. Everyone seems to agree that the clause makes no difference at all to the legal position that Parliament is sovereign. The Thoburn case of 2002 has been referred to and I should like to quote what Lord Justice Laws said in his judgment. He said that,

"there is nothing in the",

European Communities Act,

"which allows the Court of Justice, or any other institutions of the EU, to touch or qualify the conditions of Parliament's legislative supremacy in the United Kingdom. Not because the legislature chose not to allow it; because by our law it could not allow it. That being so, the legislative and judicial institutions of the EU cannot intrude upon those conditions. The British Parliament has not the authority to authorise any such thing. Being sovereign, it cannot abandon its sovereignty".

Lord Justice Laws was absolutely right. The law is clear and pretty well unchallengeable. Parliament is sovereign and remains so, despite our membership of the European Union.

I am bound to say that I dislike declaratory clauses. The danger is that, while they attempt to clarify the law, they complicate it. If the clause is not necessary, it should not be in the Bill. I cannot put the argument better than the way in which Vernon Bogdanor put it in his evidence to the European Scrutiny Committee. I have now reached an age at which, when I find a quotation that expresses the argument better than I can, I am prepared to read it. He said:

"Although there is therefore a basic rationale for the European Union bill, it seems to me that its provisions are inconsistent with the declaratory clause insisting that Parliament is sovereign. Indeed, the purpose of the bill is unclear to me. A government will not provide for a referendum unless it wishes to support a proposal for treaty amendment or transfer of powers. If it is opposed to such a proposal, it can use its veto, since all matters to be made subject to the referendum require unanimity. The present government has indicated that it will not support any amendment or transfer of powers in this parliament. Therefore, the purpose of the bill must be to prevent a future government from supporting such an amendment or transfer without a referendum. The bill seeks, in other words, to bind a future government. That seems to me inconsistent with the declaratory proposition that Parliament is sovereign".

This, of course, is the fundamental problem with the Bill. Its purpose is not to legislate in accordance with the normal doctrine of parliamentary sovereignty but to do what it can to bind successor Governments. Not only is that excessive; in some ways, the Bill is positively frivolous in its demand for referendums and unnecessary in its declaratory provisions relating to parliamentary sovereignty.

I suppose that the Bill has to be given a Second Reading, but in its present form it hardly deserves to go very much further.

6.28 pm

Lord Williamson of Horton: My Lords, I declare an interest, as I spent a good part of my career in the United Kingdom public service dealing with European affairs and some part of it as an official of the European Commission.

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This Bill is quite unlike the EU legislation with which we have been dealing over many years, principally that relating to the treaties of Maastricht, Amsterdam, Nice and Lisbon. Under those treaties, we were undertaking commitments that involved the development of policies within the European Union. In this Bill, we are doing rather the reverse, because such commitments would in future be subject to a very strict condition-the so-called referendum lock-by which the agreement of the British public in a referendum would be required if the decisions transferred power or competence from the UK to the European Union.

I shall deal, first, with the main features of the Bill and then say something about the context in which the Bill has been brought forward. The Bill, like almost all UK national legislation, is quite complicated and detailed. First, on the referendum lock, I suppose that it would have been possible to have a much shorter text, which simply stated that proposals within the EU that would transfer power or competence from the UK to the EU would require a national referendum for approval. However, the Bill does not do that. Instead, it lists the cases that could or would trigger a referendum if the Government wished to go ahead. Some of those, where a transfer of power or competence is proposed, are quite evident, notably any amendment of the Treaty on European Union or the Treaty on the Functioning of the European Union.

Secondly, there are those cases under the simplified revision procedure that would currently allow the European Council to decide unanimously in specific areas to switch from unanimity to qualified majority voting. That is covered by the referendum lock and clearly there is a case for that. I think that that will be examined in Committee, but it is an important part of the Bill.

Finally, in Clause 6 there are other evidently important proposals, such as membership of the euro or the Schengen area. However, there are also some areas, such as in relation to the European public prosecutor's office, that may need examination in Committee.

The key element of the Bill is the referendum lock. It indicates more widely which potential actions would require an Act of Parliament as well as a referendum and those that might require parliamentary approval by resolution. For me, several points must be underlined in relation to the substance of the Bill. The first is that all the possible transfers of power or competence to be covered by the referendum lock are today subject to unanimity, which means that the UK Government can refuse them all without a referendum. That is very simple. It is only those cases where the UK would consider the proposed action so advantageous to the United Kingdom that it would not wish to use its veto that the referendum lock would come into play. That is an important point in understanding the substance of the Bill.

Secondly, the exceptions to the referendum lock are very limited-notably, those cases where the Government conclude that the effect of a provision in relation to the UK is "not significant", as the noble Lord pointed out. That is in Clause 3(4). In all important matters, the lock is unbreakable. When I read this Bill for the first time, I thought that people would be dancing on

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Rannoch Moor, but I do not believe that that is the case-I got that wrong. I thought that it must be the case because the effect of the referendum lock is extremely strict.

I have heard many comments from those who are opposed to our membership of the European Union that this is only a minor measure or a cosmetic measure or that something else is wrong with it. They are entitled to their view on membership-although they are wrong-but they are not entitled, in my view, to say that this is a minor measure. It is a watershed for our policy within the EU, because the consequence of the Bill is that normally, perhaps almost invariably, United Kingdom Governments would not agree to proposals covered by the referendum lock. That is why I have described this as the "no referendum Bill"; the actions that might trigger a referendum would simply not be taken. The sole significant exception to the application of the referendum lock is accession treaties. Thus, in relation to the potential major accession of Turkey, there will almost certainly be a referendum in France, but this Bill does not trigger one here, although the Government could decide to have one on their own initiative.

Thirdly, although it is clear why, in the light of press and public opinion, the referendum lock has been put forward, it is worth noting that this Bill involves an important constitutional change. It deprives Parliament of the decision in these cases and shifts it back to the people. If it were invoked, it would be a form of referendum government, not parliamentary government.

In addition to the referendum lock, the Bill contains Clause 18, which is sometimes referred to as the parliamentary sovereignty clause and is perhaps more accurately described, as in the Bill, as the clause on the status of EU law. The Explanatory Notes correctly describe this clause-of course, it would now be in statute-as a restatement of the UK's position over many years, which was most succinctly put by Lord Justice Denning, but was also well put by Lord Justice Laws, who has been quoted. Lord Justice Denning said:

"Community law is part of our law by our own statute".

That is the basic principle of it. Some people may think that that should not be in the Bill-many noble Lords may take that view-but in the current state of public opinion it is understandable why the Government have proposed it.

That brings me finally to the context of the Bill, which I mentioned at the beginning of my speech. In this country, we have an amazing capacity to play down our achievements and to shoot ourselves in the foot. I am sorry that many of us have now tended to transfer that regrettable habit to our judgment of the European Union. We are bringing in a Bill that will affect our relationship substantially with the European Union. In reality, what does the European Union stand for? It exists to improve the quality and standard of life of its citizens, to which it has made a major contribution over its long existence and, as far as the UK is concerned, over a period of more than half a lifetime, during which we have benefited from and contributed to it. Its objectives, to which the Bill makes specific reference in Clause 4(1)(a), include the

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promotion of peace and well-being, the establishment of the single market, the principle of free movement of persons and the upholding and promoting of the values of the European Union in the wider world. Given the turmoil elsewhere in the world, the European Union has made a very good shot at attaining its objectives, as demonstrated by the very great attraction of the Union for its neighbours.

I understand why the Bill is needed now, but we have to ensure that we can still play our role in the European Union. Contrary to the malaise that hangs over much public opinion here, I consider the European Union to have been a great liberalising force over many years. Memories are very short, but the introduction of the single market throughout this huge economic area involved, in one day, the abolition of millions-I repeat, millions-of forms and of oppressive customs controls. When I first lived in Belgium, there were 21 counters in the customs hall and an English cheese, which was sent to me as a present, took so long to get through customs that it was uneatable. Frontier controls have largely been eliminated. Remember those phrase books for English travellers abroad that had pages and pages about passing through customs. How antique they seem now.

Of course we have regulations in the European Union, but the impact of many of them on the ordinary citizen is much exaggerated. However, we have a mountain of UK national-not EU-secondary legislation. In a recent period in this House, we had 2,364 national statutory instruments, of which 94-about 4 per cent-directly implemented EU law. Whatever people may say, the UK maintains national control of all the most important aspects of public life that concern citizens: public finances, taxation, education, transport and the environment, to quote but a few. This Bill is important in maintaining that position unless the British public decide otherwise, but it needs fairly thorough examination in Committee.

6.40 pm

Lord Brittan of Spennithorne: My Lords, I view the Bill with an undisguised lack of enthusiasm. I fully understand the political imperatives that have led the coalition Government to putting forward legislation of this kind, but those political imperatives do not make the Bill either objectively necessary or desirable. I suggest that it is neither. I suggest that parts of it are unnecessary, other parts objectionable, and others ineffective. Above all, it is legislation that provides the illusion of certainty when in fact it is giving massive governmental discretion.

There are three relevant commitments in the coalition agreement, which we have to take seriously. The first states:

"We will ensure that there is no further transfer of sovereignty or areas of power"-

from the UK to the EU-

"over the course of the next Parliament".

That commitment is easy to fulfil without any legislation. Moreover, if we think about the difficulties that existed not just in this country but all over Europe in getting the Lisbon treaty enacted, the fear that there is a realistic possibility of something like that happening

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again and further EU legislation being enacted that transfers powers is completely illusory. There is no appetite for further change in that direction in the overwhelming majority of EU countries.

Even if there were an appetite for such further change, there is absolutely no need for the Government to agree to it. As has been pointed out several times in this debate, such changes would require unanimity. If the Government do not want it, they do not have to have it. No legislation is needed to fulfil that commitment. Legislation should not be introduced just to make people believe that the Government will actually do what they have very clearly said that they will do and have power to do.

Moreover, the idea that the Bill would be truly constraining is illusory. It is extremely complex, but it still leaves a high degree of discretion for Ministers to decide whether a transfer of power or competence is involved. At paragraph 21 of the Explanatory Notes, provided very helpfully by the FCO, we are told:

"As the majority of treaties and Article 48(6) decisions will require the exercise of judgement as to whether a transfer of power or competence is involved, in those cases the Bill requires that a Minister must make a statement giving an opinion as to whether or not the Treaty or Article 48(6) decision meets the criteria for a referendum, and must give reasons. As with all Ministerial decisions, it would be possible for a member of the public to challenge the decisions of the Minister in such a statement".

So no certainty whatever is provided. It would seem, therefore, that nothing is gained by legislation when the Government could simply exercise their judgment in deciding whether a transfer of power is being proposed and not agree to it if they think that that is the case.

The second commitment made in the coalition document states that,

"any proposed future treaty that transferred areas of power, or competences, would be subject to a referendum on that treaty-a 'referendum lock' ... the use of any passerelle would require primary legislation".

That commitment cannot be described as unnecessary, in the sense of adding nothing new to our present arrangements; it adds a very substantial requirement, but I do not think that it is desirable. My main reason for saying that is that I am fundamentally opposed to referenda. They are inconsistent with representative parliamentary democracy. Every time one is proposed, we are told that it is quite exceptional and put forward only because of the fundamental importance of what is proposed and the need for the people to have the last word. So far from being exceptional, under the Bill we risk referenda proliferating and displacing the primacy of Parliament, which should be the real guardian not just of the popular will but of the rights and liberties of the individual citizen. The call for a referendum has become routine, and the more that referenda are agreed to, the harder they will be to resist.

The Government clearly see that risk. In order to prevent unnecessary proliferation, elaborate provisions in Clause 5 enable the Minister to specify that proposed changes are not significant and therefore do not require a referendum. That sounds very sensible, but it means that once again the apparent certainty provided by a statutory enactment melts away in the face of the

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inevitable exercise of judgment as to what is and is not significant and what does and does not evoke a referendum. Why go through that charade of purported but not real legislative certainty when, in any given case, it is open to the Government of the day to call a referendum if they are genuinely nervous about the popular acceptability of what they are minded to agree with their EU partners?

The provision in the Bill is, in my view, undesirable not only because of its illusory creation of certainty but, even more importantly, because its existence will actually weaken the hand of our Ministers when they negotiate in Brussels. They will have to look at any new proposal not just on the basis of whether it is in the national interest but also whether they dare to agree to it in case it triggers a referendum-without being sure whether it would or not.

The third commitment in the coalition agreement states:

"We will examine the case for a United Kingdom Sovereignty Bill to make it clear that ultimate authority remains with Parliament".

The Government have clearly concluded that such a legislative enactment is required, and it now appears in the very curiously worded Clause 18, which we will no doubt want to consider carefully in due course. I find its inclusion puzzling to say the least. It has been clear since the European Communities Act was passed in 1972 that the supremacy of European law, in the area in which it operates, applies in this country only because Parliament has enacted that that should be the case. That is what the courts have said.

Attempts have been made to argue to the contrary and to suggest that some new, higher, autonomous legal order has been created that has a life of its own, independent of its creation by UK statute. Those arguments have been knocked down comprehensively in our courts. The Bill is pointless. Either Parliament is sovereign, in which case it is unnecessary to say so, or it is not sovereign, in which case, as the noble Lord, Lord Kerr, cogently pointed out, nothing in the Bill can make it so.

In these circumstances, it is difficult to see the benefit of restating the clear constitutional position. Paragraph 11 of the FCO's paper tells us very clearly that that is all that the provision is supposed to be doing. If it were done in a more felicitously phrased form than in Clause 18, it would at least be innocuous, but the fact that it could be innocuous is an inadequate reason for introducing legislation of this kind.

I am afraid, therefore, that that leaves nothing in the Bill that I can truly commend to your Lordships.

6.48 pm

Lord Anderson of Swansea: My Lords, what a wealth of experience of Brussels we have had from the previous three distinguished speakers. I cannot claim to have the same intimate experience of Brussels, but I share the lack of enthusiasm of my former pair in the other place, the noble Lord, Lord Brittan, and agree substantially with what he said. Everyone respects the Minister. He is highly respected, and he is an excellent salesman, but alas on this occasion he has a very bad product to sell. It is a bad Bill-bad in its gestation, bad in its principles and bad in its effects. It does not arise from

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a cool appraisal of our national interests but of the increasing Euroscepticism of the Conservative Party and of the dynamics of the coalition.

In the 1980s, we had this odd reversal of position on the European Union between my party and the Conservative Party. We then had the awful debates in the years of Mr Major that did so much damage to our position in Brussels. The noble Lord will know the position in which we were the asterisk country in terms of progress, and this Bill will, as he said, put not a lock but a ball and chain on developments and on British influence in Brussels.

From the debate in the 1990s, we had Mr Cameron's decision to withdraw from the European People's Party, which clearly was not in our national interest. It was the result of a failure to understand that the European Parliament works through political families and that if you withdraw from that family, which is your natural centre-right family, you lose influence in committee placements, and that can hardly be in our interest.

The pledge on the European People's Party gave the signal to the Eurosceptics that the Prime Minister understood them. They were perhaps taken in, as I suspect he travels very lightly on Europe, but it is a false view to imagine that the Government are rather like a penguin-house keeper in the zoo feeding the Eurosceptic penguins and throwing fish to the penguins in the hope that they will swallow them. Yes, they will, but they will ask for more. Therefore, the Government will not satisfy the Eurosceptics by this stratagem.

As for the coalition, we had the true and traditional voice of the Liberal Democrats in the remarkable speech by the noble Baroness, Lady Williams. In terms of coalition bargaining, I have come to the conclusion that I would not ask my many Liberal Democrat friends to negotiate on my behalf because they have sold their principles for a mess of potage. Here is the most European of parties prepared to make very serious compromises just for its obsession with constitutions and the alternative vote.

The only respectable argument that has been put forward is that there is clearly a disconnect between politics as a whole and public opinion, and on this I agree with the noble Lord, Lord Pearson. However, that disconnect comes from a whole series of reasons. As someone who has been a Member of this Parliament-a great honour-for almost 40 years, I did not have many constituents coming along to complain to me about the European Union. Who can doubt that much of the Euroscepticism has been manufactured by the press lords who live outside this country and who tell us what to do and what is in our national interest?

We saw the same thing when we had the debate on votes for prisoners. The Government weakly and tamely listened to those views in total ignorance and failed to understand that the European Court of Human Rights has nothing to do with the European Union and the fact that by being willing to defy the European court on this one issue of votes for prisoners, we lose the moral high ground against the serial defaulters: Russia, Turkey and others. They will simply say, "You have done it, so why can't we?". I defer to the moral high ground.

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Lord Pearson of Rannoch: I would never seek to claim that over the noble Lord. When he says that votes for prisoners had nothing to do with the Luxembourg court but came from the Strasbourg court, does he agree that under Article 6 of the Lisbon treaty the European Union has signed up to the jurisdiction and generality of the Strasbourg court? They are connected.

Lord Anderson of Swansea: There is a very slight nexus because of that recent linkage. The noble Lord will surely know that the European convention, the European court and the Council of Europe as a whole come from an earlier stage of European integration in the late 1940s and early 1950s that was very different from the treaty of Rome and the more integrationist stage that came at that point. I hope he will look through the debate in the other place on votes for prisoners and, alas, see the enormous ignorance of those who failed to see that distinction.

So what do we have? We essentially see a failure of leadership. If there is a disconnect, it is surely in part because of the Government's failure of leadership in trying to put over the case for Europe, as the noble Baroness, Lady Williams, did so eloquently. If only there would be something positive about Europe from this Government. The only thing I have seen was from Mr David Lidington, who is a very able Minister, tucked away in a Written Answer on 10 January.

I come to the specific proposals, and I shall be brief because I can adopt everything that the noble Lord, Lord Williamson, said about the referendums. If it were in the judgment of the Government of the day against our interests, we would veto it in any event. If the Government seriously thought that it was in our interest, they would come out against this great cloud of ignorance that has, in fact, been created partially by the Government. In fact, there are unlikely to be many examples.

As for the referendums, excluded from them are the accession treaties, and who can doubt that one of the largest influences on our country would be, for example, the accession of Turkey? Yet there would be no referendum in respect of Turkey. A number of the transfers would benefit us-one thinks of the foot and mouth matter and QMV in the past-and the definition of "significant". The sovereignty clause has been mentioned by many colleagues. It is essentially symbolic. It is gesture politics. No Parliament can bind its successor. It is superfluous, meaningless and a waste of parliamentary time, and is to be seen only in the context of the Government's problems with their own Back-Benchers.

The key principle of this Bill appears not to be to be at the heart of Europe but rather them and us, as if we are engaged in a constant struggle against those who wish to conspire against us and our interests, and our need to confound their knavish tricks. In fact, it is a very false picture. It is a gesture to the populist press and step by step, as was the danger during the 1990s, we will be led inexorably along a road to distancing ourselves, or at least to a semi-detached status.

Finally, I am reminded of a distinguished observer of France on the eve of the French Revolution who looked at French aristocrats who were flirting with revolutionary ideas and said very sagely that those

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who were blowing upon the flames would one day be consumed by them. The Conservative Party is indeed blowing on those flames, and there is a real danger that the public might go for the real thing. There is UKIP, and one day it might find it is indeed consumed by it.

6.59 pm

Lord Maclennan of Rogart: My Lords, I find it ironic that the First Reading of this Bill in another place occurred on 11 November, Armistice Day, when we celebrate and remember the consequences of European civil war, not just between 1914 and 1918 but for centuries. It seems strange that the purposes of the European Union have been so inadequately spelt out by those who believe, or say they believe, that the public are not connected with the European Union. We have had some speeches today-many speeches-which have reminded the participants in this debate, and those who will listen, of what some of those beneficent purposes are. But it seems to me that this Bill does nothing to strengthen the process of integration which has brought such potential strength to this country and our neighbours over the long period since the Second World War, more than could be recalled for centuries before it.

The Bill, at its heart, is confused and confusing. It is attempting to suggest that decisions will be taken by popular acclamation about some of the more detailed decision-making that might be undertaken by the institutions of the European Union to enhance the effectiveness of their decisions, not only domestically within Europe but also internationally when, for example, we negotiate with other powerful nations-growingly powerful nations, such as India and China-about our trading; when we seek to combat global threats, such as threats to the environment from the use of unsuitable fuels; or, indeed, when we seek to rationalise and protect those who for reasons of poverty are driven to seek new homes, and to rationalise the system that enables us to absorb multicultural people.

I find it astonishing that we can have such a retreat from the recognition of the virtues of the pooling of sovereignty which lay behind the impulse to reach agreement, as we did back in the 1970s. The British Government's recent decision to pool sovereignty in defence matters with the French in the Anglo-French defence treaty, which presumably will provide for joint decision-making about the use of joint weaponry, has not been subjected to a referendum proposal. That was bounced through, and many of us welcomed it. However, it seems a more immediate diminution of Britain's decision-making capability in respect of defence than anything that has come from the European Union.

Questions have been raised about the Liberal Democrats' participation in the preparation of the Bill, and very properly so, for there is language in the coalition agreement that appears to be a part of the explanation for why this Bill has been brought forward:

"We will ensure that there is no further transfer of sovereignty or powers"-

from the UK to the EU-

"over the course of the next Parliament".

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That seems to be a gesture made to pacify the more extreme isolationists in the Conservative Party. However, it does not require a Bill to give it force. The Government can simply refuse by using their power of veto or-to take the point made by the noble Lord, Lord Hannay-by not engaging in a unanimous decision.

It is going way beyond the coalition agreement to suggest that a Bill is necessary. However, even if it was explicit in the coalition agreement, I see no reason why members of the coalition should take that as though it, like the law of the Medes and Persians, were unchangeable. A document of such profound significance as this Bill is not something to be traded or to be based upon an agreement that was put together in a few days-as though it could go on in its impact for a few years in which the circumstances are completely changing. When that agreement was signed, who anticipated what would happen in north Africa within less than a year? It is foolish to believe that that document is something that we cannot readdress and judge in relation to the appropriateness of the coalition Government's policies.

We heard from my noble friend in opening this debate that the public are disenchanted with the European Union, and there is some opinion poll evidence to suggest a movement in the direction of disenchantment. However, I argue very strongly that the reason for that is the absolutely notable failure of our political leaders to explain what they are trying to do, and to explain and make clear what the European Union is achieving. In fact what happens is that, after Heads of Government meetings or Council meetings, Ministers-and this is not a party point-come back and say, "We triumphed. The British have succeeded. We led the way". That is not the nature of the European Union. The nature of the European Union is to arrive at consensual agreements that are for the benefit of all the members, to offset the disadvantages to those who have something at stake and might lose by a particular decision.

This Bill has been very well exposed and expounded by a number of noble Lords. I do not need to repeat what the noble Lord, Lord Williamson, and my noble friend Lord Brittan said. They have made those points strongly. I am making a much more general point which I believe all political parties ought to address now. Do they want the gradual disintegration of the decision-making process in the European Union? Do they want to see people lining up and a new balance of power within Europe? That was what the Congress of Berlin talked about in the 19th century, but it led to nothing but disaster.

The actuality is that we have a framework which will be made very much worse if member Governments go around calling for referenda on detailed decisions which are designed to smooth the process of decision-making and to ease and to expedite the process of speaking with one voice so that Europe has some influence over its own future. My fear is that this Bill would delay European Union decision-making. It would jeopardise the Union's steady constitutional development, which I believe needs to be in a more democratic direction, and it is moving in a more democratic direction.

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The immediate outcome will be to marginalise this country because if the other 26 countries cannot achieve their outcomes by agreement with us, they will use the arrangements within the European Union for enhanced co-operation to achieve their purposes without us. This Bill is not just a piece of public relations from the coalition. It is a dangerous Bill, which has to be substantially changed during its progress through this House so that the House of Commons can give renewed, more detailed and considered attention to the impact of its provisions.

7.11 pm

Lord Stevens of Ludgate: My Lords, I congratulate the Government on the Bill. Some of us-indeed, the majority of the population of the United Kingdom-have eagerly awaited a Government who would finally stand up against further European integration. But do they achieve this? As the noble Lord, Lord Howell, has said in this House,

"the use of ratchet clauses or passerelles, provisions in the existing EU treaties, which allow the rules of the EU to be modified or expanded without the need for a formal treaty change, would require an Act of Parliament before the Government could agree to its use".-[Official Report, 27/9/10; col. WS199.]

As we know, a referendum is required only if the Government support a proposed change that transfers power or competence from the UK to the EU. However, even on the previous Government's own figures, more than 60 per cent of our laws are now made in Brussels. In Germany, the figure cited by the Government recently was 80 per cent. We have already lost control, with no power of veto, of-among other areas-trade, fishing and farming. We are rapidly losing control over foreign policy and health, to name but two areas. How many regulations has the hard working European committee in this House amended or rejected? I believe that it is none.

The fathers of the European project made it clear at the start that the objective was a European federation or the creation of a united states of Europe and we have gone along with it. We are now subject to rule by Brussels, which for 16 years has not had its accounts signed. The auditors commented:

"Payments from the budget continue to be ... affected by error",

The UK does not need an EU single market. Customs unions are largely redundant. More than 90 per cent of UK imports are tariff free and those that remain are very low.

The UK has a large trade deficit with the EU, amounting to nearly 90 per cent of our total trade deficit. Our exports to the EU are less than 10 per cent of our economic output, yet EU legislation and bureaucracy is imposed on 100 per cent of our economic output. UK exports and imports from countries outside the EU are growing more rapidly than those to and from the EU. Both the USA and China, without any EU regulation, export more goods to the EU than does the UK. No doubt, in the Budget Statement later this week, we will be told that the march of bureaucracy and regulation in this country will be turned back, but it cannot be reduced in any significant way because most of it comes from Brussels.

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The EU has its own supreme court-the European Court of Justice-which has the ultimate power of decision over the content and scope of Community law. As many Members will know, in 1992, the Court said:

"An international treaty is to be interpreted not only on the basis of its wording, but in the light of its objectives ... The Rome Treaty aims to achieve economic integration leading to the establishment of an internal market and economic and monetary union. Article 1 of the Single European Act makes it clear that the objective of all the Community treaties is to contribute together to making concrete progress towards European unity. It follows from the foregoing that the provisions of the Rome Treaty on free movement and competition, far from being an end in themselves, are only means for attaining those objectives".

If we look at our earlier so-called social chapter opt-out at Maastricht, we see how quickly this was undermined by the use of health and safety powers. The Bill does not address these issues. Brussels now interferes in nearly every aspect of our daily lives-from immigration to financial regulation and even to playing golf in the fog. It continues along its sublime way, increasing its budget and putting up pay and allowances when all around it are cutting expenditure.

The Government have, I am sure, brought forward the Bill to quieten the pressure for a real Bill on a referendum-in or out, part of Europe but not in Europe, or a free trade area, EFTA. So insecure are the bureaucrats in Brussels that they are proposing that European political parties use public money to publicise their referendum campaigns in any member country. We are told that we will have no liability to bail out the economies of failing member countries. But we have already agreed to help Ireland on some spurious argument about our trade with that country being more than that of several other countries combined.

The previous Government gave away a large amount of our rebate for no return. Will the Minister assure the House that the UK will not waive the UK's right to opt out of new EU justice and home affairs laws in 2014? In yesterday's debate, we agreed to European Council decision 33/10. Indeed, one can see how biased the whole system is when a government Minister, Mr Lidington, says that there was great concern to word the bail-out change so that no member country needed a referendum.

There have been several comments about press barons, of which I suppose I was one. I think that the comment about overseas ownership was a little unfair. The Daily Express, the Daily Star, the Daily Telegraph probably, the Financial Times, the Guardian, the Independent, the Daily Mail, the Sunday Express and the Mail on Sunday are all owned, as I understand it, by UK-resident taxpayers. The only papers that are not are the Sun, the Times and the News of the World. The Telegraph could be debated but it is managed in the UK.

Noble Lords: The Sunday Times.

Lord Stevens of Ludgate: I apologise if I did not say the Sunday Times. The point is that Mr Murdoch's press accounts for 32 per cent of the total turnover. I am not necessarily a supporter of everything but it is somewhat unfair to say that overseas press barons determine newspaper content.

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On a side issue, when I was chairman of the Daily Express, the editor of the Daily Star was a somewhat misguided individual who supported the European Union. I tried to persuade him of the error of his ways. It was not until he became editor of the Daily Express under Mr Desmond that he decided that it might be wise to change his views. It shows what a weak person I am. Let the Government show the courage of their convictions and have a referendum on continuing membership of the European Union instead of fudging the issue with this Bill. Any prevarication will cost them dear at the next general election.

7.18 pm

Lord Davies of Stamford: My Lords, before I get on to the points I wanted to make this evening, I must deal with the speech we have just heard from the noble Lord, Lord Stevens, because it was such a good example of the classic Eurosceptic speech. It had an absolute maximum of sloganising and an absolute minimum of thought, reflection or familiarity with the facts. I shall take three points on which the noble Lord seemed to be making an egregious error.

First of all, the noble Lord said that the European Court of Auditors has qualified the accounts of the European Union. The Court of Auditors has not qualified the accounts of the institutions of the European Union, the Commission, the Parliament or the Court of Justice. The court has qualified, because it has been unable to certify, the accounts of certain member states in the administration of European Union programmes. If he is consistent, perhaps the noble Lord would be in favour of the Commission taking over the administration of all EU programmes, for example, the structure and agricultural funds within the member states concerned. That is an enormously federalist proposal and I do not think the noble Lord really meant that. He should think about this a little more and perhaps look at the actual statements of the auditors in question.

The noble Lord then started referring to tariffs, saying that 90 per cent of tariffs have been abolished anyway. He has clearly not understood the distinction between tariff barriers being reduced and the creation of an internal market. The whole point of an internal market is that it deals with the non-tariff barriers, the really difficult obstacles to trade. Those problems have been dealt with very successfully by the creation of the single market. That seems to me to be a significant point.

Thirdly, he said that we have been forced to bail out Ireland because of our membership of the EU. Obviously he does not listen to his own Government. Ministers made it absolutely clear the other day that the reason we are contributing to Ireland has nothing to do with our membership of the EU, but is simply because it is in the national interest to help a neighbouring country with which we have a close economic relationship and a lot of ties, and indeed we hold a number of Ireland's assets that we do not want to write off. The noble Lord needs to think about all these things and perhaps take some advice on some aspects before he addresses the House again on EU-related matters.

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The Bill before us has already been described several times as a "bad Bill". It is worse than that: it is a disreputable Bill and the most cynical Bill that I have ever read-and I say that coolly, reflectively and seriously. I shall explain exactly what I mean in saying that. As has already been pointed out, of course, the Bill was born in cynicism. It has nothing to do with trying to increase democratic accountability in this country or with advancing the interests of this nation. As we all know, it was a decision by the Prime Minister to give a sop to the extreme Eurosceptics in the Tory party to get them off his back, and no doubt to make an attempt at getting some UKIP voters back into the Tory fold. The Lib Dems went along with this and thus have swallowed a lot of their own principles-just as they are swallowing their principles in supporting the Government on their excessively rapid spending cuts, on a Bill to restructure and privatise large tracts of the National Health Service and on the abandonment of their electoral promises on tuition fees and so forth. It is not a very edifying spectacle.

I pay tribute to the brave dissenting voices of a number of distinguished Lib Dems that we have heard in the course of the debate, and I hope that we hear more from them in the course of the Committee stage. But the fact is that the Liberal Democrat Front Bench has completely sold out. That is particularly sad because-

Baroness Falkner of Margravine: The noble Lord waxes on about principles, but perhaps I may respectfully suggest to him that he would know a thing or two about them, and indeed the Conservative Party, given where he is today and where he was for many years.

Lord Davies of Stamford: The noble Baroness may have better things to do with her time, but if she feels like going over my track record in public life and indeed before, I have to tell the noble Baroness that it is a matter of fact that my first political campaign was conducted on the 1975 referendum. That shows how old I am. I have been absolutely consistent on the matter, as indeed I have on other matters. When I joined the Tory party in 1974, it was actually the pro-European party. The noble Baroness would not have been born or thought of then, so perhaps she has forgotten that fact. I have been extraordinarily consistent.

Neither the Tory party nor, I have to say in all honesty, the Labour Party has been consistent on this matter, but until this moment, the Liberal Party was. We can go back to the 1950s when the treaty of Rome was first conceived and signed. The Liberal Party was the one political force in this country that was in favour of our joining the European Community as it then was, and has been committed to its principles and spirit ever since. Those were the days of Jo Grimond and Lady Violet Bonham Carter. There is thus a personal as well as an intellectual tradition that goes straight back to the internationalism of Sir John Simon to Asquith and Gladstone. What would all those figures be thinking today if they saw the Liberal Front Bench subscribing to a measure like this? It is a very sad day for all of us. I have been happy to pay tribute to the consistency of the Liberal Party and its successor the Liberal Democrat Party until this moment, and

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precisely because that history has been so honourable up to the present time, today's picture is a squalid and sad one for the country as a whole.

I said that this Bill was born in cynicism, but unfortunately the cynicism does not end there. The very fabric of this Bill is hypocrisy. The Government state that what they want to do is bring about a situation where there is direct public involvement through referenda and accountability to the electorate as a whole. All I can say, using reasonably parliamentary language, is tell that to the marines. There is no intention to have a referendum on anything at all; there could not possibly be. We know already that this Government are not going to have a referendum in this Parliament while they are still the Government because they have committed themselves not to on any grounds. Horrible thought that it is, let us suppose that the Tory party wins the next election and this Bill remains on the statute book-I take it as axiomatic that a future Labour or indeed a future Labour/Lib Dem coalition Government would immediately rescind this nasty piece of work-so can the House imagine for one second that there would be a referendum on any of this?

Let me remind noble Lords of the sort of subjects that would call for a referendum listed in Schedule 1. They include:

"Article 17(5) (number of, and system for appointing, Commissioners)".

Are we going to go to the public, spending tens of millions or even hundreds of millions of pounds-I have no idea what it costs to run a referendum-with a referendum on the number of and system for appointing Commissioners? The list goes on:

"Article 19(2) (appointment of Judges and Advocates-General of European Court of Justice)".

Are we going to have a referendum on that? Possibly we might do so on,

"(specific provisions on the common foreign and security policy)",

but what about,

"(decision of European Council extending time during which treaties apply to state withdrawing from EU)"?

The scenario there is that a country wants to withdraw from the EU. It is a complicated negotiation, so the suggestion is that we should agree timetables and negotiate with that state on a qualified majority voting basis so that we do not take a month of Sundays agreeing everything or failing to agree anything at all. Are we going to have a referendum on that? Does anyone in the House seriously think that the Government are going to go to the public and say, "Can we please have consent to have qualified majority voting to resolve this particular issue?".

The list in the schedule goes on and on and includes:

"Article 192(2) (adoption of certain environmental measures)".

Is the idea of introducing QMV on environmental protection really so shocking that we are going to go to the public with a referendum on it? There is also:

"Article 127(6) (conferral on European Central Bank of specific tasks relating to prudential supervision)".

Unless the Government have gone completely mad, Members on both sides of the House are in favour of good banking supervision, which probably does not

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involve 27 people all having to agree unanimously and then going back to their Governments to pass referenda and so forth. Is that a sensible thing to have a referendum on?

Again, I could go on and on. The list includes:

"Article 115 (approximation of national laws affecting internal market)"-

that is hardly shocking, because we have had that for many years-and,

"Article 89 (cross-border operation by competent authorities)".

What is wrong with that? The most extraordinarily minor things are covered, such as anything to do with the "European Public Prosecutor's Office". All of these might be resolved by QMV, but they have to have a referendum. Are we going to the wonderful electors of the Grantham and Stamford constituency and say, "We want you to take the time to look at all these documents about the Public Prosecutor's Office and then we want you to go to the polls"? I thought that we were all worried about excessive public cynicism about politics and low participation rates in elections. If we start having referenda on this kind of stuff, how can we expect those participation rates to be at all respectable? We cannot, of course.

Anyone who reads this thing will see more of the same. I shall draw attention to something which is the absolute killer argument. It arises in Clause 3(2):

"The referendum condition is that-

"(a) the Act providing for the approval of the decision"-

it is a decision, not a treaty change-

"provides that the provision approving the decision is not to come into force until a referendum about whether the decision should be approved has been held throughout the United Kingdom or, where the decision affects Gibraltar, throughout the United Kingdom and Gibraltar".

Are we going to ask the British public to go to the polls to determine something that does not affect us but merely affects Gibraltar? Who in this country has ever heard of such lunacy? Cynicism understates the matter. I am looking for a stronger word than cynicism or hypocrisy to describe a situation in which the Government seriously suggest that we will have referendums on these kinds of subjects taking up the time of the British people. Are we going to have dozens of referendums on this kind of nonsense? Of course we are not. This is absolutely through and through false; there is not the slightest intention to have a referendum on any of this.

There is, however, an intention to initiate a freeze-and, if possible, create a crisis-in relations between the United Kingdom and the rest of the European Union which would make it absolutely impossible for us to give even the sensible, pragmatic and reasonable responses required by the evolution of events, which we all know to be necessary. The British Minister there will be completely paralysed and he will become Monsieur Non or Mr Niet, whatever it may be; that will be his role.

That can lead to only two things. Eurosceptics dream that what will happen is that the whole of the European Union, which they hate so much-the speech of the noble Lord, Lord Stevens, is a good example of that-will come to a juddering halt or pack up and go home and that this nasty European Union will dissolve

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itself or throw in the sponge and give up trying to do a serious day's work in making sure that the interests and the futures of the peoples of Europe are properly looked after and defended. They may dream that that is going to happen, but of course it is not. The alternative will happen. The EU will proceed under the enhanced co-operation programme, the framework for which has already been created in the Treaty of Lisbon, and we shall be left behind. So that is the real agenda. It is so far from the declared agenda that I stand by my words-cynical and hypocritical.

7.32 pm

Lord Hannay of Chiswick: My Lords, the troubled history of Britain's relations with the rest of Europe has been marked by numerous incidents of bad luck and bad judgment. It was bad judgment by both of the two main parties that we did not join the Coal and Steel Community and the European Economic Community at the outset of their existence in the 1950s; it was bad luck that we were vetoed twice by General de Gaulle in the 1960s; it was bad judgment that we tried unsuccessfully to renegotiate the terms of accession in 1974; it was bad judgment, too, that we did not join the exchange rate mechanism in the mid-1980s, when the then Chancellor of the Exchequer and the then Foreign Secretary, both now Members of this House, pressed that we should do so; and it was bad luck that when we did join in 1990, the whole system was beginning to suffer from the aftershocks of German reunification. The Bill we are debating today falls fair and square in the bad judgment category.

I shall not weary the House with a full-blown rehearsal of the arguments against the use of referendums as a regular part of our constitutional practice. We debated that extensively last October on the basis of an excellent report by the House's Constitution Committee, which saw many negative aspects in referendums-many more than any positive ones-and I set out my views then. Suffice it to say that the problems of low turnout, of the impossibility of ensuring that voters address the question being asked and are not swayed by extraneous considerations or by their attitude to the Government of the day who are posing the question, are serious-perhaps fatal-defects which undermine any assertion that referendums represent a superior form of democracy to the working of representative parliamentary institutions.

It surely cannot be denied that their frequent use will seriously damage the legitimacy of the institution of Parliament, which has been built up so laboriously in this country over many centuries. Some of these defects can be palliated by devices such as adding a sunset clause to the present legislation, or by making the result of a referendum purely advisory, or by setting a voting threshold below which the matter would return to Parliament for decision-this last device, of course, being an amendment which the House supported in the context of the recent alternative vote referendum Bill. All these palliatives will, I trust, be given full and careful consideration as we scrutinise the Bill, but the fundamental negative consequences for our parliamentary system of the proposed extensive use of referendums contained in the Bill cannot simply be wished away.

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The hard fact is that the Government faced a choice when they set out to give legislative effect to the coalition agreement of last May: that any significant change to the EU treaties should be subjected to approval by referendum. They could have brought forward a quite simple Bill ensuring that any future treaty amendments that transferred significant powers to Brussels would be so treated and would be the object of a referendum. Or they could, as the present Bill does, seek to invent new procedures, including referendums, to handle decisions taken by the European institutions under the powers conferred in the Lisbon treaty, which we, like every other member state, have ratified. I believe the Government made the wrong choice.

That, too, seems to be the thrust of this House's Constitution Committee in its excellent recent report on the Bill, published on 17 March, when it stated:

"In our judgement, the resort to referendums contemplated in the European Union Bill is not confined to the category of fundamental constitutional issues on which a UK-wide referendum may be judged to be appropriate. Furthermore, many of the Bill's provisions are inconsistent with the Government's statement that referendums are most appropriately used in relation to fundamental constitutional issues".

That is a damning judgment indeed.

In making their choice to go for a complex Bill, the Government have constructed a cat's cradle of incredible complexity which, as cats' cradles tend to do, is only too likely to catch and entangle the cat that created it in the first place. The main effect of the Bill if passed in its present form will be, I would guess-others have said this, too-to blight British decision-making in Brussels, even when the decision in question might be one which is strongly in Britain's interests to see go ahead. After all, no Government are going to willingly risk defeat in a referendum as a result of mid-term unpopularity or in the approach to a general election. It is far more likely that we will find the Government of the day blocking a decision in Brussels, even when it would be in our national interests to pursue it.

There is also what I call the chicken and egg problem about this legislation. All the EU decisions which are designated to be caught by the Bill are only the ones that require unanimity in the Council. So unless and until Britain signifies its agreement to the measure in question, it does not exist in a legal form which can be put to the electorate for confirmation or rejection. Among other things, this implies that the Government as a whole will have to campaign for a yes vote in a referendum-I would be grateful if the Minister can confirm this-because they will already have backed the decision in Brussels. If they had not, there would not have been a decision and there would not be a referendum. Is that a correct reading of the situation?

If the referendum were to have a negative result, or if, for that matter, we were to block a decision simply in order to avoid the need for a referendum, we should of course have set up a simple position in Brussels under which the other 26 member states-which, by definition, would have agreed to it-could go ahead without us under the enhanced co-operation procedures of the Lisbon treaty. We would be left out of a measure which the Government and Parliament would have decided it was in our national interests to participate in. This would be an absurd situation. Is that what the Government have in mind?

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In any case, the Bill is shot through with constitutional contradictions. None is more flagrant than the clear and deliberate attempt to go against one of the main precepts of our unwritten constitution, namely that no Parliament can tie the hands of its successor. That is exactly what the Bill sets out to do. This is made all the more blatant by the statement from the Government in the coalition agreement that they do not intend to agree to any significant transfer of powers to Brussels during the lifetime of this Parliament. The referendum provisions of the Bill will only be triggered in subsequent Parliaments, not this one. That really is making constitutional innovation on the wing. It is another powerful argument for a sunset clause.

As a number of noble Lords said, there is another of those contradictions in Clause 18, on the,

"Status of EU law dependent on continuing statutory basis".

It is hard to understand what that provision is meant to signify or what, if any, effect its enactment would have. It is harder still if you read that in combination with Explanatory Notes 118 and 119, which state:

"This clause does not alter the existing relationship between EU law and UK domestic law; in particular, the principle of the primacy of EU law ... The rights and obligations assumed by the UK on becoming a member of the EU remain intact".

To use another feline metaphor, this clause really resembles the smile of the Cheshire Cat. The longer you look at it, the more it tends to disappear. Surely either the clause should be dropped or we should include in the Bill the Explanatory Note that I have cited.

I have no doubt-we have to some extent already been told this by the protagonists of the Bill-that it is designed to enable Britain to feel comfortable in its EU membership and the mere existence of this so-called referendum lock is meant to achieve that. Yet it certainly does not appear to be having that effect on the Government's Eurosceptic supporters in another place nor on the prominently Eurosceptic press. Nor is it easy to see how a succession of referendums on relatively abstruse aspects of European law and practice could have that effect either, whether they were voted down or confirmed. If it is not going to appease Eurosceptics and will work against our interests in Brussels, what on earth useful purpose does it serve?

It is regrettable that, after a lengthy period of EU preoccupation with institutional issues, we British should now be heading back down that long, dark tunnel. I had hoped that with the Lisbon treaty in force we could focus on the substance of European policy-making, completing the single market, achieving economic and financial stability and growth, freer and fairer world trade, further enlargement and making a reality out of the common foreign and security policy. Instead, we appear to be seeking to deny the EU the flexibility built into the Lisbon treaty and the capacity to adapt to changing circumstances. Without that, no institution, either at the national or international level, can hope to prosper and flourish. The Government's policy seems to be to lock the door and throw the key out of the window.

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7.43 pm

Lord Plumb: My Lords, we are half way now and in danger of getting a bit repetitive on some of the points being made. That is inevitable in a debate on a Bill such as this. I must declare my interest, having spent 20 years as a Member of the European Parliament. I have been involved in many changes in the European integration project.

We have been well reminded today, particularly by my noble friend Lady Williams, of the relevance and importance of a project that began in the aftermath of the Second World War and progressed step by step over more than 60 years. It now stands at a critical juncture, as it has on many occasions in the past. It is discouraging to hear so many negative comments today when we need to concentrate on developing that project and determining the way forward, working on many of the successes that we have had over the years. It is also inevitable that, among 27 countries, many of which are now economically weak, crises will occur needing a strong political will to overcome their many fiscal and economic problems. I regret that the Bill, from what I see in it, does not necessarily offer the sort of political will that we need to move forward on some of those more positive projects.

Your Lordships are well aware of and justifiably concerned by the need for budget discipline and long-term sustainability in the marketplace. I can be as critical as anyone else of the unnecessary and complicated controls through directives and regulations, surrounded by red tape and bureaucracy and causing unnecessary waste and expenditure. However, these are often exaggerated in this country. I often wonder whether people really ask themselves what directives or regulations we might have had in this country had we not been a member. Things would not have stood still where they were before we joined.

I can use plenty of examples, but the one that was obviously nearest to us as I spent my time in Brussels, Strasbourg and elsewhere was the inconvenience of moving the European Parliament from Brussels to Strasbourg each month. That is of course nonsense but the Parliament itself has no power to determine where it sits. In another way, the European Parliament's power has grown as its responsibilities have increased through the co-decision procedure on future development. That has given the Parliament some responsibilities. If you take power, you have to be more responsible. I believe that that is what is happening. I would be interested to go with my chairman on Thursday to Brussels to discuss these things with Members in the European Parliament.

I am sure that my noble friend the Minister would agree that the Government's role in influencing a clear strategy for a single market is considerable, given the Commission's claim that it is suffering from "integration fatigue" and "market fatigue". We must remember that the single market-something very much in Britain's interests-celebrates its 20th birthday in 2012. That birthday will take place with a new strategy that could help to open untapped potential in order to achieve a growth, as has been estimated, of 4 per cent GDP over the next 10 years. I hope that the report produced by a European sub-committee on relaunching the single market will be before your Lordships for debate shortly.

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I have no quarrel with much of the Bill, which may clear up some misunderstandings, particularly those regarding some major issues. I am concerned with the possible restrictions on treaties relating to the EU. We have been there, we have done it and we have settled those problems. Do not let us start undoing and unpicking issues that are particularly in our interest. Because of the time, I will name only one major concern.

As many have said, the Bill provides that a referendum has to be held before there can be any amendments to the Treaty on European Union or changes that may appear to give significant transfer of power from sovereign Parliament to the European Union. As the noble Baroness, Lady Symons, said, 13 cases are listed where the treaty or Article 48 could attract a referendum. I am not a supporter of referendums for such purposes, even with a 40 per cent threshold. Many of the voters to whom I speak-and I have spoken to many recently, knowing that this was coming forward-have said that they would certainly accept Members of Parliament as agents with legislative powers but would not be in favour of transferring these powers to make radical alterations by any referendum to laws that are already made and determined. It is the responsibility of those who are elected to do a job in the interests of the people. Would it not be more appropriate to have a sunset clause, as the noble Lord, Lord Hannay, has just said? Without one, there would be a loss of authority to Parliament.

Would my noble friend the Minister not agree that a referendum should be needed only for significant changes? Would this not lead to considerable confusion, triggering a tendency among other member states to engage in enhanced co-operation among themselves and leading towards the United Kingdom being excluded from intergovernmental agreements outside the framework of the European Union? Surely the co-existence of the sovereignty of Parliament and the principle of EU law is assured as long as the 1972 Act-an Act that has been amended from time to time to take account of the new treaties-remains on the statue book. Would my noble friend the Minister agree that, if we judge that we should have a referendum and it is written into the Bill, that referendum should be explicitly made only advisory? If it were to be mandatory, do I understand correctly that the Government may be bound by results but that Parliament may not, leaving Members the freedom to choose the way forward? Would that not cause a few problems if that were to happen?

The main effect of the Bill as drafted will be to encourage Governments to avoid any decision that might trigger a referendum, even decisions in Britain's interest, such as opting for the Single European Act. It is surely not in Britain's interest to be marginalised, allowing other European countries to take advantage.

As we have heard from many noble Lords, many negative publicity points are made generally about the European Union. However good the intentions may be to satisfy public opinion that our membership is important, the media have already started to campaign, knowing that there is a possibility of a referendum coming, advising voters to vote no to Europe in order

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to withdraw-deliberately, therefore, misinterpreting the many references made in the Bill. This would surely be a retrograde step.

7.53 pm

Lord Dubs: My Lords, when Labour won the 1997 election, it very much looked as if the many years during which this country would agonise about its relationship to the European Union had come to an end and that we were beginning as a country to take our full place in Europe with our European partners. Now I fear that this Bill is setting the clock back and that we will return to those agonising years in British politics, unable to settle on what basis, if any, we are members of the EU. It is a very retrograde step for that reason, if for no other.

I wonder what our European partners must be thinking of us if they are listening to this debate or, above all, to the debate that took place in the Commons, seeing legislation going through that casts doubt on the very European Union that east European countries have struggled for so many years to join. There is such a contrast between the Euroscepticism and downright hostility to Europe that we hear sometimes in this country and the passion on the part of countries that threw off communism, wanting to be members of the European Union, not just because there might be in the short term financial benefits for them but because they believe ideologically that they have turned their back on communism and want to become part of a western democracy that believes in human rights and the rule of law and all that sort of thing. Then they see us, as one of the founders of democracy, saying that we are not sure about this European Union that they have aspired to join. That is a slap in the face for them and does not send out a very good signal about the sort of country that we are likely to become if we go on down this path.

The test of any Bill is clearly the difference that it will make. At its very best, this Bill will not make too much difference. After all, if the Government do not intend to bring about any changes in the lifetime of this Parliament in transferring powers, they do not need the referendum option anyway. At worst, the Bill is harmful, partly for the reasons that I have mentioned-it sends the wrong signal to the countries that have just joined or wish to join the EU. It also sends the wrong signal about what sort of country we are and what our relationship is to be with the European Union, whether we are going to be good partners or not. I fear that our partners will see that we have turned the clock back.

Why are the Government doing this? Clearly, these measures might bind a successor Government, but a sunset clause will put a stop to that. In any case, the next Government in this country will surely say that they are not going to have this provision and reverse it. So it does not seem to have much point. As for placating the Eurosceptic wing of the Tory party, the Bill may have missed the mark as well. Certainly, to judge by some of the comments made by Tory MPs in the Commons, it has not succeeded in placating them. In a way, I feel for the Lib Dems, who are sitting there looking incredibly glum.

Lord Tomlinson: They are the goodies!

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Lord Dubs: As my noble friend Lord Tomlinson says, they are the goodies. For example, the speeches by the noble Baroness, Lady Williams, and the noble Lord, Lord Maclennan, were excellent. Clearly, they represent what the Lib Dems feel more than the official policy of their party.

As a supporter of the EU, of course I believe that the EU needs to be reformed and of course I believe that there should be changes in the EU, but these are not the changes. This Bill and the discussion that it is creating will stand in the way of our being able to consider the EU and the more positive contribution that we in the EU can play to change the EU and make it better. We could all go through a long list of reforms that we would like to see in the EU, but of course they will not be discussed at the moment.

I do not want to talk about the media except to say one thing. Reference was made to the BBC. I do not believe that the BBC is pro or anti the EU; I believe that it has failed to cover it at all. One reason why public opinion is susceptible to the Murdoch press and the Daily Express is that nobody in our media is saying positive things about the EU-they are saying nothing. The Guardian and Independent might, but I wish that the BBC would cover the EU properly, warts and all, in such a way that we had a better understanding of it.

I read with interest, as did many Members of this House, the conclusions of the House of Lords Select Committee on the Constitution, which said that the Bill is "complex and highly technical" as regards the referendum lock provisions, which,

"hinders rather than helps transparency".

Certainly there is a lack of transparency about this Bill.

I fear that the Bill will have sent the wrong signal to our European partners and told them that we no longer wish to be in the mainstream of the EU, which will lead to a two-tier Europe with less British influence. The Government have said that they will, though not in this Parliament, support an amendment to the treaty over transfer of powers. However, even with the best will in the world-and I shall give the Government the credit of saying that they have the best will in the world-things can change and there might be a need in future, even in the lifetime of this Parliament, to transfer some powers in the interests of this country. You cannot always predict the future in terms of the environment, nuclear energy, terrorism and so on. There are all sorts of measures for which we might wish for more powers, because they would protect this country better. If we got in that position, we might find it hard to get a referendum passed, particularly as we know that referenda in Europe are often decided on the basis of issues other than the subject matter of the referendum. We have seen that all too often in referenda. The popularity of the Government influences the referendum rather than the subject matter.

Like other Members, I am also concerned that if we were to get referenda we might have them on relatively minor matters, which to the British public would seem trivial. They are a costly business, as we heard time and again during the passage of the recent legislation on the alternative vote referendum. Therefore, I do not think that that is a sensible way forward.

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Fundamentally, we have to decide whether we believe in parliamentary democracy or whether we want to go down the path of too many referenda. After all, they are alien to our parliamentary traditions except where there are major constitutional matters to be decided. If the Bill were only about major constitutional matters, I would say, "Okay, fine", but to have referenda on minor or apparently trivial matters is simply not convincing. In their response to the Political and Constitutional Reform Committee's report on the Parliamentary Voting System and Constituencies Bill, the Government said:

"The Government also agrees with the Committee's view that referendums are most appropriately used in relation to fundamental constitutional issues, but that it is not possible to provide a precise definition of this term".

It may not be, but we would know one when we saw it. A lot of those liable to come forward are not in that category.

I am also concerned that under the Bill there will be a need for more primary legislation to replace the quicker procedure that Parliament has now. I do not know how many Bills that will involve or how much time, as the noble Lord, Lord Williamson, mentioned. Can the Minister tell us what sort of legislative burden there will be in additional primary legislation that we will have to go through in the course of the Parliament?

I wonder whether, if we are to have a referendum, it would not be preferable to have a non-binding outcome or, alternatively, one that might be binding only if the turnout exceeded a threshold. I feel that we have been here before on the long days and nights on the AV Bill, but I hope that we can amend this Bill so that it will work slightly better than it would at the moment.

Finally, I wish that we could reject this Bill. We understand why we in this House cannot, although all the arguments suggest that it would be defeated pretty handsomely if we all voted on our beliefs. All we can do is make it less bad by putting forward some amendments to improve it.

Lord Oakeshott of Seagrove Bay: My Lords, I wonder whether I could just correct one thing. We on these Benches are not at all glum. We are greatly enjoying all the pro-European speeches from all around the House, including the noble Lord's.

Lord Dubs: I am grateful for that. I tempted the noble Lord and he rose to the bait, which is good.

8.02 pm

Lord Taverne: My Lords, as this debate goes on my speech, as the House will be glad to hear, is getting shorter and shorter. It is almost inevitable that there be some repetition but I will try to keep it to the minimum. I oppose this Bill in principle for three reasons: philosophical, political and constitutional. The referendum argument should be put in some context because the Enlightenment -that glorious episode in the history of civilisation-saw the birth of democracy, but the recognition that the will of the majority should generally prevail led to two strands of development. One of them was the approach of John Locke; the other was the approach of Rousseau.

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Locke's approach was to emphasise the rule of law and the rights of minorities as well as the right of the majority. The Rousseau approach was to say that the will of the people must prevail at all costs and should not brook any opposition whatsoever. Locke's philosophy was expressed in our parliamentary system and its gradual evolution from the Bill of Rights of 1688, while Rousseau's approach found its expression in the French Revolution and in the Committee of Public Safety. In fact, in the house where he was staying, Robespierre the incorruptible used to read to the daughters of his host the works of Rousseau rather like a religious preacher who was reading it for the benefit and moral edification of his pupils.

I want to challenge the idea that a referendum somehow leads to a connection between the people and government. The followers of the referendum are also the people who feel that it is the ultimate expression of democracy. As a result, they regard MPs as delegates and not representatives-because if they were representatives, they might be flouting the will of the majority. Perhaps I may draw on my own experience to challenge this idea.

I once fought a by-election as an independent in 1973 on the issue of whether a Member of Parliament should be a delegate or a representative. My local Labour party in Lincoln told me that if I voted in favour of joining the European Community, against their instructions-indeed, against a three-line Whip-they would withdraw support. Well, I did and they did. I resigned, called a by-election and the result was an overwhelming victory for the principles enunciated by Edmund Burke. It is interesting that an opinion poll taken in Lincoln showed that the people there were against the idea of our joining the European Community by a majority of three to two.

I therefore believe that it is a mistake to think that, somehow or other, a referendum is the ideal instrument of democracy. If you ask people, "Do you want a vote?" they of course say yes. If you ask, "Do you think it is important that you should have a vote?", it is, "Yes, of course it is important that we have a vote". But do they vote? On the whole, the turnout in a referendum is very low and they often vote on an issue that is not the issue of the referendum. How many people are likely to turn up to vote in a referendum on whether we should partake in the office of a public prosecutor in Europe?

The political objections have been so well stated by so many previous speakers that I shall not repeat them. Yet why do we have this Bill? The fact is that a virus has infected the Conservative Party-a virus of hostility to and even hatred of the European Union, whatever the effect on our long-term national interests. It is odd how, in the past 50 years, a virus has infected both main political parties. I saw it happen in the Labour Party during the 1970s and 1980s when a virus of latter-day Marxism affected nearly all younger members of the party, including some of the brightest. Many of the champions of new Labour were at one time Trots, members of the Socialist Workers Party or the Militant tendency. All of them supported unilateral nuclear disarmament and leaving the European Union, including Tony Blair, but eventually the party recovered its senses. Now, it seems that no Conservative under 40-certainly, no Conservative MP that I am aware of-

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recognises the need to work closely with Europe as the natural forum for exercising our influence in the world at large. No doubt they will recover in time; I hope they do so soon.

My third objection is a constitutional one and a point that has been made very effectively by several speakers. The referendum will be triggered if there is any transfer of powers to Brussels, but the Government have no intention of transferring them. So have we got it wrong in thinking that they have no such intention? Are they perhaps thinking of joining the eurozone? It seems a bit unlikely. Are they going to support majority voting on foreign policy or a common defence policy, take part in a European public prosecutor's office or extend the scope of majority voting? Will the Minister-I feel slightly sorry for my noble friend who is going to reply-explain under what circumstances the referendum would be triggered in the present Parliament?

The answer regarding the purpose of the Bill is quite plain: it cannot and will not apply to the present Parliament-its purpose is to bind the next Parliament. That is a wholly unconstitutional proposal. It contradicts the principle that Parliament is sovereign and cannot bind its successors, a principle that is now restated in Clause 18. It is a most unconstitutional principle and there is a simple way of thwarting it: to have a sunset clause saying that Clause 1 and Schedule 1 shall cease to have effect when this Parliament is dissolved. I hope that all Liberal Democrats will support such a clause because I see nothing in the coalition agreement that forces us to accept a wholly unconstitutional principle. I hope that Members of all parties, irrespective of their views on the merits of Europe, would also support such a clause to stop a constitutional monstrosity being enacted.

8.09 pm

Lord Stoddart of Swindon: My Lords, I remember the noble Lord's by-election very well because I went along to it and canvassed against him. It was not a very good experience because most of the people who had previously voted Labour, or a good many of them, were going to vote for him. They voted him back into office and here he is, still making speeches in Parliament, which of course are very welcome.

Today there seems to have been a coalition Bill but also a coalition against the Bill. This has been an interesting experience; I do not think that I have heard one speaker for the Bill. I have to say that I was going to welcome it, and to some degree I still do. However, it is 40 years too late. We should have had a referendum before we joined the European Economic Community, as it was then, but Mr Heath fought the 1970 election-in which I was elected the Member for Swindon-on the basis that he wanted a mandate to negotiate, no more and no less. Instead of holding to that mandate, he decided that he would push the legislation through Parliament without a referendum, and it was passed.

In 1975 we had a referendum, which was brought on by pressure from Tony Benn, and the people decided that they wanted to remain in the EEC. The opportunity was then missed, and it would have been a proper opportunity, to test the opinion of the people to see whether they wanted to join the Common Market, or the EEC or whatever it was, and discover exactly what

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road they had embarked upon. It was not simply a common market but a road towards much larger European integration than they expected. So any referendum now would be 40 years too late.

Opportunities to have referendums on other important matters, like important treaties, have been missed. We should, for example, have had a referendum on the Single European Act because it was a huge step towards further European integration. We should have had another referendum on the Maastricht treaty; unfortunately, that was refused by a mere eight votes in the House of Commons. We should have had a referendum on the Lisbon treaty. We did not, and because we have refused to grant referendums on these huge changes people have begun to distrust government altogether. The result is that the Bill, which will not solve the problems that we face, will give some reassurance. However, the building blocks for a single European state are already in place. Apart from having a single currency and a single defence policy, it is difficult to see how much further we can go without creating a country called Europe.

There are, as we have heard, many defects in the Bill. It is devoid of anything to repatriate powers that should not have been ceded in the first place. There is nothing there that gives hope for the repatriation of powers to this country. Indeed, the Government can avoid having referendums by various devices. Parliament does not seem to have any redress in such cases, unless it is to take action through the courts. That, in itself, would undermine parliamentary sovereignty. As we have already heard, the Bill cannot commit future Governments or Parliaments. There is no way in which the Bill can do that. That has been pointed out forcefully by many speakers today and they are absolutely right.

My other very important point is that there are apparently to be no referendums on new entrants to the European Union. That is the most essential thing for the people to have a say in. The extension of the influence and geography of the European Union is very important, particularly in the case of Turkey, which has a population of 80 million, all of whom would have access to this country in due course. Turkey would be an enormous influence on the leadership of the European Union. Once you have attracted a country from Asia, it would cease to be a European community; it would be a Eurasian community. Furthermore, the French want to incorporate the north of Africa as well. Would we have a referendum on that? I am sure that we would expect one.

Incidentally, there are no safeguards in the Bill against referendums being run time and again, as they have been in Denmark and the Republic of Ireland. If the Bill is to pass, we need an amendment to ensure that if a referendum is held it cannot be held again within, say, five years, so that Governments cannot say, "You must keep voting until you give us the right answer". As I say, it has happened elsewhere.

Finally, we need a cost-benefit analysis of our membership of the European Union. Time and again, the Government have been asked to do this and, time and again, they have refused. Hence, they cannot really make their case. Unless the Government can tell the people of this country that there are real benefits,

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which they can see and understand, they will not believe that being in the European Union is good for them and good for the country. We need a cost-benefit analysis, and we should then have one referendum, asking "In or out?". That would settle the matter and I could go home and have a nice, comfortable retirement.

8.19 pm

Lord Judd: My Lords, I hope my old friend the noble Lord, Lord Stoddart, will forgive my observing that, in the last part of his remarks, he seemed to reveal the old fault of looking at the price of everything but failing totally to see its value. Of course we want effectiveness and do not want waste-we would all agree on that. However, we all know that building a spirit of European co-operation is about something more than just cost-benefit analysis.

If there has been one refreshing aspect to this debate, I found it in hearing the authentic voice of the principles of the Liberal Party at its best-on international realities and the relevance of the European Union to those realities. I found it altogether reassuring to hear the honest comments of Members such as the noble Baroness, Lady Williams, and the noble Lord, Lord Maclennan. Both spoke about the European project originating in the aftermath of the Second World War and the vision of how we were going to prevent another nightmare of that kind. Incidentally, I say to the Conservative Party opposite that it was a vision very much shared and expressed by Winston Churchill himself.

It is always good on a Bill of this kind to break free of intricate detail and to look at the context in which the legislation is being put forward-there has been a good deal of consideration of context in the debate-and the driving reality. There has been a good deal of examination of what really is the driving reality: coalition politics and the rest.

There has been much mention of sovereignty. I take second place to none in my views on the sovereignty of Parliament in a constitutional sense, but when we start to talk about sovereignty emotionally, we may be conveying other messages about which I am far less happy. We seem to talk about sovereignty as a sacrosanct end and principle in itself. The sovereignty of Parliament is of course part of how we achieve effective democracy, but we have to look at the world in which that democracy is being taken forward. We live in a totally interdependent global community. This is true of the environment, the problems of which are accentuated by the finite nature of many essential resources. It is true in an economic sense. It is true increasingly as regards the movement of people. It is true of health and the advance of information technology. It is true of culture. Most importantly, it is certainly true of security of defence in an age of cyberspace and potentially highly disruptive terrorism.

The first responsibility of a Government is of course to protect the people within their jurisdiction, but not one of the issues that I have mentioned, and many others, can be resolved in the context of the nation state alone. Every one of those issues requires effective international co-operation. The test of political leadership and government is to secure the well-being of the

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people who live in the British Isles by contributing to effective international collaboration, and finding and applying the necessary solutions. European co-operation is a vital step towards this.

There is of course a paradox. Certainly, as globalisation has come about, there has been a growing sense of helplessness among increasing numbers of people-a helplessness in their ability to affect events. There has been a loss of confidence and identity, and political apathy has resulted. This has led to the appeal of power-hungry xenophobic opportunists who seize the opportunity of alienation to peddle their message. However, as has been stressed in the debate, this is above all a challenge to political leadership. It is a complex task-of course it is. However, these issues are not separate or moving in opposite directions. The challenge to political leadership is surely to strengthen that sense of identity at the same time as leading on a public understanding of the imperative of international co-operation. These two things should be two sides of the same coin.

European institutions are remote-but why? Again, I side completely with noble Lords who argued that perhaps the biggest culprit is a total failure of political leadership to argue the case for their relevance. Instead, the reverse has happened. I did a stint as Minister for Europe way back in the 1970s. I remember being confronted with the culture and not being happy about it. It is always easy to say these things later in life, but it is true that I was not happy. When a meeting had taken place, the nature of the job was to rush out to a press conference and demonstrate how strong one had been for Britain in the negotiations and what one had gained for Britain. I used to think, "Surely, for God's sake, we should be going out of meetings saying, 'Look at what we have achieved for Britain and the people of Europe by the agreements that we have reached, and this is why they are so important'". We all know that this has been the name of the game. The populism has been there: we have faced in two directions.

We must also face up-and those of us in the political community should never miss an opportunity to ram this home-to the absolute, crude, opportunist sensationalism of the media at their worst, as they look constantly to win circulation battles and the rest, instead of understanding the historic and crucial role in a democracy of providing the quality of analysis on which that democracy can operate.

Some might argue, in the context of the social and political realities and of the public attitudes that exist, that we need to move to a more confederal approach. However, if we do that, the test must be how far it strengthens international action. At the moment, we have too many of the characteristics of neurotic ostriches. The Bill depresses me because of its lack of vision, lack of strategy, lack of purpose and total lack of political honesty. As my noble friend Lord Dubs has just said, how on earth will it enhance our influence in Europe and in international institutions to be seen constantly as the elderly neurotic on the edge, afraid to throw ourselves in?

Back in the 1970s, funnily enough before Jim Callaghan invited me to be the Minister to Europe under David Owen-now the noble Lord, Lord Owen-I had been

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a critic of the European Community. I felt that it had more of the characteristics of the nation state than of the kind of international co-operation for which I was looking. I was very interested by the outward-looking nature of EFTA and the rest. However, with all sincerity I share with the House my total conviction, which I had at the time of the referendum during the Labour Government and have had ever since, that if the nation decided that it was going along the European road-and we did decide to do that-there was only one way to play it, namely to be second to nobody in our commitment both to building a strong, effective Europe and to ensuring that the project met the needs of our people and the people of Europe. I am afraid that time and time again we have undermined our potential to make that contribution because of our neurosis, because we are looking two ways and because of our political leadership's failure to spell out to the British people as clearly as it should be spelt out that their destiny lies in effective international co-operation, starting with Europe.

The Bill does nothing to meet that challenge. We ought to be ashamed of it.

8.29 pm

Baroness Nicholson of Winterbourne: It is a very great honour to follow such eminent speakers in this debate. This is a topic of very high value. The noble Lord, Lord Judd, commented on the great emotion that it raises. I am afraid that in comparison with his speech and that of the noble Lord, Lord Stoddart, for example, mine will be very dry, and I hope that your Lordships will forgive me.

The Government are right to believe that United Kingdom membership of the European Union is in our national interests, and the promise vigorously to champion those interests while playing an important role in the European Union is to be welcomed. Of course, Britain has always played a powerfully important part in all affairs of the European Union, and we have been wonderfully well represented by successive generations of our diplomats. The Foreign and Commonwealth Office is generally considered to be primus inter pares and is spoken of as such by other delegations in the EU. With the inspiring presidency of the noble Lord, Lord Plumb, who has spoken today, the tremendous Commission competences exercised by the noble Lord, Lord Brittan-another powerful and important British figure-and the Commissioner today, the noble Baroness, Lady Ashton, we have been wonderfully well served. Many speakers in this debate have not touched on the eminent contributions that the United Kingdom has made so effectively in Brussels and Strasbourg over such a long period. Indeed, I cannot move on without commenting most positively on the wonderful way in which the different Ministers here in the United Kingdom have briefed Ministers in the EU, enabling them, too, to play their part in successive Councils of Ministers in different sectors of our involvement.

The coalition agreement states that in the context of a leading role in an enlarged European Union,

"no further powers should be transferred to Brussels without a referendum",

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on the basis that this would strike the correct balance between constructive engagement with the European Union and protecting our national sovereignty. This Bill seeks to enshrine that principle in statute. However, I suggest that much of the debate in the United Kingdom that has been sceptical or hostile towards Europe has gained disproportionate traction through a perceived remoteness and democratic deficit. There should be nothing to fear in seeking to improve the democratic accountability of the European Union, thereby ensuring that the British public are engaged and active participants in the future of Europe. This remoteness was not addressed by the Treaty of Nice, nor by the Lisbon treaty, which increased the relative powers of the European Parliament. However, the intractable problem of lobbyists-6,400 of them-operating in Brussels, and within the European Parliament in particular, makes it even more important today that national Parliaments deliver the necessary accountability and public scrutiny. Your Lordships' House and the other place should not be reticent in providing the necessary counterbalance to, and additional scrutiny of, European matters.

Part 1 of the Bill, which deals with the so-called "referendum lock", specifies the circumstances in which parliamentary scrutiny is to be undertaken. The effect is likely to be at least an enhanced involvement of Parliament with EU matters, which have often been more or less left to Ministers. However, I believe that in our debates on the European Union we should be mindful that we are discussing our intergovernmental structure. The European Parliament, where I had the privilege of serving in the Comité d'affaires étrangères, was conceived to provide only occasional scrutiny of Council of Ministers decisions-once or twice a year perhaps-giving the flavour of democracy and not the real thing. Why was this so, or perhaps more importantly, why did we not raise this point at the time of our entry?

In the decade or so running up to UK membership, we took the view, or our Government of the day perceived, that Brussels would create laws only very occasionally and that this feather-light European legislative touch would not imperil nor even infringe our national sovereignty, as those few Brussels laws would be inferior in status to our national legislation. How wrong we were. That view held good even 20 years ago when the picture was changing fast in consequence, at least in part, of the European Parliament's transformation from a nominated body of national parliamentarians to today's directly elected European Parliament with significantly enhanced authority, which often seems, from the perception of the electorate, to overrule Westminster and locally elected councillors time after time.

Today the picture is very different. Together the five EU institutions create, modify or influence a larger part of member states' legislation over an ever increasing range of competences. As the noble Lord, Lord Howell, has already confirmed, European Union legislation has acquired autonomous status. Unless a member state Parliament takes an exceptionally active and determined position in scrutinising, debating and voting in a timely manner, European Union legislation rolls through, apparently unheeding of national parliamentary rights and obligations. However, parliamentary involvement

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in the essentially intergovernmental system on which the EU was built and still remains, relies in large part on Governments' willingness to allow that to happen. I suggest that history shows that successive UK Governments have been unwilling to involve Parliament in a timely and appropriate manner.

For a decade, I served in the other place on European Union Standing Committees A and B. We should have had papers; we should have had debates; and we should have been able to put statements to the House before the Council of Ministers made its decisions. Too often, that was not the case. Not only was it not the case, but sometimes we got the papers after the Minister had made the decision in Brussels and had reported back to Parliament. It was the most extraordinary democratic deficit in the United Kingdom, within the powers of successive Governments, that I could ever have imagined experiencing. That was not the fault of the European Union, the Commission, the Parliament or the Council of Ministers, or even the Court of Justice or the Court of Auditors; no, it was the responsibility of the United Kingdom. The heart of the democratic deficit of the European Union lies in the United Kingdom national Parliament.

Even today, Council of Ministers debates and reports are rare and post hoc. That is not necessarily the case in other member state Parliaments or in other Governments. When I reached Brussels, I was astonished to discover that other Parliaments did not have information withheld or their authority undermined by their own Governments. The Danish situation is particularly interesting. Before a Danish Minister goes to the Council of Ministers with a proposal from his ministry or before he or she embarks on a debate or a decision-making process, he goes to the relevant committee of the Danish Parliament and tells that committee what the topic is all about and what will happen. Then the committee instructs the Minister or debates with the Minister. When the Minister has been to Brussels and attended the Council of Ministers at any level, he or she reports back to the relevant committee and then to the Floor of the House. That is the case not just in Denmark but also in other member state Parliaments.

Where is the democratic deficit? I suggest that it has been here in Westminster. Hence, I suggest, the coalition is right in its determination to take some action to bring the British Parliament and the British public closer to the heart of the EU decision-making process. To involve Parliament, Ministers must decide to do so, not once, not twice but consistently and for the long haul. That is why the Bill is of such high value to the UK. Despite its perhaps necessary complexity, it commits the Government to what I and many others perceive as the right course of action. Even if it is late, it is never too late in democratic terms.

However, I must admit that the House of Lords Select Committee on the Constitution's report on the Bill finds:

"The multiple specification of individual Treaty provisions hinders rather than helps transparency and accessibility in the law".

It is therefore wholly legitimate to debate in your Lordships' House the use of referenda as a mechanism in our constitutional practice, as the Bill represents a change. That alone may warrant wider detailed consideration.

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We have not had referenda in the United Kingdom with the great frequency that the noble Lord, Lord Stoddart, for example, suggested in his speech. He talked, for example, of the Single European Act. I was in the other place during the passage of the Single European Act-I beg your Lordships' pardon, I mean the Treaty of Maastricht. With the noble Lord, Lord Hurd of Westwell, who was UK Foreign Secretary, I recall spending a full year debating the Maastricht treaty. Was that not democratic? Would it have been any better if we had had referenda every moment with the British public? We are not California, I suggest; referenda should be scarce and carefully thought through, and then they will bring the British public into greater familiarity with European Union legislation and competences. Regular referenda would not be welcome. Your Lordships' House will want to debate the use of referenda in considerable detail.

I therefore particularly welcome Part 3, even though it does little more than reassert what is already the common law position: that European law has currency through legislation and a mechanism agreed by Parliament. Case law has upheld that common law position, but there is nothing to be lost and much to be gained in placing that principle on a statutory footing. Similar provisions exist through a sovereign act in other member states, such as Germany.

The Government's undertaking to use the Bill to reconnect European Union citizens with European Union decisions is appropriate. To be most effective, as I have already stated, that will require the Government to be proactive in making the case for our continued membership and demonstrating the benefits which our active participation brings. Those are significant, serious, long-lasting-permanent-benefits. The general public does not understand that because the Government have made no effort at any time in the past 30 years to explain that point. By leaving out Parliament to the degree that I have identified, we do not give our Members of Parliament in the other place or us in this place the opportunity to speak more clearly, as we should do, on European Union matters. The Government should be significantly more ambitious in establishing a true and lasting connection between the European Union and the people of this country.

The Bill is therefore to be welcomed as the first step towards establishing a robust connection between the public and the European Union, but many unanswered questions remain. I hope that in responding to the debate, the Minister will be forthright in responding to the issues that the Government have yet to address. The Bill is so technical and complex-a point that has been accepted by Ministers-that it risks creating greater uncertainty than it resolves. The principle underpinning the Bill is sound, but the Government have yet to explain how it will be applied in practice. Its breadth is considerable, and how it is to be applied will be important. Can the Minister clarify precisely how the Government envisage this concern being addressed?

Ministers have argued that this Bill will strengthen our democracy, but mostly powers will continue to rest with the Government. Ministerial determination will remain pivotal. It will be the Government who

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determine whether there has been a transfer of power. What mechanisms does the Minister propose to address that deficit and overcome those concerns? What action will the Government be taking within their own programme and communications to facilitate greater engagement between the electorate and European Union business? Their approach to European scrutiny, even within your Lordships' House, has not always been as open and timely as would be desirable and it has been historically lamentable in the other place. How long does the Minister anticipate before the results of this will feed through to the public consciousness? What action do the Government envisage taking to make more widely available the workings and considerations of the European Commission, the European Parliament and the Council of Ministers?

This Bill is profoundly useful, insofar as it restates the common law position and provides a mechanism to establish a new and proper connectivity between the electorate and the European Union. The measure of success will be the extent to which the Government's intentions are truly reflected in their application of these mechanisms for advancing our national interest through serious parliamentary involvement here in Westminster in EU matters and through the active incorporation of our electorate in major decisions such as transferring UK powers and competences to the European Union. I support the Bill.

8.46 pm

Lord Kerr of Kinlochard: My Lords, is it an ineluctable law of coalition government that the Wallaces get all the ghastly jobs? I think we all greatly admired the tact and skill of the noble and learned Lord, Lord Wallace of Tankerness, in extremely difficult circumstances on another Bill, but as I listen to this debate-the score so far is one supporter, two convinced that it does not go far enough and 22 critics, some of them very fundamental, of the Bill-I begin to think that the noble Lord, Lord Wallace of Saltaire, has a more difficult task on his hands. I have the greatest respect for the noble Lord, Lord Wallace. I have learnt a great deal from him down the years. I know what he thinks about the European Union, and I know how difficult is the situation he finds himself in now. He has my sympathy.

Let me say straightaway that I have absolutely no quarrel with Part 2 or Schedule 2. Part 1 is a little more complicated. I find the referendum requirements absurd in conception and damaging in effect. As for Part 3, or rather Clause 18, I think it is certainly spurious and possibly sinister. The Bill is, of course, also very badly drafted. What has happened to Foreign Office drafting? Who could have drafted Clause 18? Nobody in the Foreign Office, I am quite sure. It must have come down from a great political height. The Bill is incoherent. You cannot assert parliamentary sovereignty in Part 3 and demolish it in Part 1, condemning it to a death by a thousand cuts. It does not make sense. Clause 18, which appears to be declaratory, asserts the sovereignty of Parliament. Directly applicable EU laws apply directly to us because Parliament passed the 1972 Act. I agree. If Parliament repeals the 1972 Act, they would no longer apply to us because we would leave the EU using the new procedure set out in Article 50 TEU and the noble Lord, Lord Stoddart of

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Swindon, could go home a happy man. I agree with that too. Parliament decides, because Parliament is sovereign. However, in Part 1 there is this enormous list of provisions where Parliament does not decide where a referendum requirement is introduced.

The noble Lord, Lord Davies of Stamford, entertained us with some parts of Schedule 1. The one that most puzzles me is:

"Article 346(2) (changes to list of military products exempt from internal market provisions)".

It is not the substance of the list that we would go to the nation about, it is whether the procedures for deciding the list should be changed. I know what that is about. The internal market competition rules do not apply to certain categories of defence goods, because some countries with inefficient defence industries wish to preserve them, and we wish therefore to have a protectionist situation applying to the goods on the list. The list is decided by unanimity, so it is quite a long list, because everybody who has a tinpot little defence industry that makes something which it would like to buy for its own forces makes sure that the goods in question are there on the list.

We happen to have the most efficient defence industry in Europe. It would be strongly in the UK's interest to have the procedure for deciding on that list moved to qualified majority. The Government say that they will make sure that that does not happen in this Parliament; and in the next Parliament, the Government say, it could happen, but only if there was a referendum vote in favour of it happening. I do not understand this.

Let us remember that these are mandatory referenda, not advisory referenda. However obscure the issue, however low the turnout, however keen the Government are on the measure, however strong the support for it in Parliament-because, by definition, Parliament will have approved it and the Government will have approved it; they will have signed up to it and the whole European Union will want to do it-but however much it is in our interest, if on a turnout of 20 per cent it is 11 noes and nine yeses, that is it, it does not happen. I do not understand this. It may be, as a minimum, that we need to think about the provision that this House voted for by a large majority proposed by the noble Lord, Lord Rooker, in another context, when we were dealing with another Wallace, almost as distinguished as the one we face tonight.

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