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House of Lords

Monday, 13 June 2011.

2.30 pm

Prayers-read by the Lord Bishop of Chichester.

Message from the Queen

2.36 pm

The Lord Chamberlain (Earl Peel): My Lords, I have the honour to present to your Lordships a message from Her Majesty the Queen, signed by her own hand. The message is as follows:

"I have received your address about His Royal Highness the Duke of Edinburgh on the occasion of his ninetieth birthday. It gives me great pleasure to convey to the Duke of Edinburgh the loyal and affectionate sentiments you express on behalf of My Lords".

Royal Assent

2.36 pm

The following Act was given Royal Assent:

Postal Services Act.



2.37 pm

Asked By Baroness Kramer

Lord Taylor of Holbeach: My Lords, the current Office for National Statistics census coverage survey is a validation exercise that will greatly enhance the statistical authority and value of the census. It will cover some 17,000 postcodes across England and Wales. This represents a sample of 1.3 per cent of all postcodes in England and Wales, and will cover some 330,000 addresses. The cost of the field operation of the survey is estimated to be £6.5 million, representing around 1.3 per cent of the total census costs. The cost for the processing of the information collected in the survey is included in the overall cost of the processing operation.

Baroness Kramer: My Lords, I thank the Minister for that very full Answer. However, he will be aware that this is a survey of people who have filled out the census form and about whom no questions have been raised as to accuracy. They are required to stand on a doorstep for 10 minutes, answering personal questions from a complete stranger. If someone refuses to answer, surveyors are instructed to return as many as 10 times to wear them down into answering this survey. As someone said to me, it is fascinating to watch an

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exercise that not only wastes public money but manages to alienate the public. Will the Minister give us a guarantee that future evaluations of the census will be proportionate, targeted and designed-please-with a dose of common sense?

Lord Taylor of Holbeach: I am sorry that my noble friend takes that view of this exercise, which is a valuable part of the census. I understand her concern about intrusiveness; these things are not taken in hand lightly. However, the survey is a vital element of the whole of the 2011 census operation. It is necessary in order to assess the extent of any undercount, and to provide information on those persons missed in the census to adjust the final estimates so as to enable all the resulting statistics to relate to the whole population.

Lord Desai: If one has to hold an objective survey, is it not necessary to get complete strangers to ask questions? If somebody I knew asked me questions I might not give the right answers, because he might misuse them. The noble Baroness asks why complete strangers ask the questions. Of course strangers have to ask the questions; if they did not, it would not be an objective survey.

Lord Taylor of Holbeach: A short interview on the doorstep is available and a form can be filled in if people prefer to do that. People may well wonder why they are doing this when they have already completed a census form, but we seek to ensure statistically that the figures which the census is delivering are an accurate representation of the household. This is a valid statistical exercise which complies with quality assurance as defined by the United Nations and is international practice. It is worth investing a little extra effort to ensure that the census really does achieve its objectives.

Baroness Gardner of Parkes: Will the Minister clarify this for me? I had thought that it was an either/or situation and that if you completed the form you did not have to be interviewed on the doorstep. However, from what he has just said, it sounds as if a certain number of people are still to be interviewed even if they have completed a form. Is that correct? How is it assessed which people who have completed a form should be interviewed?

Lord Taylor of Holbeach: This is done on the basis of postcodes. The measure is designed specifically to include those postcodes where information has been difficult to obtain and to ensure that the information returned is valid. I thank my noble friend for pointing this out: the actual households may or may not have completed a form in the first place. This measure is designed to ensure that the information that is available is correct.

Lord Dholakia: My Lords, the information in a census is required by law in this country. Does this survey have a penalty attached to it if one refuses to answer any questions?

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Lord Taylor of Holbeach: No, it is entirely voluntary, but I would hope that people would realise why it is important to complete the survey.

Baroness McIntosh of Hudnall: My Lords, if it is the purpose of this survey to ensure that the information on the census forms is, broadly speaking, accurate, is it possible to ensure that Members of this House are included in that survey? I wonder whether the Minister is aware that the way that the census form was designed made it extremely difficult for people who are Members of this House to give accurate information about how they spend their working days.

Lord Taylor of Holbeach: I thank the noble Baroness for that question. I struggled a little to complete my own form and was rather embarrassed by that considering that I have occasionally to answer questions on the subject. So I understand exactly what she is saying. However, I can reassure her that were she part of the postcode lottery-that is, the postcode selected for this interview process-she might indeed find that somebody wanted to interview her about her census form. If so, it would be a very much abbreviated questionnaire compared with the one that she was asked to fill in in the first place.

Lord Brooke of Sutton Mandeville: My Lords, I declare an interest as a former canvasser in an inner London seat. Can my noble friend tell me what happens if the only method of communication with the person being interviewed is through an entry phone?

Lord Taylor of Holbeach: This is a familiar experience for most noble Lords. It relates in some ways to the difficulties experienced in some inner urban areas in this regard. Noble Lords may remember that I was asked a question on this some time ago and that Kensington and Chelsea had only a 64 per cent return of census forms in 2001. We are on track for a much better return this time, aiming at a 94 per cent return. The early indications are that it is on target, and that is very satisfying. As my noble friend has pointed out, communication is often difficult in these hard-to-reach areas. In the case of non face-to-face communication, it is possible, as I say, for a form to be filled in by the respondee.

Baroness Farrington of Ribbleton: My Lords, will the Government have regard to the assessment of population as a result of the census when considering parliamentary boundaries? It is my recollection that the Government closed that issue at the end of last year, and that therefore the new parliamentary boundaries could be drawn up on fallacious figures.

Lord Taylor of Holbeach: I think that we have discussed this previously, if I may say so, but I thank the noble Baroness for bringing it up. The truth of the matter is that registration for the electoral register is entirely voluntary in this country and not everyone is registered. On the other hand the census is mandatory and designed to make sure that government resources go to where they should. Therefore the two are not

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compatible; they are drawn up under separate legislation and conducted by totally separate organisations. The Office for National Statistics has nothing to do with local electoral registration.

Health: Transmissible Spongiform Encephalopathies


2.46 pm

Asked By The Countess of Mar

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, the Government continue to invest considerable funds in this research. I am pleased to note that the risk from BSE has declined significantly, and that cases of variant CJD peaked in 1999 and have declined ever since. The Government intend to continue to fund this research in order to ensure that policies are based on the best possible science and that there is evidence of efficacy, safety and cost-benefit for any measures implemented.

The Countess of Mar: My Lords, I am grateful to the noble Earl for that encouraging reply, because there have been rumours that the TSE research by the Health Protection Agency at Porton Down was to be "downsized", as they say. Does the noble Earl agree that it is very important that we retain our knowledge acquired since the 1950s, when researchers were looking at scrapie, and that it is rather dangerous to put all our eggs in one basket? We ought to encourage lots of researchers to keep up to date, because these little prions seem to have naughty ways. What is happening to the archives for TSE conditions, which really ought to be called neurodegenerative diseases?

Earl Howe: My Lords, the Government are committed to continuing research in TSEs. Many fundamental questions remain unanswered and the research is, by its nature, long term. Considerable funding is provided by a number of bodies-not only the Department of Health, but the Medical Research Council, the Biotechnology and Biological Sciences Research Council, Defra and the Food Standards Agency. The total funding last year was in excess of £20 million, and I should add that the DoH funding is ring-fenced. That funding to key institutions ensures that expertise is maintained and continued in the UK.

As for the archive of research data, I agree with the noble Countess. The Government are committed to this research, as I have mentioned, and to surveillance, so our data and resources will remain accessible through peer-review publication systems for sharing material and through continuing liaison with the research community.

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Baroness Finlay of Llandaff: In making decisions about funding, do the Government recognise that the research into prions and TSEs may be only the tip of the iceberg, and that prions may be implicated in a whole range of other protein-folding abnormalities, including Alzheimer's and amyloid disease? In asking that question, I must declare an interest, because research in the field is carried out in my own university, Cardiff University.

Earl Howe: My Lords, I am aware of emerging findings in that sense. We welcome, of course, any significant findings from research, and my department has indeed part-funded some of the studies that the noble Baroness may have been referring to. Future funding applications for new studies will be considered, as they always are, on a case-by-case basis. These decisions are dependent on, among other things, existing research in progress and the availability of funding. However, this is an interesting area.

Lord Greaves: My Lords, does the Minister agree that this country is a world leader in research into spongiform encephalopathies and the role of prions generally? Nevertheless, what we know about this area remains a great deal less than what we do not know. In those circumstances, will he answer what I think was behind the noble Countess's original Question? Is the amount of money devoted to funding this research continuing at the same level, or is it actually being reduced?

Earl Howe: My noble friend asks a very good question. Over 20-odd years, we in this country have invested almost £0.5 billion in research into TSEs. That is a significant amount of money. The total amount is declining, but that is because in the early days it was important to invest in research to ascertain the pathogenesis of this condition in cattle in particular. We are much further forward in understanding how this disease develops in cattle. Nevertheless, as I indicated to the noble Countess, important questions remain unanswered, and I think we will continue to see this research funded well into the future.

Baroness Masham of Ilton: My Lords, what is happening about the P-Capt filter for prions? Are we not lagging behind Ireland and China in this research?

Earl Howe: My Lords, the noble Baroness will know that the independent Advisory Committee on the Safety of Blood, Tissues and Organs-SaBTO-has advised that there is evidence that a particular filter can reduce potential infectivity in a unit of red blood cells. It has recommended the introduction of filtered blood to those born since 1 January 1996, subject to a satisfactory clinical trial to assess safety. We are undertaking an evaluation of the costs, benefits and impacts to inform a decision on whether to implement that recommendation, and we are awaiting the results of clinical trials, which are expected in early 2012.

Baroness Thornton: My Lords, following on from the noble Countess's Question and linked to the need for continuing research, can the Minister assure the

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House that the scientific teams at the HPA and elsewhere will be kept together when the HPA has been broken up, and that during the period of establishing the independent health research agency the work will not be interrupted?

Earl Howe:My Lords, we are keen to see a smooth transition in the creation of Public Health England, which will include the current HPA. The expertise in prion research in this country is largely independent of the HPA. There is expertise particularly in Edinburgh and in the national prion unit in London, but her point is well made.

Banking: Government Shares


2.53 pm

Asked By Baroness McDonagh

Baroness McDonagh: I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as non-executive director of Standard Life.

The Commercial Secretary to the Treasury (Lord Sassoon): My Lords, in line with its framework document and investment mandate, UK Financial Investments will advise the Government on the timing of the disposal of these assets, in light of market conditions at the time. The Office for National Statistics will decide how to account for the proceeds in the public finances of any share sale, taking into account the precise nature of the transaction. How any proceeds will be used will be determined as part of the normal annual Budget process.

Baroness McDonagh: I thank the Minister for that reply. The Government have been able to tell us little about their future banking policy. Perhaps we could be enlightened more about the here and now. I do appreciate that it is difficult for the Minister, given the abject failure of Project Merlin, but how have we got ourselves into a situation where under the Government's own enterprise finance guarantee scheme we are lending to SMEs less and less each month to the degree where we are now lending half in the first quarter of this year of what we were lending in the first quarter of last year? The Government are threatening banks to lend more and more. When are they going to get banks to lend to small and medium-sized enterprises at rates they can afford?

Lord Sassoon: My Lords, I could be churlish or be fair to other noble Lords who might want to ask about the subject of this Question, which is the Government's plans to sell shares in the publicly owned banks. We

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seem to be straying rather far from it. Project Merlin, agreed between the Government and the banks, means that the banks have put aside considerably more lending capacity this year for SMEs than last year. We have transparent reporting and a range of other initiatives to which the banks have committed to ensure that lending flows. We have also put money into a new equity fund for smaller businesses. These were things that the previous Government did not do but which have only peripheral relevance to the subject of this Question, which is about the sale of shares in the banks.

Lord Peston: My Lords-

Lord Newby: My Lords-

Noble Lords: This side!

Lord Peston: No.

Baroness Anelay of St Johns: My Lords, it is a courtesy. The Question was posed from the Labour Benches. It might be helpful to hear from a different Bench, just for the moment.

Lord Newby: My Lords, given that all UK citizens have, to a greater or lesser extent, had to bear some of the costs of the Government bailing out the banks, can the Minister confirm that the Treasury is giving serious consideration to the distribution of the state-owned shares in RBS and Lloyds Banking Group to the UK population as a whole?

Lord Sassoon: My Lords, I can confirm to my noble friend that UK Financial Investments will be considering retail participation in the distribution of the shares. That does not, of course, necessarily mean quite what he said, which is some form of distribution but, yes, mass participation in some form is very much to be considered. Value for money is also one of the considerations that UKFI is required to take into account.

Lord Peston: My Lords, particularly as the Minister used the phrase value for money, is not the Government's prime duty in determining when to sell making sure that the taxpayer gets the maximum proceeds from the sale of the shares? Is that not clear-cut? Is it not also clear-cut that the one group that should not be allowed to bid for the shares is the bankers who got us into this financial mess in the first place?

Lord Sassoon: My Lords, the obligation on UK Financial Investments is to provide advice to the Government on the time and form of sale. Value for money, as widely defined, is very much a consideration. The Government do not intend to be a permanent investor in the banks, but the timing of any disposals will take account of many considerations, including market conditions at the time.

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Baroness Wheatcroft: My Lords, one of the answers to getting more lending to our small firms, who are clearly not yet being well served by Project Merlin, must be to encourage more competition. Can the Minister assure me that he sees no conflict between the desire to get the maximum price for the Government's investments in banks and ensuring more competition?

Lord Sassoon: My Lords, I am grateful to my noble friend as she enables me to point to the mandate which UK Financial Investments was given by the previous Government. It was that in creating and protecting value for the taxpayer it must have due regard to both financial stability and competition. At all stages, whether it is the involvement of the Independent Commission on Banking or the mandate of UKFI, competition is at the centre.

Lord Eatwell: My Lords, the noble Lord has mentioned Project Merlin on a number of occasions. Will he explain to the House why the lending targets set for the banks under Project Merlin and announced to this House have now been reduced by a good 10 per cent? Why are the Government fiddling the figures?

Lord Sassoon:Number one, this is a Question about the disposal of bank shares; number two, I would not believe everything that you read on the front page of the Financial Times every day.

Lord Lawson of Blaby: My Lords, in saying that financial stability should be one of the considerations in the disposal, which I warmly welcome, does my noble friend agree that an element of that financial stability must be ensuring the greatest possible separation between retail banking and investment banking?

Lord Sassoon: My Lords, I will wait with interest to see what the final report of the independent commission led by Sir John Vickers says on that point but, as indicated in its interim report, it is at the heart of its deliberations. The Government await with interest its final report.

Lord Touhig: Is the Government's holding in the banks listed in the National Asset Register, and, if not, why not? If it is listed, can the Minister tell us where it is, because I cannot find it?

Lord Sassoon: My Lords, I shall have a look at the National Asset Register myself when I get back to the Treasury and, if it is not there, I shall write to the noble Lord to explain why.

Groceries Code Adjudicator Bill


3 pm

Asked By The Lord Bishop of Wakefield

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The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox): My Lords, the Government published the draft Groceries Code Adjudicator Bill on 24 May-that is, they have published draft legislation during the first Session, as they set out to do. The objective is to introduce a final Bill in the second Session, although it could be earlier if we have the opportunity. Of course, the timetable for introducing the final Bill will also be subject to the outcome of the pre-legislative scrutiny.

The Lord Bishop of Wakefield: My Lords, I am most grateful to the Minister for her encouraging reply. One of my main concerns is the speed of implementing this legislation because of further haemorrhaging in our dairy industry, in particular. However, I am also concerned that the adjudicator should have teeth. In relation to the implementation of the Groceries Supply Code of Practice, can the Minister explain why financial penalties will not be available to the adjudicator in the early stages of operation but will be made available only by order of the Secretary of State?

Baroness Wilcox: I know that the right reverend Prelate the Bishop of Wakefield is most anxious to see the groceries code adjudicator established, as the pastoral care of farmers in his diocese is important to him. The Government believe that the most effective way to handle this matter in a highly competitive market is to name and shame retailers who breach the code. However, if experience shows that negative publicity is insufficient, the Secretary of State will have reserve powers to allow the adjudicator to impose financial penalties. I know that the Commission recommended that we should have such financial penalties, but the Government believe that the most effective method of control is to go through the naming and shaming process and to see whether that works before resorting to fining.

Lord Avebury: My Lords, is my noble friend aware that many Members in another place who represent agricultural constituencies-primarily my honourable friend the Member for Ceredigion-have campaigned for some years for legislation along these lines to afford protection to agricultural producers against the abuse of monopoly power by large retailers? Would it not be wise therefore to take these interests into account and to press on with the Bill as rapidly as possible?

Baroness Wilcox: My Lords, we all agree that we wish to get this legislation through as quickly as we can. We have widespread cross-party support, and one retailer, Waitrose, already supports it, as do bodies representing suppliers, including farmers and third-world producers. However, as my noble friend knows, we have to go through the legislative process. If we can bring the Bill forward any earlier than we are aiming to do at the moment, then we certainly will, but there is a very full legislative programme and everyone thinks that what they have to do is extremely important. However, I fully agree with my noble friend and I, too, should like to see the legislation brought forward earlier.

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Lord Kennedy of Southwark: My Lords, I think we would all support the groceries code and adjudicator who will ensure that British farmers and growers get a good price for their quality produce. However, can the noble Baroness tell us whether other producers will get a fair price for their produce? I am thinking, in particular, of the banana industry in the Caribbean.

Baroness Wilcox: I am delighted to answer this question because I know that third-world producers are very keen for the adjudicator to be in place. I agree that suppliers to the large supermarket groups come in all shapes and sizes. I was once one myself, so I know exactly how this process works and exactly where the worries lie on either side. However, it is worth remembering-I used to have to remind myself of this-that these are huge contracts and people go for them because they are a wonderful way of increasing employment and expanding one's business. Therefore, a balance has to be found.

Baroness Byford: My Lords, does the Minister accept that there is extreme pressure from all sides of agriculture to have the adjudicator in place as soon as possible? The right reverend Prelate mentioned dairy, but the situation for pig farmers is extremely acute, and a lot of supermarket offers promote imported products rather than our own, which seems grossly unfair. Everybody is hoping for a fair deal for all those who have to deal with the few major players who control prices.

Baroness Wilcox: The whole reason for bringing in the adjudicator will be to arbitrate in disputes between the large retailers and their direct suppliers, and to investigate possible breaches of the grocery code, which has been in place for a year now. Of course, when there is a group of very big supermarkets together, that is a worry. That is the whole reason for putting this in place and I am sure that the noble Baroness would want this to go through as quickly as possible.

Lord Young of Norwood Green: My Lords, we welcome the Bill and the assurances received. The Minister said that only direct applications from suppliers can be made to the adjudicator. Why will the Government not consider trade associations? The Government have allowed anonymity in terms of representations, but allowing trade associations to make a direct representation on behalf of suppliers would be a valuable source of evidence for the adjudicator to consider.

Baroness Wilcox: I have no doubt that as the Bill goes through, the noble Lord will stand up and put these points to me. I am absolutely sure that everything will be considered. At the moment that is exactly what we are doing: looking at every possible way of getting this right for our country.

Baroness O'Cathain: My Lords, the noble Lord, Lord Kennedy, made a point about bananas. Almost all the major supermarkets now have Fairtrade bananas.

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Is there anything we could learn from the organisation of Fairtrade bananas in this country that we could copy for dairy, pork, sausages or anything else?

Baroness Wilcox: My noble friend makes a very good point. I am quite sure that other areas will be looking at the way in which Fairtrade and other such organisations have chosen to supply.

Export Control (Amendment) (No. 3) Order 2011

Motion to Approve

3.07 pm

Moved By Baroness Wilcox

Motion agreed.

Taxation of Equitable Life (Payments) Order 2011

Motion to Approve

3.08 pm

Moved By Lord Sassoon

Motion agreed.

European Union Bill

Main Bill Page
European Union Bill

Report (2nd Day)

3.08 pm

Clause 4 : Cases where treaty or Article 48(6) decision attracts a referendum

Amendments 11 to 12A not moved.

Clause 6 : Decisions requiring approval by Act and by referendum

Amendment 13 not moved.

Amendment 14

Moved by Lord Hannay of Chiswick

14: Clause 6, page 4, line 34, leave out from "Parliament" to end of line 35

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Lord Hannay of Chiswick: My Lords, I will speak to the long list of the amendments in this group. Because some amendments in the group have been changed since they were debated in Committee, I hope that I will be forgiven if I say a little about them. The broad case for this group of amendments remains that which was referred to by many noble Lords at Second Reading and in our debates in Committee: it is the belief that the long list of potential referendums is excessive and disproportionate, that it does real damage to the structure of representative parliamentary democracy and that it needs to be shortened. I do not know how on earth the Government arrived at a list as long as 56. Some earnest people have discovered even more in this legislation. Indeed, why stop one short of where Mr Heinz got to? The amount is quite excessive and would have a disproportionate effect on our constitutional practice. What it amounts to is massively increasing the number of potential referendums in one area of policy while not doing so in any other area of policy. It is completely unbalanced in its approach.

The amendments that I and other noble Lords have tabled today reduce the number of areas that would be subject to a referendum mandatorily if they were pursued separately, one by one. I will come back to the point about what happens if they are pursued collectively later on. In these amendments we have tried to take account of the debate in Committee. The noble Lord, Lord Howell, who was the Minister on that occasion, spoke about the big five and attached a lot of importance to their being the subject of a referendum. I and other noble Lords listened carefully to that speech and have taken considerable account of it in the way in which these amendments are cast. When we discussed it in Committee, we only suggested that there should be an explicit referendum requirement for a decision by Britain to join the euro and that other matters referred to in Clause 6 should not be so treated. However, we listened to what the noble Lord said in the debate, in particular the great importance that he attached both to the question of any move towards military co-operation and to the question of any move on border controls-that is the Schengen treaty, which, of course, does not apply to this country at the moment. Therefore, we have recast these amendments in such a way that, if they were passed, while there would be a considerable reduction in the number of referendums that potentially would need to be held, there would still be a referendum requirement if we were to decide not only to join the euro but to move decisively in the direction of military co-operation. Here the amendment is more precise than the extremely woolly wording of the Government's own Bill, and makes it clear that what the Government and their supporters were talking about was the circumstances in which defence co-operation moved to an area that involved the setting-up of a European Union force or structure. That is the way in which it is now cast and it suggests that this would definitely require a referendum. The addition of the Schengen provisions requires less explanation; it is fairly straightforward. Britain has had an opt-out since, I believe, the Amsterdam treaty, and it is not suggested that that could be shifted other than after a referendum.

These changes show that those of us seeking to amend the Bill are listening carefully to the debate, in

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Committee and indeed on Report, and are taking full account of points that have been made from the government Bench on this matter. I hope that on their side they will reciprocate that spirit of compromise.

3.15 pm

It is quite important to emphasise one or two negative points about the amendments: things they do not do. First, the removal of a mandatory referendum requirement for a whole long list of things in Clause 6 but not for the euro, Schengen or military co-operation does not mean that they would not under any circumstance be caught by a referendum requirement. The noble Lords, Lord Howell of Guildford and Lord Wallace of Saltaire, have told us on a number of occasions that, in their view, most of these issues will come up not separately but in a group. As has been the case in the European Union in the past-at the time of the Single European Act, of Maastricht, of Amsterdam, of Nice and of Lisbon-they will come up as a wide range of amendments on different and disparate issues which will be brought together in a single new treaty. By definition, the British Government will be willing to agree to it because, otherwise, none of this would happen at all. If they objected to such a package, there would not be such a package.

In the circumstances where a package was taking shape and being supported in principle by a British Government, and where one or other of these issues which we are suggesting should not be the subject of a separate referendum requirement were part of that package, it would be caught by Clause 2, which we are not suggesting should be changed. If one of these issues, such as the question of the public prosecutor or all the other list of issues which it is suggested should be dropped from being dealt with individually as a referendum, were to become part of a package, that would not then mean that it was exempt from a referendum-quite the contrary. Because it was part of a package being taken forward under the normal treaty revision process, as it is called, it would be caught by Clause 2. The exemption from a referendum is merely if it is dealt with individually.

I do not want to get into a guessing game with noble Lords on the government Bench as to which of the two is more likely. They have said on quite a number of occasions that they believe that the overall-package approach is the more likely if the European Union were to move to change its treaty again, in which case they have nothing to worry about. Nothing will differ from what they wish to see, because, if any of these issues which we are suggesting should not individually be dealt with by a referendum were incorporated in such a package, there would be a referendum and they would be dealt with in it. That is a fairly important negative point to note. The amendments are a great deal less far reaching than noble Lords might think when looking at them on the paper before them.

The second negative point is that those proposing the amendments, as we explained when we discussed them in Committee, are not seeking to move back from the referendum requirement in the Bill to the simple situation that existed on the basis of the legislation which this House and another place adopted at the

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time of Lisbon; that is, where such changes would require merely a positive resolution in both Houses. We have accepted the Government's wish to ensure primary legislation-that is, the full works in both Houses-if any of the changes were to be approved by Britain following a decision by the British Government that they were in Britain's interest in the first place. Again, I emphasise that none of these matters will come before any House unless that condition has been fulfilled. Far from weakening Parliament's powers, in proposing the amendments we are strengthening them, because Parliament will now have the role of passing primary legislation or rejecting it, depending on which way it goes, and there will not be a return to the Lisbon arrangements.

I think that is pretty important. Those who move these amendments argue that we are strengthening Parliament's powers over the handling of changes to the treaty, not weakening Parliament's powers-as the Government would-by giving referendums the possibility of overruling a view reached not only by the British Government but by both Houses of Parliament. Frankly, that is a pretty radical constitutional innovation. The amendments move in the opposite direction, towards a strengthening not a weakening of the powers of both Houses.

The third negative point is that nothing in these amendments cuts across or undermines any commitments by any of the major parties in the last election or those contained in the coalition agreement. None of those texts envisages the "Heinz minus one" number of referendums; they all envisage a broad statement that when the treaty is going to be changed, there will be a referendum. That is preserved by these amendments because if there is the normal treaty reform process, that is what will happen. For all those reasons, we are trying to introduce a bit of the proportionality which noble Lords on various Benches have called for in the last few weeks of debate on the Bill. We have done something to limit the damage to the system of representative parliamentary democracy-which all of us, not only those who tabled these amendments, hold dear-if this Bill passed unamended. I hope that, after debate, the House will support the amendments. I beg to move.

Baroness Nicholson of Winterbourne: My Lords, I shall comment briefly on the important set of amendments which the noble Lord, Lord Hannay of Chiswick, has put forward, and focus on two important points. The first concerns Amendment 15, in which the noble Lord, Lord Hannay, recommends that after "defence" we insert the words,

As I understand the amendment, this would trigger a referendum. The second point concerns Amendment 16, in which the noble Lord recommends that decisions on common defence and security policy be referred back for an Act of Parliament.

It is immediately of interest that the supporters of this amendment, led by the noble Lord, Lord Hannay of Chiswick, have, in a sense, given a concession: they have agreed that if Amendment 15 is incorporated, there should be a referendum on a single, integrated military force. However, in their second amendment,

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Amendment 16, the noble Lord has ceded that although the issue of common defence and security policy is very important, it should be referred back to Parliament, in contrast to the purpose of the Bill, which is to seek the approval of the British people.

I should like to comment first on this welcome opening-up as regards the potential for a referendum on the single, integrated military force. My problem, however, is that I cannot really understand what that phrase means. I do not find "a single, integrated military force" a phrase that is commonly-or ever-used in treaties or Acts of this nature. In fact, I have not been able to recall it at any time during my decade or the decade previously in the other place. I cannot help but wonder precisely what it means. Does it mean, for example, the single, integrated military force that I saw and worked alongside in the south of Iraq in 2003 to 2007, when we had a number of military forces that co-ordinated themselves under UK command? We had the Poles, who were superb; we had the Italians-a little bit more questionably perhaps; we had the Romanians, who were very fierce fighters; the Bulgarians, over whom hung a little bit of a question mark; the Danes, who were superlative; and one or two others. On top of that, of course, we had Australia and the US.

What does a single, integrated military force mean? Does it mean a command under one structure, leader and nation state? Does it mean all 27 member states? Well, I think that that is unlikely. Mercifully, the ones that do not belong to NATO are now very few, but they are very unlikely to offer troops for a single, integrated military command. Does it mean, say, the Franco-British military command, which is getting stronger and whose strength I and others most warmly welcome? I may be correct in saying that at least until recently we had had at least 32 different actions going on with the French on the ground somewhere, some of which were training. We are strengthening that duality in military terms all the time.

Although the referendum proposed here for a single, integrated military force is a welcome admission that a referendum for the British people on common defence and security policy matters, at least in this perspective, is of high value-high enough for the proposers of the amendment to accept that a referendum would be required-none the less, the phraseology is with great respect too loose, too weak, too open and too imprecise to allow this amendment to be adopted.

In Amendment 16, on the other hand, the common defence and security policy is important enough to the proposers of the amendment to bring it back for an Act of Parliament. But how does that differ from now? Parliament has primacy in any event; if we wish to have an Act of Parliament on anything to do with EU legislation or policy, we can do that now. We have the primacy; it has been restated in Clause 18 and it has been there since 1972. The purpose of this Bill, which I support, is to put it to the people, which is why I cannot accept Amendment 16, which brings it solely back to an Act of Parliament. That is no different, in essence, from the situation that we have today.

Another amendment that the proposers have put forward, led by the noble Lord, Lord Hannay, and the last on which I will comment, contains the proposal

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that we should lose our potential veto for the multiannual budget. Is that truly sensible? I draw noble Lords' attention to a highly possible situation, whereby in Brussels there could easily be today a time, not far distant, when the discussion on the multiannual budget was about the 40 per cent of the common agricultural policy expenditure. Noble Lords will know how difficult it is to get reform; it is almost possible-it has so far proved impossible to grasp the common agricultural policy by the tail and pull it into the reform network. It is rather like The Hunting of the Snark; it just has not been possible.

It is easy to imagine that reforming the common agricultural policy would be an expensive business. How might that be paid for? Suppose that it would be paid for by the British rebate. It would be very hard indeed to obtain a majority against that for the United Kingdom. We might not be in a minority of one: others who are net contributors and who also wish the reform of the common agricultural policy, such as the Netherlands and Poland, would perhaps be with us; I am not sure. But as sure as eggs is eggs we would lose France. In fact, we would have lost France before the argument began because France-great ally as it is, net contributor as it is-would have been arguing for just that. The loss of the British rebate as a payment for a partial reform of the common agricultural policy would be enormously attractive.

3.30 pm

Of course, as noble Lords know well, particularly those who have served such excellent times in Brussels, the key strength of Brussels-of the system and the mechanisms that have been built up over the decades; the game which everyone now plays all the time, some more successfully than others-is to find ways of isolating those members of the blocking minority. How do you do that? We know how to do that very successfully indeed: by playing the game long, by building up a whole handful of debts and by calling in those debts at the one moment when it matters to your nation or to your grouping. It would not be difficult at all to have used that technique to place Britain in the dunce's corner in such an argument.

In principle I also believe that a veto is a negative way of behaving. None the less, the European Union is not such a stable body. In fact, with Croatia, the incorporation of Kosovo as a sort of colonial item and other more difficult-by which I mean corrupt-member states coming in, Brussels is not going to be strong, stable and balanced or provide fair treatment for every single member for a very considerable time to come, if ever. I believe that the veto for the multiannual budget is an essential prerequisite, for the sake of the United Kingdom and other member states, and therefore I support the Bill rather than this amendment.

Of course the imperative must be to help Brussels and the EU in general to be clear and transparent and to fight corruption much more effectively. Brussels is not well co-ordinated-none of us would suggest that it is-with other enormously important global players with whom it has to link, such as the World Bank or the United Nations. Through this Bill, we must tackle the waste that Brussels represents in the eyes of the British public and is in fact true in many instances.

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Our job must be to force Brussels, in a positive way, to tackle its waste management, both financial and administrative. Perhaps the best way of doing that is by transparency. We should ask Brussels to focus on project delivery and proper budget management, through the means of openness, transparency and as full as possible an involvement of the people of the United Kingdom. Our objective must be to reassure the British public that money spent in the European Union goes further and is better spent because of British involvement than would otherwise be the case.

I thank the noble Lord, Lord Hannay, immensely for putting forward such interesting amendments. Unfortunately I cannot give him and his fellow supporters my support.

Lord Rowlands: My Lords, over the whole of my parliamentary lifetime I have always had a Eurosceptic disposition. Indeed, looking back at or listening to the deliberations in Committee, and now on Report, brings back floods of memories of the debates in 1972 and the various devices that were then thought up to try to make the system more accountable. I recall, for example, an amendment that there should be a general election before we entered the European Union, while there were of course numerous debates on referendums both in 1972 and particularly at Maastricht. I would therefore have had a natural sense of empathy for this Bill.

I have supported referendums and greater accountability on European decision-making right throughout my parliamentary lifetime. Having listened to much of the Committee and read as much as I can of our deliberations, I must say that this is now becoming a hugely overcomplicated process of accountability. Just look at Clause 6(5) and the list of issues that will, through its paragraphs (a) to (k), be subject to a referendum. It is not unreasonable for anyone reading this clause to believe that, as a result, there will be a potential plethora of referendums.

I support the objective, the principle, and the idea behind the Bill, but the Government have overcomplicated the issue. Reflecting on my own experience, I now rather regret that we did not in an earlier time invest greater interest and press the business of ensuring greater parliamentary accountability-a much tougher regime of accountability. That is why I find parts of the Bill, particularly Clause 6, if it were shorn of the referendum provisions as these amendments suggest, very important and attractive.

I was on the Constitution Committee in the previous Parliament when it brought forward an amendment during debate on the Lisbon treaty that all opt-ins should be the subject of particular parliamentary processes, approval and accountability, and the House subsequently devised the procedures to do just that. That is now the best route that we can take to make these European decisions more accountable. Some fundamental issues should be the subject of a referendum, and the three listed in the amendment clearly qualify. Indeed, our own Constitution Committee suggested in its report on referendums that they are best confined to the big, fundamental issues. Those should be subject to a referendum, but not the plethora of some of those listed in Clause 6. Given one's own experience, and having listened to the debate, I certainly support these

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amendments, because they would reinforce the role of parliamentary accountability and do not go down the confusing route to the possibility of a plethora of referendums.

Lord Waddington: My Lords, the noble Lord, Lord Rowlands, was very eloquent, and I can well understand how he has reached the position that he has. Looking at just one of the amendments that we are considering, I must say that I find the wording of Amendment 15 really rather odd. It seems that, taken at its face value, all sorts of decisions could be made on a common European defence and no referendum would be required unless the intention was to permit a single, integrated military force. We could integrate our Navy with every other country's navy and still be well short of creating a single, integrated military force, so there would not have to be a referendum. That seems very odd if you are going down the route of having referendums at all.

The noble Lord, Lord Hannay, was again rather beguiling. At one stage he said that he was putting forward these amendments in a spirit of compromise. It might look like an exercise in compromise to some people, but to others it might well look like part of a general strategy to whittle down the protection that the Bill is designed to afford. That is what I find so terribly depressing: that having gone all through Committee, and now on Report, not a word is spoken by the opponents of the Bill to suggest that they have a clue as to how disillusioned people feel and how necessary it is to give them some reassurance, or how necessary it is to show them that their views are not going to continue to be overridden and that we are not going to go on continually conceding powers so that eventually we finish up being no longer a sovereign, independent state. Never a word comes from opponents of the Bill to show that they have any realisation of the difficulties that we face at the present time.

In these debates we are constantly told that the right to a referendum can be safely whittled down here, there and everywhere. We are constantly told that referendums are an affront to parliamentary democracy, but I am bound to say that people are asking me what Parliament has done so far to guarantee our independence and to protect our fundamental freedoms. They point to what happened over the Lisbon and all the rest of it, and, as I say, they are thoroughly disillusioned. I think that they, like me, will not be at all impressed by the suggestion that somehow or other we can meet most of these problems by making sure that Parliament does its work properly.

I remind my noble friends and noble Lords of some of the history. The noble Baroness, Lady Quin, said in a speech the other day that it was made clear in the 1975 referendum that we were joining not just a common market but an EEC. Let us leave aside for a moment the fact that the question on the ballot paper was:

"Do you think the UK should stay in the European Community (Common Market)?".

Let us leave aside for a moment the fact that there was no mention of the EEC at all. In fact, Harold Wilson, as he then was, made a great speech in which he recommended a yes vote because the threat of monetary union had gone away. I distinctly remember him saying that. That is all part of the dismal history. "Stop

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worrying, it is not going to happen". Then it happens. "Well, it is not so important after all and it certainly will not happen again. This is the end of the road".

I came back from Bermuda in 1997 having looked somewhat askance at some of the developments during the years when I was away. The first thing that happened to me was that I was invited to a rather grand dinner party at which every other guest was a Whitehall mandarin. There were three ambassadors and one or two permanent officials from the Foreign Office, and they said, "Oh, what are you banging on about, David? Stop worrying". These are the exact words that were used to me that night: "The high-water mark of European integration has been reached". That is what they told me. Well, the next day the tide continued to come in and it has been coming in ever since.

We are constantly told that it is safe to leave all these matters in the hands of our elected politicians. We might not have much to thank Mr Gordon Brown for, but let us give credit when credit is due; but for Brown, Tony Blair might well have used his vast majority to take us into the euro at the end of the 1990s, and a fine mess we would be in now. Remember, he dreamt up the idea of a referendum only to get him through the 2001 election. There was no question of the need for a referendum on the euro prior to that.

Lord Liddle: If I am correct, Mr Blair made his referendum commitment in 1996.

Lord Waddington: I am sorry, will you please repeat that?

Lord Liddle: Mr Blair made a commitment to have a referendum on the euro well in advance of the 1997 general election, in 1996. Some of us thought that that was a mistake at the time, I hasten to add.

Lord Waddington: That had escaped my notice. By the end of the 1990s, he was certainly sending out messages that he thought the time might well be right to think about going into the euro. If Mr Blair were in office now-this would have been relevant on one of the amendments that was not moved-he would no doubt be advocating the need to have elections for a European president, which he would urge upon us as a not very significant matter that would only increase the powers of the people and was a thoroughly good idea, when we all know perfectly well that if a European president were elected that would be a dramatic step towards a United States of Europe. In fact, from the moment of such an election, the international community, whatever the constitutional niceties of the matter, would consider that Britain had turned itself into a United States of Europe.

Lord Radice: My noble friend is right. In fact, the Labour Party committed itself in 1994 to a referendum on the euro. That pushed the Conservative Party in that direction as well, and the Liberal Democrats were also in favour. Before the 1997 election, all three main parties were in favour of a referendum on the euro. I do not know where the noble Lord was at the time-was he out of the country? That is what actually happened.

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Lord Waddington: Perhaps we could have a sweepstake and people could put in their bids; we have had 1996, 1994 and 2001, and we could have a few other dates thrown in. The fact remains that in 2000 and 2001 the papers were full of the possibility of a joint platform to take us into the euro. We were going to have the leader of the Liberal Party, Kenneth Clarke and Blair all on the same platform advocating our entry into the euro, so it is a bit rich to tell us now that there was no danger at that time of our going in. We know perfectly well that there was a very real danger of that, and, as I say, we were rather saved from it by Mr Brown. That at least can be said for him.

No one has answered the other point that I have made-I would have raised this on the third amendment if it had been moved-about the issue that has now arisen: what do we think Mr Blair would have done if he had been in office now and the possibility had been dangled before him of the direct election of the European president? He would have said, "Marvellous idea. It certainly doesn't affect the rights of the British people. In fact, it extends their rights. It gives them the right to vote for the person they want", without any regard whatever for the appalling constitutional consequences, which, from his press statements of the past few days, he clearly does not recognise. European matters safe in the hands of Parliament? History shows many things but certainly not that. This is not a very creditable performance.

It is no wonder that present-day people think that it is about time that there was more protection for them so that we can be sure that at some stage, if the European train goes tearing along towards the ultimate destination of a united Europe, we will get off before all British sovereignty is lost and we cease to be an independent nation. I am not attracted at all by this piecemeal approach of, "Don't worry, this will all be done in a spirit of compromise. We can just take away the right to have a referendum here and another right there; it does not really matter". That is just like the language that we have had for the past 25 years, and I do not find it attractive.

Lord Goodhart: My Lords, my noble friend Lord Waddington said early in his speech that some Members of your Lordships' House are opponents of this Bill, and no doubt he includes me among the opponents. I am not an opponent of the Bill and nor are others of any significance in the House. What we want to do is make sure that matters which until now have not had to be decided by Parliament will be decided by Act of Parliament, and we are entirely in favour of giving the right to a referendum in matters of importance, which the noble Lord, Lord Hannay, has already described. We are looking for a different Bill, but we have no wish to destroy this one.

Referendums to be voted on by an entire country involve a lot of work on the part of those arranging them and cost a great deal of money. I understand that the referendum voted on a couple of months ago cost something in the order of £120 million. That is why referendums should be used only for matters of real national importance. Another reason, which is perhaps even more important, is that we must recognise that people will vote in a referendum only on issues of real

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interest to them. So far, the principle of the way referendums should be used has been recognised and observed. Only one referendum, of course, has been voted on across the whole of the United Kingdom; the 1975 referendum on our continued membership of the European Union. Since then, there have been referendums in Scotland, Wales and Northern Ireland on the important subject of devolution.

Those of us who support Amendments 14 to 21 accept that three of those issues, as the noble Lord, Lord Hannay, has said, are now covered by Clause 6. In all probability, they would justify a referendum. They are the creation of a single integrated military force in Amendment 15, making the euro the currency of the United Kingdom in Amendment 18, and bringing the United Kingdom into the Schengen protocol in Amendment 19. But extending referendums to other matters now covered by Clause 6 and its subsidiary, Schedule 1, wastes time and money and is completely unjustified.

In Committee, I spent some time demonstrating this, particularly in relation to matters affecting the legal system. I take, for example, the possibility that the United Kingdom Government might wish to participate in the European public prosecutor's office. This is an organisation that does not now and may well never exist, and it is perhaps unlikely that the United Kingdom would participate in it if it did, although it is a possibility. But the point about this is that the EPPO, to shorten the name, is far from being a potentially serious change to the United Kingdom legal system. If your Lordships look at the terms of the TEU or the TFEU that deal with this issue, it becomes obvious that the EPPO would apply only to offences against the EU's financial interests or to serious crime that has a cross-border dimension. Those would represent a tiny proportion of prosecutions in the United Kingdom and would affect hardly any of the ordinary citizens of this country. So if an EPPO is created and the British Government want to join it, what will happen? Most citizens will surely say, "This does not affect me so I am not going to waste my time by going out to vote on it". Of course, the dinosaurs of UKIP will thunder down to the polling station to cast their votes. No doubt they would win in those circumstances, but that does not represent the real view of the people of this country.

There are also several cases in the Bill where the existing provisions of treaties require unanimity, but there is a possibility that member states might get together in the future to agree to QMV. Since the United Kingdom Parliament would have to give its consent to that change, it is likely that it would occur only if moving to QMV was of benefit to the United Kingdom, which it often is. It is more often than not to our benefit because it avoids the blocking of QMV, and therefore of legislation, by small member states that have a limited interest.

Matters made subject to QMV may be important or relatively trivial. It is totally inappropriate to insist on the referendum when we do not know how important or controversial the issue for that referendum will be. It is unlikely that ordinary citizens would take an interest unless it was clear to them that the referendum was a matter of importance, and one that would affect them personally.

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We have never seen anything like this piece of draft legislation before. In cases where legislation has called for a referendum, that referendum comes first. It comes before any talk of an Act of Parliament. If the result is negative, there is no Act of Parliament to give effect to it. What we have here is an Act of Parliament first, followed by a referendum that might overrule it. If Parliament makes a decision, surely that decision should be binding. If Parliament wants to leave it to a referendum, so be it. What we have here is a ridiculous system that is contrary to the constitutional practice of this country.

Lord Flight: My Lords, the noble Lords proposing these amendments seem not to understand yet, notwithstanding the amount of time we spent in Committee, the whole point of the Bill. Put very simply, the point is that, whether by intent or by being beguiled, over the past 20 years British Governments have continued to give away sovereignty to the EU, notwithstanding that they have frequently pledged not to do so. Agreeing to the Lisbon treaty, clearly in opposition to the majority view of this country, was a huge example of just that.

This rather strange Bill and the arrangements for referenda are, I concede, a constitutional novelty. How it will work, assuming it becomes law, we shall have to see. However, it is clear that the referendum locks are there as a deterrent to prevent Governments repeating the behaviour of the past. It is fine to talk about letting the decision be made by Parliament, but we all know perfectly well that if one party has a substantial majority, Parliament is, alas, in practice an elected tyranny. There is absolutely no guarantee that even the wisest heads of this noble House will vote against the Government of the day if that Government have a substantial majority of Members in both Houses.

The issues that these amendments cover are among those that have been red line issues for Governments of both sides for some time. They are not issues that have been plucked out of the air. As was apparent from debates in Committee, there are several other issues that could have been picked up in both Schedule 1 and Clause 6, where there are clearly some aspects of transferring of power but where, for better or worse, the Government have decided not to make them subject to a referendum. It is not a case of issues being protected by the referendum lock-this is not something new that has been pulled out of the air-but about issues which have been seen as important red lines that should not be crossed by, I repeat, Governments of both persuasions.

4 pm

The issues covered in these amendments are very straightforward to my mind. The European public prosecutor is a sensitive issue and in Committee we debated precisely why that is so. Looking at the matter from the perspective of not wanting Governments to lead us further down the path of giving away power, I suggest that it warrants a referendum lock. The vetoes are similarly extremely sensitive issues and need to be caught under the passerelle provisions. Otherwise, they could lead to treaty change via the back door.

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The common defence is vital to UK interests-the noble Lord, Lord Waddington, made that point extremely clearly. To me, at least, it is absolutely unthinkable that we should move towards an integrated European army by stealth without the confirmed decision of the British people, and wake up one morning to find that although we had been promised that that would not happen, it had happened.

I am afraid that these amendments to me amount to little more than the tactic deployed by certain noble Lords throughout our debates on the Bill; that is, endeavouring in all possible ways to weaken the principle of the Bill, which is to make absolutely sure that even if Governments are unwise enough to propose giving away power, there will be the check of the British people being able to say no. Some say that we cannot be swamped with referenda, but it is clear that they are there as a deterrent. Although the prospect of referenda occurring at all is pretty small, I cannot think of a more effective check. In an age when we are likely to be going into very new territory as the drop-out of the weak financial positions of certain European states is felt, we are likely to enter an era in which it will be only too easy for Governments to be persuaded or dropped into giving away further major powers. The Bill is there to stop that. I can understand why a keen Europhile might not like that very much, but the whole point of the Bill is to protect the British people.

Lord Davies of Stamford: My Lords, I rise to do two things. One is to address the contention made by the noble Lord, Lord Waddington, that I have heard before from him and other noble Lords during our debates on the Bill. His contention is wrong-that the British people have been systematically deceived about the nature or purposes of the European Union, or the European Community as it previously was, and that therefore they were unable to take informed decisions at election time or, indeed, at the time of the 1975 referendum.

It was always clear from the beginning that the European Union, or the European Community, was not a dead institution that was fixed once and for all. It was a dynamic institution, even a teleological institution which had a final purpose or end; all that was stated in the preamble of the treaty of Rome. The phrase about the ever closer union of peoples was always there. Right at the beginning, even when Macmillan first suggested that we might join the Common Market, or the European Community, I remember that speeches were made by members of my own party. I was a schoolboy at the time but I was already taking an interest in these matters. I remember Hugh Gaitskell's famous speech. My noble friend Lord Radice, who has written books on this subject, will correct me if I have the date wrong. I think that it was in 1962 that Hugh Gaitskell made a famous speech saying that the effect of our joining the European Community ,or the Common Market, would be that we would become like Texas in the United States. If I am right and that speech was made in 1962, that means that literally for the past half century this discussion about the constitutional significance, and the significance for national sovereignty, of our being

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members of this institution have been clearly, expressly, openly, overtly and thoroughly transparently discussed in public.

Lord Flight: I thank the noble Lord for giving way. It may be that he was more involved at the time than I was, although we are roughly the same age. However, I remember being organised by the Conservative Party at the time to go out and preach on voting in the referendum for the Common Market-indeed, I voted for it-specifically on the grounds that it would be a good economic prospect for this country. We had lost an empire and we needed to belong to something where we could trade. I was not even aware of the idea that I was trying to market something about political unification-fool though I may have been at the time.

Lord Lea of Crondall: I am sorry-I do not know who is speaking and who is intervening here.

Lord Davies of Stamford: Perhaps I may resume my remarks and then of course I will give way to my noble friend Lord Lea. Given that the noble Lord, Lord Flight, brings up his personal reminiscences of the 1975 campaign, I can respond only by saying that I did indeed take part in it. I actually became chairman of the City in Europe committee-I had been working in the City only for a year or two at that time-that organised the campaign in the City, and I chaired a meeting attended by 600 or 700 people at which Edward Heath spoke effectively. I remember that very well. I say with great sincerity that then, as now, I was committed to the long-term agenda explicitly set out in the treaty of Rome, which I had taken the trouble to read-even in those days. I believe that I knew what I was doing and that those who campaigned with me knew what we were doing. We made it absolutely clear to the British public what was intended and what we had in mind. I am very proud of that campaign.

Those are my personal reminiscences, and I am delighted that at the time the noble Lord had the right views on the subject. Perhaps he will come around to the right views again one day. Both of us took part in an interesting campaign. I give way to my noble friend Lord Lea.

Lord Lea of Crondall: I am most grateful to my noble friend. Perhaps I may give an even more telling example that gives the lie to the other contention. I recommend to the noble Lord, Lord Flight, that he looks at the 1971 White Paper. Mr Heath was Prime Minister, although he was not necessarily the favourite Conservative Prime Minister of the noble Lord. The first page refers to going towards ever-closer union. That is not a phrase that I particularly like, but I invite the noble Lord, Lord Flight, to read that White Paper, which is in the Library, and see whether he wants to keep reiterating this falsehood-I am sorry, I withdraw that-or, rather, this error.

Lord Davies of Stamford: My Lords, the second point to which I wanted to draw attention is a theme that has come through in all these debates. All I shall

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say in a few sentences is to try to make explicit in Hansard what should be implicit for anyone who reads our proceedings with any degree of attention. A clear difference is emerging between those of us who are in favour of the Bill and those of us who are against it as regards the role of Parliament and our view of Parliament's constitutional importance, functioning, efficacy and efficiency. It is clear that the coalition Government and those who support them in this Bill do not really believe in Parliament in the same way that those of us on the other side of the argument do. That is a sobering thought, because until now, for hundreds of years, there has been no distinction between the parties about Parliament and the fact that it is the best way of taking complex decisions on behalf of the country. That is why most of us came into politics and public life in the first place. It was because we wanted to be part of that process and to influence it in one way or another. All parties in this country and all of us who have stood for public elected office have always believed that Parliament was the best possible mechanism for achieving good governance and for making sure that complex arguments had been viewed from their different perspectives and debated, and that we came to a mature and considered conclusion on difficult issues. I am very proud of being here in the mother of Parliaments.

Now half our Members in this House this afternoon-perhaps more than half; I do not know, but we will see what happens in the vote-are sceptical about Parliament. They pay lip service to it and, no doubt, see some role for it, but they are clearly very sceptical indeed about Parliament. They do not think that Parliament is mature enough or sufficient for the purpose of deciding complex questions in the future. They want to go back to this Napoleonic concept of the plebiscite or referendum as a mechanism that is superior to that of parliamentary government. That is a sobering thought. I will not go further into the constitutional implications or the historical significance of that because it would take me well outside the amendment we are debating. However, it has been a theme which, unambiguously, has emerged from the debates we have been having on this Bill. It is something that we should all reflect on carefully because the long-term consequences of such a split in what has always been a constitutional consensus in this country are to my mind very sobering indeed.

Lord Kerr of Kinlochard: I support the final point made the noble Lord, Lord Davies, and the final point made by the noble Lord, Lord Goodhart. My point is a Burke point. I hope that the noble Lord, Lord Waddington, is listening: I am addressing it to the rising hope of the stern, unbending Tories. It seems to me really important that we should try not to undercut Parliament. As the noble Lord, Lord Goodhart, said at Second Reading, as he has said again today, what we are doing with these referenda, the ones talked about in this clause and in this Bill, is asking the simple question: do you wish to overrule Parliament; do you wish to disallow an Act of Parliament? In every case, the Act will be on the statute book and the question for the electorate will be: do you want overrule Parliament? What, I ask the noble Lord, Lord Waddington, would Burke have said?

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Lord Waddington: As the noble Lord has been kind enough to bring me into this debate, is there not a difference between this situation and the situation which has normally appertained in the past? Is it not right to say that in the eyes of the public people are elected to Parliament to exercise the powers which are going to be bestowed upon them? The difference which has taken place over the past years is that people who have been elected to Parliament to exercise specific powers have thought that they are entitled to give away those powers in perpetuity to others. That is the great change which has come about and must be acknowledged when we are talking about Burke. Burke never envisaged that representatives in Parliament would give away the powers which they have been given-quite the contrary.

Lord Kerr of Kinlochard: I could repeat my Burke quotation with which I thought I had skewered the noble Lord, Lord Waddington, in an earlier debate but I will not. It is of the essence of Burke's theory of parliamentary democracy, in which the Conservative Party used to believe strongly, that the people were consulted about who should sit in Parliament. The decisions of Parliament reflected the judgment of the people whom they had chosen. That seems to me to be quite a good rule and the point made by the noble Lord, Lord Goodhart, is a strong one. I support these amendments with the exception of the wording of the amendment on the euro, on which I have a separate amendment to which we will come later.

Lord Flight: I thank the noble Lord for giving way. I spent eight or nine years as a Member of the House of Commons when one particular side had a large majority. I felt that I was simply going through the motions and that there was no prospect of the Opposition members being able to stop that which the Government of the day wished to do. It was an elected tyranny by a large majority.

Lord Kerr of Kinlochard: I look forward to hearing the noble Lord express that view in the debate on the reform of the House of Lords.

Lord Faulks: My Lords, the amendment seeks to remove the referendum lock from all potential transfers of powers and competences, with the exception of the euro, Schengen and defence, in the sense that it is defined in the proposed amendment. Noble Lords might have thought, after the amendment proposed by the noble Lord, Lord Williamson, and its 40 per cent threshold, that the principle of a referendum lock had received acceptance, albeit without much enthusiasm except for those who are constitutionally opposed to referenda as a whole. This amendment goes much further. It takes outside the lock all potential transfers included in the big five, as they have been identified by my noble friend Lord Howell, with the exceptions that I have already described. I shall mention just one, referred to by my noble friend Lord Goodhart, the European Public Prosecutor's Office.

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4.15 pm

Lord Hannay of Chiswick: I am most grateful to the noble Lord for giving way, but he has managed in about three sentences to say three incorrect things. He said that in moving the amendment, we paid no attention to what he referred to as the big five. If he had listened to my introductory statement, he would have heard that, exactly to the contrary, we have amended the text that we had on the table in Committee by including Schengen and the international military force. If I may say so, it is clearly not sensible in our debate to pay no attention whatever to the person who introduces the amendment. I covered all that quite thoroughly.

Lord Faulks: I am grateful to the noble Lord for his intervention. I listened carefully to what he said and took on board the fact that the suggestion was that some other matters might also be the subject of a referendum if they were joined with those explicitly dealt with by the amendment. I also listened to what he said about the fact that there had been a change since Lisbon because now there was to be parliamentary approval, which was not the case before. I hope that the noble Lord accepts that I had listened to what he said, but, time being as it was, I was trying to truncate my remarks to make them digestible.

I return to the European public prosecutor, which is a matter which I suggest would not be in our national interest for the reasons I gave in Committee. It would involve us adopting the corpus juris, as it has been called; it might well involve us having national prosecutors representing the European public prosecutor; and it might involve an attempt at harmonisation of legal systems, so that we would have to take on board, for example, rules in relation to evidence; hearsay-

Lord Goodhart: My noble friend may be right on those particular points, but that would surely be a good reason for Parliament rejecting British participation in the EPPO, not for saying that that is an appropriate matter for members of the public to decide in a referendum.

Lord Faulks: I am grateful to the noble Lord and I accept his point. I am not quite sure what is the position of the party opposite in general terms on the European prosecutor. In Committee, the noble Lord, Lord Triesman, said, "Just say no"-as he said in respect of several proposals-from which I understood him to mean that Parliament would not put forward the possibility of a European public prosecutor and that there would therefore be no need for the referendum lock. However, from observations made by the noble Lord, Lord Liddle, I was not at all sure where he stood on the European public prosecutor.

I am, however, in no doubt about the view of the noble Lord, Lord Davies of Stamford, because he described the matter as being, to use his words, a no-brainer. Were somebody with his views to be the Minister for Europe in some Government to come, it would no doubt be said that the establishment of a European public prosecutor was generally to be the policy of the Government. The matter would then go through Parliament without the British people having

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been consulted and we would then have a European public prosecutor, with all the disadvantages which I have attempted to identify.

I am not in any way lacking in enthusiasm for the European project but, as a lawyer, I am aware that whereas sometimes I would like to conclude a negotiation without consulting my client-often I think I do much better without consulting my client-it is sometimes necessary to do so and to seek their instructions. It seems to be accepted on all sides of the House that enthusiasm for the European Union is, sadly, not as great as it might be. It is therefore, I suggest, incumbent on us as parliamentarians to consult and inform the people by means of a referendum, so that we can reconnect with those who are the source of our power.

Although I accept the qualifications made by the noble Lord, Lord Hannay, the amendment would take away that reassurance which has been identified by the coalition Government. I suggest that they have identified the zeitgeist. The Bill reflects what the country would like. To remove the referendum lock in the way proposed by the amendment would undermine that.

Lord Risby: My Lords, perhaps we could return to the Laeken declaration, which signified a very important moment in the history of the European Union. We all recognise the problem of disconnect. The Laeken declaration was intended to inform the individuals who were considering the whole future of the European Union what should be done about that problem. It is a fair summary to say that out of the Laeken declaration we saw the emergence of the constitutional treaty, which became the Lisbon treaty. Anyone, by any objective standards, would have to conclude that the spirit of Laeken, which was meant to inform the constitutional treaty, and later the Lisbon treaty, was not successful. Right across Europe we have seen an increase in Euroscepticism and in the disconnect between the peoples of Europe and the institutions of the European Union. The treaty, which was meant substantively to deal with that problem, has failed, not only in this country but right across the European Union. I suppose that one of the definingly difficult moments in the history of our relationship with the European Union was when Tony Blair substantially gave up the rebate in return for some structural reforms particularly linked to the common agricultural policy.

At the heart of this Bill must be the veto for the very firm purpose of restoring a sense of ownership of the processes of the European Union and our relationship with them. I think we all agree that the rebate is a most sensitive issue. Therefore, I just pose this question: would we wish to delete the requirement for a referendum if a future Government agreed to remove unanimity from the EU multiannual budget? This is a very contentious issue-it covers the whole envelope of European Union spending. The annual budget veto has already gone, and I suggest that nothing, particularly at a time of austerity, would be more damaging. It is precisely the threat of that happening that the Bill attempts to deal with.

I come back to the point that right across the European Union we have failed dismally to give people a sense of ownership or to secure the feeling that they

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have some sort of control. Therefore, comprehensive but clear processes, with a significant range of vetoes, are crucial in this country if we are to restore a sense of confidence and connection between the people and the European Union.

Lord Stoddart of Swindon: My Lords, I think that I have taken part in virtually all our Committee days. We are beginning to get to the end of our labours, although there are still a few amendments to go. This is a very important amendment and it has been discussed at great length. However, I want to get back to the reason why we have the Bill at all. It is because the people of this country have felt let down by the Government, and indeed by Parliament, for not involving them in very important decisions which affect their lives and the future of our country. I think that the Lisbon treaty brought that to a head and persuaded the Conservative Party that it had to do something about it. Together with its Liberal Democrat colleagues, it has now brought forward a Bill which, frankly, I believe has to stand virtually as it is or not at all. For that reason alone, if there is a vote, I shall vote against the amendment.

During our debates, we have heard a lot about parliamentary democracy, and so we should. Of course everyone agrees with real parliamentary democracy, if that is what we are talking about, but are we really talking about proper parliamentary democracy or do we have a "whipocracy", in which great issues are not decided following proper debate in Parliament and relatively free votes on important constitutional matters but are voted on at the behest of government with strong whipping? Under those circumstances we cannot say that Parliament alone should be responsible for the great issues of who governs Britain-which is what it is all about.

Lord Richard: I have listened to the noble Lord for 20 years. He has been a passionate supporter of parliamentary democracy and British sovereignty, and has passionately opposed any kind of Eurofication or steps towards greater union with the countries of Europe. How on earth does he square the position that he has held for donkey's years that Parliament is sovereign, and that it is what Parliament does that matters, with the idea that now Parliament has been doing things that he does not like it can no longer be trusted-even though Governments with majorities have been elected in general elections-so we have to move to a different form of public consultation? It is inconsistent with everything that he has said for 20 years.

Lord Stoddart of Swindon: Of course, I have listened to the noble Lord, Lord Richard, for longer than 20 years, and I know that he is an absolutely committed Europhile. He is right to say that I am very much in favour of parliamentary democracy, but I am trying to explain that in relation to the European Union we do not have a proper parliamentary democracy. All the amendments made to the European Communities Act 1972 were made by treaty. Under those circumstances, the Government agree to the treaty and sign it. One

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former Secretary of State for Foreign and Commonwealth Affairs said, "Now that I've signed the treaty, perhaps I'd better read it". Therefore, we cannot be sure that even those who sign the treaties know what they are about. Nevertheless, the treaty then comes before Parliament and Ministers come to the Dispatch Box and say, "You must pass this treaty because we have agreed to it. If you do not, the country's standing in the world will be damaged and we will never be trusted again". Governments put Parliament in an almost impossible position. If Parliament rejects the treaty out of hand, the Government will say, "My God, we have no further influence in the world because Parliament has declared that it does not agree with the treaty".

Baroness Symons of Vernham Dean: I was the lead Minister on the Amsterdam and Nice treaties. I stood at the Dispatch Box and argued for them. I do not recall ever saying to the noble Lord, Lord Stoddart of Swindon, that we would not be trusted again. We argued on the merits of the treaty. It is important that we stick to the merits of the treaty in this argument today. I would not like the noble Lord's arguments about what was said from the Dispatch Box to stand on the record without being challenged by the person who stood at the Dispatch Box.

4.30 pm

Lord Stoddart of Swindon: Of course the noble Baroness is entitled to challenge what I have said. I accept that she did not say that from the Dispatch Box, but various Prime Ministers did so. I am sorry if I offended her, but I did not accuse her of any such thing. However, we do have this problem; and there is a further problem that treaties cannot be amended. Parliament, which is here to scrutinise and amend, is told that it is not allowed to amend a treaty. Treaty amendments are simply not allowed, so Parliament has to accept everything in the treaty or nothing. That is Parliament's situation in relation to the European Union. It is not democratic and it is not demonstrative of parliamentary democracy; when we talk about parliamentary democracy, let us realise that in respect of EU treaties. It has been the case with every single treaty that I have taken part in-and that is all of them. As the noble Lord, Lord Richard, pointed out, I was never in favour of joining the Common Market in the first place, and I believe that it would be in the best interests of this country to leave it at present. That is my view on this Bill. It is the best that we are going to get, quite frankly, at this stage.

Out in the country there is disquiet about our membership of the European Union-where it was, where it is now and where it is going in the future. My view, which I expressed in Committee, is that there should be a referendum as to whether we remain in the European Union or come out. I know that is difficult, but some way, some time, that is going to have to happen. I do not think the people of this country will be satisfied until it happens. I am sorry that I cannot support the amendments before us. As I have said, I think this Bill is about the best that we are going to get.

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Lord Dobbs: My Lords, the noble Lord, Lord Davies, has tested our memories, and I ask noble Lords to test theirs. I did not intervene in Committee because to do so might have delayed the Whitsun Recess. Never have I received such a warm reception for a speech that I did not make.

I have been reluctant to intervene on this Bill because it has so much detail. I have been prompted to change my mind by two things. First of all, sitting here last week listening to proceedings for many hours, I heard language that I did not think did the argument justice. I heard Members of another place called "rather nerdy people" simply for being persistent and consistent. I do not know whether it is my job as one of the newest Members here to say that that sort of language in a debate helps neither the debate nor the reputation of this House.

I also thought that I should not intervene because, frankly, there are so many big beasts of the European jungle here-some very big beasts. Looking around this Chamber I can see that many of them are waiting to pounce, although where they were last week when the noble Lord, Lord Faulks, and I defended the honour of this place in the Commons versus Lords tug of war, I do not know. I wish they had been there. For those who do not know, we came a very close second.

Listening to this debate, I often feel as though I have dropped into the scene of that wonderful film, "Casablanca", right at the very end when the wicked deed has been done, the fog is swirling, the body is lying on the ground and the police captain instructs his men:

"Round up the usual suspects".

Having sat through this Bill for so many hours, I am beginning to recognise some of those usual suspects. If they will forgive me, I think it is not I who have missed the point but they. We have heard the blandishments of compromise that the noble Lord, Lord Hannay, has put forward so eloquently today, and we have heard the noble Lord, Lord Goodhart. Apparently we cannot afford a referendum on these issues. We have just had a referendum on AV, which no one seemed to want, so why can we not afford referendums on matters that people so clearly want?

This debate has tried to bury the point in details rather than address the fundamental purpose. This amendment, like so many of the others that we shall deal with today, is yet another excellent example of that. The details are of course important, but the fundamental purpose of making the EU responsive to the people is far more so.

Europe is unpopular and is growing ever more so. No institution that claims to be democratic can sustain itself in the face of continued popular hostility. That is the huge challenge that this Bill aims to meet. We have heard it called a process of reconnection, but that language is insufficient. This Bill is much more than that; it is an attempt to save the European Union from itself.

It is my firm proposition, and, I believe, that of the Bill, that the people know best. To suggest, as so many of the amendments do, that there is nothing wrong with an institution that asks to be taken on trust yet embraces accounting practices that would have any company director thrown in jail is hopeless. Some

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might even argue that it is pretty shameful. Ministers have been accused constantly of not listening. Well, your Lordships will forgive me if I say that it is the usual suspects who have not been listening; they seem even afraid to listen. If they had listened more, perhaps we would not need this Bill. The Bill is a mark of their failure, a failure to recognise the need for change.

There is nothing inherently wrong or evil in the European dream. What so many ordinary men and women object to is the way in which that dream has been put into practice, imposed from the top down rather than built from the bottom up, so that it has now become so top-heavy it is in danger of toppling.

The face of Europe has changed over these past 40 years, whether the people accepted it or not. Often, little has changed perhaps from day to day; just a small change here, a little adjustment, a nip or a tuck there-a bit of bureaucratic Botox for which the EU is so well known. However, as with any ageing process, the face has ultimately changed beyond all recognition. It needs rejuvenation, and the only way to do that is by re-establishing the pre-eminence of the people in its deliberations. That will not harm the European dream; it will save it. The great irony of this amendment and all the amendments that we will discuss today is that, if they are pushed to a vote by their proposers, it is a vote that they will deny the people whom we were sent here to serve.

Lord Empey: My Lords, the noble Lord, Lord Davies of Stamford, referred to the argument about Parliament and said that the party positions had changed. However, I said at the beginning of my remarks on the Bill last week that we are nothing if not consistent in our consistencies. This House voted so that people such as me in Northern Ireland would have a referendum on our constitutional future and that we would decide. As recently as on a visit to Northern Ireland last week, the Prime Minister said that the decision about its future lay with the people there; he did not say that it lay with Parliament. If we want to take the argument to its logical conclusion, that Parliament decides everything, why did Parliament provide for referenda in the first place? If you are going to be consistent in saying that such matters are a decision for Parliament, you do not have referenda. However, we do have referenda. We had one in 1975, and we have had a number since. Therefore, the argument that Parliament always takes the decisions is simply not true.

Edmund Burke was quoted again. He is very popular in this debate, but we are talking about the 18th century and things have moved on. Life has changed. We have a totally different world in which people are, thank God, educated and able to participate in a meaningful way and no longer require people who can read and write to interpret things for them. As a new Member, it has struck me from the very beginning of our debates on the Bill that it is hard to construct an argument that we support the Bill in broad terms, inelegant though it might be, without automatically being deemed to be someone who does not want to have anything to do with Europe. I refute that. There are positive things about Europe, but, as the noble Lord, Lord Dobbs, said, in the view of the British people Europe has been systematically salami-sliced.

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I think I understand why that is. There is a small group of people at the heart of Europe who, for perfectly legitimate reasons, believe ultimately in a large superstate to rival the United States. We saw an example of that last week when one former Prime Minister said that we now need a leader. I am not speculating on who he thought that person might be, but the implication is that the nation state is not held by some people to be the fundamental building block of the European Union. Indeed, the nation state is merely in transition towards something else.

Baroness Nicholson of Winterbourne: I apologise for interrupting the noble Lord, Lord Empey, but the facts are very firmly against him. I ask him to accept that the very architecture of the European Union is one of the most decentralised architectures of a large bloc of countries coming together that the world has witnessed in modern times. It is a highly decentralised, very diffuse organisational structure, and I beg him to recognise that point despite his excellent oratory.

Lord Empey: I thank the noble Baroness for her comments. I understand the argument for subsidiarity. I was part of a European institution that practised it in the days of bringing decisions ostensibly down to the lowest level at which they can be taken. However, the practice is somewhat different. It is all very well to push things down, but setting the envelope within which those bodies can take decisions and determining the size and shape of that envelope centrally, which is what happens, goes against the argument.

The point I am trying to develop is that I believe in the nation state and in nation states coming together in common cause where that is in their national interests. However, I do not believe in a push by some people to transform those nation states into a collective within a larger body that in effect has all the characteristics of a state: its own President, its own Foreign Secretary, its own system of justice, possibly even its own army. The people of this country are not ready for that argument. Those who for economic, political or security reasons push that argument are pushing against the tide and undermining the people of this country's view of Europe. They are therefore undermining their own argument.

I hope as we go forward with this that we will recognise that confidence in the principle of a European Union in this country will be re-established only if people feel that they are in charge. Indeed, its standing, with pages filled with people claiming for Kit Kats and all sorts of things, has been undermined and has suffered colossal damage. It may take a generation to repair it, but in the mean time this Bill, with all its downsides, can at least begin the process of saying to people, "You are now in charge". Yes, Ministers and Members of Parliament will play their role, but in a modern democracy with modern communications and an educated electorate, who says that it is incompatible to have parliamentary democracy on the one hand and on the other hand, for certain defined purposes, a referendum in which the people can be specific? When they vote for a Member of Parliament, they vote for myriad policies covering everything from defence

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to social services-the whole gamut of government. Constitutional matters are much more precise, and, with an educated electorate, why should the people on occasions not be able to tick the box that they feel is appropriate?

4.45 pm

Lord Richard: My Lords, to follow the argument advanced by the noble Lord, Lord Empey, on referenda, the last few sentences of his speech seemed to indicate more than anything else a decision or a desire to support the amendment tabled by the noble Lord, Lord Hannay, and not to vote against it. Referenda are scattered throughout the clauses in the Bill on almost any given issue on which it is quite absurd that there should have to be a referendum.

Will the noble Lord consider again the provisions of Schedule 1 and apply them to Northern Ireland? Is he seriously suggesting that in Northern Ireland there should be a referendum on,

or a

or on the, "European Public Prosecutor's Office"? Is he suggesting that there should be one on,

in Northern Ireland, or on the,

I could go on and on about this.

The point about the Bill is that if it was enacted you would have to have referenda on those issues. The noble Lord is saying that once we have crossed the bridge and accepted referenda in Northern Ireland, Scotland and Wales, why do we not accept them in this Bill? One does not accept them in this Bill because these are not proper and fit matters to be put to a referendum. They are matters for a Government to decide.

I cannot believe that the noble Lord would advocate having referenda on the issues set out on Schedule 1 if they were to apply only to Northern Ireland. It is absurd; it could not be done. It is exactly what Parliament is there to do. You do not to consult people on issues of that sort; you govern. The amendment in the name of the noble Lord, Lord Hannay, specifically confined the issue of referenda, which he accepts-and we accept-to certain major constitutional issues. I totally accept that. If the Bill confined it to those issues, no doubt there would be much less difficulty in getting it through. When it is as absurdly worrying as it is here, it does not make a great deal of sense.

Lord Empey: The noble Lord, Lord Richard, caught me as I was sitting down. I think he has misunderstood the point that I made at the beginning of my remarks about what the noble Lord, Lord Davies of Stamford, said-that the argument was that Parliament should effectively decide. I made the point to him that we had been required to have a referendum whereby the people in that referendum were taking a decision outwith Parliament. I was not suggesting for one moment that

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referenda would be held in Northern Ireland alone-in fact, the issues that the noble Lord, Lord Richard, listed are United Kingdom-wide. Tax harmonisation and the rest are very important matters but they are United Kingdom-wide not Northern Ireland-specific.

Lord Hamilton of Epsom: My Lords, I have been on a steepish learning curve for the duration of this Bill and one of the more amazing things I have learned this evening is that my noble friend Lord Goodhart is actually a supporter of the Bill. For some reason I got the impression that he did not really like this Bill at all. I am very encouraged to hear that he supports it, but I find it rather extraordinary that someone who is trying to support the Bill puts their name to an amendment which will mean that a whole lot of things that were going to be subjected to referenda will not be subjected to referenda any more.

As we know, the way in which the EU has operated for a very long time is that it never does anything in a great big bang: it is always "grandmother's footsteps", it is always one bit after another. It is very unlikely that at any stage the EU would introduce something saying that there should be a single, integrated military force. That would be much too large and dramatic a step. They would do it incrementally, bit by bit, until we ended up with a single, integrated military force.

Lord Radice: Is the noble Lord, Lord Hamilton, actually arguing that it is not legitimate to amend this Bill? He is coming very close to that. This amendment is trying to accept the principle of referendum but confine it to the major issues, as our own Constitution Committee suggested was the best way forward. It is trying to escape from the fact that this Bill has referenda for 56 separate issues, which brings the whole idea of referendum into disrepute.

Lord Hamilton of Epsom: I am very glad that the noble Lord, Lord Radice, has mentioned that point. This Bill covers a large number of issues concerning where there should be referenda. Of course, they are all wired back into the red lines laid down by a Labour Government. This is why they are in the Bill: they are not just dreamt up at random, they are related back to the red lines laid out by a Labour Government, and those are the issues that will now be subject to referenda.

The noble Lord's accusation that I say people should not have the ability to amend this Bill is absurd-that is what we are here for-but some amendments have a much more wrecking impact on a Bill than others, and I would suggest that these amendments go a long way to removing most of the point of this Bill altogether. That is why I will not be supporting this amendment, but it will be up to the House to decide whether this amendment should go through.

My noble friend Lord Goodhart said that when these referenda come to be debated in the country the dinosaurs of UKIP will be the ones out there campaigning and winning the argument. I would suggest to him that if there is any rationale for UKIP, its primary purpose seems to be to have a referendum to decide whether we should stay in the EU. However, another

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reason people join UKIP is the feeling that not only are we in the EU but we are getting sucked further in. That is one reason there has been this pretty modest growth in the membership of UKIP, the feeling that not only are we in the EU but we are getting dragged further into a federal Europe, which people do not want to be part of. I think that UKIP is going to be very seriously damaged when this Bill becomes an Act of Parliament because it will be reassuring to people to know that we are not going to be taken any further into the EU and end up in a federal Europe for which nobody voted.

Lord Grenfell: Before the noble Lord sits down, he appeared to suggest that there were a large number of red lines which the Labour Government had introduced and that these were now under threat. The fact is that there were, I think, six red lines in the Lisbon treaty. Every one of them is now enshrined in the two treaties as amended by the Lisbon treaty, so one should not cry wolf where that is not appropriate.

Lord Hamilton of Epsom: I think that the noble Lord would accept that, enshrined or otherwise, the red lines have until now never been subjected to a referendum. If this Bill goes through, there will have to be referenda on all the red lines originally laid down by the Labour Government. That seems eminently sensible, so I will not be supporting these amendments.

Lord Lamont of Lerwick: My Lords, the noble Lord, Lord Dobbs, said in a very amusing and eloquent speech that the face of the European Union has changed out of all recognition. He added that all faces change unrecognisably as they get older, but he did not add "except to those who are behind the face". Some of the enthusiasts for European integration should look in the mirror when they say that the European Union has not changed at all.

Earlier, we had an argument, which bordered on being disagreeable or a little ill tempered, about whether misleading things had been said about the future development of the European Union. I have to confess- I do not intend to pursue this point very long-that I am rather on the side of those who think that there was some misleading about its future development. I seem to remember that, in 1975, Harold Wilson told us that there was no question whatever of monetary union ever arising in the future. As for the phrase "ever closer union", of course there will be ever closer co-operation in coming together, travelling and meeting across European boundaries-that is the nature of the modern world and of commerce and travel in Europe today. However, I never interpreted the phrase "ever closer union of the European peoples" as meaning the involvement of a supranational authority to such an extent, but perhaps I was wrong in my assumptions and failed to understand.

I remember standing in Trafalgar Square and sharing a platform with my noble friend Lord Deben. He and I have entirely different views on the European Union as it has evolved, but at that time we stood on the same platform advocating membership of the Common Market, as it was then. However, because, in a sense, the point

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is not of such great importance, I am quite prepared to concede that perhaps I failed to understand. Yet if I failed to understand, so did millions of other people in this country. Regardless of whether they should be criticised or told that they are fools for not understanding, the fact is that there is considerable disillusionment with the European Union, not just in this country but throughout Europe. I acknowledge that the noble Lords, Lord Hannay and Lord Kerr, have both admitted that extremely important fact during these debates.

As I have said before, it is not because of the Daily Express that the True Finns party has suddenly burst upon our consciousness. There are other reasons for it. First, there is a real problem with governance and democracy within the European Union which relates to the type of indirect democracy that we really operate. Deals are done between Governments; Ministers come back to the House of Commons and announce decisions; decisions can then hardly be modified because they are dependent on other decisions and concessions that have been made and on the horse-trading that has taken place. Secondly, as came out in the exchange with the noble Lord, Lord Stoddart, treaties cannot be amended. Treaties are treaties. So the role of Parliament and the great discussion which we have had about Burkean democracy is a bit irrelevant when you have the results of horse-trading in that indirect democracy and when you have the presentation of treaties. Those are two reasons why there is a real problem of governance in the EU. I am pleased to see the noble Lord, Lord Kerr, returning to his seat at this point.

The third and most important point is the irreversible nature of the decisions that are made in the EU-not just decisions about competence, but so many decisions about policy as well. They are very difficult to reverse simply because they are arrived at by a process of compromise, a process of agglomerating, of aggregating the decisions and interests of different countries together. If three, four or five years later one country has now got a different view of that issue, it is extremely difficult for the Parliament to reverse that decision because, unless public opinion has changed throughout the European Union, one Parliament alone cannot then change the decision that has been made, because one Government will require either a qualified majority or unanimity in order to reverse the decision.

5 pm

That means that democracy in the European Union-legislation-is often a one-way street. It is very difficult to reverse things. That is the problem with arguments that it might be in our interest to give that qualified majority. It may be in our interest at one time to have qualified majority voting on one issue, but it does not follow that it will be in our interest for all time. That is why the Bill is long overdue. I regard it as almost a constitutional Bill, giving us part of a written constitution. It is actually saying, "Here are certain areas and we are not going to let them go to Europe. Some of them are more important than others, but they are all important up to a point and we are not going to go beyond these red lines. A future Parliament can change these decisions if it wants to do so, but we are not going to move beyond those red lines at this moment".

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The difficulty in reversing European legislation and in making it more flexible needs to be addressed. We are going to have an argument about a sunset clause later, but when did we ever have a sunset clause in any European Union legislation? It is so difficult to bring the rights of the House of Commons to bear on European Union legislation that we have to be very careful about all these areas where power can move away from our country. Once it is gone, it is gone beyond recall.

Baroness Symons of Vernham Dean: My Lords, the noble Lord, Lord Lamont, has gone to the heart of the issue in many ways and I applaud him for what he has said. I do not agree with a lot of what he said, but at least he was dealing with the issues and not with the bland assertion that has come from some on the Benches opposite that this side, or those who are putting forward this amendment, the noble Lord, Lord Hannay, and his supporters, have somehow not got the point of the Bill, either out of deliberate perversity or just plain ignorance. The fact is that we simply disagree. We have to argue through that disagreement and Parliament is the right place to have the argument. In so far as that was the point that the noble Lord, Lord Lamont, was making, I agree with him wholeheartedly.

I say to the noble Lord, Lord Flight, that putting forward amendments in this way is not a tactic. It is part of a reasoned argument. Much of it has come not from the political side of these Benches, but from noble Lords on the Cross Benches, who have put forward well-reasoned amendments, although, of course, he may disagree with them. The noble Lord, Lord Flight, says that he sat through what he called "an elected tyranny" in the other House. Well, that "tyranny" was elected in 1997 and the British people, in whom he places so much faith over referendums, re-elected that "tyranny" in 2001 and again in 2005, so perhaps not so jolly tyrannical after all.

Lord Flight: Does the noble Baroness agree that there is a difference between how people vote at elections and what happens in the House of Commons? I was simply making the point that when any party has a large majority in the House of Commons, under the British system since it was changed by Walpole from the originally intended system in the Act of Rights, I am afraid that when there is a large majority it does function as an elected tyranny on either side.

Baroness Symons of Vernham Dean: The fact that there is a difference in Parliament from what happens at elections is precisely what we are discussing. The fact is that after the passing of the Amsterdam treaty the British people re-elected a Labour Government and after the passing of the Nice treaty the British people re-elected a Labour Government. They had the opportunity to get rid of the Government on those occasions and they chose not to do so.

The noble Lord, Lord Dobbs, made a very interesting argument. He said, with passionate conviction, that the British people know best. Do we therefore extend that argument to a referendum on the current health

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proposals that are dominating our headlines and are probably far closer to the hearts of the British people than a lot of what we are discussing here? Did it occur to the Benches opposite to have a referendum on the increases in university fees?

Lord Dobbs: Does the noble Baroness accept that I was trying to make the point that there should be moderation and a sense of balance in all this? That is what so many parts of this argument lack. It is not a matter to be taken to extremes; it is a matter of balance and common sense. Had we pursued that with the British people, they would be far more onside than they are.

Baroness Symons of Vernham Dean: My Lords, of course it is a question of balance and common sense. Where do we find arguments about balance and common sense but in another place and, especially, here? It is here where we have those arguments and can argue out what is in a Bill.

The noble Lord said that the British people know best-he did not qualify the sentence that he uttered-in making his argument about how important referendums could be. I merely suggest to him that the British people would perhaps have liked to have had a referendum on the increases in university fees.

Lord Stoddart of Swindon: Will the noble Baroness give way?

Baroness Symons of Vernham Dean: I will give way in a moment. Perhaps it would be pertinent to suggest that there should be a referendum on the future of the nuclear deterrent.

Lord Stoddart of Swindon: I am most obliged to the noble Baroness for giving way. Would it not have been more pertinent if the Labour Government who introduced university tuition fees had had a referendum? That would have saved them from betraying everything that the Labour Party ever stood for.

Baroness Symons of Vernham Dean: No, my Lords, of course that is not the case. The point about what has happened in the very recent past is that not only did one of the parties in the referendum say in its manifesto that it would not raise fees but its members signed individual pledges to their electorates to say that they would not increase them, let alone put them up by three times. I do not take the noble Lord's point on that; it was rather a weak one.

I return to the noble Lord, Lord Waddington. We understand that he has very robust views, as do many of his noble colleagues, but I hope that the Conservative Benches have listened to what I thought was the generous support from the noble Lord, Lord Goodhart. There can be no doubt where he stands on the European Union and yet he and the noble Lord, Lord Hannay, are willing to compromise on this issue. They are willing to acknowledge some of the points that have been raised on the Conservative Benches-and I make the point that it is very much the Conservative Benches,

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with one or two exceptions on the Liberal Democrat Benches. The noble Lords, Lord Goodhart and Lord Hannay, and others are willing to support referendums on the really important issues. That is the point. We are not saying no; we are saying, "Let's listen to what our own Constitution Committee, with its representatives from the Conservative Benches, has said unanimously on this issue", and it has said that referendums must be kept for the really important constitutional issues. If we do not concentrate on what is important, where we should be concentrating the British public's attention, then indeed we do have a big argument about the role of Parliament and we do start to get into the fundamental constitutional issue of what Parliament is here to do.

It has been said that people will really want to have these referendums. I put it to your Lordships that we all know that is not true; of course they will not want them. They would want them on the euro; if we decided that we were going to leave the European Union; on Schengen issues, because immigration is such a major issue; and on whether or not there should be a European army. Those are the fundamental issues that have been at the centre of most of the arguments in this House in the whole time that I have been here, listening as we went through them over and over again. I suggest to your Lordships that going through the long list in front of us will do nothing to make the British public more confident in what we are doing here. Frankly, it will make them think that we have been dealing with trivia instead of with the important issues that face us.

Lord Maclennan of Rogart: My Lords, perhaps I may intervene briefly at the end of a fascinating debate. Those who are opposed to Amendment 14, which I strongly support, and the other amendments in the group have been at pains to suggest that what the British people really want is to stop the European Union taking decisions. My noble friend Lord Lamont made the point forcefully that one of the reasons for the unhappiness about the European Union is that it makes decisions in a cumbersome and not very transparent way. It does not actually always intervene to deal with the problems that occupy the British public most closely. It seems that the matters on which the Bill suggests that there should be referenda before decisions are finally taken would in fact make that doubt about the effectiveness of the European Union much stronger. It would make it more difficult for the Union to be able to answer the problems of banking, which are uppermost in many people's minds at this time. It would make it more difficult for the Union to deal with problems of cross-border immigration and it would make it more difficult for the Union to take action on the environment, which many regard as the top priority today.

The noble Lord, Lord Lamont, talked about the indirect democracy of the European Union. Yes, I agree with him that that is a suitable characterisation. Of course all democracy is indirect in a sense, and the kind of cutting of agreements between interest groups within a Cabinet is comparable with what he described when decisions are taken at the European level. However, it is not altogether true that treaties are unamendable. We have had many treaties since we entered the Common Market which have endeavoured to make the decision-

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making process more democratic, open and expeditious, and I think that most of those treaties have gone through without any hostile reaction from the public. This Bill seems to have been designed to put a drag anchor on the process of improving decision making within the European Union. I do not accept the view expressed by the noble Lord, Lord Lamont, that decisions taken in the Union are irreversible. Even among those who are full members of Schengen, discussions are going on about the need to look at immigration in the light of the probable influx from Arabian countries. It is not impossible that steps will be taken to respond to that.

If we want the European Union to be more appreciated for what it does, we should not be putting rocks in the road that make it more difficult for its institutions, including the European Parliament, the Council and the Commission, to come up with legislative proposals to tackle the perceived difficulties that we all share within Europe. Most of our interests are common interests in the areas for which the European Union has responsibility. Certainly, ideologies will divide people in all countries, but because of the fact that so many of our interests are common, we do want to improve the democratic processes. Requiring referenda to be held on some of these matters by one out of 27 or 28 countries would be seen as a block on progress, democratisation and modernisation not only by other countries, but also by many people in this country who are conscious of the value of the work that the European Union has done over the 60 years of its existence.

5.15 pm

Lord Liddle: My Lords, we have had a long debate on this set of amendments. We on the opposition Front Bench strongly support this group of amendments, spoken to by the noble Lord, Lord Hannay. I shall focus our debate on Report on the essence of these amendments, which is to reduce the 56 varieties of referendum lock that the Bill contains to referenda on new treaties and three major issues: joining the euro, joining Schengen and the setting up of a single European army or force, as my noble friend Lady Symons mentioned.

What people who accuse us of proposing a set of wrecking amendments have to take into account is that the Bill as amended would be a substantial step forward in public accountability as far as the European Union is concerned. There could be no major new treaties containing the kind of proposal that former Prime Minister Tony Blair floated last week-for an elected president of the European Union-without a referendum. We could not join the euro, which clearly might now mean significant steps towards a fiscal union, under the amendments in this group. We could not join Schengen, which would certainly mean abolishing our own border controls and replacing them with border controls at the EU frontier, a common set of asylum rules, burden sharing and so on. Under the amendments that we are proposing, that would be subject to a referendum, as would a major step towards common defence.

Therefore, these amendments do not wreck this Bill; they just make it more sensible and get rid of the huge number of referenda in it. That is wholly in line

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with the spirit of your Lordships' Constitution Committee's recommendation that referenda should be confined to matters of major constitutional significance. One of the curiosities of the many days of debate that we have had is that we have never heard why the Government think they can set aside in this way the recommendations of your Lordships' committee on these specific matters when it comes to the European Union. On all these other matters-on which, if this amendment were passed, there would be no need for a referendum-there would still be a need for an Act of Parliament. That is an enormous change from the position that we are in now. We are not wrecking this Bill; we are trying to improve it. I hope that on that basis the Government might be prepared to show a flexibility that they have so far lacked in these debates.

One of the very wise contributions to this discussion was made by my noble friend Lord Rowlands. In a distinguished career in another place, he was a sceptic in the proper sense of the word and had to be convinced about the case for Britain's membership of the European Union and the pooling of sovereignty that it involved. However, as he said, we are setting up a far too overcomplicated process of accountability with the plethora of referendums proposed. What I find difficult about this is why the presumed lack of legitimacy of the European Union is seen as being so peculiar and special compared with the huge problems that our democracy as a whole faces in today's world.

I looked at the Eurobarometer opinion poll for October 2010-that poll asks people questions about trust on a regular basis-and found that a very depressing 64 per cent of the British people do not trust the European Union. That is why we accept that there is a legitimacy problem. However, it seems that 66 per cent do not trust the British Parliament, 67 per cent do not trust the UK Government and 82 per cent do not trust political parties in Britain, so what is so peculiar about the lack of legitimacy of the European Union compared with the rest of our democracy?

It is argued either that confidence in Europe has been destroyed by so-called competence creep or that we face lots of threats to our sovereignty in future. As my noble friend Lord Triesman has said many times, if you are in government and do not want to do something, you just say no. The noble Lord, Lord Lamont, made a very interesting speech in which he pointed out that there is a very distinctive issue about the irreversible nature of the surrenders of sovereignty that take place in the European Union and the problems of a Union that moves by a process of intergovernmental compromise. Many of us who are pro-Europeans have been worried about this issue for many years and have wanted to think of ways of closing that democratic deficit. Certainly, we should have a debate about the role of the European Parliament, which plays a much bigger role now than it did 15 years ago, largely because of the treaties that the noble Baroness, Lady Symons, when she was leading for the Government, put through this House. However, I presume that the noble Lord, Lord Lamont, would not regard those treaties or the strengthening of the European Parliament as being good things. I agree with him that we have to think of ways of addressing that democratic deficit, but I suspect that he is not prepared to accept these kinds of remedies.

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There is a problem of legitimacy vis-à-vis Europe that is particular to Britain, because over decades we have failed to establish a cross-party consensus about our membership of the European Union and failed to argue the case for British membership with a united voice. Amendment 31-which we shall discuss later; the noble Lord, Lord Radice, moved it in Committee-will try to address that problem in part. However, there is another explanation of why the EU has run into problems. The explanation is, as I said at Second Reading, that there are two ways of looking at legitimacy. One is to think about it in terms of how decisions are approved, but the other is to think about whether the institution is effective at doing the job that it is supposed to do. One of the problems with Europe is that it is not as effective as it could be, and this causes public disillusion.

I looked at a poll carried out last November about attitudes to the European Union. If you ask a general question-do people think that we should co-operate more or do they want us to loosen the links with the European Union?-only 21 per cent want us to co-operate more, but 49 per cent would have us loosen the links. However, when you ask people questions about specific areas such as climate change, attacking terrorism and crime, regulating banks, minimum rights for workers, or minimum levels of tax on business, a strong majority in Britain want the European Union to do more. I therefore argue that it is not a question just of how decisions are taken, but of how we make Europe effective. That is what we ought to focus on in our debate.

Finally, in support of the amendment, perhaps I may say that we have had a good and long debate, but one of the depressing things about it is a tendency to be historical, to look back to the past, to take trips down memory lane, and to look at the debates in the 1950s, 1960s and 1970s. I am very prone to that tendency, and this is therefore a self-criticism. When we think about Europe, we really should remember that the world of which the European Union is part is transforming itself at enormous speed. Since the Maastricht treaty, communism has fallen and that aspect of the world has changed enormously, the Arab world is in revolution, China has risen enormously as a power, and the weight of the European Union in the world is decreasing at a rapid rate. Our weight in the world as the United Kingdom is decreasing at an even more rapid rate.

Yet, in response to these extraordinary developments of the past 20 years, this Government have come forward with a policy on Europe that is essentially, "Thus far and no further". In other words, "We have no imagination about how the European Union might develop. We are saying there should be no change without a referendum". This is a depressing attitude that destroys the flexibility that a British Government should have to respond to an unpredictable and unknowable future. I urge the House to support these amendments because they confine referendums to the really big issues on which the people ought to decide.

The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford): My Lords, we have had a rather amazing debate in which I found all kinds

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of echoes of agreement that did not seem to be there in the darker days of May when your Lordships first went into Committee to examine the details of the Bill. We have come a long way since then and there seems to be a greater appreciation-not necessarily combined with agreement-about some of the issues that the Bill seeks to address.

We have of course been down memory lane with the various comments by noble Lords who have been extremely experienced in European affairs over almost half a century. Edmund Burke featured again, although I must say that the more I think about that great man, the more I hear in my mind his remark, "Show me the man; show me the things". In other words, he was interested in the situation as it actually was, rather than in the high theory of how it ought to be. I did not agree with the final remarks of the noble Lord, Lord Liddle. He should not be depressed because the possibilities for our leading in European reform are much greater than he accepts, although he is an expert in these matters. He is entirely right to say that the landscape has changed and that we are dealing with an entirely new situation.

5.30 pm

I agree with the noble Lord, Lord Rowlands, who put his finger on the matter when he said that this is all incredibly complex. It is complex. I was venturing the view only this morning that having taken through the other place and this House somewhere in the region of 35 Bills, I have to say that this is one of the most complex measures I have had the privilege of laying before a House of Parliament. The complexity is there because the EU legislative landscape is complex. Some of its 1,001 aspects are understood and some are not. Many, because of their unintelligibility and obscurity, create the atmosphere of mistrust and reinforce the devastating figures, just given to us by the noble Lord, Lord Liddle, about the decline of trust in the political process generally and the administration of power in places where power is held, including the European Commission and European institutions.

As we tried to wade through the complexities, we had a splendid reminder from my noble friend Lord Dobbs of the overarching purpose of this Bill and of how some of us are trying to persuade your Lordships of the validity of what is proposed in detail in the Bill, which is, in a sense, to rescue the European Union from a trend of declining confidence and a growing dismay that the European Union is about to lose its way and to underline the important part the European Union is playing and can play, contrary to the views of some noble Lords, in repositioning this nation in the totally new international situation that is emerging very fast.

Finally, on the general points, my noble friend Lord Risby reminded us very importantly of the spirit of Laaken, which was, if I may put it in the vernacular, "For heaven's sake, let us bring the workings of the Union closer to the people"-a task that was totally failed by the consequent European constitution, which we debated for long hours in this House, and to some extent the Lisbon treaty, which I am afraid also failed to meet that particular objective.

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I will address, with your Lordships, the precise issues that came up in the amendments, not necessarily in the order in which they were put forward. I would like to deal with my noble friend Lord Goodhart's profound and learned comments on the European public prosecutor and associated issues. I would certainly like to address the comments of the noble Lord, Lord Hannay. I would also like to deal with the common defence aspects.

The noble Lord, Lord Hannay, led the first amendment in a very persuasive and even seductive way. I welcome his concession that there should be a referendum before the UK gives up its border controls and for certain aspects of common defence. I also welcome the acknowledgment that some other matters in Clause 6 might merit a referendum in certain circumstances. This is what I mean by us all travelling up the learning curve.

I hope now to persuade and explain to your Lordships why all the elements of Clause 6-which, contrary to this constant reference to trivia, are directly wired into and relate back to the major red-line issues that concern the public and the nation-should be under the referendum lock, so that there is no inconsistency and no uncertainty.

Let me first make some general comments on the whole group of amendments. The Bill and Clause 6 -and Schedule 1, which the clause activates-set out to give the British people their say on future transfers of further competence of power from the UK to the European Union. With great respect to the noble Baroness, Lady Symons, who gave a splendidly eloquent speech, this has absolutely nothing-thank goodness-to do with university fees or reform of the National Health Service. Those are very important issues that we will debate with great intensity. What we are debating here is the transfer of competences and powers away from this Parliament and this nation to the European Union, and not the internal domestic reforms that we all argue about and which are controversial, I realise, and a matter of heated debate. To exempt specific areas of competence or power in the way these amendments propose would in my view, and in that of many who want to see our role in Europe repositioned as a leading and positive one, a thoroughly retrograde step. It would serve to undermine the direct, frank and honest commitment that we wish to make to the British people.

It has been implied that the Government might on occasion be better placed than the people to assess the national interest-this is the thought underlying many of the contributions that have been made-and that the representatives of the people in Parliament should be left to decide. I can only reiterate, to add to the figures given by the noble Lord, Lord Liddle, that in the 2009 European Parliament survey over 80 per cent of those polled agreed that all treaty changes should be determined by referendum. I really would suggest that the public can be trusted to determine what is in their own interest on issues on which they wish to express their view. They are not trivial issues at all. It should be for Government and Parliament to commend with confidence a further transfer of competence or power to the electorate and make the case on its merits. I do not see why there is such fear about that.

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Listening to the debate in the other place, I am not sure that there was all that much fear. Even the Front Bench of Her Majesty's Opposition in the other place seemed to be fairly aware of that. The more I listen to the Front Bench in this House, the more it seems that it is getting a little out of step with its party's views and with the general, overwhelming public view that this legislation must be devoted to achieving some reconnection between people, Parliament and the European Union.

I would mention, in brackets really, the constant reiteration that this is weakening Parliament. Parliament is involved at every stage. Parliament has to legislate as to whether there should be a referendum. Our Parliament remains at the centre of this entire process. It spreads the validity of the authorisation to the electorate in a way that is thoroughly consistent with modern trends. This may sound a little avant garde to those who are thinking about the European Union of 20, 30, 40 years ago and a different kind of politics that existed then, but the world has changed. That has to be accepted, and I am not sure that it has been by everyone in the general debate about this Bill.

I turn to the specific amendments in the order in which I said I would and, first, to the European public prosecutor. Clause 6 reflects issues of great sensitivity for successive UK Governments, as well as those of many of our European partners. The debate is too often conducted as though we were striking out alone on these issues, with our concern for reconnection. Not so; it is the same in very many other European Union countries. I repeat that these are not trivial issues, as some noble Lords insist. The evidence from the European convention, which was gathered together, as noble Lords will remember, to devise the constitution, shows us how divisive the creation of the office of European public prosecutor proved to be with a number of member states, which registered,

The treaties provide for the possibility of a European public prosecutor, but there is no consensus whatever among member states that it should be set up because of the sensitivity of the proposal. It cannot be pushed aside that that sensitivity is very great.

It is only right that if we agree to participate in such a measure, which would result in the possibility of British citizens being prosecuted in British courts by prosecutors working for the European public prosecutor and not our legal authorities-that would be quite revolutionary-we should first seek the consent of the British people. That remains our view. That is why I have to say to my noble friend that I fear that I cannot accept his amendment.

Lord Goodhart: I accept that other countries in the European Union have been very reluctant, as have our Government, to join up to the EPPO and I think it is unlikely that there will ever be an EPPO, but that is mostly because of the inadequacies of the legal system in a number of those countries. For this country, under Article 86 of TFEU:

"The European Public Prosecutor's Office shall be responsible for investigating, prosecuting and bringing to judgment ... the perpetrators of, and accomplices in, offences against the Union's financial interests, as determined by ... regulation".

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That makes it perfectly clear that those who would suffer would not be ordinary citizens in this country. If the EPPO was brought into this country, those who would be subject to it would be international criminals and some major commercial companies. It would not affect the ordinary people in this country in the slightest.

Lord Howell of Guildford: I respect what my noble friend is saying, but one has only to pause for a moment and think about the phrase, the European Union's financial interests. Who will interpret that? How widely or narrowly will that be interpreted? Will offences be generated by the misuse of structural funds or other arrangements to do with the EU's finances? We do not know. We do not know who will define these things, but we can see clearly that they may well lead to a prosecution authority outside the UK, when we have our own prosecution authorities which are perfectly adequate in most-indeed, in all-cases to deal with those matters. We will have a prosecution authority from outside the United Kingdom for the first time charging and prosecuting British citizens. That is one reason why a huge uncertainty hangs over that.

Furthermore, once set up, although it is confined to EU financial interests now, the range can spread. Who is to say that it may not? We do not know. All those matters are reasons why many European countries-possibly the majority-are reluctant to see a development of that kind and why, if a Government in this country decided to change their mind, flatly against what the previous Labour Government wanted and flatly against what the present Government want, that should certainly be one item that should be put to a referendum.

I turn now to some of the comments made by the noble Lord, Lord Hannay, which were very reasonably put. I know that he felt that he was in a consensual and concessionary mood and looked for some reciprocity from the Government. In that, I fear that he will be disappointed. The passerelles allowing for a move to QMV, which are listed in Clause 6(5), have been included simply because they are covered by Schedule 1. That is obvious to most of your Lordships. It would be wildly illogical to provide for a referendum on an amending treaty which abolished those vetoes without also providing for a referendum on any decision to use the passerelles attached to the specific articles listed in Clause 6(5), which would achieve exactly the same result. That would be tantamount to locking the front and back doors of the house-not closing them, locking them; and not throwing away the key either, but giving the key to the British people-but leaving the kitchen window open.

5.45 pm

I have made clear before our firm belief that the Bill will not lead to the litany of referendums that some noble Lords keep suggesting-although I think there has been a learning curve on that. History tells us that individual vetoes do not get abolished on an individual, ad hoc basis, just as treaty changes tend not to be piecemeal and ad hoc without good reason: namely, that they are important and urgent. I take the example of the Czech and Irish protocols agreed during the

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ratification of the Lisbon treaty. They are a very good example. They have been held back until the next accession treaty. Why? Because of the arduousness and length of going through a round of treaty change just to agree to append those protocols.

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