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Lord Stoddart of Swindon: My Lords, I am trying hard to follow the noble Baroness's argument. I understood that the Conservative Party was in favour of a referendum on the proposed new constitution. Before we can have a referendum, presumably we shall need to know the pros and cons of whether we should continue in this particular organisation as it is to be revised. Why is she so against the Bill, which seeks only to find out whether there are implications from withdrawing, in which case the implications for remaining in would also be seen? I could understand what the noble Baroness, Lady Ludford, said, but I am afraid that I am simply not able to follow the argument of the noble Baroness, Lady Rawlings.
Baroness Rawlings: My Lords, I thank the noble Lord, Lord Stoddart, for that intervention. He is absolutely right that Conservative Party policy is for a referendum. It is better to go for a wider view of the general public of this country.
We have surely learned by now that trying to stay detached from Europe's future is a recipe for disaster for us all. We want to see an open, internationalist, outward-looking Europe. That involves seizing the historic opportunity presented by the recent enlargement to set the seal on the principles of free trade and free enterprise in the former Communist dictatorships. It involves Europe pioneering the idea of international free trade, starting with its immediate neighbours, proceeding with an alliance between the European Union and NAFTA, to extend the free trade zone across the Atlanticthat is what we should be talking about with NAFTAand moving from there to tackle the challenge of global free trade by 2020.
I want to say a few words about the economic situation, and perhaps to mention the alternative offered to us, as mentioned by my noble friend Lord Liverpool. The North Atlantic Free Trade Association is, of course, a single currency area. It has a currency called the dollar.
Lord Pearson of Rannoch: My Lords, my noble friend really must not say that; it simply is not true. The Canadian dollar continues to exist, and so does the Mexican peso. They float freely on the world market against each other. The same mistake was made by the noble Baroness, Lady Williams of Crosby, during our previous debate on the subject. It simply cannot be allowed to go on the record.
Baroness Rawlings: My Lords, I thank my noble friend for that intervention. I believe that the Canadian dollar and the Mexican peso are both pegged to the American dollar, as the Bulgarian lev is to the euro, to give a little extra information.
Were we to join NAFTA, we would be in a single currency area, just as certainly as we would in the European Union by voting for the euro. However, that sacrifice of sovereignty does not seem to trouble many of today's speakers.
Europe needs to complete the internal market, including electronic commerce and financial services, bringing more choice and lower prices to Europe's consumers. Europe must concentrate on the enforcement of competition rules and a programme of deregulation. It should be realising its full potential and becoming a driving force for greater prosperity. Britain has an historic opportunity to chart such a route and lead Europe along it, so that it is outward looking, with low regulation, low tax, free enterprise and flexible.
The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, I, too, thank the noble Lord, Lord Pearson of Rannoch, for moving that his Bill be read a second time. I have listened with a great deal of interest to the contributions made by your Lordships. As always, it has been an enjoyable and enlightening experience, and at times quite exciting, too. Noble Lords'passion
The forcefully argued case of the noble Lord, Lord Pearson of Rannoch, was somewhat marred by his repeated claims that governments of both parties had deliberately lied in order to mislead the British public. That is a very heavy charge, and one on which he may wish to reflect. I am not sure which is worse: to be accused of lyingthe noble Lord, Lord Pearson of Rannoch, made that accusationor of conspiracy, an accusation made by the noble Lord, Lord Stoddart. I am bound to say that neither charge will add a great deal to the rational debate that we need at this time.
Lord Stoddart of Swindon: My Lords, the Minister will of course know that I was around in 1975 and, indeed, in 1972, when I was in the House of Commons debating the then European Communities Bill. The fact of the matter is that Mr Heath misled people by saying that our essential sovereignty would not be compromised. Later, when he left government, he went on a television programme and said, "Of course everyone should have realised that we were going to sacrifice sovereignty". As Iand I think the noble Earl, Lord Liverpoolpointed out, he set up a Civil Service department to mislead the people about the real intention. That is the history of the matter.
Baroness Symons of Vernham Dean: My Lords, the noble Lord had 15 minutes to argue his case, which he did very forcefully. I am bound to tell him that if I am going to be interrupted at the Dispatch Box every time I mention his or anyone else's name, we will not get away from the House this afternoon much before six o'clock.
I congratulate the noble Lord, Lord Pearson, on the exemplary timing of his debate. What better day could there have been to consider the implications of withdrawal from the European Union than the day after the Union agreed the set of reforms to modernise and improve the common agricultural policy? Yesterday's agreement is a breakthrough for agriculture in Europe and, as some noble Lords have rightly acknowledged, for world trade.
If the United Kingdom were not a member of the European Union, we would have had no chance to press for the much-needed reforms. The consequences would have been felt not only in Britain, but around the world. As it is, we are now in a position to negotiate
The matter is not only important to the export of our manufactured goods, as the noble Lord, Lord Pearson of Rannoch, claimed. World tradethe growth of the world economycan benefit by as much as 400 billion dollars each year. That is not my calculation but that of the World Bank. We, the United Kingdom, have been part of opening that door through our membership and the arguments that we put forward in the European Union.
The Bill calls for a committee of inquiry to examine the implications of this country withdrawing from the European Union. Let there be no mistake about the position of Her Majesty's Government. At the risk of further inflaming the noble Lord, Lord Stoddart of Swindon, I believe that the benefits of EU membership are evident. The European Union is arguably the most successful regional organisation in the world, and this Government are absolutely convinced that membership of the EU is in the best interests of the United Kingdom. We believe that it is in our political interest and in our economic interest. So I am not going to "wiggle", as the noble Lord, Lord Pearson,particularly asked me not to do, but I am going to set out the Government's case.
Baroness Symons of Vernham Dean: My Lords, I am going to set out the Government's case. The noble Lord has had his opportunity, he took it, and he will have an opportunity to reply. I am now having my say.
Much of my argument will not, I am afraid, surprise the noble Lord, Lord Willoughby de Broke, but I hope that he will find that not all my arguments are entirely "tired" and "old", to quote his words.
The noble Earl, Lord Liverpool, asked whether we have the option to withdraw. The answer is: yes, we do. It is a matter for all of us to judge whether, in any practical sense, we have a real option to withdraw. That, as I understand it, is at the heart of the debate on this Bill.
The economic arguments that first convinced the British people that EU membership was in the United Kingdom's interest remain as valid today as they were when that decision was taken. Indeed, it could be argued that they have grown stronger over time. British jobs and prosperity have increased as a result of our free trade with Europe, and I agree strongly with the case that was put forward by the noble Baroness, Lady Ludford.
There are more than 370 million customers in the single market; that is, some 38 per cent of world trade. With enlargement next year, that will rise to 450 million customerscreating the world's largest single market. Enlargement alone is expected to boost the UK economy by some £1.75 billion.
Not only does that provide benefits for British businesses trading with other EU member statesand it is worth pointing out, particularly to the noble Baroness, Lady Cox, that some 58 per cent of UK trade in goods is with our EU partnersit benefits producers too, by ensuring a level playing field on which British producers can compete. It benefits customers. More often than not, it is the mythssuch as banning curved bananas; and we have heard quite a few such references todaythat we remember rather than the reality. That reality has seen the EU championing better consumer safeguards on a range of subjects, from toy safety to package holidays. Thanks to the single market, British consumers have access to a greater variety of and better-quality products at competitive prices.
Of course the European Union provides jobsI agree with the point put forward by the noble Baroness, Lady Ludford, which excited so many of your Lordshipssome 3.5 million already, and 300,000 more upon enlargement. These are the kinds of results that matter to most peoplenot people sitting in the House of Lords at five past two on a Friday afternoon, but those in Darlington and other towns throughout the country who are working to sustain those jobs in the future, people whose jobs are needed in this economy.
The noble Baroness, Lady Cox, put her argument well and cogently, as she always does. But let me try to put the other side. A brief glance at the figures demonstrates how important EU membership is for British jobs and prosperity. More than 3 million of our jobs now depend on our exports to the EU; 800,000 British-based companies trade with Europe; through our membership of the EU, British business has tariff-free access to 380 million customersthe largest and richest market in the worldand that is set to rise by nearly half a billion consumers after enlargement next year. Because Britain is a gateway to the European market, we, here in the United Kingdom, receive the largest share of foreign direct investment in the EU. American firms alone employ nearly 1 million people in Britain.
I am sure that others will argue: "Ah, well, the Americans are the ones doing the investing". But do they really believe that we should have that much investment were we not part of the European single market? That single market has helped to deliver the highest standard of living in European history. It has helped to provide the greatest choice and the cheapest prices for consumers ever.
So, in promoting the benefits of withdrawal from the EU, the noble Lords, Lord Pearson and Lord Stoddart, fail to take account of quite a number of crucial facts. They would argue that we should still be able to trade with Europeand, of course, that would be true to some extent. Self-evidently, European countries do trade with countries that are members of the EU. That is a perfectly straightforward point. But the other countries are not members of the single market. That is the point: I refer to the tariff-free trade that we have at the moment.
I would also argue that, even if we were not a member of the EU, we would have to abide by EU standards if we wanted to trade with the EUa point made by the noble Baroness, Lady Ludford. But there would be one fundamental difference: we would have absolutely no influence over setting those standards. As a committed and respected member of the Union, not only do we have access to the market, which is crucial, but crucially as well we can help to shape it and mould it into the kind of union that we want to seemore democratic, more effective and, of course, more efficientand better able to deliver real results to citizens.
I am sure that the noble Baroness, Lady Cox, is right: if the world economy expands, if the developing countries do come to expand their economies in the way that we should like to see, we may not be as much richer in comparison to them as we currently are. But we as a Government argue for decreasing the gap between rich and poor countries around the world. I have heard the noble Baroness make that argument. We hope and we work for a trading system where many of the poor countries in the world do get richer. If that is so, the proportion of European trade in comparison to the rest of the world may well change. The noble Baroness is right. It may well do that. But is that such a bad thing in and of itselfif developing countries are becoming richer, if they provide us with more markets, if we raise their standards of living, have greater stability in the world and less of the much spoken of gap between rich and poor countries? I believe that that is something to look forward to: it will increase world prosperity and world stability.
I turn to some other areas. The noble Lord, Lord Pearson of Rannoch, implied that the EU was an instrument for lessening democracy rather than promoting it. But the European Union is far more than just a free-trade area. The benefits are not only economic. For more than half a century, the EU has been a powerful force for good, bringing democracy, peace and human rights to the peoples of Europe. It has done much to ensure peace and prosperity, and it offers us new opportunities and experiences, from the food that we eat to the holidays that we are now able to take.
It has also delivered tangible benefits to improve the everyday lives of people in this country. In areas as varied as culture, sport, music and literature, Europe is an ever-present and positive influence. Europe today is not only about an ideology of "peace and unity"; it is a real, living organism. It delivers practical benefits that, although often overlooked, people would never want to live without again.
The noble Lord, Lord Stoddart of Swindon, said that our trade union leaders should reconsider their position. They have considered their position; they know what the benefits of EU membership are. Thousands of British workers have gained from EU legislation which improves working conditions. Every member state must apply the principle that men and women should receive equal pay for equal work. Under EU law, it is illegal to discriminate on the grounds of sex, race, religion, belief, disability, age or
The noble Lord, Lord Monson, spoke of the freedoms that he claimed we must relinquish through our membership of the EU. The noble Lord, Lord Weatherill, had some rather similar fears. But perhaps I may list some of the freedoms that we gain. Being in the single market means that British people now have the right to travel, work, study and live, visa-free, throughout the European Union. Hundreds of thousands of British people have been able to take advantage of that. UK citizens will make around 40 million trips to mainland Europe this year alone; 100,000 Britons are currently working in other EU member states; 234,000 UK pensioners draw their pensions in other EU countries; and more UK students study abroad in the EU than those of any other countryon average, 10,000 each year.
The noble Lord, Lord Harris of High Cross, entertained us with his litany of difficulties arising out of European Union membership, although I considered his characterisation of some of them to be more of a caricature than a description. But perhaps I may try to put the positive case to him. The Union improves our quality of life. I see that the noble Lord is not in his place. In that case, I shall not detain your Lordships further in answering the noble Lord, Lord Harris.
I turn instead to the points raised by the noble Lord, Lord Griffiths of Fforestfach. He reminded us that the Bill of the noble Lord, Lord Pearson, is not about leaving the European Union. Of course, it is not, although I believe that it was presented to us very much in those terms.
The noble Lord, Lord Griffiths, concentrated much of his address on what I might call the "threat of creeping federalism". It was the "F" word that the noble Earl, Lord Liverpool, felt so constrained to use. But this Government have made it abundantly clear that we do not want a federal state; we want a Europe where national identities are not submerged and where countries co-operate with each other. We shall not agree to any action at Union level simply for the sake of it; we shall do so only where there is a clear benefit to the United Kingdom.
We also had some discussion about the convention on Europe. Perhaps I may turn to the wider issues raised on that, as did the noble Lords, Lord Vinson and Lord Moran, and the noble Earl, Lord Liverpool. It was precisely because we needed a response to the type of concerns raised by those noble Lordsand, indeed, by the noble Lord, Lord Beaumontthat the Convention on the Future of Europe was convened. It was convened,
The draft constitutional treaty prepared by the convention was presented to the European Council at Thessaloniki last week. There, leaders concurred that the agreed draft was a good basis for starting our discussions at the intergovernmental conference which will begin in October.
This Government believe that the convention has done a good job. The outcome provides a foundation for a modern, more democratic Europe, that is better anchored to the member states and more accountable to its citizens. The draft constitutional treaty will be clearer and easier for everyone to understand, and it will help them to ensure a more efficient, effective union of the future.
In answer to the noble Lord, Lord Vinson, there are areas in which negotiations are continuing. There are issues which we should continue to defend, and fight hard to protect British interests. We shall return to these matters at the IGC. Above all, the draft constitutional treaty offers the prospect of stability in the way that the union works.
Those are the same diplomats whom some of your Lordships have accused of being party to some sort of international conspiracy against this country. The noble Lord, Lord Vinson, quoted freely from the Guardian, the Economist and The Times. I could quote back to him from Le Monde, from the Spanish newsper El Pais and from German newspapers. Le Monde of 29th May 2003 stated:
Finally, in an oratorical flourish worthy of the noble Lord, Lord Pearson of Rannoch, himself, it was Mr Amato, the vice president of the convention, who, on voicing his disappointment about the outcomes of the convention, said, "I want to kill myself".
Some of your Lordships have concentrated on defence issues. The noble Lords, Lord Griffiths of Fforestfach and Lord Harris of High Cross, mentioned these issues. I cannot agree that we have more military powers than the rest of Europe put together. It is demonstrably not true. I would agree with him, if the point that he really wanted to make was that we have more military strength than any other single country in Europe. That is true. We have the best disciplined forces in Europe. Those are strong points. We do not support the introduction of common defence, either at 25, or through enhanced co-operation. We believe that it is divisive and a duplication of NATO.
I will not detain your Lordships any longer on these points, because I have repeated them so often from this Dispatch Box. However, I stress that there is no question of our moving away from the position that the Government have adopted in relation to our defence relationship in Europe and the importance that we attach to NATO. I hope that there is no dubiety whatever on that point.
The noble Earl, Lord Liverpool, stressed the cost of enlargement. He is quite right; it is natural that current member states pay more for enlargement. That is a matter of record. However, I am bound to say to the noble Earl and to the noble Baroness, Lady Cox, that there is no greater testimony to the benefits of EU membership than the desire of the 10 accession countries to be part of the Union. It stretches the imagination too far to believe that 10 independent countries should all be suddenly struck by the same aberration of wanting, against their national interests, to join the European Union. That stretches the bounds of credibility too far.
I could detail many other points on reform, but I am not going to do that. The noble Lord, Lord Pearson, does not attempt to camouflage his motives. He says unequivocally that he wants to leave the European Union. By his own admission, he is "a rabid Eurosceptic". He told us of the detriment to fishermen, to the art world and to those who take herbal remedies. However, he did admit that parts of our national life were intact, including our Armed Forces, foreign policy, judicial system, health and education, and possiblyalthough I was not sure about thisour tax system. Even by his own criteria, the noble Lord's own assessment was far from a compelling case for leaving Europeunless one happens to be a vegetarian fisherman with a penchant for a little artwork.
The benefits of the European Union are abundantly clear. If we had not joined the EU, we would be poorer todayeconomically, socially and politically. We would find it harder to project power and influence
The costs and implications of withdrawal are evident. We have seen the implications of the United Kingdom being a not-so-committed member of the EU in the past. The impact of complete withdrawal would be far worse, with dramatic consequences for jobs, economic security, and for the quality of life of the people of this country.
Therefore, the Government do not believe that it is necessary to set up a committee of inquiry to tell us what we know already. However, it is not the Government's practice to oppose a Private Member's Bill on Second Reading in this House, so I do not do so. But I do not do so in the full knowledge that all your Lordships understand the Government's position.
I was particularly grateful for the comments of the noble Lord, Lord Stoddart, which he addressed to the Conservative Party. I have been saying it for years, but it does not seem to have had any effect. Let us hope that here we have an instance of nemo profeta inpatria.
The noble Lord, Lord Harris of High Cross, frightened even me with his estimate of the total cost of some £38 billion a year for our membership of the European Union. But the noble Lord, Lord Harris, is one of the great economists of our age and a great father of free-market economics. The trouble with £1 billion is that it slips very easily off the tongue. But just £- billion builds a really decent district hospital. It equips and staffs it to run indefinitely. So in this absurd contribution to the corrupt octopus, we are throwing away 76 district hospitals per annum.
I was very grateful to the noble Lord, Lord Moran, for his intervention and for his suggestion that a Select Committee of your Lordships' House might be the best way of taking this Bill forward. If the Government upon reflection really want to stick to the line put forward by the Minister, I hope that the noble Lord and I can do that together.
The noble Baroness, Lady Ludford, speaks from her great experience as a former employee of the European Union. I was a little surprised that she did not mention it. It would have allowed us to understand the wisdom with which she spoke. She mentioned the proposed exit clause in the new Giscard constitution. Quite so; but how do we know how to judge the exit clause if we do not know what it might mean?
The noble Baroness, Lady Ludford, and the Minister exalted the referendum results from the applicant nations in Europe. Of course, those nations are voting for one thing and they may be a little less amused when they get another. There is also the point that nearly everyone who has conducted negotiations for the applicant nations hopes to get a job in the European Union when their countries accedeI may say at a minimum of times 10 of their present salaries. I feel sure that that has had some influence on the process.
I am accused by the noble Baroness, Lady Ludford, of wanting the same status for this country as Switzerland. Then the old chestnut fell from the lips of both the noble Baroness and the Minister that that would mean we would have to obey all the European rules without the possibility of influencing their making, with our measly 14 per cent of the votes. But of course that is not true. The only change that we would have to make is that our exports would have to meet the requirements of the single market, just as do exports from the United States of America, Japan or anywhere else to the single market.
The noble Baroness, Lady Symons, took me to task for saying that the British Government have been lying. My definition of a lie is when someone says something which they know to be untrue, as Mr Heath undoubtedly did. So I am afraid I do not withdraw the comment.
And then the Minister could not resist telling us how wonderful was the new breakthrough in the common agricultural policy. As far as I am aware, British taxpayers will not save anything under the deal. I am not in a position to ask her a question, but I am sure
Then I am afraid both the Minister and the noble Baroness, Lady Ludford, said what I said they would say: that the 3.5 million jobs which support our trade with the single market would be at stake if we left the European Union. Of course that simply is not true. We could have a free trade agreement and that would be the end of it.
Finally, the Minister got herself in a bit of a muddle as to whether I accused her of being about to wiggle or to wriggle. I am sure that your Lordships would not mind if she wiggled on a Friday afternoon at this time of year, but I feared that she might have tried to wriggle out of the case that we have put to her. I would say that she did so with great elegance, but with a considerable lack of conviction.
The Bill does not require us to leave the European Union. However, European integration is clearly moving to the point where most of our partners may wish to create a union of which very few people in Britain will want to be part. The Bill would show whether that is necessary or wise and I trust that your Lordships will support it.
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