EU: UK Membership

My Lords, like others, I congratulate the noble Lord, Lord McNally, on choosing Europe as the subject of this debate. I must declare an interest as vice-chairman of Business for New Europe, business leaders who argue for a constructive British approach to European issues and for European reform. After 20 years of immersion in European negotiations—10 years under a Conservative and 10 years under a new Labour Government—I am convinced that positive, though when necessary critical, engagement with the EU is indeed in Britain’s interest. I believe, too, that our experience over the past 20 years indicates that we should have far more confidence than we often show in our ability to influence the development of the European Union to our and the EU’s benefit. I give three examples: first, the single market, as others have mentioned. The Single European Act of 1986 gave real and much needed momentum to realising the four freedoms referred to by the noble Lord, Lord Haskel—goods, services, capital and people. The single market is not yet fully achieved despite the deadline of 1992, the further impetus given, again with British support, by the Lisbon Agenda of 2000 and, indeed, the agreement reached on energy liberalisation on—this is worth stressing—a British model earlier this year. But the creation of a substantially complete single market of some 400 million people is a boost to jobs, enhances European competitiveness and benefits British business—manufacturing and services. Britain has been for 20 years—and must remain—at the heart of that process. Secondly, on enlargement, the Bruges speech delivered by the noble Baroness, Lady Thatcher, in September 1988 was not universally well received on the continent of Europe. But in one crucial respect it was ahead of its time and visionary: in recognising Budapest, Warsaw and Prague as great European cities even before the Berlin Wall came down. Britain’s consistent advocacy of enlargement over the past decades under Conservative and Labour Governments has helped to ensure that democracy and liberal market economics now dominate the European continent, and, indeed, that the original goal of the Treaty of Rome—ever closer union among the peoples of Europe: peoples, not states—is closer to being realised than Monnet or Schuman would ever have thought possible. Enlargement, too, is unfinished business. Difficult decisions over Turkey and the Balkans lie ahead. But Britain’s influence in this crucial aspect of Europe’s development is undisputed—and here again that influence remains essential for the future. Thirdly, Britain has long argued for a more coherent and effective European foreign and security policy, not to replace but to build on and complement national foreign policies, including our own. Noble Lords rightly spoke of some of the failings of the common foreign and security policy. Like the noble Lord, Lord Roper, I believe that it is important to stress that there have been successes too. One recent success is Iran, where the constancy of EU diplomacy, led by the UK, France and Germany and, crucially, by the EU’s High Representative Javier Solana, has helped to keep the US, China, Russia and among others India and Egypt united in maintaining pressure on Iran. The CFSP too is work in progress. Greater coherence in the EU’s foreign policy must be in our interest. Britain has played a key role in its development so far and must continue to do so. Again, that is in our and the EU’s interest. What is the result of those and other developments over the past decades? It is an EU of 27 increasingly diverse nation states, united by a belief in democracy and by market, not centralised, economics. It is an EU that increasingly recognises the diversity within it, through, in the jargon, variable geometry, the euro and the Schengen arrangements. I fear that I differ slightly on that point from the noble Baroness, Lady Williams of Crosby, in that I see those as sensible although not necessarily permanent constitutional precedents, which may indeed need to be followed in other areas too, as a way of finding that essential balance between supranationalism and respect for the nation state. It is an EU that increasingly sees the need to look outwards and to respond to global challenges, as we saw in the far-reaching agreement on climate change at the European Council in March. It is an EU whose hitherto excessively declaratory foreign policy is moving towards a more hard-headed approach over Iran, Kosovo and, I hope in the future, the Middle East. It is also of course an EU with flaws; a still insufficiently reformed common agricultural policy, a budget tilted too far towards agriculture, a strong protectionist streak in WTO negotiations and a lingering attachment to over-regulation. As other noble Lords have mentioned, it is an EU that faces huge challenges; migration, terrorism and competition from the emerging economies. I am convinced that those are flaws and challenges that Britain, with allies, is as well placed as any in the European Union to address and so to continue to influence developments as it has the past. That is particularly so since, as the noble Lord, Lord Hurd, said in a recent speech to the Conservative Group for Europe, "““the European Union is not now evolving towards a united states of Europe””." We really can and must lay that demon to rest. Some argue that the European Union is in crisis; I do not accept that. As the noble Lord, Lord Hannay, said, it has important and recent successes to its credit. Like all organisations, it needs to modernise and adapt its institutions to meet the new challenges that it faces. It needs to avoid the risk of stasis, as the noble Lord, Lord Maclennan, said. That is what the forthcoming negotiations are about. This does not mean a new constitution, but it does mean replacing the six-monthly rotating presidency with a permanent chairman of the European Council. It does mean combining the Commissioner for External Relations with the High Representative for the CFSP. Sending two sometimes squabbling EU representatives to treat with Putin or Bush makes no sense at all. It does mean fewer commissioners. It means a voting system that gives more weight to the larger member states and it means giving more weight to the role of national Parliaments in the EU’s decision making. The fact that those were elements in the doomed constitution does not seem to me to matter much. What matters is that they are sensible and necessary changes to ensure that the EU can implement the policies and programmes that are in its and Britain’s interests. Of course, others will want to go further. There will be tough negotiations. We shall have to accept some things we would rather not, but I suspect that we may also gain some things that we really want. That is what negotiating means; that is what negotiations in the EU have always been about. As I have tried to show, we have done that successfully in the past, far more successfully than we give ourselves credit for. We should be confident about doing so in the future; and we should get on with it, starting at next week’s European Council. As I have said in your Lordships’ House before, the last thing that the EU needs now is a long, protracted period of introspection. Will the outcome of the negotiations require a referendum in the United Kingdom? I do not know. I personally hope that it will not, because referendums are uncertain things and they tend not to be focused on the question on the ballot form. Like the noble Lord, Lord Tugendhat, I accept that if the outcome of next week’s European Council and the negotiations that follow it were to change substantially the balance between the UK and the EU institutions, there might be a justification for a referendum. I see no constitutional bar to that. But that is surely a decision that we will have to make when we know the outcome of the negotiations; I can see no grounds whatever for committing to one now. What we need to do now is to enter with determination and confidence the forthcoming constitutional talks and the crucial negotiations next year on the budget and reform of the CAP, where there are real British interests and real opportunities at stake, and to recognise the other real challenges that the EU faces.