European Union (Amendment) Bill

My Lords, we have in this House an extraordinary array of expertise on this matter, including most of those who were involved on our behalf in the principal negotiations in Europe over the past 30 years, in my own case the Fontainebleau agreement correcting the British budgetary contribution and the Single European Act, which was intended to put an end to all the barriers to free trade in goods and services across Europe by 1992. There are two main issues before the House—of substance and of procedure. We can all recall the many occasions on which your Lordships have been most solemnly advised that it is not for us unelected representatives to challenge the sanctity of manifesto commitments; instead we must bow down before them. What a delicious irony, therefore, it is that there now rests with this House the only remaining chance of insisting that the Government and other parties should honour their manifesto commitments. Whatever we may think about the substance of this treaty and whether or not it is in this country’s interests for it to be adopted, the indisputable fact is that a referendum was promised on this matter and no amount of special pleading will suffice to prove that it was not. The House of Commons Select Committee has pronounced that this document is ““substantially equivalent”” to the European constitution. The same has been said by every other European Government. It has been left only to ours to pretend that it is not. Every Member of the House, wherever they sit and however they propose to vote on this constitutional treaty, knows perfectly well why the manifesto commitment is being ignored and a referendum denied. It is because the Government believe they would lose it. This is not a course of action likely to enhance their reputation or prospects of electoral success. How do we explain this volte face? We can only do so by concluding, in the words of Berthold Brecht, that the people have lost the confidence of the Government. This is not a situation of the noble Baroness’s making and we all have some sympathy with her, but could she reassure us that if the Government were to suffer a rush of blood to the head and propose that we should join the euro, the manifesto commitment would not be set aside in that regard as well, thereby helping us to understand what is the difference in quality between these two manifesto commitments? As to the substance of the Bill, does this represent a further stage in European integration? Self-evidently it does and we should not pretend otherwise. There will in future be a President of the European Council serving for two and a half years. It will be interesting to see how national Governments co-exist with such a figure. The conflation of the High Commissioner for Foreign and Security Policy and the External Relations Commissioner in a post which is supposed to be that of European Foreign Minister—the title having been changed, according to Chancellor Merkel, purely in order to appease the British—represents a potentially dangerous elimination of the distinction between community competence and intergovernmental co-operation. The new External Action Service clearly is intended to be a more than embryonic European Foreign Service. Other Members of the House have pointed out the extensions of competence in other areas, in particular in justice and home affairs, with potentially unpredictable consequences. Meanwhile, President Sarkozy was successful in insisting on the removal from the treaty of the commitment to ““undistorted competition””. The most fragile of all the arguments advanced in favour of the Bill is that the document represents the end of European institutional reform. The Government cannot possibly believe this. Every previous institutional treaty has been followed by a renewed attempt to take the integrationist vision to the next stage, and this one will be no exception. Of course important points have been won by our negotiators and they should be congratulated on that. I am not a root and branch opponent of the treaty, but let me try to explain why an ungrateful nation is not more appreciative of those efforts. There are many aspects of the EU today which must cause the most reasonable of people a great deal of concern. The reaction of the Commission to an audit report setting out the vast scale of corruption in Community finances was to fire the auditor, an action for which the director of any publicly listed company here might expect to go to gaol. We are now in the 15th successive year in which the auditors have declined to sign-off the accounts. In this country, public resistance to further integration and to more government from Brussels is not foolish or misguided. These sentiments are shared by a large proportion of the business community and the financial services industry. The reason for this is not far to seek. For 47 years after the entry into force of the treaty of Rome, and 22 years after the signature of the Single European Act, it is hard to find a single British business leader who believes that there is anything approaching a level playing field for British business in Europe. Instead of further market-opening measures, we have had a truly spectacular market-closing measure, in the form of the takeover directive, denounced by the Competition Commissioner as intended to entrench the power of national governments to prevent takeovers when it suits them to do so. While it is common practice for French, German and Spanish utilities to acquire utility companies here, no one can seriously imagine that British companies would be permitted to do the same in France, Spain or Germany. The French Government recently declared nearly all its industries strategic, including the leading manufacturer of chocolates and fizzy drinks. The Greek, Portuguese and until recently the Italian Governments have continued to bail out their airlines annually, regardless of the prohibitions on state aid under the treaty of Rome. In the financial services sector, a series of efforts have been made to erode the competitive advantages of the City of London through regulation from Brussels. The reason given by the Bank of England for its failure to take action to assist Northern Rock was the fear that this might run counter to EU competition rules. Does anyone believe that the French would have failed to act to save one of their financial institutions on those grounds? In fact, a €15 billion bail-out of Credit Lyonnais was engineered without any protest from the Commission at all. I conclude with a very practical suggestion, which I hope will be taken seriously by this Government and by any future Government. When the suggestion is made, as it most certainly will be, that the Union needs another round of institutional reform and further amendments to its constitution, we, the British, should make it clear that we will not be prepared to sign any new treaty until the existing treaties, including the treaty of Rome and the Single European Act, have actually been implemented and a genuine common market has been established, which manifestly it has not been yet. What position could be more communautaire than that? If we had the resolution to stick to it, we could hardly fail to exert more effective pressure on the Commission and other member states to actually carry out the treaty obligations that they have long since assumed but, in many cases, have continued to be remarkably successful in ignoring. If successful in that endeavour, we might then be successful in changing the attitude of the British people as well, which no amount of institutional tinkering will do otherwise.