European Union Bill

My Lords, the House should be grateful to the noble Lord, Lord Pearson. I want to congratulate him on lightening the mood of the House after what has been a pretty dismal day. We had the attempt this afternoon to introduce proposals that amount to constitutional vandalism and there will be no proposal for a referendum on that. The noble Lord, Lord Pearson of Rannoch, has today conducted himself in a way that is worthy of our congratulations for his fertile imagination, which I hope somebody will recognise as qualifying him for consideration for the Booker prize for creative fiction. If we come to the substance of what the noble Lord, Lord Pearson, was saying, he inevitably gets his estimates somehow sort of right. Our membership of the European Union costs us somewhere between 4 per cent and 10 per cent of our GDP—not much of a margin; the odds are that he is going to be somewhere within that sort of range, but it lacks precision. The noble Lord, Lord Pearson, once again referred to Switzerland—he has done it a number of times in Committee although I have not risen to the bait before—as if it were a paradise for democratic decision-making by referendum. I have not bothered to go to the Library, because I am sure that the noble Lord will correct me if he thinks that I am wrong, but my recollection tells me that the last three referenda in Switzerland have been on matters of great importance. One was forced on the heights of minarets. If people who had a different cultural background from the majority of the Swiss wanted a mosque in which to practise their religion, a referendum would determine the height of the minaret. Another was on the role of women. Unfortunately, this democratic paradise run by referenda damaged the role of women. And then there was a referendum fairly recently, of great importance, where males who had served in the Swiss military service insisted on keeping their rifle, after it had been disabled, rather than hand it back. I say to the noble Lord, Lord Pearson, that I really do not think that this is the participatory democracy that we want. Having raised Switzerland, the noble Lord then made his fundamental mistake. It was in his analysis of the financial implications of our membership. The budget of the European Union—this is the point that I expected the noble Baroness, Lady Nicholson, to make—is not actually written in sterling; it is written in euros. If we look at what our membership has cost in euros, we will find a remarkable level of stability, with the increase in the budget barely matching the rate of inflation. Yet the noble Lord, Lord Pearson, happily tells us that it has gone up from £6 billion or £10 billion, or nearly £10 billion—it is £9 billion this year and will certainly be £10 billion next year—and that we will have to have a referendum. However, during the past seven or eight years, our budgetary contribution, for which we were billed in euros, was in euros that cost us about 65 pence each. The budgetary contribution that we would be asked for today is in euros that cost 87 pence each. That is because the great economic success of the United Kingdom in the European Union, which we were led to believe would have been even greater were we trading independently, has been to see from 2004 to 2011 a devaluation of about a third—33 per cent—in the value of our currency against the euro. Most of the increase in the sterling cost of our contribution to the European budget is not reflected in the euro figures; it is the translation of those euro figures into sterling. The major increase in our budgetary cost is caused by our relative devaluation. However, I do not want to be harsh on the noble Lord, Lord Pearson; I encourage him to continue. His efforts are very much appreciated. They lighten the mood after a rather dismal sort of day. I would encourage him with the thought that one day, maybe by accident, he will get a fact right.