European Union Bill

My Lords, I have the greatest regard for the noble Baroness, but I think no one has spoken from this side of the Committee recently. The noble Lord, Lord Flight, will not be surprised to learn that I rise to speak on the other side of the argument and do not support his Amendment 47A. However, I rise in support or Amendments 45 and 46 and against Schedule 1 standing part. Before I do that, perhaps I could give a word of personal explanation to the noble Lord, Lord Howell. I did say to him that I would not be able to take part in today’s proceedings and I regretted that. I assure him that I made that comment entirely in good faith because, as I explained to him, at the time I had an engagement that I thought I ought to attend but I have managed to extricate myself from it. I hope he is not too disappointed to find that I have returned to the fray here. I shall speak directly to these amendments, particularly Amendment 46, but before I do I must repeat that the whole progress of this Committee has thoroughly reinforced the conviction which I expressed at Second Reading: that the effect of this Bill, if it becomes law, will be twofold. First, there will not be any referenda. The idea that we are going to have referenda asking the British public to decide on moving from the ordinary to the special legislative procedure in relation to something involving the procurator-general is absurd. It was never going to happen and still less do I think it likely to happen that we are going to have 10, 20 or 30 referenda. The Government, in response to my Second Reading speech, said in desperation that these referenda would be grouped but you cannot possibly ask the British public to answer 10 questions of that kind in the course of one referendum, so there is no doubt about it: there is no intention to have any referenda and there will not be any. The intention must therefore be, as I have said before, to adopt what I call a frozen policy in the EU. It is quite frightening that this country should adopt a frozen policy in any international organisation of which it is a part. It is not only deeply destructive of the national interest but not at all in accordance with public opinion in this country. Public opinion may well be sceptical in many ways about the European Union but it expects the Government to respond flexibly, pragmatically and intelligently to the challenges of the hour, not to adopt frozen policies. This schedule has a whole list of absurdities in it. If I dealt with them all, although I should be delighted to do so in many ways, I would take up much too much of the Committee's time. Perhaps I might focus on two, because I want to illustrate how misconceived the approach encapsulated in the Bill is. The first item in Part 2 of Schedule 1 is: "““Article 19(1) (measures to combat discrimination based on sex, racial or ethnic origin, religion or belief, age or sexual orientation)””." If one looks up the relevant reference, Article 19 goes as follows: "““Without prejudice to the other provisions of the Treaties and within the limits of the powers conferred by them upon the Union, the Council, acting unanimously in accordance with a special legislative procedure and after obtaining the consent of the European Parliament, may take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation””." It is, unfortunately, not impossible that there should be problems with discrimination in the European Union, particularly racial or religious discrimination. Racial discrimination is, sadly, not absent from any part of the human race and we have had some disturbing incidents and tendencies in the European Union, for example in Romania and Hungary—and, surprisingly and rather shockingly, in France—in relation to the Roma. We have had racialist remarks made by members of the current ruling party in Hungary and by prominent members of parties in Poland and Latvia who are now partners of the British Conservative Party in the European Parliament. It seems to me that there would be a great advantage in moving from the special to the ordinary legislative procedure in this area of discrimination, so that once we had done that it would not be possible for one member state to hold out against a clear declaration, legal statement or piece of legislation that made it impossible to discriminate against people on those grounds. There was horror when the French Government suggested that it was a greater priority to get illegal immigrants out of France if they were Roma than if they were anything else. That is exactly the kind of problem that all of us, surely, have an interest in ensuring does not arise and does not disgrace or besmirch the European Union, to which many of us are committed. Therefore, if one had a problem involving a country there would be a real danger of a veto under the special legislative procedure. I cannot for the life of me think why a British Government who are composed of a Conservative-Liberal Democrat coalition should want to exclude the use of qualified majority voting without the block, which we know will never be overcome, of a threatened referendum. So it seems a thoroughly perverse consequence of the Government’s policy in this area. Let me take another, very different, example, which shows how we are shooting ourselves in the foot if we pass this Bill. It is an area which I know a bit about, having been Minister for defence procurement for a while before the general election. The penultimate item in the list under Part 2 in Schedule 1 is: "““Article 346(2) (changes to list of military products exempt from internal market provisions).””" In the relevant governing article in the Lisbon treaty, Article 346 states that, "““any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material; such measures shall not adversely affect the conditions of competition in the internal market regarding products which are not intended for specifically military purposes … The Council may, acting unanimously on a proposal from the Commission, make changes to the list, which it drew up on 15 April 1958.””" What the Government are saying is that they cannot change that and move from unanimity to qualified majority voting without a referendum. Let me explain what this clause does. It is a derogation from the single market in relation to military goods. It is a protectionist measure, which I believe was insisted upon by France at the time the original treaty of Rome was signed. For many years it was Article 46 of the treaty, but it has been overtaken by events. It is contrary to the interests of the British defence industry, which is the largest—that is not a value judgment but a fact—by volume of any defence industry in the European Union and, I think, the most competitive. It therefore suffers from this protectionist measure, which in my experience and to my own knowledge has often been abused. Member states have argued that vehicles used for military purposes are military equipment and therefore have to be manufactured in that particular country—Italy, in this case. There are arguments the whole time about whether something is genuinely military equipment. This can sometimes be resolved, but the effect is a major derogation in the single market. I thought that it was a matter of consensus in British politics—certainly involving all three major parties—that we are in favour of a single market and we want to get rid of obstacles to it. Yet this Government are placing an obstacle in the way of extending the single market. This Government are using a referendum to block the removal of a derogation from the single market legislation. In effect they are supporting a restriction on the possibility of the British defence industry expanding its exports within the European Union. This is a crazy, crazy policy, there is no doubt about it. I do not know whether the Government have thought this one through. If they have, I hope that at this 11th hour they will think about it again. I am proud that, as defence procurement Minister, for the first time I abolished protectionism. I said that Britain should buy the capability it needed, where it could get it best and at the cheapest price. I made that absolutely plain. There are certain areas where, for defence purposes and strategic security reasons we would not buy military equipment. We would not buy from Russia or China, for example, because we would not know what was in it. If there was any software, we would have to be very wary indeed of allowing it into the country. Nevertheless, where security and defence considerations did not apply, we would buy equipment from the best and cheapest source. I placed a contract for an armoured vehicle, the Warthog, in Singapore and I am glad I did. I have a record, if I may say so, of being liberal in defence procurement and it is deeply shocking to me that we have a Government who are trying to go against that liberalism and damage an important British industry. The defence industry, probably together with pharmaceuticals, is the manufacturing area in which we have the greatest international competitive advantage. I hope that, as a result of the debates in this House—unfortunately these matters will not be explored properly in the House of Commons—the country as a whole, including, in this case, the manufacturing and defence industries, will be alerted to what is going on here. If the arguments that we bring forward from these Benches, and those of others with reasonable views on Europe on the other Benches, do not prevail, maybe the voice of British industry might be heard. If it is not heard soon, a very important piece of damage will be done. It will be extremely difficult for us to find a rational solution to this problem if we continue to have enforced unanimity in this area of single market legislation, because that is what it is.