European Union Bill

This is a slightly different order of amendment from those that we have just considered. I fear that it is Osric or Malvolio, but it is not much ado. It does not address any of the great questions that we have been debating. I promise your Lordships that I shall not mention Burke versus Rousseau. I promise you that it has nothing to do with the underlying debate about flexibility versus dealing with the disconnect; it has nothing to do with whether there should be a referendum should the Government wish us to join the euro—that is agreed—it is merely about the timing of the referendum in relation to the process of our joining the euro. The Bill ties the referendum to a decision under Article 140(3) of the TFEU, which irrevocably fixes the rate at which the euro shall be substituted for sterling and takes the other measures necessary for the introduction of the euro as the single currency of the United Kingdom. It explains that this will be a proposal from the Commission which will be the subject of consultation with the European Central Bank and then decided by a unanimous decision of the existing eurozone member states and, of course, the UK. The Government say that the referendum on our joining the union should be taken on that draft decision about the modalities and the rate. My contention has been—I spoke on this matter at Second Reading and on our fifth day in Committee—that to wait until there is a negotiated draft decision on the modalities of joining the euro and the rate at which we join would be a mistake. I argue that the decision that is appropriate to a referendum is on whether the pound is to be replaced by the euro, not the decision, as in the EU text drafted by the Commission, on the detailed arrangements for the transition, the timetable or the rate. My contention is that the referendum should be earlier in process and not the last stage. I was grateful to the Minister for a letter which he sent me and copied to a number of other noble Lords this morning dealing with my arguments at Second Reading. His contention is—and I hope that I in no way misinterpret his letter—that it would be possible for the Government of the day to prepare a draft decision on the modalities before making the initial notification to the Council and Commission in Brussels and make that text available during the referendum campaign. He states in the letter that the ““detail of the decisions”” could be prepared, "““prior to the UK’s initial notification to the EU of its intention to adopt the euro. The question of the UK’s notification would then be subject to a referendum, by the time of which a draft decision … would be available for public discussion””," and, "““form part of the public’s consideration””." I do not want to exaggerate the difference between us; my point is rather small. I accept that the sequence that the Minister has set out might work; I am not saying that it is unworkable. What I am saying is that it is a little unwise. The process in Brussels starts with a notification by the member state that wishes to suppress its currency and join the euro. When that is received, it is the task of the Commission to make the proposal, the ECB in Frankfurt to express a view on it and the Council to reach a decision. On the Minister’s scenario, we would draft it here. I confess that I can think of several precedents where it has been possible to get the Commission to put forward a text precisely in the language which the British Government wanted it to do—I happened to glance at the noble Lord, Lord Lamont of Lerwick, as I said that. I can think of no precedent for us publicising such a text in advance, passing it by Act of Parliament, as we would do, making it subject to a referendum and still hoping to persuade the Commission to present it as its own. Nor can I think of anything more likely to risk some discussion among the existing eurozone member states than our announcing the rate at which our currency was going to join theirs and giving it to them to buy—giving them the text, the decision, the modalities, the transition, the timetable. One would expect to go through some process of negotiation. It would be easier for everyone to save face if the text had not been published in advance from the start. Moreover, subject to the views of three distinguished former Chancellors, with all of whom I have worked, I argue that it would be rash to set the rate before you produce a text in Brussels on which you are going to ask Parliament to pass an Act and you are going to ask the country to approve by referendum. ““Events, dear boy””—things happen in the currency markets. It would be wiser to set the rate at the end of the process when you are ready to have sterling join the euro rather than some months before the end. I urge the House to consider the law of the land now, the 1993 post-Maastricht Act. The wording of my amendment replicates the wording of the post-Maastricht Act with the addition of the referendum requirement. We are talking about the European Communities (Amendment) Act 1993, this bit of which was drafted in Her Majesty’s Treasury—nothing to do with me; I was in Brussels. The wording of the Act is: "““No notification shall be given to the Council of the European Communities that the United Kingdom intends to move to the third stage of economic and monetary union (in accordance with the Protocol””," and so on, which is the same language we have now, "““unless a draft of the notification has first been approved by Act of Parliament””—" a draft of the notification, not of the decision. Article 140 was there in the Maastricht treaty, under a different number. Article 143 was there but the Government of the day chose to make the issue for Parliament not the Act, the modalities, the transition details and the rate, but the question of whether we should join the euro. It was the notification that would trigger the parliamentary procedure. Therefore my amendment is in line with the precedent and the statute book. I also think it is the honourable course. To try to force our partners to negotiate on a UK draft on the modalities of our adopting their currency, before this Parliament and this country has decided that we want to join the euro, seems quite difficult. I would not like to be the negotiator who had to attempt that task. Some of them might be inclined to say, ““Go away and decide whether you want to join. We will focus on your draft text once you are clear whether you wish to join the euro””. To seek to drive through the Brussels process the text that we want with the modalities and rate that we want because it had been approved by referendum is equally unwise. I am not arguing that the course dictated by the Bill and the specific reference to Article 143 is an impossible course. It is even possible that the rate you chose months before might still be right on the night, but why risk it? My amendment would not preclude the Government doing what the Minister said in his letter to me—which I tried to summarise a moment ago—would be the Government’s preferred course. It would be possible to negotiate and draft your decision in Brussels or publish your decision to the country during the referendum campaign, though were I still in some of my old jobs I would advise against it. However, given that this is merely about the modalities and not the principle, it would be much wiser to ask the country to take the decision of principle first. The question for a referendum must surely be, ““Do we want to join the euro?””. The Government lose nothing by adopting my amendment because they could still let events follow the sequence described in the Minister’s letter to me if that is what they prefer. I therefore believe that precedent, honour, prudence and common sense point to the language of Amendment 22. I beg to move.