European Union (Amendment) Bill

Part of the debate – in the House of Lords at 4:15 pm on 20th May 2008.

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Photo of Lord Blackwell Lord Blackwell Conservative 4:15 pm, 20th May 2008

I hope this amendment will be relatively uncontentious. I will therefore keep my opening remarks fairly brief. The treaty of Lisbon inserts into the relevant protocol a provision that Her Majesty's Government may notify the European Council at any time of their intent to join the euro. The treaty is, of course, silent on what process may go on within the United Kingdom before the Government make that notification. Fortunately, for the last decade we have had cross-party agreement in the United Kingdom that no decision to join the euro would be taken without being the subject of a referendum. It has been a sensible policy to uphold in this country because of the recognition of how important a step joining the euro, were we ever to do so, would be.

There are a couple of reasons for that. This is not the place to discuss the pros and cons of the euro, but most people would accept that it has both economic and political significance. The economic benefits have been argued by many, but equally there are those—among whom I include myself—who believe that floating exchange rates were one of the great successes of the second half of the last century, and that they have worked greatly in the UK's favour by enabling our economy to adjust in periods of turbulence. Indeed, you could argue that the only periods when the UK has had real trouble have been when it has attempted to link its exchange rate permanently to some other grouping. I happen to be in favour of maintaining floating exchange rates. Whichever side of the argument you come down on, most people would agree that these are serious and deep economic arguments that run across party lines. There are people of both persuasions in all parties and, indeed, in no party.

Similarly, on political grounds, a number of eminent people gave evidence to the recent House of Lords European Union Committee report on the euro. Most accepted—or indeed made—the point that because monetary policy is intimately linked with fiscal policy and therefore overall economic policy, and because of the impact that overall policy has on the way economic development affects the country and the individuals in it, it is very difficult to proceed to monetary union without that carrying with it some degree of political union. That factor has been one of the driving forces behind the adoption and development of the euro as part of a project of European integration. Therefore, any decision by the UK to join the euro would, most would accept, have implications for the level of pooling of sovereignty in a number of areas that that carried with it.

For economic reasons and reasons of sovereignty, and the important point that these arguments have run across party lines in the United Kingdom for many years, there has been a common policy of accepting that any decision on something so important should be adopted through a referendum.

One might ask why we need this commitment in this Bill. To be delicate, the public might have reason, as a result of recent debates, to be suspicious of whether commitments to referendums made by parties in manifestos have the level of value and confidence that they might have believed them to have. It is not for me to enlarge on that point. But, with this Bill including the provision to notify the Council of a decision to join the euro, it would be sensible for us to put beyond doubt that all parties in this Parliament, and those who are not of any party but are here to uphold the constitution, still subscribe to the view that a decision of this importance should be subject to a referendum. Including this provision takes it once and for all out of the political debate. It would be settled and decided that that is the view of all involved in this question.

I do not think any member of any political party would want it thought that, having made a commitment to a referendum, there was any doubt about that commitment. Therefore, it would be helpful to all political parties to have that written into the treaty so that no one can ever question their commitment. That is why I believe this is, I hope, an uncontentious amendment that should have the support of all sides of the Committee. I look forward to it being received in that manner. I beg to move.