European Union Bill — Committee (3rd Day) (Continued)

– in the House of Lords at 9:00 pm on 3rd May 2011.

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Amendment 23C

Moved by Lord Liddle

23C: Page 4, line 7, at end insert-

"( ) provisions that strengthen the effectiveness of the European Union to mitigate the effects of climate change"

Photo of Lord Liddle Lord Liddle Opposition Whip (Lords) 9:07 pm, 3rd May 2011

My Lords, with the permission of your Lordships, in order to expedite the business of the Committee-because we have no desire to be thought to be unduly delaying the consideration of the Bill-it would help if, for Clauses 4 to 7, we have a single debate on the remaining groups of amendments that we have tabled that come under the same broad heading. The common features of these amendments are that these are all areas where we believe that there is a broad ranging, cross-party political consensus in this House and in the country that Europe is a good thing and that we would like to see Europe acting effectively in these areas. There is a consensus on these issues and on the need to have a more effective Europe. Also we agree with the Government's argument that, to a very large extent, the Lisbon treaty provides the European Union with sufficient competences and powers to deal with many of these issues.

We agree with that argument with two exceptions. One is the point that I made with some force-although I know that the Government did not agree with it-namely, that the Government are trying to have their cake and eat it on the Lisbon treaty. They are saying that the Lisbon treaty gives us all that we need but they are also trying to say that the provisions of the Lisbon treaty cannot in important respects be brought into force without referendums. The Government wish to restrict the passerelles, Article 48(6) and anything which provides flexibility within the Lisbon treaty. So it is not true that the Government stand behind the Lisbon treaty; they are seeking to tie up its implementation in important ways, which could be detrimental to the European Union being effective in the areas that we wish it to be effective.

Secondly, treaty drafters are not blessed with perfect foresight; they cannot anticipate all the circumstances that might occur ahead of them in the real world. A good example of that is the need for the treaty change, under the simplified revision procedure, to establish a European stability mechanism to deal with the sovereign debt crisis in the euro area. No one anticipated that at the time that the Lisbon treaty was going through the House. One has to recognise that circumstances can change.

When the Government say, "No change in anything for this Parliament" and, "We will not have lots of multiple referenda but we may at some stage in the future have another big revision", we fear that it will defer the possibility of flexibility in the European Union powers for some considerable time-probably, at the minimum, a decade. We have to ask ourselves whether this is a sensible, realistic policy. The Government say that it is realistic because there is no will on anyone's part to change the treaties and, therefore, that their policy is not out of line with the rest of the European Union. However, we saw in the establishment of the European stability mechanism that, when faced with a crisis, the European Union was prepared to act and to take the necessary powers.

The amendments deal with a series of areas and I do not intend to go over each one. I shall give one or two examples of where, within a medium-term time horizon, there might be a need for action which could result in pressure within the EU for some kind of treaty change, probably under the simplified revision procedure. The fear on this side of the House is that the Government are putting themselves in a position where they will rule it out on principle, without any serious consideration of the issues, and Britain will find itself isolated and ineffective when I am sure many of us in this Chamber want it to be playing a leading and effective role in the Union.

The examples in Amendments 23C and 23E relate to climate change and energy security. On climate change, the commitment of the EU to put itself at the forefront of the battle to tackle climate change has been striking. At the same time, at the Copenhagen summit the EU found itself largely bypassed. On energy, we all know that there is a real problem. There is a lack of common policy, particularly among the big member states of the union, in our dealings with the major energy suppliers, particularly Russia. These are problems that are widely accepted within the European Union. There is a desire for Europe to be stronger on these issues. It is possible-I am not saying it is certain-that people might come up with treaty proposals or amendments to the treaty under Article 48(6) to address these weaknesses.

For example, on climate change, it is perfectly possible that we could see people arguing for a trade model for Europe's dealings on climate change with the rest of the world. In other words, the European Commission would become the single negotiator on climate change matters with other countries. It would work to a common negotiating mandate established by majority decision by the Council of Ministers and the Commission, act as Europe's negotiator and report to this group of ministers or their delegated officials on, as with the trade model, an almost weekly basis so that the member states have a close supervision of what is going on. Something like that might help the European Union to be much more effective in negotiating with China and the United States on climate change matters.

Photo of Lord Deben Lord Deben Conservative 9:15 pm, 3rd May 2011

What would the referendum question be, were such a suggestion to be made? Would that referendum question be capable of a reasonable yes or no answer for the majority of the people of Great Britain?

Photo of Lord Liddle Lord Liddle Opposition Whip (Lords)

The noble Lord, Lord Deben, has made an apposite intervention. I do not know what the relevant question would be but this is something in the real world that Ministers might have to address. It could enormously strengthen the Union's capacity to deal with climate change and energy issues.

Amendments 23J and 23L are further examples. Amendment 23L is on piracy. We know that there is a growing problem of piracy, particularly in the Red Sea and the Indian Ocean. We know that an EU force is attempting to deal with this problem but that its efforts are inadequate. What is the reason for that? Is it a lack of resources or commitment on the part of the member states? That is possible, but another explanation is that the basis on which the force is patrolling this area does not match the tough circumstances that need to be dealt with. There is no agreement between the member states on the terms of engagement between the EU force and the pirates. There is no agreement on the circumstances in which force can legitimately be used.

These are difficult issues to tackle within the European Union because they touch on terribly sensitive issues to do with defence and armies, areas where the European Union has rightly been cautious in getting involved. I am not in favour of a European army, nor is the Labour Party, so do not try to say that this is trying to open the door to that.

Photo of Lord Liddle Lord Liddle Opposition Whip (Lords)

Yes, the noble Lord, Lord Wallace, is right about that.

We are not talking about that but it could be, if we are going to have an effective force for this purpose, that we need to have a much more integrated force posture with common rules of engagement. That is a possibility that member states in these particular circumstances ought to be prepared to consider.

Look at north Africa, where the events occurring mean that the European neighbourhood policy and the Union for the Mediterranean require a complete rethink in their light. We need, as a European Union, to develop a coherent policy which particularly offers those countries in north Africa which are going down the path of strengthening democracy and human rights incentives for going further in that direction. I was interested in a piece that I read-I think it was yesterday-by Peter Sutherland about what might be necessary in order to make that policy happen. It involves tackling very sensitive and difficult issues, such as the need to have more flexible rules on immigration for people from those countries so that they can come and study in Europe, spend time here and then go back there. It requires having more flexible rules on trade so that trade with the European Union can boost their economies and jobs. That would do something about the appalling problems of youth unemployment in those countries. It may require a more common approach to asylum. We are potentially facing having 400,000 people in refugee camps in north Africa, so I read in a newspaper article the other day. These are issues that cannot be addressed in 10 years' time but on which the European Union needs to develop credible policies, in its own interests, in the next year or two.

Most of the time, we obviously want Europe to use its existing powers under the existing treaties. Yet are we saying that we would not contemplate any change at all? This is the Williamson question which was asked earlier. The Government are getting themselves into a trap here. The coalition has pursued a positive approach to the European Union so far in its negotiations, but if they really believe that they are pursuing a pro-European policy, we urge them to be flexible on these issues and to recognise that we do not want to tie ourselves down with referendum requirements in areas where there is cross-party agreement and a general consensus that we need a stronger and more effective European Union. I beg to move.

Photo of Lord Davies of Stamford Lord Davies of Stamford Labour

My Lords, the most important theme emerging from the contribution on this side of the Committee to the debate tonight is the need for the European Union, like any businesslike and serious organisation, to retain the capability for flexibility in responding to what are unpredictable and therefore, necessarily, unpredicted situations. That is enormously important and it is quite clear that the Government are, by contrast, saying of the European Union that we should remain rigidly anchored on the existing constitutional arrangements until and unless, by some enormous shift involving a public referendum in this country, there is a sudden, seismic change. That is the fundamental difference between the perception on this side of the House and that on the other side of the way that the European Union ought to be conducted.

Many of us on this side have the considerable suspicion that, because the Government's attitude is so unrealistic in relation to what would be the requirements of any organisation that expected to survive in the modern world, there is actually a Machiavellian plan deliberately to make the EU inflexible, to cause crises and conflicts and, at some dramatic interlude, to stymie the whole of the EU. We know that many members of the Conservative Party have had that agenda for a long time.

There is a particular issue of flexibility facing me at the moment. As I understand my noble friend, he has suggested that in the interests of the House and of making rapid progress, we should debate in one session all the amendments from Amendment 23C to 23L. I understand that they cannot be formally moved together en bloc, but my noble friend's suggestion was that they should be discussed and debated as such and I am happy to do that. If I receive so much as an eyebrow signal from either Front Bench that I am doing the wrong thing, I will sit down and try to address the House again under Amendment 23L, which is what I was intending to do. Unless I receive such a signal, I shall proceed to make a few remarks about that amendment against the background of the theme that I have just set out, which is the unifying theme in all the debates that we are having on this clause.

Amendment 23L deals with the issue of piracy. As my noble friend rightly says, this is a grave and serious problem that does not merely affect east Africa but, unless we get this right, could affect large areas of the world because, if piracy is shown to be something that pays and makes a lot of money with impunity, others will inevitably get involved in it. We will return to a situation that we thought we had left behind in the 19th century when the Royal Navy, above all, in collaboration with the navies of other civilised countries succeeded in more or less extirpating piracy, which had been such a threat to lives, to civilisation and to developing world trade, and I do not think anyone wants that to happen.

My noble friend Lord Liddle sensibly said-I agree-that there may be great advantage in trying to review and standardise the terms of engagement of our various naval units and fleets that are off the coast of east Africa at present. It is slightly absurd that we have three task forces there-one American, which we are supporting, one NATO and one EU. That does not seem a sensible way of making progress, but I leave that matter aside.

I agree with what my noble friend said about the probable need for greater operational co-ordination. I am not sure whether that raises the issues of the Bill in relation to changes in the competences or powers of the European Union, but I have a suggestion to make to the House. I listened with respect, as I always do, to the noble Lord, Lord Wallace, when he commented the other day that, by saying that in future the EU might need some particular power and it would not be sensible for us to deprive ourselves in advance of the opportunity of granting the EU that power in the interests of us all, I was raising hypothetical issues. He said that I did not actually come up with concrete scenarios or specific cases. I hope that I have his attention now because I am coming up with just such a specific scenario.

Anyone with a business or economics background will always look at the demand side before they look at the supply side, on the grounds that the supply side emerges only when there is a demand for something. I put it to the Minister that one of the big problems with piracy is that, on the demand side, people are prepared to pay the money. That issue has not been addressed at all. I have to tell the House that every week ransom payments are paid amounting to millions of pounds. Sometimes they are paid through banking channels, and sometimes they are paid literally with cash dropped out of chartered aircraft on to the coast of Somalia that is then picked up by pirates. As a result, some individual or ship is released from imprisonment by the pirates who have illegally hijacked them. This happens the whole time; I repeat, it happens every week. Every year tens of millions of pounds are paid in this way; indeed, the figure may well be getting into hundreds of millions in the course of a year. I have spoken about this to underwriters in the City of London, who confess that to pay ransoms to pirates is becoming quite a normal part of their business.

It is clear that this river of money is available for pirates, and there is not much of a downside. They might get arrested and sent to Kenya; they do not know how long they will spend in jail there, but they will not be shot. The pirates discovered long ago that our rules of engagement are such that you do not get shot unless you shoot first. One or two people made mistakes at the beginning, but pirates have not made that mistake for a long time. So there is not much of a downside and the upside is a vast amount of money. Piracy will continue until this cash flow is brought to an end. That will happen only when Governments decide to take powers to make these payments illegal and to enforce such measures. We already have legislation in place; I am thinking of the money-laundering regimes and the criminal assets seizure regimes that exist around the world and which could all be applied, if there was sufficient political will, to the problem of piracy to interrupt these enormous cash flows, but that is not happening.

There is a great perversity in this; from the point of view of underwriters, in each case there is a conflict between the short-term interests of certain individuals, groups or companies and the long-term interests of society. That is the classic conflict that we encounter in human affairs, and it is very striking in this context. In each case, a ship owner or underwriter will prefer to pay a ransom of £2 million, £3 million or £5 million rather than lose a ship which is worth £50 million. So he will pay the ransom and the underwriters-as long as the premium rates for this kind of risk increase such that it still remains a profitable business-do not mind so much if the costs involve claims for ransom payments from time to time, because over time they will make money.

There is a big problem, and it will be resolved only when Governments take action. It is not enough for one Government to take action; by definition, many ships will be owned in one place, chartered to a charter party in another country and insured on the third party. It is essential, if we are to make progress on piracy, that there be an international agreement.

It would be ideal if 193 countries-I think there are 193 members of the United Nations-or the 150 or so countries which have coastlines and coastal states all agreed to adopt a regime which would constrict and effectively bring to an end ransom payments to pirates, whether for ships or individuals or other assets. However, getting world agreement is extraordinarily difficult. One reason we set up the European Union is because it is much easier to make progress with a limited number of countries sharing a set of values and the same level of socioeconomic development than it is to try to make progress with the world as a whole. That was a perfectly respectable reason for setting up an organisation such as the European Union.

The European Union might well want to take a more active and effective line in dealing with piracy. For that purpose, because of the perversities I have mentioned, it will be necessary to have legislation which applies across the European Union. It will be necessary for the European Union to take new powers in this matter. I see the noble Lord, Lord Wallace, scowling at this. Perhaps he does not like the idea-I have come up with a concrete, precise scenario and he has to address it. However, this is a serious possibility; indeed, it would be a very desirable scenario to develop if we decided as a Union to take a strong line on this.

What is more, if the European Union decided to take the initiative on this internationally, we would have much more influence with the United States, China and other major players in the world, which obviously have a great interest in world trade and do not want to increase the costs of world trade through accepting the burden of piracy, than if we simply took action as an individual state. In that context, it would be necessary for us to be credible and to have powers of enforcement. It would be necessary for us to take action under Article 48(6), which provides for the capacity of the European Union to take decisions more rapidly, using unanimity, which do not involve the traditional long-winded method of constitutional change.

The noble Lord, Lord Wallace, has a lot of difficulty in responding to these debates, but not because he is not a man of first-class intellectual ability, which he certainly is. Nor is it because he does not know anything about the European Union, on which he is an acknowledged expert. He is on a bad brief because he is a member of this Government. He tends, as anybody in such circumstances might be tempted to do, to set up an Aunt Sally and attack that, rather than defend himself against the arguments that are being made. Very few people on this side suggest that there will be frequent requirements for major constitutional changes-not at all. We have been constantly told by the noble Lord in this evening's proceedings, and previously on the Bill, that it will be only every few years or once in a month of Sundays that there has to be constitutional change in the European Union. There is no great desire for any constitutional change on the continent at present, so it will be quite a long time after the treaty of Lisbon that anybody wants to go through that again, with an intergovernmental conference and so forth. That is perfectly true.

However, I am talking about Article 48(6), which provides for change without going down the intergovernmental conference route. That is a very real possibility for dealing pragmatically with issues and challenges that arise, such as piracy and many others in the areas of immigration, the environment and all those that my noble friend has talked about this evening. It is necessary for the Government to address that. Do they seriously want to deprive themselves of the opportunity to use these limited powers for some specific purpose, such as might arise in the case of piracy? They could be in the ludicrous and humiliating position of saying around the table in the Council of Ministers, "This is an extremely good idea. This is in the interests of the people of Europe, the people of the United Kingdom and the world-world trade, world peace and so on. I am awfully sorry but I cannot agree to it. We cannot have a referendum at present. Parliament has been going for two or three years and the Prime Minister would not accept a referendum on something. We cannot have a referendum for a long time-maybe not in the next Parliament. Sorry, we are out of this. I have to leave the room and cannot go along with this proceeding at all, whatever its merits". That is the position to which this country would be condemned if the Government force the Bill through Parliament unamended. I hope that, even at this 11th hour, the very experienced and knowledgeable noble Lords on the Front Bench opposite will think again carefully about this issue.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lord in Waiting (HM Household) (Whip) 9:30 pm, 3rd May 2011

My Lords, I apologise if the noble Lord thought I was scowling at him. I was looking at him in some confusion. The question of how one deals with piracy off the coast of east Africa is rather different from how one might deal with piracy within the territorial waters of the European Union. Among the ships dealing with the anti-piracy patrols off the east coast of Africa are some very effective Chinese and Indian ships. The complications in co-ordinating ships from a large number of countries are considerable. How one should treat pirates whom one captures off the east coast of Africa is a large question in international law, but not under EU law since the EU does not extend to the Indian Ocean.

I was delighted to hear the noble Lord, Lord Davies of Stamford, spell out his conspiracy theory. It is useful to know which conspiracy theories underlie different views. I encourage him to compare his conspiracy theory with that of the noble Lord, Lord Pearson of Rannoch. They run in opposite directions. The noble Lord, Lord Davies, thinks that we are working secretly to undermine Britain's membership of the European Union, while the noble Lord, Lord Pearson of Rannoch, thinks that we are not working hard enough by half to undermine it. The two of them could have a very enjoyable dinner together.

Photo of Lord Davies of Stamford Lord Davies of Stamford Labour

I am grateful for the noble Lord's contribution. I said that it was how some people felt. That was the formula I used; I did not myself endorse the conspiracy theory. The implication was that the conduct of the Government was such as to make it possible for constituents to develop that conspiracy theory. In relation to his most recent remarks to me, I accept that piracy is a matter for international law. Piracy has always been against international law. There should not be a problem there. His implication was that we needed to co-ordinate with the Indians and the Chinese, which we do to some extent. We might need to co-ordinate with them more. That is true and I acknowledged it explicitly in my recent remarks. I said that in this context, as in others-I suspect the noble Lord used to teach this to his students-it is much more effective, if we want international agreement and consensus on a matter, to act as the European Union rather than as one country or as 27 different countries. That is the point I was making.

However, there is a third point that I must make in relation to the noble Lord's comments to me, which is that I was specifically addressing the need for powers to make it an offence to make ransom payments. I think that he, and anyone with any knowledge of the world, will agree that the chances of getting 150 or 193 countries to legislate identically for anything are virtually zero; that is not going to happen. If you wish to make it a criminal offence to transfer such payments, to collect money for the purpose of paying ransoms, to provide money for the purpose of paying ransoms, to make ransom payments, and to enforce those criminal offences, you need to obtain agreement throughout the European Union as an essential starting point. That is not a matter of international law; it is very much a matter of European law. If we do not have the powers to do that at present, it is very desirable that we should develop them. However, if we needed to develop them, we would run into the issue that, if the Government succeeded in passing this Bill, Article 48 would no longer be usable in that context if Great Britain were to be included.

Photo of Lord Deben Lord Deben Conservative

My Lords, it might encourage your Lordships' House to hear that I do not intend to talk about piracy; I seek to talk about the amendments that deal with the environment and climate change. These differ from earlier amendments. I disagree with the noble Lord, Lord Triesman, as it seems to me that most of the areas that he covered were unique competences of the European Union, whereas we are now talking about a number of areas where there is joint competence. I say to my noble friends that if we were arguing that the British Government felt that we had sufficient powers in the European Union to do most of the things that we wanted to do, if we saw no reason to extend powers, and if the Government were going to commit themselves not to do that, I would have real sympathy with that.

If the Government went on to say that there might be occasions on which we have to go along with things that seem to be sensible extensions, I would have sympathy with that too. However, I find entirely unacceptable the concept that we cannot go along with anything unless we have a referendum. I find that unacceptable with regard to the environment, for the reason that I gave when I interrupted the noble Lord. Many of the issues about which we are talking are almost incapable of admitting a question of the kind of which a referendum admits. I do not like referenda. As the Committee knows, I am opposed to referenda on any grounds in any circumstances. I am a believer in parliamentary democracy. One of the sadnesses of this Government is that they have betrayed what seems to me to be a fundamental part of our constitution.

Referenda have always been used in partial circumstances for particular reasons. Napoleon III was the best user of referenda before General de Gaulle. This is a foreign activity much disliked by sensible people in the United Kingdom. I yield to no one in my dislike of referenda. They are always partial and always undertaken for a particular reason. The provision that we are discussing is included because the Government want to make it difficult to do anything in this area. The noble Lord, Lord Pearson, thinks that this is not so. The difficulty is that the Government speak in different ways to different people. They say to some people, "This is a wonderful step forward for those who are Eurosceptic", and to other people, "This does not matter very much anyway because we are not going to need it". Therefore, I find it very difficult to take this debate seriously. However, it is crucial with regard to environmental issues.

I have one or two suggestions as to why that is the case. For example, we are going to have a real issue with the transfer of electricity across the European Union. The superconductor systems, which will enable us to pass electricity very fast without losing power, will be very important in enabling us to meet our energy requirements and the requirement to cut the damage we do to the atmosphere and to mitigate climate change. I know that the noble Lord, Lord Pearson of Rannoch, does not believe in climate change. He is a sceptic on a wide range of subjects. It will not therefore worry him, but it worries me considerably if we cannot do something about this

The problem with the superhighway that the plan creates is that it needs to pass over national boundaries. For example, if we are able to produce a lot of electricity from the almost permanent sunshine in Morocco and pass that into the European Union, it has to go through Spain and then France to come to northern colder climes. The French are not, at the moment, disposed to take this electricity because of their commitment to nuclear power. Therefore, we may need some additional competence of the European Union to make sure that this fundamentally European matter can be carried through. Are we really going to have a referendum asking whether the people of Britain are in favour of a superconductor system that enables Moroccan or Spanish electricity to move to northern Europe and Denmark? Is there a question that could sensibly be presented to the British people? I do not think that there is, and furthermore no sane Government would want that. This Government will tell us that that will not be necessary and that somehow or other under the present mechanisms it will be possible to get this scheme.

If that is so, your Lordships would agree that if this Bill is to help people to be less cynical about the European Union, what could be more productive of cynicism than the argument that when you get such a thing, you can find a way round doing it? That is extremely difficult to accept.

There is a second reason. Why does Britain often find a way of looking at things differently from the rest of the European Union? It is because we have been lucky and blessed enough to have had 1,000 years of history with only one revolution and no invasion. The one invasion that we had in 1066 was enormously important, because it stopped us speaking "Skogalog" and taught us to speak English. It was hugely valuable, and thank God we lost. Apart from that, we have had an evolutionary system.

The problem with the Bill and this particular bit of it-and why these amendments seek to change it-is that we are denying the European Union the ability to evolve. We are saying that these things can be decided only by some massive change and that we must have a vote of the British people on subjects as limited as those that we are talking about. We should be doing the opposite. We ought to be encouraging this great European Union-the most important thing that has happened in peacetime to anywhere in the world for 100 years. This great European Union must develop by evolution, not by having this confrontational system whereby, once you feel it has gone too far, you must have a referendum, even if it is on a totally unsuitable subject.

Photo of Baroness Falkner of Margravine Baroness Falkner of Margravine Liberal Democrat 9:45 pm, 3rd May 2011

I wanted to make a point about his example and did not want him to lose his train of thought. If the superhighway had to go through France's territory-leaving aside the parody of the need for a referendum there, because it is a policy question, not necessarily a competence question-and the French did not wish to sign up to that because they felt that one of their strategic industries, nuclear power, would be at a loss, would it be right, in the spirit of European Union co-operation, to use qualified majority voting or some other passerelle or clause to force the French to allow their territorial sovereignty to be infringed by others? That would seem to be curiously anti-European and against the spirit of European co-operation.

Photo of Lord Deben Lord Deben Conservative

That would mean that we had no common trade policy. Every country could say that this decision was contrary to their national interest. The French have managed to make the sale of Orangina contrary to their national interest. What the noble Baroness suggests would destroy any possibility of the scheme. It would not touch their sovereignty. They would not have to use the electricity. All that they would have to do was not prevent someone else using the electricity. It is otherwise a curious definition of national sovereignty.

Secondly, if we do not do that, my national sovereignty is being infringed, because my climate is being changed. Unless we find ways of using non-fossil fuels, my climate will be changed. This is a question on which we have to accept that our national sovereignties are all imperilled-but I do not want to go further down that road, or someone will suggest that I am not keeping to the amendments.

There is a whole series of issues here where the Government are making it more difficult to stand up for Britain's interests within the European Union by setting this entirely unnecessary and manufactured way to enable them to say to the rest of the world, "We are not going to be pushed around". I think that the Government are perfectly capable of not being pushed around without the Bill. I think that my noble friend is quite wrong to apply Canute to a bit of the Bill. The whole Bill is a Canute Bill. It suggests that you can in some way stop the necessity of the nations of Europe working together by setting in train a system which makes Britain uniquely unable to play its part in the European Union. It is all right saying that other people have all sorts of methods, and the rest of it, but they have been much more careful in writing their legislation, and they do not have a situation where even the simplified system is called into question, which is the way that this legislation operates.

I want to say just two more things. The first is that if ever there were a policy that needs change, it is the common fisheries policy. It is hugely important, and it is based on a European competence, but there are some things on which the European Union does not have competence. For example, it does not have competence to enter member states' ports with European inspectors, but there is no way to have a sensible common fisheries policy without that. Who has been against that? We do not want people entering our ports. I cannot understand why, because we try to keep the law, but evidently we will not allow that. If we were to do that, we might do something about the very policy which is, for most of us, the least satisfactory of European policies. That is why, given the environment, it will be very important. Evidently, we are not going to do that unless we have a referendum asking people whether they are prepared for French inspectors to come into English ports. Of course, they will say no to that, because the question does not say what I want it to say: are we prepared for British inspectors to go into French ports? They would say yes to that. It depends what the question is. That again comes back to the danger of having referendums.

My last point is that the trouble with this bit of the Bill, unless it is amended as we suggest, is that, as the noble Lord, Lord Triesman, rightly said, it gives the opportunity for anybody who does not like the European Union, who has an obsessive belief that somehow it is the epitome of evil instead of being our most exciting and remarkable peacetime achievement, to find any change, any aspect that is altered, any suspicion or scintilla of alteration proof positive that there should have been a referendum. Therefore, instead of doing what the Government think will happen under the Bill, instead of ensuring that people feel happier about the European Union, it will give endless opportunities for the noble Lord, Lord Pearson, and others to suspect that there is something much deeper, much worse, much more wicked. Frankly, it is like the Jehovah's Witnesses. It is a perversion of the realities and the truths. Once you have caught it, you cannot see the realities and the truth except through that prism. The Bill helps that. The bit which does not allow the European Union to take proper steps to strengthen its effectiveness in mitigating the effects of climate change and pollution is particularly damaging, and it is especially damaging for the nation that leads in these matters-Britain. I want Britain to lead in these things and not to say to the rest of Europe, "Frightfully sorry, old boy, we can't manage this because it means a referendum and we're within two years of an election".

Photo of Lord Judd Lord Judd Labour

The noble Lord is absolutely right. That was a powerful argument, well put, and one with which I found myself completely in agreement. These amendments go to the centre of what is wrong with this lamentable piece of legislation. It is not just a question of a lack of vision; it is a matter of selling the British people short. If there is one fundamental reality in relevant politics, it is that we live in a totally interdependent world. The job of government is to help the British people to find a place within the reality of that interdependence and to work out how the interdependence can best be handled. That should be central to our education system and to the whole message of politics.

The trouble with the Bill, as we said powerfully at Second Reading, is that it does not provide any flexibility. Here I slightly differ from my noble friend Lord Liddle, who is doing a formidable job on the Bill and makes me very proud to come from the same county in England. However, it is not simply flexibility that we are talking about but leadership of the British people in meeting the realities that confront us. The trouble with the Bill-and we all know it-is that it is an effort to reassure the British people that government will protect them against the European Union. Instead of asking how we can strengthen the well-being of the British people through the part that we play in Europe, and instead of coming out of negotiations and saying, "My God, look at what we have achieved for the people of Europe and therefore for ourselves in this context", we come out saying, "Look at what we've managed to hold off in looking after British interests". That kind of argument is all tactical and totally lacks strategy. From that standpoint, it seems to me that these amendments are central. Not one issue is mentioned in them that can possibly be carried forward on behalf of the British people within the context of the nation state alone. They require international solutions.

In responding to my noble friend's very important intervention on piracy, kidnapping and ransom, the noble Lord, Lord Wallace, seemed to suggest that these are matters of international law. Of course they are, and they are absolutely central to the future of my children and grandchildren. Of course we have to get the international and global policies right, but surely the noble Lord does not want to align himself with the argument that establishing firmly in the European Community a stepping stone towards making that wider international policy effective is somehow unnecessary. It is vital, and we have done it with, for example, arms exports. It was in the context of the whole issue of arms exports and the damage they could do that we saw the establishment of the European code on arms exports. A lot of work is still to be done on it but it is a starting point. It illustrates to the world what can be done and it enables us to move forward practically to a wider, more successful policy within the United Nations.

The issue that we must come back to is that these amendments are vital because they try to ensure that we bring home to the British people that their interests lie in strong collective action at the international level. I repeat that the trouble with the Bill is that it faces in the opposite direction. It is saying, "We will make some concessions to Europe where necessary, but we do not see our future in international co-operation and effective international instruments: we see these as something that reluctantly we have to concede from time to time-and, my God, we will insist on the opportunity always to test public opinion if we are asked to take an obviously sensible step".

These amendments deal with the heart of the Bill. It is a sad day in British history when we have this wretched piece of legislation before us.

Photo of Lord Taverne Lord Taverne Liberal Democrat 10:00 pm, 3rd May 2011

My Lords, the previous two speakers eloquently demonstrated the importance of these amendments. They made a passionate plea for a much more sensible and enlightened policy towards Europe. I will deal with one particular aspect: Amendment 23F and the banking crisis.

There are two aspects to the current financial crisis in Europe: sovereign debt and bank liquidity. Many continental banks are undercapitalised. They need more rigorous stress tests as a basis for recapitalisation. National regulation and supervision have failed. We need a special EU-wide resolution regime. We need new, more effective European regulation. If we have that, it will of course give new powers to Brussels and that, as I understand it, would trigger a referendum. The question arises: what sort of question would be posed in a referendum dealing with bank regulation?

Leaving that aside, it will mean that in the course of negotiations taking place in Europe, when negotiators are being very careful and thinking that they can achieve something without triggering a referendum in Denmark or Ireland, or an adverse ruling of the German constitutional court, our negotiators will have to have regard to the fact that there will have to be a referendum. They will be inhibited and looking over their shoulders: they will be negotiating with their hands behind their back. Since this will be an obstacle to reaching a very important area of agreement, the likelihood is that we will be bypassed.

Already we are being bypassed in many important respects. While John Major wanted to be outside the eurozone in a multipolar Europe, it seems that Mr Cameron has more or less accepted that there will be a small but very powerful unit in Europe. We will find that being in the outside lane of a much less congenial Europe is not a particularly effective experience for very important aspects of our economy. I have heard Treasury officials saying that we are now in the same position as Latvia, asking what agreements are being reached in rooms where the important people are meeting.

A story was told at a conference I went to about an occasion when Gordon Brown insisted on being present with eurozone Ministers. They said that they would meet him, but the press outside were speculating on how long he would last: would he be out in five minutes? In fact, that was precisely what happened: after hearing him for five minutes, they thanked him, said that they must now have their private meeting and asked him to leave. He could not face the press after five minutes, so he stayed in the lavatory for half an hour.

It is not very dignified to be outside the corridors of power. This, however, will be much worse. Obviously there were problems about joining the eurozone, but the regulation of banks will affect the City profoundly, and it will be another case where we are likely to be bypassed.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Chair, EU Sub-Committee F - Home Affairs

My Lords, I will address Amendments 23C, 23D and 23E, as did the noble Lord, Lord Deben, who gave us a brilliant illustration of why flexibility in this area is not only desirable but necessary.

I have, off and on, had quite a few dealings with the issue of energy in the European Union, and I have to say that we have got it comprehensively wrong. In the 1970s we fought desperately-of course, Mr Tony Benn was the Minister at the time-to avoid the European Union having any responsibility in this field whatever in case it stole our oil, which it was never going to be able to do because European law is perfectly clear on that point, and so we prevented any policy emerging then. Then, when the Single European Act was passed, we allowed-I agree that by then we were not favouring it-energy to be kept out of the single market at that stage because of the objections of the French and the Germans, and that was a disastrous mistake. Now, when we have discovered that we are not one of the three major oil and gas producers in the world, we have discovered, surprisingly, that we could do with a common energy policy, but it is quite difficult to get; and, as the noble Lord, Lord Deben, has said, it is in an area of shared competence. So it may very well be that, sometime in the not too distant future, we will want to support some changes that will give more powers to Brussels in the area of energy security, competition, interconnectors and all these things; yet here we are subjecting all that to a referendum requirement under which the no campaign would no doubt say yet again, "This is the European Union coming to take all our North Sea oil", and so on. The result may very well be negative because that campaign would be very emotive. Heaven knows what the Scots would think about it-quite a lot, I should think.

I do really feel that this illustrates the case for flexibility-and the same is true on climate change. It is rather clear that the European Union will struggle under its current institutional arrangements to find a way forward through the next 30, 40 or 50 years on climate change. Things are going to be very different. Crises are going to emerge and Europe is going to have to find a response to them. Some of those responses may involve new powers for the Union as a whole. And yet again, this will be made extraordinarily difficult by the provisions of the Bill.

I am not saying that these particular amendments are the last words in wisdom on this particular issue, but I do really think that the Government ought to be taking this a bit more seriously. We have not had a single serious response from the Government since we began this Committee stage on any point that has been raised. I am waiting now for the response to this debate to have, for the first time, a serious response to the substance, because we have not had it so far. Those are issues of major importance. I think that if the Government were to go away and reflect on this now, they would see the wisdom, at the very least, of truncating the list of issues on which there need to be referendums.

Photo of Lord Empey Lord Empey UUP

I am grateful to the noble Lord for giving way. A lot has been talked this evening about energy. Maybe I am missing something, but any of the energy sources that we will need for our future security will come from outside the European Union. In other words, they will be merely transmitted through the European Union, and that will largely be down to the authorities in each country, including planners, as to whether they will allow these things to pass through.

I was involved in a gas pipeline that transmitted from the United Kingdom to the Irish Republic and from the different parts of the United Kingdom to the Irish Republic directly. The European Union contributed financially towards it, because it could be done under a whole range of headings-infrastructure, the cohesion fund, economic development, climate change issues, carbon reduction. There are many mechanisms already in existence. I may be wrong on this, but I feel that the energy example is not necessarily the most relevant.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Chair, EU Sub-Committee F - Home Affairs

I am afraid to say that I believe that the noble Lord is wrong on this. He has used a particular example of which he has very great experience. It is extremely interesting for the House to hear that example, but it is not very typical. It does not deal at all with the issue, for example, of whether it might be in the interests of the European Union in the not distant future to give a negotiating mandate to a body-whether it is the Commission or the presidency or whatever it is-to negotiate for outside energy supplies from outside the European Union, particularly for gas, and to negotiate as a single unit. That would require new powers. It is as simple as that, and is, I am afraid to say, nothing whatever to do with building a pipeline between Ireland and Northern Ireland, interesting and important though that was.

I think there is serious matter in the energy field, the climate change field and the pollution field to reflect on here and a need for greater flexibility. I plead with the Government that we do not have the preprandial/postprandial schizophrenia that we have had in recent Committee stages in which in one session we are told that we need not worry about this enormous number of referendums because none of them will ever take place and we will stop anything happening in Brussels that will cause them to take place and then immediately afterwards we are told that we need not worry because the European Union does not work that way, and there will be a big package and we will all be able to find some nice sugar-plums in it for ourselves. I thought that was where we came in and decided that that was nothing that we wished to encourage in future. I think the Government need to make up their mind whether they are trying to lock the door and throw the key away, which is what this Bill does, and the consequences of that are pretty damaging for this country, or whether they are trying to propel the European Union towards another big institutional package, which I do not believe to be in the interests of this country. I would like to hear a response on Amendments 23C, 23D and 23E.

Photo of Lord Willoughby de Broke Lord Willoughby de Broke UKIP

My Lords, on the issue of climate change, the subject of the amendment that we are supposed to be talking about, several hours ago the noble Lord, Lord Wallace, said that Amendment 21 was the most useless, superfluous amendment that he had come across during the hours of Committee stage. I believe that Amendment 23C actually takes the palm as the most useless and redundant amendment we have had. The idea that the European Union is effective in climate change is frankly laughable. Let me remind your Lordships that our policy on emissions is guided entirely by the EU and we have to have 20 per cent of our energy from renewables by 2020. Of course, there is not the remotest chance of achieving that, and in the past couple of years, that aspiration-that dream-has begun to collide with reality.

Just to give your Lordships a little information on that, I shall repeat what was said in two sets of figures from two separate reports over the degree of delusion that surrounds the wish of our Government in Brussels and their subsidiary here in Westminster that the centrepiece of our energy policy should be to build ever more windmills. The report that drew most attention was from a Scottish environmental charity that focused on the fact that last year, despite our building ever more wind farms, the lack of wind meant that they operated on average at only 21 per cent of capacity, and that was during the period of highest demand. Several times when demand was at its highest the contribution of wind to our electricity supply was virtually zero.

I do not know why, but less attention was given to an interesting report put out by our Department of Energy and Climate Change showing that the 3,168 turbines that we have built at a cost of billions of pounds contributed on average less than the output of one large coal-fired power station. From the DECC figure, it is possible to work out that for this derisory contribution we paid through our electricity bills a subsidy of nearly £1.2 billion on top of the price of electricity itself. In return for getting 3 per cent, roughly, of our energy, nearly 7 per cent of our bills are paid in subsidies for these completely useless wind farms, and that will go up as years go on because we have committed to this 20 per cent from renewables by 2020. That report dealt with last year.

Noble Lords will remember that this year there have been about two months of cold, windless weather. I have figures that show that during those months only 0.2 per cent of our energy was produced by wind turbines. The director of the Energy Intensive Users Group, Mr Jeremy Nicholson, gave warning that this could turn into a crisis when the UK is reliant on 6,400 turbines accounting for a quarter of all UK electricity demand over the next 10 years. He said:

"If we had this 30 gigawatts of wind power, it wouldn't have contributed anything of any significance this winter", because there was no wind. He continued:

"The current cold snap is a warning that our power generation and gas supplies are under strain and it is getting worse".

Of course, that is made even worse by the European Union's large combustion plant directive requirements whereby we have to close 15 of our coal-fired and oil-fired power stations over the next two or three years. I believe that the UK has committed to switching off these by 2015, which will leave it uniquely vulnerable to gas shortages and the intermittency of wind farms.

Mr Nicholson of the Energy Intensive Users Group, said:

"We need to ensure that energy can be quickly accessed in times of peak demand through improved gas storage and investment in clean-coal and nuclear power stations".

I cannot see where he mentions wind power at all in that energy requirement. It is completely superfluous and very expensive.

In order to help the noble Lord, Lord Deben, on a referendum question, I should have thought that it is very simple. You simply have to ask the British people whether they want to go on spending masses of their hard-earned taxpayers' money on supporting an energy source which is not only supremely inefficient but massively more expensive than any other energy source. I think that that is quite a simple question.

Photo of Lord Deben Lord Deben Conservative 10:15 pm, 3rd May 2011

Might the noble Lord not suggest that there could be a better question: do the people of Britain want to have their climate changed and their health impaired by the continuation of extremely dirty power stations, which happily we are going to close down?

Photo of Lord Willoughby de Broke Lord Willoughby de Broke UKIP

The noble Lord says, "happily we are going to close down". I hope that he has got a generator in his house so that he can watch his television and read his books because with wind power that simply will not happen. Nuclear of course is a different matter, but let us not get into that debate right now.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Chair, EU Sub-Committee F - Home Affairs

I merely want to congratulate the noble Lord on having raised the issue of gas storage, which is a subject close to my heart. I ask him to recognise that the best way to improve the level of gas storage in Europe would be to impose a minimum gas storage obligation through the European Union.

Photo of Lord Willoughby de Broke Lord Willoughby de Broke UKIP

Surely it could be up to the nation member states to impose their own minimum gas storage obligation. Why do we have to do it through the European Union? It is perfectly ridiculous. This unhealthy EU obsession, which is what it is-I am very sorry that the previous Government and this Government seem to have signed up to it-of using wind power to keep our lights on is one of the most damaging fantasies of our time. I oppose the amendment and I hope that it will be dealt with accordingly.

Photo of Lord Lamont of Lerwick Lord Lamont of Lerwick Conservative

My Lords, I want to make one simple and brief point, but before I do that perhaps I may respond partly to what the noble Lord, Lord Taverne, said because I was a little puzzled by it. He is a former Treasury Minister and chairman of a think tank in the City. He was referring to the two aspects of the banking system in crisis being capital and liquidity, with which I totally agree. But he was, I think, arguing that perhaps we need more European attention to capital. That was quite a surprising thing to suggest because, as he will remember, not long before the Irish banking crisis struck and the Irish banks were revealed as hopelessly undercapitalised, we had stress tests carried out on the European banks-a separate exercise in the European Union and in Britain. The European Union banking tests revealed that no bank had a problem with capital other than one bank in Germany. That was shortly before the crisis was fully revealed in all its horror in Ireland.

I agree with the noble Lord that there is a separate aspect of liquidity which the European Central Bank has, in a skilful and constructive way, provided to the European banking system. Equally, the Bank of England has also exercised its national function well. He did not make the case for further European competence or the transfer of power or competence from this country to Europe by merit of that alone.

The noble Lord went on to make the familiar point about the eurozone and whether we were marginalised by not being in it. It is of course true that eurozone Ministers may make certain decisions affecting themselves in which we do not participate. We do not participate in meetings of the Federal Reserve Bank, although its decisions affect us. However, anything that eurozone Ministers decide to do that is governed by the rules of the single market or competition law continues to be governed by the rules of the single market and competition policy. He was careful to say that issues would arise if we were proposing to join the euro but the implication of his argument was that in order to gain influence we should join the euro, which I am sure he does not really subscribe to. Very few people will own up to arguing that we should join the euro today.

Photo of Lord Taverne Lord Taverne Liberal Democrat

I was not arguing that we should join the euro today. On the earlier question, I defer to my noble friend's greater experience in these financial fields. However, a large number of economists have taken the view that what is needed at the moment are much more effective stress tests for European banks on a euro-wide basis. For example, I dare say my noble friend has read economist Willem Buiter's considerable contribution to Citigroup's paper on the subject. He is not alone in this because a large number of economists are concerned that only through a much more rigorous euro-wide stress test system will the banking liquidity part of the problem be adequately resolved.

Photo of Lord Lamont of Lerwick Lord Lamont of Lerwick Conservative

I think the stress tests refer to capital rather than liquidity, which is a slightly shorter-term issue. I agree with the noble Lord and Willem Buiter that we need proper stress tests. However, the previous stress tests that were applied within the EU were revealed in all their nakedness as thoroughly inadequate.

As the noble Lord, Lord Wallace, said, we should remember that the regulations that govern these issues are not only European but worldwide. The BIS has a crucial role-in fact the lead role-in determining the capital ratios of banks. I do not think that the argument about the failure of the banking systems is an argument per se for why the UK, which is outside the eurozone, ought to contemplate further integration in this field than has already been provided for. This area has to be addressed internationally and through many agencies.

The main point that I want to make about the debate is this. We have had some amazingly excellent speeches but there is confusion, or insufficient distinction, in these debates between the European Union acting to legislate or make a policy decision and it altering its own constitution-if I can use the word "constitution"; I know people who might object to that-or its own rules. People have made eloquent speeches about human trafficking, piracy and the environment, but not all the speeches have distinguished between the EU's ability to act and to have a policy and its need for more powers.

The noble Baroness, who made a tremendously moving speech about human trafficking, did not actually demonstrate that more powers were needed. More agreement might be needed, and might be achievable within existing powers, but she did not demonstrate that more powers were needed. Equally, the noble Lord, Lord Davies, spoke about piracy but did not demonstrate that we could not have an EU policy on piracy within the existing competencies and powers of the EU. I appeal to the Minister to make that distinction when he addresses all these areas.

Where there are political and human problems-piracy, the environment, energy, human trafficking and all the other issues listed in the amendments-can the Minister distinguish between the EU's ability to act, to legislate under its own rules and, quite separately, the need to change its own constitution? The people speaking for the amendments ought to have argued for a change in the European Union's rules. With great respect to all those who spoke so movingly on the issues that mattered to them, not all of them made the case for a change in the rules of the EU. That seems to be the crucial point in this group of amendments.

Photo of Lord Grenfell Lord Grenfell Labour

I hesitate to intervene at this late hour but what the noble Lord, Lord Lamont, has just said provokes me to do so. He has, maybe inadvertently, hit the nail on the head. This Bill is about trying to prevent the European Union acquiring more powers in ways that the Government feel would be wrong. The noble Lord spoke about the difference between powers and agreement. In fact, the effect of the Bill is to prevent and make far more difficult the reaching of agreements within the European Union. That is what it is all about. It is not about power but the ability of the European Union to reach more and better agreements.

We have had an interesting debate that has covered an enormous number of topics. We have talked about the Monetary Policy Committee, the environment, piracy, human trafficking-all very interesting for those of us who respect the views of those who know what they are talking about. However, I am not sure that the coalition Government and those on this Front Bench are at all interested in this debate. They have already made up their minds; the integrity of Clause 4(4) has to be defended at all costs. They are not prepared to give way on any of this and do not want any additions to the clause. One wonders what this debate is all about.

I do not want to belittle the powers of this House to be able to persuade Governments to change their minds, but on this particular issue I am a pessimist. We are not going to be able to do so because if these excellent amendments are accepted, one of the central pillars of the whole Bill collapses. When that pillar collapses, the whole edifice begins to crumble, so I am sure the Government are going to stick firm on this. It will be extremely hard for us to persuade them to accept any of these amendments. That depresses me greatly because these amendments are vital. I suggest that we make every effort to persuade the Government, but I am a pessimist on this. The case has been well made by my noble friends Lord Triesman and Lord Liddle to get these amendments through, but if the Government are not prepared to accept them this bad Bill becomes even worse.

Photo of Baroness Brinton Baroness Brinton Liberal Democrat

My Lords, I absolutely agree that the policy areas set out in these amendments are important for debate. We had an extremely interesting debate earlier and it is absolutely key as well that the EU continues to focus on these issues. However, I am really struggling to identify the areas within the existing treaties where the EU is not able to act. I would be grateful to the noble Lord, Lord Liddle, if he could help by giving some specific examples. On those covering climate change, for example, which the noble Lord, Lord Deben, spoke eloquently about earlier, I understood that Article 191 of TFEU allows the EU to act in,

"preserving, protecting and improving the quality of the environment", so where is it not covered that requires this amendment?

Photo of Lord Deben Lord Deben Conservative 10:30 pm, 3rd May 2011

Very simply, the EU does not have powers to insist that we improve the electricity transfer between countries, yet that will be an essential part of our future energy needs.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Lord in Waiting (HM Household) (Whip)

My Lords, Article 170 says:

"To help achieve the objectives referred to in Articles 26 and 174", et cetera,

"the Union shall contribute to the establishment and development of trans-European networks in the areas of transport, telecommunications and energy infrastructures".

That seems to me very much to give the competences needed.

Photo of Baroness Brinton Baroness Brinton Liberal Democrat

I am grateful for that intervention from my noble friend Lord Wallace, which was much more informed than I could possibly have given.

Photo of Lord Deben Lord Deben Conservative

It was a perfectly right intervention but that does not actually give powers to compel. It says that the countries shall do it but there is no mechanism at the moment to insist that they do it. That is the issue.

Photo of Baroness Brinton Baroness Brinton Liberal Democrat

My Lords, I fundamentally disagree with that point. The key point here, which we have come back to day after day on this Bill, is that this is about the process not the policy. The process has been absolutely clear and I still wait to hear from the noble Lord, Lord Liddle, on where these are not covered by existing treaties.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch UKIP

My Lords, the noble Lord, Lord Deben, was good enough to mention me in his few remarks and to accuse me of what I think was the impossible and most undesirable dream of the United Kingdom being altogether free of the European Union in all these matters. He is of course correct. However, he then mentioned the common fisheries policy as though that has to be solved by the European Union and as though the EU will not solve the acknowledged disaster which the policy is, environmentally and in every other way, if it is prevented from doing so. Surely, from our point of view, as I have mentioned before, the answer is terribly simple. We simply leave the European common fisheries policy and take back our international waters. Seventy five per cent of the fish which swim in European waters all the year round swim in waters that used to belong entirely to the United Kingdom before we made the mistake of joining the European Union. We then manage our own waters, re-establish our fish stocks and let out any surplus to foreigners.

On energy, the noble Lord again believes that the European Union is essential to solve our energy problems but, surely-

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Chair, EU Sub-Committee F - Home Affairs

I am afraid that the noble Lord is yet again misleading the House. The waters did not belong to Britain before we joined the European Union. We had 12-mile limits in those days and the areas beyond those limits were high seas. The decision to go out to 250 miles was taken by the European Union collectively when we were a member.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch UKIP

Yes, but we should not have gone along with that decision because we should not have been in the policy in the first place. I therefore insist that most of the fish which swim now in European waters and are fished by European boats used to belong to us and they could and should belong to us again. I do not wish to detain the House-

Photo of Lord Deben Lord Deben Conservative

The noble Lord really must not say that. It is not true. Most of our fishing grounds have always been shared with our neighbours-the French, the Belgians and the Germans-and we have always had to come to terms with them. All that the European common fisheries policy does is to have a sensible mechanism. It is not that the policy being common is wrong but that the policy is wrong. You have to have a common policy; otherwise you can only make these decisions with the marlinspike. It is just not true that we had 75 per cent of it before.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch UKIP

The noble Lord and those of his view have been saying this now for 30 years. It has not happened and it is not going to happen. The solution for this country is to leave the common fisheries policy and take back our waters to the median line and whatever we had before in territorial waters into our own control. Then, when our own fishing industry, which has been decimated by the common fisheries policy, has been rebuilt, we can share any surplus and lease it out to people who want to buy it.

Photo of Lord Davies of Stamford Lord Davies of Stamford Labour

I do not know in which amendment the common fisheries policy arises, but I have to tell the noble Lord that if he is interested in that policy, he will rapidly find that the only explanation consistent with the facts is that the common fisheries policy suffered from an excess of member state sovereignty and an insufficiency of federalism. At every stage the European Commission, being the regulatory agency, has proposed quotas that, if they had been accepted, would have preserved the stocks. It is the member states pursuing their own individual interests that have always resisted those proposals on the part of the European Commission. As a result, the quotas have never been sufficiently tight and all these waters have been overfished. Under all circumstances, whether we had our own fisheries policy or not, it would be necessary for us to have regulation, quotas and some effective enforcement mechanism. If we disbanded the European Union, the next day we would need to set up a new common fisheries policy by agreement with a set of quotas and a common enforcement policy.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch UKIP

My Lords, when we leave the European Union, we will not do as the noble Lord, Lord Davies, suggests. We will take back those waters that were our waters, take back those fish that were our fish and re-establish our national fishing industry. That is what we will do. As the noble Lord has mentioned, this was not actually in the amendments but as the noble Lord, Lord Deben, mentioned it in connection with me, I thought that I would just touch on it in closing.

The noble Lord assumes, again, that some form of European common energy policy is in any way necessary for this country. We simply rebuild our own energy supplies. We do not let the European Union close down our coal-fired stations, as my noble friend Lord Willoughby de Broke has mentioned, but build new ones. We might even consider incineration of landfill. We certainly consider nuclear power. We therefore supply our own energy. If we then wish to go on buying Russian gas through France, which is what we have to do at the moment, then we may be able to, but I entirely agree with my noble friend that this pursuit of wind power is madness of a dimension that only the political class could be guilty of. I think that that covers everything that I had to say to the noble Lord, Lord Deben, and I shall sit down.

Photo of Lord Howell of Guildford Lord Howell of Guildford Minister of State (Foreign and Commonwealth Office) (International Energy Policy)

Perhaps your Lordships would welcome it if we began to come to the end of this enormous debate. I agree with my noble friend Lord Lamont that the effect of this debate has been to clarify our differences, particularly the concerns of noble Lords opposite, about the Bill, and the worries that lie at the centre of their anxieties.

I do not want to parody what the noble Lords, Lord Liddle and Lord Triesman, have said again and again. They wish for more flexibility, and by "flexibility" they mean the readiness to agree to or even initiate treaty changes. They further argue that in some of its provisions-notably Article 48(6), but in others as well-the Lisbon treaty provided this flexibility, which somehow the Bill is reversing and putting back in the box. I think that that is a fair summary of where they stand. I question straight away whether they have got the Lisbon treaty quite right. We know that using the passerelle provisions requires a treaty change, and in a life experiment, not a laboratory experiment, we have seen how that is conducted. It is conducted through some very elaborate negotiations on an urgent issue that will not be solved by any immediate policies to hand-namely, the stability of the European financial and monetary system-and, to meet that, a treaty change is winding its way through the system and will take one year and three-quarters to come to fruition and be agreed. So that structure, that passerelle arrangement-which, incidentally, was as noble Lords know very well, an agonising compromise between several other suggestions at the Lisbon treaty negotiations-is certainly not a quick solution, a flexibility device, an emergency provision, which somehow the Bill is negativing. That is not the pattern.

Then we come to the broader question of whether treaty changes generally are synonymous with flexibility. I have considerable difficulty with the line taken by the Opposition. Not only does it take 18 months to two years to work up and elaborate treaty changes and get them agreed between the 27 members, which all have their own procedures for handling these matters, going through their own legislatures and constitutional arrangements and, in many cases their own referenda arrangements as well, but this seems to be a very poor response, a very poor kind of flexibility and a very poor pattern of responding to emergency and difficult issues.

As I understand it, the implication of the amendments, which extend the exemptions to a very wide range of issues, is that it would be nice to be ready to have treaty changes in an enormous list of things. We dealt with banking and financial regulation in the previous group of amendments, and I would be testing the patience of the Committee if I went through that again. However, these amendments deal with climate change, pollution, energy security, migration, cross-border crime, neighbourhood policy, maritime law, piracy and human trafficking, about which my noble friend Lady Williams spoke with such precision, knowledge and telling appeal. In all those areas, as I understand it, the amendments would like to see treaty change. I wonder whether the Opposition realise quite what they are asking for; it seems extremely doubtful that treaty change is the way to solve crises or problems in any of those areas. The amendments appear to have been drafted on the assumption that the Bill is trying to impair the UK's role and participation in all these areas. They take no account of the fact-and it is a fact-that the existing treaties which extend enormous areas of competence to the EU already afford the European Union ample scope-I shall show in detail why this is so-to legislate in all the specific areas referred to in all the amendments.

If I were to go through that vast list now, we would be here till well after midnight and probably the early hours of the morning, so I cannot do justice to every aspect. But let me try to show how, in many of these areas, the competences are there. The need to plunge into this complicated area of treaty change is minimal; the opportunities for creating a highly effective European posture and policy are available within the existing competences and the existing absolute competence in particular is available to the EU in trade questions. Let me explain some of the points where this is so.

Perhaps I should begin with referenda generally and the concern that a multiple stream of referenda lies ahead if the Bill gets on to the statute book. That, I think we have established, is nonsense. Far ahead, a great new treaty could touch on a number of the issues we are looking at tonight. But the idea of a stream of referenda, which I know noble Lords in many cases dislike intensely, is unrealistic. In two highly eloquent pieces of oratory in two debates, my noble friend Lord Deben has let us know that he does not like referenda at all. That is my impression from listening to his words. He is perfectly entitled not to like referenda at all. However, he must face it: they increasingly creep into modern government, particularly in this internet age when 2 billion people, out of 6 billion on this planet, are on the web every morning. This obviously empowers people and leads to more consultation of public opinion than ever before in many democracies. It goes with parliamentary representative government; it does not undermine it, provided it is handled in a sensible way.

I query what my noble friend Lord Deben said-although I hesitate to do so because his eloquence is mighty on these matters-about the British people not liking referenda. A survey last year by the European Parliament election study found that 81.4 per cent of people in the United Kingdom agreed that EU treaty changes should be decided by referendum. That is a lot of people. I love the bravery of people like my noble friend Lord Deben who stand up for their own views, even when they are those of 10 per cent, 15 per cent, 5 per cent or even 0 per cent of people. That is fine-let them do so. However, to say that the British people as a whole are against this sort of approach, in the right way on the right occasions, is just not correct.

I turn now to the various issues that have been raised by these amendments. Climate change was first on the list. Several noble Lords expressed the concern that we need some new treaties for the EU to be more effective in this area, and that we did not do too well at Copenhagen. The treaty package that we have now was ample for the European Union to act on behalf of member states at Copenhagen. It did not do so for all sorts of detailed reasons, of which I suspect my noble friend Lord Deben and others who follow these things closely are well aware. We might need new treaties only if, for instance, the EU conceived the idea of a pan-European carbon tax or something like that. Is that something that we want to see? Is it not something that we would wish not only to examine in our Parliament, but to be part of a package that should be put to the British people? It would be a very brave person who suggested that something like that could just be put into a treaty and dealt with by means of some parliamentary Act and no more than that.

Energy is a more interesting area still. A great deal of debate took place across the Floor on energy issues. A new competence on energy was added under Article 194 of the Lisbon treaty. The Bill would not affect that at all. Climate change is specifically covered under Article 191 of the TFEU, and is therefore already covered by the treaties. Article 191 on Union energy policy, which my noble friend Lord Wallace has already quoted, aims to promote the interconnection of energy networks. Article 170 of the TFEU says that,

"the Union shall contribute to the establishment and development of trans-European networks in the areas of transport, telecommunications and energy infrastructures".

My noble friend Lord Deben is right. The need in Europe is for interconnectors. There is, at times, plenty of electricity and gas available across the whole of continental Europe, but it is in the wrong places and the transmission systems are inadequate. If there are difficulties with our Russian friends, while there is gas in some areas, other countries are cut off completely. Transmission systems are needed. However, I contend that the way to get those transmission systems and interconnectors in place is to work through elaborate co-operation within the treaties. If one wants delay, start on a new treaty. Start that elaborate two-year process, which will lead to endless negotiation, argument and compromises. At the end of it, I would place a strong bet that we would have fewer interconnectors, pipelines and trans-European electricity grids than we would through proceeding by the complex, but nevertheless available, degrees of co-operation under the existing treaties.

The next item on my list is piracy, on which the noble Lord, Lord Davies, spoke extremely eloquently. He is right that this is an extremely serious issue. I was recently in Norway where people told me that they were losing one ship a week. There is no doubt that this is potentially an extreme danger in the entire Indian Ocean and the Gulf of Aden. Indeed, the coast of Somalia and the whole east coast of Africa could become a no-go area. The EU already operates in a cohesive way under the CFSP. My noble friend is right: the border issue is being addressed through a whole range of international bodies, including the UN. It is all co-ordinated highly effectively under British leadership through the Bahrain contact centre.

Matters concerning common rules of engagement are fairly well harmonised although more resources are needed from all sides. The Chinese and the Indians are contributing and the Americans have patrols but we need more resources. We probably need more aerial surveillance, perhaps even UAVs. Above all, we need more effective treatment when pirates are caught in terms of deciding who imprisons them, convicts them and holds them. That is a very difficult issue involving careful negotiations with Kenya and Somalia, although there is not much hope on that front, and Somaliland, where things look better. Again, I can think of no better way of delaying the urgent measures that are now needed than by setting out on a new treaty and a two-year treaty process to try to get co-ordination between the navies of the 27 countries. I am completely baffled by the approach of noble Lords who think that plunging into the complex area of changing treaties through these devices would meet urgent problems; it would not. It would mean a lot of argument and delay and certainly would not meet the problems concerned.

We need a more co-ordinated approach among the nations of north Africa. The European programme has so far been somewhat marred by different views within the European Union on the whole question of the degree of intervention needed. There is no doubt that the powers are there; all one needs is agreement between the parties to develop with other countries-the United States and in the Middle East, and perhaps with the African Union but certainly the Arab League-more effective support systems to follow up that happy day when we see peace and a settlement again in Libya and, indeed, in the other countries where Arab revolution has taken place.

I heard mention during the debate of the need for more flexible rules on immigration and asylum. Perhaps they are needed but, again, the proposition that treaty changes are needed and should be brought forward as part of some large treaty-changing pattern to solve these problems seems to stretch credulity. Treaty changes are not the answer to the great problems of developing a more effective European Union in this very complicated world where the entire pattern of power and influence has changed and shifted eastwards and, indeed, has dispersed to the millions of people now operating through the internet and modern information systems. I just cannot conceive that in some dire way this Bill is standing in the way of the necessary array of treaty changes which will be needed.

As I think the architects of Lisbon hoped, a new treaty may arise in the longer-term future, but that is some way ahead. It may be five or 10 years away. It could be a very big package indeed designed to adjust the European Union to the new international landscape, just as my right honourable friend the Foreign Secretary is seeking, through his speeches in the network world in which we are now operating, to adjust the position of the United Kingdom and the whole European Union stance in relation to Asia, Latin America, the emerging powers and Africa. The rising, looming power of China probably needs adjusting for as well. I would not rule out the need for a treaty five or 10 years ahead. When that treaty comes, it will contain many issues that involve extensions of competence. It might even contain issues that involve the retreat of competence, but the extensions of competence will be there. Extensions and transfers of power will probably be there, and that treaty, in the view of the coalition and of 84 per cent of the British people, will require a referendum. That is what some-I admit, not all-of us argued for over the Lisbon treaty. That is what the Government agreed to over the constitution for Europe, which was the predecessor of the Lisbon treaty, and that is what most people in the United Kingdom want to be reassured about. To make certain that that happens, we must have an admittedly elaborate and complex set of arrangements to ensure that all kinds of transfers of power and competence do not creep under the radar or take place without proper transparency and consultation of the British people after the necessary parliamentary Acts have been passed.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Chair, EU Sub-Committee F - Home Affairs 10:45 pm, 3rd May 2011

I am sorry to interrupt the noble Lord, but no one, as far as I know, has tabled an amendment to Clause 2. It states that if there is a major new constitutional package there will have to be a referendum. No one has argued about that-not one person. What we are all arguing about is whether you need this cascade of Clauses 3, 4, 5 and 6 that block off the non-intergovernmental conference treaty big-package route. Honestly, I ask the noble Lord not to answer the wrong question. All the amendments relate to this cascade of referendums for matters that are dealt with within the Lisbon treaty.

Photo of Lord Howell of Guildford Lord Howell of Guildford Minister of State (Foreign and Commonwealth Office) (International Energy Policy)

The noble Lord, who is very skilled in these matters, knows that he is putting the question upside down. It is dangerous to halt a cascade, because you may have to divert it, and the cascade that the Bill is designed to halt is the cascade of small competence and power transfers that have been going on over the years in many areas and have caused a lot of people to fear that competence creep-I am sorry to repeat that unfortunate term-and power creep are continuing all the time, allegedly under parliamentary control, but somehow without proper public discussion, and certainly without the consent of the people.

The referendum-lock device is precisely to ensure that when the big transfers of competence and power come, they are in a clear package. The noble Lord said that that was the wrong thing to talk about, but that is the way that it will happen, like the Lisbon treaty, and the country will be invited, because of the many items that will involve competence transfer, to have a referendum on them. That is precisely my point. There will be no cascade because, if the Bill works effectively, which I think it will, the great changes needed in the 2020s and 2030s in the European Union, as it adjusts to new conditions, will have to be treated in a substantial treaty that must and will automatically trigger a referendum. That is entirely right and it will offend only those who, like my noble friend Lord Deben, do not like referenda at all. However, for most people, including 84 per cent of the country, or their children, that will be the right way to proceed. It should ensure that some degree of trust, reconnection and support for the great European cause is resurrected. At present that support is fading away very fast. It is draining away in Finland, Hungary, to some extent in Poland and in many other countries. I am not sure that even in Germany these matters carry the popularity and support needed for the kind of reforms we want to see in Europe.

This is a very serious matter. I do not say that this Bill alone will do the job of reconnection-of course it will not. We need leadership, articulation and an understanding that giving more and more powers to the centre is an outdated 20th century idea and that the more you accumulate powers at the centre, the more you get public disaffection and remoteness. That must be understood. It must be understood that in this networked age, you do not need centralisation to carry out effective powers. Once that is understood, we will begin to get shapes in the European Union that relate to and connect with the people, as the Laeken declaration pleaded for almost a decade ago. That is why I believe that these exemptions will increase mistrust and take Europe back, rather than forward to the 21st century adjustment needed in the information age, and why I therefore plead with the noble Lord and his colleagues to withdraw the amendment.

Photo of Lord Liddle Lord Liddle Opposition Whip (Lords) 11:00 pm, 3rd May 2011

My Lords, I fear that in trying to be helpful to the Government in helping the business in Committee to go forward more quickly, we have ended up with a long omnibus debate and are sitting late. I shall be very brief.

In his reply, the Minister somewhat distorted what the Opposition are trying to achieve. We are not arguing for vast new treaties; that is a straw man. We are not arguing for the massive centralisation of powers in Brussels; that is a straw man. We are arguing that there are issues that we as a nation state cannot tackle effectively on our own. There are issues such as energy and climate change, our dealings with north Africa and the financial crisis in the banks, which are cross-border in nature. There are issues that have to be tackled at EU level which the nation state can no longer tackle, and we must ensure that there are the necessary competencies and powers at that level to act effectively. Otherwise, we will let our people down. That is not an argument for centralisation or for sweeping new treaties, but it is an argument for flexibility in cases where we discover-because we do not have perfect foresight and neither do the drafters of treaties-that those powers are lacking.

I argue that in the contributions that we have heard from all sides of the House tonight, we have had examples of where, not in 10 years' time but possibly in two years' time or less, we may need changes. There are issues such as human trafficking; energy, where in order to deal with networks and negotiations with third parties we may need to establish an exclusive competence at EU level; north Africa, where for a group of new democratic countries we may have to adopt an entirely new type of relationship; and for the financial crisis in the banks, where we may need a cross-border resolution mechanism.

The Government should be open to the Article 48(6) simplified revision of the treaty of the type that the euro area has had to agree to to establish the stability mechanism, rather than closing the door. That is the test of an effective European policy; "Are you prepared to do the things that are necessary to make Europe effective where it needs to be effective?". The truth is that this Government do not want to do that. Instead, they want to apply this referendum lock, which will not enable Europe to be effective in all circumstances, and they are going to throw away the key.

Our position is a pragmatic one. It is not saying that these things are inevitable; it is saying that we have to be open to them happening. As part of the structure of the Bill, the Government are saying that there are certain grounds for exempting measures from the need for a referendum. We have tried to illustrate what those grounds might be and, on some of the other flexibilities in the treaty, we have tried to demonstrate where the significance test might be widened from the very narrow circumstances in which it is currently allowable.

If the Government want to improve the Bill, I urge them to come back to this House by Report with a set of amendments that give us cause for hope that Britain can play a leading role in the European Union rather than always having to say to colleagues, "No, we can't possibly agree to that because we're not allowed to have a referendum". I beg leave to withdraw the amendment.

Amendment 23C withdrawn.

Amendments 23D to 23M not moved.

Clause 4 agreed.

House resumed.

House adjourned at 11.07 pm.