EU Referendum and EU Reform (EUC Report) - Motion to Take Note

– in the House of Lords at 11:37 am on 15th June 2016.

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Moved by Lord Boswell of Aynho

That this House takes note of the Report from the European Union Committee The EU referendum and EU reform (9th Report, Session 2015–16, HL Paper 122).

Photo of Lord Boswell of Aynho Lord Boswell of Aynho Chair, European Union Committee, Principal Deputy Chairman of Committees

My Lords, alongside The EU referendum and EU reform report, the House will also be debating my committee’s report, The Process of Withdrawing from the European Union, and the report from the Science and Technology Committee on EU Membership and UK Science, to which the noble Earl, Lord Selborne, will speak. Our committees have a history of harmonious collaboration on European matters, and I had the privilege, a generation ago, of serving on a research council under the noble Earl’s chairmanship. I look forward to his contribution with anticipation. I record on behalf of the committee our thanks to its impeccable staff and to all our many correspondents and contributors.

I am delighted that we have the opportunity to debate these reports before 23 June—referendum day. The process that has led up to that momentous decision has, of course, been a continuing preoccupation of the EU Committee. At the end of the previous Parliament, we reported on the coalition Government’s balance of competences review, highlighting in particular the Government’s failure to provide an overarching summary of their findings; a summary that might have driven, or at least influenced, proposals for EU reform. Then, last July, we published a short report warning the incoming Government of the need to approach their negotiations inclusively, and in particular to have regard to the importance of parliamentary scrutiny. The problems we explored in these two reports were never fully tackled and have played into the end game on which we now report.

Before I delve further, I should emphasise, or re-emphasise, our committee’s settled view that it is not for us to take a view on whether the UK should remain in or leave the EU. That critical decision is for the British people next week. Our remit is to scrutinise Her Majesty’s Government and to interrogate the approach which—in distinction from that of the political campaigners on both sides of the campaign—they are adopting in presenting their official case for remaining in the EU.

That is the basis for our current report on EU reform in which we analyse the process whereby the Government decided on their four negotiating “baskets” of sovereignty, fairness for the eurozone’s ins and outs, migration and competitiveness. These negotiating objectives were not confirmed for several months following the publication of our report in July 2015. Perhaps it was only pressure from Europe that crystallised them in the form of a letter from the Prime Minister to President Tusk last November.

Chapters 2 and 3 of our report dissect the rather opaque process that led to the publication of this letter. It is history now, and I shall not dwell further on it. It was the so-called “new settlement for the United Kingdom”, agreed by the European Council last February, that in effect fired the starting gun for the referendum campaign. Chapter 4 of our report analyses in some detail this new settlement, in which the Government sought to achieve their reform objectives.

In broad terms, we found that some concrete progress had been made, reflecting perhaps a welcome degree of realism in the approach of all parties. The new settlement takes the form of an international law decision. Given the known difficulties of treaty change, and the explicit buy-in of all member states and the European institutions to this process, we accept this as a realistic and viable approach to delivering commitments to reform.

If the UK votes to remain, we will need to pursue further our detailed scrutiny of these provisions; if we opt to leave, the deal automatically falls away. The assurances received on the UK opt-out from the commitment in the treaty to ever closer union, whatever their intrinsic merits, appear to signal conclusively an end to any ratchet process leading towards greater centralisation. We concurred with the Foreign Secretary, who told us in evidence that we have “reached the high-water mark” and the intense involvement in our national life which,

“irritates so many people in this country, is a thing of the past”.

Under the same sovereignty heading, the new settlement also sets out an enhanced role for national parliaments by means of a so-called red card—that is, power for a 55% majority of national parliaments, acting collectively, to stop an unwelcome proposal. We have no objection in principle to this, but I remind noble Lords that my committee has also consistently argued for what I have called a “forward gear”, involving positive upstream engagement with European policymaking, whether it is better regulation, simplification of laws or more widely. Hence, in conjunction with a number of other national parliament chambers, we as a committee pioneered last year the first European green card on food waste.

On the crucial but legally and technically complex issue of fairness between eurozone and non-euro states, we see the terms of the new settlement as providing welcome clarity and assurance that the interests of both groups will be safeguarded. We are also not alone among member states in wanting a more competitive Europe, and we have the European Commission as allies in this. We welcome the agreement to press for better regulation, including an annual progress report, and the intention to reduce administrative burdens, particularly on SMEs, as well as to press forward an active and ambitious trade policy. We have of course heard similar aspirations in the past and we shall have to hold the European institutions to account for them.

The final main “basket” of the negotiations relates to migration, or free movement. Self-evidently, this is the one with the greatest political salience. The analysis in the report speaks for itself, and, in light of more recent controversy, I do not intend to rehearse it now.

I turn to our short report on the process of withdrawing from the EU. This was based primarily on evidence provided by two experienced and expert lawyers, Sir David Edward and Derek Wyatt QC, supplemented by our excellent internal committee legal advisers. The report is largely self-explanatory, but if I may summarise, our key finding is that Article 50 of the Lisbon treaty provides the only means of withdrawal consistent with EU and international law. Withdrawal is final only once a withdrawal agreement enters into force, so a member state that had given a notification under Article 50 would be legally empowered to reverse that decision before this stage.

Photo of Lord Lawson of Blaby Lord Lawson of Blaby Conservative

I was slightly puzzled when the noble Lord said that Article 50 was the only means. Is he saying that the 1975 referendum, when the Lisbon treaty and Article 50 did not exist, was a complete fraud because we could not have left anyway?

Photo of Lord Boswell of Aynho Lord Boswell of Aynho Chair, European Union Committee, Principal Deputy Chairman of Committees

My Lords, provisions in the Vienna convention on treaties would enable a member state to withdraw from any international obligation by consent of the parties involved. As the noble Lord rightly said, the Lisbon treaty followed long after the 1975 referendum, in which we probably both participated. In order to be consistent with European and international law—which, of course, are obligations for Ministers as well—the treaty confines any action to the terms of Article 50, under which it would have to be carried out. I hope that that is helpful to the House.

Notwithstanding this legal argument, which I have some diffidence in opining, it has not escaped us that there would of course be political consequences on both sides of the argument in doing so. On the practicalities, the process of negotiating withdrawal would be complex, involving, among others, vital issues of trade policy and complex issues of rights acquired by individuals, as well as the need to review our existing body of law. It can be done, but it will take time—probably several years—to complete.

Photo of Lord Spicer Lord Spicer Conservative

On Article 50, surely force majeure will come into play. Is it realistic to suggest that a nation state could be forbidden from leaving the European Union if it wished to do so?

Photo of Lord Boswell of Aynho Lord Boswell of Aynho Chair, European Union Committee, Principal Deputy Chairman of Committees

My Lords, the question is not whether a nation state would be inhibited from doing so, because the Lisbon treaty specifically empowers and provides a process for it. The question for the noble Lord and this House as a House of law and proper procedure is how we may meet our international obligations if the nation decides to initiate that process—no more, no less.

I am conscious—although it is beginning to seem that the note I had marked may be a little obsolete in the circumstances—that I have yet to address the more overtly “political” issues which loom large in all our minds as we approach the referendum. Reverting to our report on EU reform, perhaps the key question is: what happened to the new settlement? A little like the dog that did not bark in the night, its almost complete absence from the current debate on EU membership is telling. This was the agreement on which, we were told, the Government’s support for EU membership depended, yet it has had almost no influence at all on the referendum campaign.

This takes us back to our starting point: the Government’s failure initially to provide an overarching assessment of the findings of the balance of competences review; the failure to offer a considered, evidence-based diagnosis of what, if anything, is wrong with the EU; and what the real costs and benefits are to the UK, so that we can understand what needs to be fixed for the UK to remain a member. If the British people need anything over the next eight days, it is real, objective evidence, on the basis of which they can make an informed decision.

This brings me to my final point. As a committee, we have tried our best to fulfil our duty in tackling complex technical issues around the process leading to the referendum, and we have done that in our traditionally non-partisan style. Yet we also stressed that the Government’s case for EU membership needed to be an inclusive one, crossing party-political lines and speaking to all the peoples of the United Kingdom. We suggested that it needed to be based on a positive vision of the UK’s role within a reformed EU, and we warned that a campaign based on narrow national economic self-interest, alongside mere fear of the alternatives to membership, might be insufficient. Noble Lords may wish to reflect on whether our plea has been listened to, or whether our warning has become a reality.

The decision in eight days’ time will be as much of the heart as of the head. If the Government are to persuade the people to endorse their recommendation to remain in the EU, they need to focus on facts, but also appeal to the feelings and ideals of the voting public. It is not too late, but in that somewhat sober context, I beg to move.

Photo of The Earl of Selborne The Earl of Selborne Chair, Science and Technology Committee (Lords) 11:51 am, 15th June 2016

My Lords, it is a great privilege to follow the noble Lord, Lord Boswell. It is most appropriate that the report of the Science and Technology Committee on EU membership and UK science should be debated with these two reports from the European Committee. I thank our specialist adviser, Professor Graeme Reid, our clerk, Chris Clarke, and our policy analyst, Dr Cat Ball, for their contributions to this report. As I am introducing the third Motion of this debate, I understand that I might be allowed a little longer than the advisory time of six minutes.

Once the date of the referendum on the United Kingdom’s continued membership of the European Union had been announced, the committee decided that it would be important to conduct an inquiry to help understand the wide-ranging influences, for better or worse, that the EU has on UK science and research. Science is, after all, a major component of the UK’s membership of the European Union, with nearly one-fifth of EU funding to the UK spent on research and development. Our inquiry aimed to understand and characterise the principal linkages between EU membership and UK science, and this proved rather more complicated than expected. In order to inform our investigations, we sought a diagrammatic representation of the main ways that the EU supports science and research. We could not find such a diagram so we have attempted, in figure 2 on page 28 of our report, to draw up such a representation ourselves.

The EU supports science and research through five main mechanisms: namely, the Horizon 2020 programme, formerly the series of framework programmes 1 to 7; the European structural and investment funds; sectoral research and development programmes; other connected programmes; and, lastly, partnerships. I will refer just to the Horizon 2020 programme and the structural and investment funds for reasons of time.

Horizon 2020 is the EU’s flagship programme for science and innovation. It replaces the seven successive framework programmes and will run from 2014 to 2020, with a budget of €74.8 billion. Funding is mostly allocated competitively through calls for proposals to which researchers and organisations can apply. However, criteria for allocating funds vary and also include scientific excellence, alignment with a number of strategic objectives, geographical and disciplinary diversity and potential for commercialisation.

The exception to this is the European Research Council funding, as its funds are awarded solely on the basis of scientific excellence. Its grants have neither thematic priorities nor geographical quotas. The United Kingdom is the top performer across member states in terms of securing European Research Council funding. This reflects the quality of UK science. We heard from universities that this funding is equivalent to having another research council. Framework programme 7, which ran from 2007 to 2013, provided 3% of the total UK expenditure on research and development. The evidence we received from national academies, professional bodies, universities and research institutes was overwhelmingly enthusiastic for EU membership.

The university sector was our largest recipient of the framework programme 7 funds. However, it is not the university sector which undertakes the majority of research and development in this country. Sixty-four per cent of UK research and development is conducted by business, yet businesses attracted just 18% of the total funds awarded to the United Kingdom through framework programme 7. Participation of UK businesses in framework programme 7 was below that of Germany and France. Indeed, it was below the EU average. However, this low participation was not uniform across the spectrum of United Kingdom businesses. Small and medium-sized enterprises attracted more funding than French SMEs and a similar amount to German SMEs. It appears that it is large businesses that are particularly underrepresented in the United Kingdom’s EU-funded research and innovation portfolio.

We formed the conclusion that while it was clearly for businesses to decide for themselves whether they wish to engage in EU funding schemes, there is a need for the United Kingdom Government to assess whether their support for businesses which seek to engage in EU funding schemes is as effective as that of other member states. In this respect, the support formerly provided by regional development agencies might have deteriorated with the absence of local enterprise partnerships.

The purposes of the competitive framework programme funds and structural funds for research and innovation are different. By designating a portion of structural funds for research and innovation, the European Commission aims to boost scientific capacity across member states and increase the success rate from regions with weaker economies. It is not surprising, therefore, that the UK does not benefit greatly from structural funds for research. However, we were concerned by the apparent lack of evidence as to whether this spending has actually raised the scientific competitiveness of recipients, and we suggest that the evidence should be assembled by the European Commission.

It was repeatedly put to us that one of the most significant aspects of the UK’s EU membership is provision of opportunities to collaborate. A number of EU schemes enable researcher and student mobility across Europe, including the Marie Sklodowska-Curie actions and the Erasmus+ schemes. Many would maintain that the provision of collaborative opportunities is perhaps the most significant benefit that EU membership affords science and research in the United Kingdom. These collaborative opportunities are not just between member states but can extend to non-EU and non-European countries.

Although witnesses highlighted several grievances with the EU regulatory environment, the majority of evidence suggested that the regulatory harmonisation brought about by the EU was of benefit to the UK. Such harmonisation can provide a strong platform for collaboration and commercialisation in science and research. The increasingly global nature of science and business means that international harmonisation is becoming ever more relevant. However, those EU regulations highlighted to us as inappropriate or defective included: the protection of animals used for scientific purposes directive, the protection of personal data directive, the deliberate release of genetically modified organisms directive, and the clinical trials directive. On the latter directive, a new clinical trials directive has now been developed and is expected to come into effect in 2017. The Academy of Medical Sciences stated that the United Kingdom health and research community has played an important role in influencing the improvement of this regulation.

We found that the UK plays a leading and valued role in the development of EU policies and decision-making processes that relate to science and research. UK scientists in various European Union committees and organisations act to ensure that the UK’s voice is clearly heard and that the EU remains aligned with the advancement of UK science. The long-term prosperity of this country will be highly dependent on attracting inward investment into the new technologies that will provide jobs in the next decades. All scientific collaboration, whether with our European neighbours or elsewhere around the world, must be fostered, and the European Union should be credited for having advanced this cause.

Photo of Lord Liddle Lord Liddle Labour 12:00 pm, 15th June 2016

My Lords, I declare an interest as a member of the EU Select Committee and say what a pleasure it is to serve on that committee under the wise chairmanship of the noble Lord, Lord Boswell. I should like to address my remarks to the shorter of our reports, which attempts to answer the question: a vote to leave is a vote to leave, but what happens then? I will express some personal views on this subject. The leave campaign tells us that it is all very simple, and it has launched something today to that effect. Parliament would legislate to do such things as end the jurisdiction of the European Court of Justice over the UK, end the free movement rights of European citizens, stop EU budget contributions and so on, and we would negotiate a free trade deal with our EU partners by 2020.

With respect, the campaigners have obviously not taken the trouble to read your Lordships’ report. Their plans would pitch Britain into a limbo, a state of ill-defined economic and legal uncertainty that would be the most serious self-inflicted damage to the UK economy since the three-day week, which I remember being imposed in December 1973. This economic and legal uncertainty runs a very significant risk of weakening private investment, particularly overseas investment, including overseas purchasing of UK assets, over the next few years. We have needed that overseas investment to continue funding our very substantial trade deficit, which has been in place for a generation. That would be put at risk. It would create an environment in which firms that are able to move their activities to the legal certainties of the single market would do so because otherwise their boards would be failing in their duty to their shareholders to minimise risk. The logic of a Brexit is that any British-based company whose business is mainly with the European single market would, in the event of a leave vote, substantially reduce its risks by relocating its activities within that market. That is what I believe companies will do.

Why do I talk about limbo rather than a quick and clean exit? In my judgment, this would be a painful and protracted state of limbo before—I am not sure I have the theology right—we reach the permanent purgatory of Brexit. It is clear to me how our EU partners would react to a leave vote and the Brexiteers’ plans. They do not want us to leave the EU and there will be a lot of real sadness at our parting, but I do not think there will be any special favours for Britain. Their granting Britain special favours would only encourage the populist forces in their own countries. Like our Brexiteers, they are wrongly and unscrupulously seeking to blame the European Union for difficulties in European societies, in the rest of Europe as well as in Britain, in finding an adequate economic and social response to the structural tensions and injustices of globalisation. That, essentially, is the problem.

Instead, the EU will decide that it will negotiate with Britain in a civilised way, but only within the terms of the treaties that we have signed and that this sovereign Parliament has agreed. The EU would say that Article 50 provides the path and that it will not talk to us unless we follow it. The EU 27 would instruct the Commission to draw up a negotiating mandate for British withdrawal that the European Council must then endorse, without of course Britain being present.

This mandate will make clear that there can be no continued access for Britain to the single market unless we meet existing obligations on free movement and contributions to the EU budget. On this point, the EU will never yield. I expect this mandate to be agreed relatively quickly later in 2016, but there will then be a pause for the French and German elections, so we will not get around to anything serious until the end of next year. After that I anticipate a lengthy stand-off, with a new British Government under a new Prime Minister, and probably after a general election in which the Brexiteers will have sought a mandate to pursue their demands.

However, the Brexiteers are fundamentally divided and inconsistent on one central point, which is their attitude to the single market. On one hand, they say that Britain will no longer be part of the single market and will be free to take back control. On the other, they say that a free-trade agreement will be dead easy to negotiate because we currently meet the regulatory requirements of the single market. Under their plan, they say that they will not accept free movement and contributions to the budget.

As for the regulatory obligations, they use these at one point to argue that we could easily have a free-trade agreement, while also saying that they want to scrap all these regulations because they think it will mean a huge boost to British enterprise. The truth is that the proposition that a free-trade deal will be easy to negotiate depends on an essential fallacy: that we will stick to the single-market rules that the Brexiteers have no intention of sticking to.

Is their aim a better deal, on the Norway model, or is it for Britain to pursue a wholly different economic course? They cannot agree among themselves and it is unlikely that they will get a majority in either House of Parliament for a credible leave option. Vote leave has no practical alternative to British membership of the EU. As Nye Bevan memorably said of unilateral nuclear disarmament, it is an emotional spasm. We should brace ourselves for a long period of limbo that could do incalculable damage to the British economy and Britain’s working people. I pray that it will not happen.

Photo of Baroness Falkner of Margravine Baroness Falkner of Margravine Chair, EU Financial Affairs Sub-Committee 12:09 pm, 15th June 2016

My Lords, I should declare that I am a co-owner of a property in the eurozone area and that I am married to a citizen from another EU member country whose right to remain in the UK could theoretically be affected by Britain leaving the European Union.

It has been a pleasure to work under the chairmanship of the noble Lord, Lord Boswell, and the committee has been extremely well served by its chairman and its secretariat through the inquiries and its scrutiny work. For my part, as chairman of the sub-committee responsible for economic and financial affairs, I will confine my remarks to those areas where additional safeguards have been obtained in economic governance.

I turn to the new settlement for the UK. It is an extraordinary settlement when viewed from other EU capitals. One has only to talk to the delegations from the 27 other countries to see how special this new status the UK has secured is in their eyes. We are not in the eurozone or in Schengen. We have chosen our opt-outs in justice and home affairs and we now have safeguards on the impact of eurozone integration, on welfare, on sovereignty and on further integration. The other EU countries are rather envious that we can dine à la carte while they are stuck with the set menu.

This renegotiation has also been dismissed for lacking legal force, as our chairman pointed out. In the committee’s view, the terms of the new settlement have the same legal force as any other intergovernmental treaty under international law, so those who rubbish the legal status of the renegotiation need to explain to the public why any other treaty has legal force if they believe that this one does not. Why should the public believe that our international obligations under the UN charter hold, or indeed under the WTO, in which the Brexiteers have such faith as the basis of a new trading relationship—oblivious, of course, to the fact that the WTO does not cover services or financial services trade? That is such an important and vital aspect of the UK’s relationship with the EU and the rest of the world. So the question they need to answer is why their new trade deal would have any legal basis if this renegotiation does not. Moreover, the renegotiation specifically states at Article 7 of the section on economic governance that the provisions under Section A will be incorporated into EU law the next time treaty change takes place.

On the details of economic governance, the UK and my committee had concerns that eurozone integration would disadvantage sterling. In Section A of the new settlement the UK has ensured that there can be no discrimination against those who do not use the euro and that our interests are protected. There was concern that eurozone caucusing might leave us outside the room, so to speak, when decisions are taken by the eurogroup. That, too, has been addressed and we have secured safeguards not only for ourselves but for the other eight countries currently outside the eurozone. We also have the additional safeguard mechanism whereby, if we feel that Section A has not being upheld, we can escalate our concern to the European Council, which, if our argument has merit, is required to,

“do all in its power to reach … a satisfactory solution”,

within a “reasonable time”.

I have been bemused by Vote Leave’s obsession with the Five Presidents’ Report. This, for the uninitiated in the Chamber, is a paper published last year by the leaders of the five EU institutions. The sub-committee I chair has conducted an inquiry into this and we published our report only last month. We say, in terms, that the ambitions of the five presidents apply mainly to the eurozone. Where they do not, such as recommending national competitiveness boards, they are voluntary. The Five Presidents’ Report is actually notable for saying so little. We commented on that in our report. We criticised it on the institutional direction and political structures needed for the eurozone to proceed to be successful. It is a very thin statement of good intentions. The conspiracy theorists in Vote Leave need to be pressed as to where they find all that they claim indicates the direction of European monetary integration—it is pure fiction.

I turn to the process of withdrawal, as the framework proposed by Vote Leave today sets out, and on which the noble Lord, Lord Liddle, has commented. We are led to believe from what one is tempted to call the presumptive Government—pace the Republican nominee; both have rather similar traits—that they will not need to use Article 50. Presumably they will take their time until 2020 to finalise the exit, including their new trade deal.

As noble Lords have heard, the legal experts consulted by the committee told us that Article 50 provided the only means of withdrawing that was consistent with the UK’s obligations under international law. If the UK unilaterally decided to start putting Bills through Parliament to disentangle ourselves—and, of course, this assumes that Parliament would be prepared to break its own treaty obligations in a very significant way, demonstrating to the world that it does not live by its word—the same UK, assuming Parliament were prepared to do this, would then seek to sign a whole lot of other treaties with the rest of the world, including the 27 other EU states, having spectacularly broken its word. What a non-display of bona fides this would represent.

So those who seek to disregard law while they sit in a law-making body need to bear one thought in mind. Trust is at such a low ebb in British political life, but the British public still expect their country to uphold the rule of law. That is the foundation of our democracy. This is a nation that values integrity, and if it finds that it has sleepwalked into a self-made disaster it will be a very long time indeed before it will permit itself to be led in that way again by that group of individuals.

Photo of Lord Jay of Ewelme Lord Jay of Ewelme Crossbench 12:16 pm, 15th June 2016

My Lords, I speak as a member of the EU Committee and draw attention to my interests in the register.

My own view is that remaining in the European Union and playing a full and constructive role in its policy and development at a crucial time for Europe is firmly in the United Kingdom’s economic and political interest, all the more so after the Prime Minister’s renegotiations. As the noble Lord, Lord Boswell, said, that is seldom mentioned now by either side, but the measures to protect the single market of 28 against a more closely integrating eurozone, in particular, seems to me of great importance, not just for us but for other non-eurozone members, notably Denmark and Sweden.

The report on the process of leaving the European Union makes clear that it would be uncertain and lengthy. In the immediate aftermath of a no vote, I suspect that not a great deal would happen, although the Prime Minister’s renegotiations would immediately fall. I leave aside any effect on the currency markets, or any effect on the domestic political scene, which I think is not for a Cross-Bencher to comment on, but looking further ahead I cannot see how, in order to respect our international legal obligations, we can do other than invoke Article 50 of the Lisbon treaty, leading to fraught and difficult negotiations with our 27 EU partners. Even if we did not invoke Article 50, it seems to me that we would still have to have the difficult, fraught and lengthy negotiations. I think that that is an important point.

As our report says, there would need to be two separate negotiations. What would be our relationship to the European Union? Would we be in the single market or not? What would be the implications for EU citizens in Britain and British citizens in the European Union? There would need to be a second negotiation on the process and timing of leaving. The articulation of those two negotiations is unclear, but it is clear that the outcome of those negotiations will be immensely important for the United Kingdom.

Those will be immensely important, too, for the rest of the European Union, but the context there will be entirely different. There will be a powerful desire to ensure that British exit does not stoke demands for other countries to exit or to seek a new relationship with the European Union. There will be other questions, too. What will be the relationship between France and Germany? What will be their relationship with the United States? And so on. We would not be immune from some of those concerns ourselves. We are already seeing the French start contingency plans for enticing London-based banks and bankers to Paris—I am sure Frankfurt will follow.

At the same time, the European Union will need to continue to confront the huge challenges that it now faces: terrorism, migration, and the need for closer integration within the eurozone. Dealing with those issues will not be made any easier by the need to hold complex and difficult talks with the United Kingdom—indeed, quite the contrary. The idea that these negotiations will somehow be straightforward and constructive, and that it will be in the European Union’s interests to give us more or less whatever we decide to ask for, seems implausible to say the least.

We will not just be negotiating with a bloc or with the Commission; we will effectively be dealing with 27 member states with 27 sets of vested interests, which they will want to see reflected in the negotiating mandate that is given to the Commission to negotiate with us. The German Finance Minister is upping the ante already by saying that membership of the single market will not be on offer to us after a vote to leave. I was in Paris when the French tried to prolong the ban on British beef following the BSE affair, after the Commission had declared it safe. With the Commission’s support, we saw them off. I mention in passing that British beef is not accepted into the United States. The chances that the French and other member states will not seek to further their own interests during their negotiations with us seems to me to be exactly zero.

Here is the irony: a vote to leave the European Union will lead to two, five, or up to 10 years of fraught negotiations with the other 27—us against them, with the Commission on their side—which will make the present relationship with the European Union look like sweetness and light. The tougher the negotiations—and they will be tough—and the greater the dissension and the greater the uncertainty, the greater will be the disincentive to invest in this country and the greater will be the consequences for jobs.

All this leaves aside the consequences of Brexit for the cohesion of the United Kingdom and, in some ways most worrying of all, the implications for the external border of the European Union running between Northern Ireland and the Republic, on which my noble friend Lady O’Neill spoke eloquently in the debate on the Queen’s Speech. My guess is that it would not be long after a vote to leave before there was an agonising cry of “How on earth did we get ourselves into this mess?”. It is my earnest hope that we do not take that risk.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch UKIP 12:22 pm, 15th June 2016

My Lords, I cannot help mentioning that, of the 34 speakers in this debate, I can see perhaps only two who think that we should leave the European Union. I remind your Lordships, and anyone who may read this debate—and indeed the one that follows, where I cannot see a single Brexiteer on the Order Paper—that your Lordships’ House is a very Europhile place, well-stocked with former government Ministers, Members of Parliament and servants of the EU, who between them have been responsible over long, and what they no doubt regard as successful, lives for bringing this country to its present state of subservience to the corrupt octopus in Brussels. It must be disappointing for them to see so much ingratitude and anger boiling up among the British people against the project in which they have invested so much and in which they so fervently believe.

That is why, during this referendum campaign, we have seen Project Octopus turning into Project Fear—we are told to be fearful of leaving the clutch of its tentacles. This morning we have Project Panic as the Chancellor threatens us with all manner of taxes and pestilence if, as the world’s fifth-largest economy, we dare to take our own place outside the failing project of European integration and simply join the 160 other countries in the world that have not made the mistake of joining it.

At the heart of this threat of economic disaster if we vote to leave next Thursday lies a wholly improbable scare: that somehow we would lose our present free trade with the single market and have to pay job-destroying tariffs to export into it. I propose to spend the rest of these few minutes examining that central fallacy in the remain position.

Government figures suggest that around 10% of our GDP goes in trade with clients in the EU—supporting some 3 million British jobs; another 10% goes to the rest of the world; and 80% stays in our domestic economy. But EU overregulation strangles all 100% of our economy, so 90% of it would be set free from Brussels overkill if we leave the EU. Of course, we would have to meet single market requirements for the 10% that we export to it, just as we do for what we export to the foreign markets outside the EU.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench

The noble Lord says that EU regulation strangles our economy. Can he explain why the OECD found that we were the second-least regulated economy in the OECD—that is, we were less regulated than its non-EU members—and that the only country less regulated than us was another EU member, the Netherlands? Perhaps he could give a little thought to that before he makes foolish remarks such as the ones he has just made.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch UKIP

My Lords, I do not see that anything the noble Lord has said alters what I said. The Dutch Prime Minister recently went so far as to say that he thought a large proportion of the Dutch economy was afflicted by EU regulations. The noble Lord will simply have to wait until we are out of the European Union and then he will see how we set ourselves free.

As I was saying, we would go on exporting to the rest of the world as we do now. We would meet the conditions required by the rest of the world, just as it pays to put the steering wheel on the left if you are selling a car to the United States.

The Government’s ONS Pink Book reveals that our growing trade deficit with the single market reached £85 billion in 2015. This means that manufacturers in the EU sold us £85 billion-worth more in goods than we sell them. If we accept the Government’s suggestion that some 3 million jobs support the 10% of our GDP which exports to the single market, this means that there are around 5.5 million jobs in the EU which support exporting to us. So if the politicians in Brussels try to impose tariffs on our trade together, that would hit 2.5 million more jobs in the single market than it would here and would not be tolerated by EU manufacturers.

Let us take the specific example of our car trade, which the Prime Minister and other Europhiles pretend would suffer a 10% tariff on its exports to the single market if we leave the political construct of the EU, with consequent job losses here. That must be nonsense, because we import twice as many cars from the EU as we export to it—1.7 million cars in and 700,000 cars out—while EU manufacturers also enjoy having 64% of our domestic car market. So those powerful manufacturers, with their suppliers and employees, will simply not tolerate a tariff which would damage them so much more than us, however much Herr Juncker and Herr Schäuble and sundry other mischief in Brussels might wish to punish us for leaving the rest of the EU.

Photo of Baroness Armstrong of Hill Top Baroness Armstrong of Hill Top Labour

I wonder if the noble Lord will reconsider what he has just said. Nissan in the north-east exported 800,000 cars in 2014, largely to the EU and all of them through EU agreements. It exports one in three of the cars exported from this country, so he has his numbers wrong somewhere. Nissan may well be thinking, given that its major owner is actually Renault, that if we in the UK are not in the EU, it might as well move to France.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch UKIP

My Lords, I do not, with all due respect to the noble Baroness, withdraw a word of what I said. The fact is that 1.7 million cars come into this country from EU manufacturers—they have 64% of our market. I was about to say that anyone who wants to read the detail of what I have just said should consult the globalbritain.org briefing notes, particularly Nos. 114 and 118, which give the detail which is supported by the Society of Motor Manufacturers and Traders.

Time moves on, but the noble Lord, Lord Lamont, made another good point in yesterday’s Daily Telegraph. The tariff which we might suffer on our goods going into the single market would be around 3%, if the Brussels politicians get their vindictive way, but the net £10 billion we pay to Brussels every year is equivalent to a tariff of around 8%. Whichever way you look at it, tariffs will not be imposed to our detriment, so the whole economic scare story falls away.

In conclusion, I am often asked what happens if we vote to leave the EU next Thursday. The answer is: nothing much in a hurry. For a start, it will take the Conservative Party until its conference in September to elect a new Prime Minister, who would start withdrawal talks, so there will be plenty of time for the Eurocrats—

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

On the thought about nothing happening next Thursday if the vote was for Brexit, until recently we were told that the idea of economic effects was scaremongering. Does not the noble Lord observe that the pound has been falling, and would he say that nothing will happen to the pound in this scenario?

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch UKIP

My Lords, a falling pound is not a disaster; it helps our exports, for instance. It has been falling, but not as fast as some other currencies. We will have to see what happens, but there is no disaster here: the pound goes up, the pound goes down. A far more important influence on trade is the interest rate and the exchange rate, so I really do not accept that point. The noble Lord is clutching at straws to make it look as though we will be in terrible trouble next Friday if we have voted to come out of the EU; we will not.

As I was just mentioning, the new Prime Minister will emerge next September and it is he who will start withdrawal talks, so there will be plenty of time for the Eurocrats and noble Lords to cool down and face the reality of the strength of our negotiating position. For instance, we do not have to trigger Article 50 immediately. We do not have to trigger it until we have pretty much agreed the terms of our departure. We have other strong cards to play in the meantime. For instance, we could offer to reduce our net £10 billion over a period of years. We could say that we will not impose tariffs on our trade together if they do not try to mess around with the City of London. We could withdraw from the supremacy of the Luxembourg court and take control of our borders in a way that causes them least inconvenience, and so on.

After all, we wish them well. We are not their enemies. We want to continue in friendly collaboration with them, but we want to get off their “Titanic” while we can.

Photo of Lord Howell of Guildford Lord Howell of Guildford Chair, International Relations Committee 12:33 pm, 15th June 2016

My Lords, the noble Lord, Lord Pearson of Rannoch, has certainly raised the temperature of the debate. I would say on his behalf that he is a reminder in the calm Chamber and calm wisdom of your Lordships’ House that outside, the temperature on this issue is rising—certainly at the more excitable end of the media—to boiling point. It is also worth commenting that so far in this debate—indeed, in the very facts that the noble Lord, Lord Boswell, set before us—there is now an assumption that Brexit, or leave, is a possibility. Indeed, the report addressed itself to how that possibility would unfold.

I was not in the excellent and learned team of the noble Lord, Lord Boswell. He has produced a very interesting report, which makes one think a great deal about these different possibilities, although there is one omission from the report, which I shall come to in a moment. I am not really surprised that, outside this House, in the wider world, the stay campaign is now on something of a back foot. You would have to be completely deaf not to hear the dismay and grumbles from many people—I suspect the majority in this country—who feel that this is the wrong debate about the wrong issues altogether. They believe that the renegotiation, which was attempted but has been somewhat forgotten, as the noble Lord, Lord Boswell, reminded us, was on the wrong basis and assumptions.

On the generality, although the big markets of the future are most probably in Asia, Africa and the Commonwealth, geography and history nevertheless keep us firmly in Europe. Every attempt to stand on the sidelines or wash our hands of continental European development has always ended in disaster, as the Prime Minister pointed out. In Britain, we have always, in the end, been drawn in. So for us, the sidelines, as we should long ago have discovered and as we have discovered, just do not exist. Incidentally, we keep being told that countries such as Canada and Japan have a perfectly good access to the single market without being members of the European Union. I have looked in the history books and I cannot find any time when Canada or Japan were in Europe—we are, and that is the basic difference.

The referendum project and the negotiation project started from the right point. The first sentences of the Prime Minister’s Bloomberg speech of 23 January 2013 made it clear that the task was to be about the reform and future of the European Union to meet 21st century conditions, not just the reform of UK relations within it on a bilateral basis. But then something went wrong, and the debate lost its way. Experts crowded in to insist that all should be reduced to a sort of shopping list of British demands, and that was what the negotiations had to be about, and that the fundamentals—the pillar principles of EU architecture—should on no account be touched, because they were the ark of the covenant. So what should have been from the outset to be a European question—I believe the Prime Minister wanted it to be that way—became a British question, and an increasingly narrow one at that. For example, reputable think tanks such as the Centre for European Reform advised loudly that on no account should the Prime Minister even try to address or look at fundamental changes in the Union. Yet far from not touching on the fundamentals of the European model, it was always those basic features and principles that needed addressing and opening up. Why? Because the EU is a 20th century construct, rooted in and founded on 20th century concerns, which it addressed to great effect. But it is trying now to operate in a totally transformed world environment where big data and new platforms have completely revolutionised markets, business models and trade patterns, and are about to change much more—and, of course, where huge migrant flows have become a permanent feature, and will get much worse.

The digital and big data age invalidates all past precepts. There is simply no need for the doctrines of centralisation, integration and control in Europe; nor is this any longer the path to efficiency and innovation in our respective economies. With not only trade but actual production processes being globalised, the very concept of a single, tariff-protected goods market, as was designed in the 1970s, 1980s and 1990s, begins to melt away. Instead, the technologies cascading out from digitalisation permit and demand decentralisation, flexibility, differentiation and localisation. Those are the underpinnings of what should be the vision that the report has been looking at. The age of platform technology not only alters radically the relations between consumers and producers but places individuals—voters or the grass roots, call them what you like—in a completely different relationship to the governing authorities. The ground beneath the feet of the ruling caste who created the EU hierarchy is being visibly washed away. We should be aware of that and should not shut our eyes to it.

My one criticism of the report is that it does not come to grips with this vital aspect of what is happening as opposed to what we think, from our various standpoints, ought to happen. Common sense, when it is allowed into the debate, confirms that neither of the extreme campaigning poles—the leavers’ nirvana of pure sovereignty and control snatched back from some embryo superstate, along with a magical insulation from migrant flows, versus the remainers’ happy and overcomplacent idyll of staying in the EU in its present form—is remotely available in the real and changing world or will ever be. The centrifugal powers of the information age, the ever-stronger restraining interdependence of all modern states, the absolutely unavoidable need for massive and continuous reciprocity and the spaghetti bowl of new types of trade and supply chains across the planet, which are now mostly in data and information form, will put paid to both those dreams. Big changes are certainly coming, but not the ones that either camp predicts, and we should surely be warned about that.

Whatever happens on 23 June, the time has come to analyse coolly the very fast- changing international order of things and put deep and serious intellectual effort into redesigning and preparing the European region—our region, whether we like it or not—for the torrent of changes from the wider world and the storms to come. Some, like the migrant flood, have already arrived. The global repositioning of Britain should be a central part of this story. Our relations not just with a changing EU but with America and the whole gigantic Commonwealth need revisiting. They are all relevant to the renegotiation approach. Meanwhile, we are being asked to travel on a wrong and fruitless route with the possibility of some very nasty shocks along the way immediately ahead. A still, small voice should be reminding us that as a nation we are making fools of ourselves instead of offering the best of ourselves, which could be very good indeed, when confronting the real issues and threats.

The debate now should be a negotiation—if that is the right word—about how Britain can help lead the European Union out of the trough and the time warp in which it has become entrapped. On the morning of 24 June, whether in or out has won, we will still find ourselves enveloped of necessity in a common purpose: to help reform and equip the European region in which we live for its survival in a totally transformed international milieu. It will be a context in which, with skilled statesmanship, bridges can be rebuilt between the bitter antagonists in this debate. Why? Because in today’s hyperconnected world all the countries of Europe, including Britain, are functionally inseparable. That is the reality that has to be faced or, to put it in more homely terms, the egg that cannot be unscrambled, Brexit or no Brexit. The EU today, troubled though it may be, is our village and our neighbourhood, but it is not our destiny. We should remain good neighbours but lift our vision to much higher challenges ahead.

Photo of Baroness Smith of Newnham Baroness Smith of Newnham Liberal Democrat 12:43 pm, 15th June 2016

My Lords, I welcome the suite of reports that came from your Lordships’ European Union Committee and, in particular, the fact that finally we have some documents contributing to the debate on the UK’s future in the European Union that are based on fact and evidence and, as The Process for Withdrawing from the European Union states, conclusions that are as far as possible neutral statements of fact. That has been very rare in the debate that we have seen in the country in recent weeks and months. We have seen fear, mendacity, hyperbole and hysteria on both sides of the argument, and that includes some of the actions of Her Majesty's Government; they cannot be exonerated either. We have heard from both sides arguments based on fear, myth and fantasy. But it may not surprise noble Lords, particularly the noble Lord, Lord Pearson of Rannoch, that I intend to focus particularly on the issue of what we might be withdrawing from and where we might be going to.

As the noble Lord, Lord Liddle, pointed out, there is an issue about why we are leaving and what the leavers think we are doing. First, though, I suggest that those who would have us leave, having already left the Chamber for today, have no agreed position on what it is they think they are leaving. If we are in the realms of fantasy and fairy stories, I thought I might give noble Lords a modern fairy story based on Goldilocks and the Three Bears. I suggest that at least three different visions of what the European Union currently is are being put forward by the leavers. The first, the Daddy Bear scenario, is that the EU is a dangerous place that has entrapped and ensnared us. As the noble Lord, Lord Forsyth of Drumlean, put it very graphically, we are caught in a bear trap, bleeding to death. One notes that this poor bear is looking at a £10 note, wondering how he got it when it used to be a £20 note, thanking God that it is not a euro note but still being extremely puzzled by how he ended up in an enterprise that he never thought he had agreed to be in.

Mummy Bear, meanwhile, is represented by my Cambridge colleague Dr Christopher Bickerton, who says that actually both sides of the debate have got it wrong and that the European Union is not overbearing, it is not a very strong edifice, it is not powerful and, although it is not particularly democratic, it is actually a mirage. The closer you get to Brussels, the more you see that the EU does not really exist. So Mummy Bear disappears as a mirage.

Meanwhile, Goldilocks goes and talks to Baby Bear, thinking, “Surely this third member of the family will have a better understanding of the European Union”. But she walks in and finds him with the godfather, Daniel Hannan, reading him a goodnight story: not Why Vote Leave but his elegant essay A Doomed Marriage: Britain and Europe—not necessarily something you would think was suitable for small bears or children, but nevertheless something that explains why the UK and the EU are fated to be separate and not to be together.

So we have three very different visions of what the European Union currently is, and the leavers cannot even agree on what it is they think they want to leave. Now they are trying to persuade us that we should vote to leave and negotiate some new arrangement. Of the three scenarios, the idea of a marriage breaking up is probably the best and most relevant. With regard to how we would get out of this European marriage, there is now a legal mechanism, thanks to Article 50, and your Lordships’ European Union Committee report makes it very clear how that would work legally. However, we do not have any practical experience of how this European divorce would work in practice because it would be the first time that Article 50 had ever been triggered. But one of the things that we know about divorce in the real world is that it is usually expensive and very often acrimonious. Even if a couple think they will be happier apart than together, it is very rare to have a divorce that does not include lawyers—who benefit probably more than anybody else—and that does not end up being costly. Then you leave behind the rest of the family.

The parallels with the United Kingdom leaving the European Union are surely clear. There is a legal process that is as yet untried, but the reality is one that is human, emotional and economic. The 27 other states that we are leaving behind, just like leaving members of a family, are not going to say, “That’s fine, off you go. We’re happy to see you go but we’ll carry on trading with you just like before”. Inevitably, those whom we leave behind will have a sense of hurt and betrayal, particularly given the amount of time that the other 27 states, plus the European Commission, spent on trying to create a deal that would work for the UK and keep us in the EU.

The leavers are not just saying, “Let’s have a divorce” but suggesting that they want another relationship altogether. Perhaps they want to go back to EFTA, which is what Daniel Hannan suggested recently—like a girlfriend they left behind years ago, trading her in for the European Economic Community because they thought that was the better offer. Like a long-term spouse, the EEC may have changed—but it is still your long-term spouse of over 40 years. Do you really want to give that up and walk away at considerable cost, trading it in for the mistress—the European Economic Area? Eventually you will find that being with a mistress is quite similar to being with a wife, except that your original family are a little unhappy, to say the least. They still have loyalty to the wife—the European Union. You have probably ended up with a slightly inferior relationship and have begun to wonder why you did it. Was it all worth taking the risk? I suggest not. The United Kingdom should not head towards an Article 50 type of divorce.

I hope that this will all turn out to have been just a fairy story, with Baby Bear waking up and finding that he has chased away the demons of Uncle Dan. I very much hope that citizens of the United Kingdom will do likewise on Thursday of next week; otherwise, they will only have bought into a cruel deceit and an unhelpful fantasy.

Photo of The Earl of Caithness The Earl of Caithness Conservative 12:50 pm, 15th June 2016

My Lords, I feel that I am rather in the position of Willie at the “Wet Review” as the person out of step. I am going to talk about the Motion on the Order Paper, but I shall at least be in step with the noble Lord, Lord Boswell.

It is strange to debate reports that your Lordships have produced—I was honoured to serve on the committee that produced the two reports under the chairmanship of the noble Lord, Lord Boswell—when we do not have a reply from the Government. However, that may be just as well, as we would not have had the debate if we had had to wait for the Government’s reply. First of all, I thank all those who helped us on the committee. I pay special tribute to the work of our clerks and our legal adviser, and I thank them for the help that they gave us.

I want to turn to what is called the “new settlement”, which was very much the subject of our first report. As the noble Baroness, Lady Falkner of Margravine, said, this is an important document, although it may well never see the light of day. From the evidence that we got, we came to some very strong conclusions about that new agreement and they are well worth studying.

We have talked in economic terms—I declare my interest as having just served on the EU Financial Affairs Sub-Committee, chaired by the noble Baroness, Lady Falkner—and we have been very concerned about competitiveness, which is addressed in the new agreement. It is one of the major issues that has been taken forward. Indeed, we say in Recommendation 27 that,

“the competitiveness element of the new settlement is a significant achievement”.

It is important to remember that.

Another point that I would like to highlight is the wording of the “new settlement”. It is completely wrong to have called it “A new settlement for the United Kingdom” because much of it relates to how the EU works. As we say in Recommendation 44, it is,

“a misnomer: as our analysis demonstrates, many aspects of the ‘new settlement’ reflect the views of most if not all Member States. If the ‘new settlement’ is in due course implemented, it will have far-reaching effects,” on how the EU works as a whole. It is sad that the new settlement has played no part in the discussion in the European referendum campaign.

Turning to the campaign, I think that the important thing to remember as part of the background is highlighted in paragraph 5 in our conclusions and recommendations. This refers to the UK being less knowledgeable about the EU than any other member state. I do not think that that position will have improved at the end of this campaign, and that, to me, is a real tragedy.

In paragraph 2 of our conclusions and recommendations, we say:

“The debate leading up to the referendum should be of a quality and breadth proportionate to the importance of the decision. It should be wide-ranging and inclusive, based on accurate information”.

Given that we know so little about the EU, the campaign has been darkness itself.

The noble Lord, Lord Boswell, is right to say that we are here to hold the Government to account, but at this point I want to widen my remarks. I am very angry and saddened by the campaign. I say to the noble Lord, Lord Pearson, that the leave campaign and the remain campaign have done this country no favours at all. To tell a lie often enough and to persuade the public to believe it, and to recklessly disregard history, is a fatal flaw. I am fearful that senior politicians are entering into the no-truth zone. That has huge implications for government in general. It is a serious worry.

There has been no attempt by either side to look at a way forward that could work for Britain and the continent. No effort has been made to project how the future might be or to realise that the eastern part of the EU and the countries adjoining it are in a state of almost anarchy in some cases and heading close to war in others. This is a supremely important time in Europe’s history and both campaigns are looking away and facing inward. That is a real sadness. Perhaps the campaigns have been burnished and become light only on the egos of those involved.

The press have not helped either. It is sad to see but one person in the press box today. Perhaps when we reform this House we might get rid of the press box altogether; it would make no difference to how things are reported.

I turn to the process of leaving. The EU is a highly legal structure. The noble Lord, Lord Jay, made that point, and I want to strengthen it. If Brexit wins the day, we will have to have two agreements: a withdrawal agreement and a new agreement for continuing ongoing business. However, because of the legal structure, if those agreements are what is called “mixed”—that is, they include member state and EU competences—they will have to be agreed by the EU Council, the EU Parliament, 27 member states individually, the UK Parliament and our three devolved Governments, because European law is involved. That is going to be hugely complicated.

One talks about the timescale in which this can be achieved. It is worth remembering, as is pointed out in our report, how little time was given to the renegotiation or “new settlement”. With Britain coming out of the EU, how much less time will the EU give to our problem of trying to negotiate a withdrawal and a new agreement, particularly when there are French and German elections? There is a two-year period—the legal advice is quite clear on this—and because the European Union is a legal structure, we are duty-bound as a country to obey international law. If we do not, we are providing new meaning to “perfidious Albion”.

I have come to the conclusion that referendums are divisive and very distracting. The result of this referendum will not end the problem or the debate on Europe. It is merely a stepping stone in the long history of how Britain and the continent have made an arrangement to live. If we look back over the past 1,000 years, we see that it has been a turbulent arrangement. No doubt that will continue.

Photo of Baroness Armstrong of Hill Top Baroness Armstrong of Hill Top Labour 12:58 pm, 15th June 2016

My Lords, this is a very timely debate. As a fairly new member of the European Union Committee, I thank the chair, the noble Lord, Lord Boswell. He makes sure that we approach these things in a measured way and has been incredibly inclusive and supportive of all members, particularly the new members. I thank him for that.

I will concentrate on the short report on the process of withdrawing from the EU. There is a lot of other business in the House today, and I am very tempted by more general matters, but I am going to confine myself to that. As the report makes clear, the only mechanism for withdrawal in all the treaties and the international agreements is Article 50. The process of withdrawal, therefore—as is made very clear in the report and in Article 50—will not be determined by the minds of the Brexiteers. No one group will have the whole say in how things are developed and progressed.

That is very important. I was a bit astounded to hear one of the Cabinet Ministers this morning speaking about the Bills that would be brought in immediately. As the noble Baroness said, there is—as in a divorce—more than one party involved. What Britain decides will have an effect on the rest of Europe; it has the right to have a say, and we have to acknowledge that. One side cannot determine both the terms of the negotiation and the end point of the negotiation.

The Commission, as the report makes clear, will be responsible for the day-to-day negotiation, but it will be the EU member states, all of them, through the Council, that will have control over the terms of the negotiation. The European Parliament also has to give its consent. The idea that we can be totally in control of that is, to put it mildly, somewhat naive. Those giving evidence to us said that, as far as the negotiating terms were concerned, they thought that there would have to be near unanimity in the UK Parliament about these terms. I agree with previous speakers today that the debate externally has been horrendous and has shown the worst of Britain and its politicians and everyone else. It is certainly not the right way to enter a referendum debate or to enter negotiation should a particular outcome occur.

We can therefore only be relatively pessimistic, and I do not like being pessimistic because I want to see the best of this country and not what I think is the worst. The debate has revealed incredibly strong divisions and differences which are not just about European Union membership, yet of course what the report demonstrates clearly is that there will have to be good, firm relationships which demonstrate trust. At the moment, that is quite difficult to see, not just here but between this country and the other members of the European Union as well as the other institutions.

The agreements will also need the support of individual parliaments in the European Union. If we are not going to work in a more positive way, how on earth are we going to improve those relationships? It is only through good relationships that we will get a good outcome. Governments will have to work well together, as all the key decisions will continue to be taken by the Council.

The other thing that our inquiry made so clear to me was that the UK Parliament will be trapped in unpicking legislation and in deciding which piece of legislation we might want to keep and which piece we have to unravel in order to uphold a decision to leave the Union. My great fear is that the real anxieties of the British people during this time will be squeezed because we will be so busy unpicking the relationship with the European Union that we will not understand what the vote was about. I know that the vote is ending up being about whether we remain a member of the Union, but actually it reflects a deep fear and uncertainty about the experience of globalisation and how different people in our country are being greatly affected in different ways.

I spoke last week about my own region, and I am not going to repeat that. We would be the greatest sufferers because of our dependence on European trade. Through that dependence, we bring a balance of trade surplus to the region; we are the only region to do so. The people out there really feel that, whatever we are doing, we are not reflecting their needs and their ambitions. In that way, I agree with the noble Lord, Lord Howell, that there can be no ending of the debate on the referendum and that we have to rediscover the ambition to reconfigure things in this country and in our relationship with the world if we are to make sure that everybody in this country is able to benefit from the effects of globalisation.

The battle for Britain’s future, as it is being played out, should not be seen as the end point, whatever the result next week. It should be seen as a staging post for that new phase of globalisation that the noble Lord, Lord Howell, was talking about, one that offers hope to those who feel disenfranchised by the changes of recent years and a sense of purpose to every part of the country. Whatever the outcome, that is our challenge; but we know from this report that, if the outcome is that we leave, there will be a very painful and difficult negotiation. We will have to up our game in a way that, quite honestly, we have not done over the period of the referendum to date.

Photo of Lord Maclennan of Rogart Lord Maclennan of Rogart Liberal Democrat 1:07 pm, 15th June 2016

My Lords, this has been a very good, and timely, debate. I declare an interest, in that I am a beneficiary of the common agricultural policy. I would prefer to focus not on the short term, as I think most people have, but on the longer term.

We have lived in a peaceful Europe for more than 70 years. That is part of the outcome of bringing together the member countries in Europe into a community, and has been one of the most important aspects. In the 20th century, millions of people were killed because the European Union did not exist and member countries of Europe fell out with each other. That goes back a very long way. We have seen countries such as Germany and France, western European countries, falling out with each other over a long period of history. This has not been sufficiently focused on during the referendum campaign; the Prime Minister spoke of that on one occasion.

We should recognise this as a benefit of our membership. The economic benefits for this country are considerable—46% of our exports go to Europe; rather fewer of the exports from other European countries come to us—but a whole tendency towards disintegration could be started by Britain. That is a great risk that we take. The Union is to some extent not as close as it was, and some Nordic countries might consider following our lead if we go for Brexit. We have also noticed in eastern Europe the coming together of member countries. Hungary has a very poor Government at the moment, but it is none the less a beneficiary of the European Union and I think that it wants to stay a member of it. Let us consider what the greater impact might be of our withdrawal from the Union. I fear that it could be the stimulus to the Union falling apart.

The connections we have made are very important. I served on the Convention on the Future of Europe in 2002-03. That seems to me a more favourable circumstance in which to negotiate agreements. On that occasion, the members of the European Union found it possible to reach consensus. Afterwards, France and the Netherlands rejected the outcome in referenda, but they did so not on the substance of the agreements—which they finally came to accept—but because they wanted to vote against their Governments, and the Governments of both came to grief shortly thereafter.

We need unanimity about the objectives of the Union and should recognise that we can lead in this negotiation and this debate. We should help in that. “Lead not leave” is the message I want to put across.

Photo of Lord Hastings of Scarisbrick Lord Hastings of Scarisbrick Crossbench 1:14 pm, 15th June 2016

My Lords, these reports and this debate give us an opportunity to look away from some of the more myopic aspects of the referendum discussions so far. So much of the conversation to date has focused on what the UK may get back, how much richer we might become or how much poorer we might become. One of the great institutions of the European Union, one of the great roles it does well, is to focus and co-ordinate international aid and humanitarian work. That is an important dimension of the EU’s work which, ironically, is not mentioned in these reports but deserves our attention. After the United States being the largest cash provider of aid but one of the worst percentage providers by GDP, the European Union comes next, and then comes the United Kingdom, followed by a series of smaller nations. We are proud of our 0.7% of GNI contribution to international aid assistance, and of everything that DfID and the UK do, but, in contributing some 20% to EU aid budgets, the UK also punches well above its own capacity. We do more for fragile states, we do more to support the development of democracy, and we do more to respond to the challenges of climate change and continuing desperation in our world.

While we have had politically insensitive conversations about what it means to separate from other rich parts of the world, almost nothing has been said about what that separation would mean for the poorest people in the world. The European institutions created to facilitate collective aid had a good purpose in mind: if we could have more effective co-ordination, greater focus, a clearer line of sight, we could achieve those development objectives which raise the collective boat of wealth around the world, empower markets to work better for our exports and, importantly, prevent some of the tragedies of migration and trafficking that we are now witnessing.

We have to remember that, although the effort focused on the problems of migration from Middle Eastern countries, particularly Syria, across to Turkey and Greece has been the subject of media attention, an equivalent number of people are coming across the Mediterranean from poorer African countries where development aid is fundamental to addressing some of the most desperate conditions created by climate change, poor harvests and inadequate agricultural production methods. The European Union has a massive amount investment to give in not only technology but techniques, and it improves the UK’s position as a supporter of development in the world to have the European Union acting in concert.

An article in the Economist last week reflected on the disparate problems of fractured aid:

“In one big way … the proliferation of donors harms poor countries. Aid now comes from ever more directions”— it might be welcome that more money is coming from countries which never gave money in the first place, particularly China and, in some cases, India—

“in ever smaller packages: according to AidData, the average project was worth $1.9m in 2013, down from $5.3m in 2000. Mozambique has 27 substantial donors in the field of health alone, not counting most non-Western or private givers. Belgium, France, Italy, Japan and Sweden each supplied less than $1m. Such fragmentation strains poor countries, both because of the endless report-writing and because civil servants are hired away to manage donors’ projects.

The noble Lord, Lord Howell, referred to Africa as one of the most important next-level markets for our goods and services, and he is right: the 54 countries of the continent could provide phenomenal opportunities for the United Kingdom, let alone the other countries of the EU. But it will not be so if we undermine and destroy the impact of our collective aid investment, if we reduce our capacity for aid because we wreck our economy by foolishly pulling out of the European Union without foresight to the poor, and if we continue to lose sight of our collective responsibility to stand up for those who are more desperate than even this argument around the referendum has been.

Photo of Lord Hunt of Chesterton Lord Hunt of Chesterton Labour 1:19 pm, 15th June 2016

My Lords, I refer back to the debate introduced by the noble Earl, Lord Selborne, on the Science and Technology Committee report, while acknowledging the important remarks of the noble Lord, Lord Hastings.

The result of the referendum may have a great and potentially adverse effect on UK science, particularly the relationship of science to industry. One of the vice- chancellors speaking in the House last week commented that their university might lose up to £100 million a year through the loss of research grants, so these are big effects. I declare my own interest and experience as a scientist. I have worked in university research with universities across Europe and helped set up a small company that works with the European Commission. I was head of the Met Office, a government agency that worked very closely with all the agencies across Europe. One other interesting feature of being a scientist in Europe over the past 30 years has been the development of very effective networks. One that we set up for aviation and the motor industry carries on very well, and the European Commission helps it.

The question is, what will happen? In my experience and that of many of my colleagues, European officials and European committees have considerable experience and vision and they have encouraged these networks across Europe. The capacity for the same thing in the UK is, I am afraid, not present. Of course, UK science takes a leading role in some of the greatest pure science projects across Europe—in astronomy, fundamental particle physics, bio and pharma—and the evidence to our committee was that Europe takes a leading role and co-ordinates very effectively. There are controversies in terms of working with the European Parliament, which often takes a particular view, but nevertheless the European science scene is very strong and at the top internationally.

An important aspect of collaborating across Europe, which was perhaps not so strongly written into the report, comes from the collaboration of the governmental agencies and laboratories—the Met Office is one, but there are many others that are important. These institutions will continue, as will the collaboration between them if the UK makes the unfortunate decision to leave the EU. The way these agencies programmes work means that they will involve countries in Europe that are not part of the EU, but the primary decision-making co-ordination comes from the EU component in those programmes. We would see the UK take a secondary position. Given the experience and brilliance of all the UK contributions, it would be very galling for us to be in the second tier of advising on these projects. Some noble Lords have been dismissive in previous debates about the European Commission, but all I can say is that our programmes benefit from its advice.

The chairman of our Science and Technology Committee at the House of Lords, the noble Earl, Lord Selborne, explained that UK industry does not make the best use of EU funds. That was strongly expressed in one session of the committee by the director of Rolls-Royce speaking on behalf of his company and the Royal Academy of Engineering. He said that SMEs did not have enough support from the UK Government to learn best how to collaborate across Europe and make best use of European funds. Given that we may now leave the EU, how will HMG provide funding at a higher level for UK SMEs to compensate for the loss of EC funds? The companies that I am talking about are vital for our economy and employment in the UK in the future.

Of course, there will have to be continued collaboration with all the European countries on the key issues of the environment, natural resources, energy and fishing—as we are hearing from the noises beyond—but it will be much more effective if the UK remains in the European Union. I can see no benefits from Brexit.

Photo of Lord Browne of Madingley Lord Browne of Madingley Crossbench 1:24 pm, 15th June 2016

My Lords, I welcome this thorough report on the referendum and EU reform. In particular, I wish to comment on its conclusion that the Government should set out a positive, inclusive vision of the UK’s role in a reformed EU. As a businessman, I have long been convinced of the economic benefits of being part of the EU’s single market. In leaving the EU, we deny ourselves not only access to the European market, its consumers and its ideas, but a very important gateway to most of the world. We would create barriers for those who would contribute to our economy. It would be a backward step towards self-imposed exclusion.

My personal perspective on the European Union has been heavily influenced by my family’s experiences. I was born to a father who served in the British Army and to a mother who survived the horrors of Auschwitz. The link that they made, as the continent was being rebuilt, transformed their lives. They demonstrated that, although the EU’s origins may have been economic in nature, its core purpose was to promote peace and prosperity in Europe and to help dampen the ever present and damaging trend towards nationalism. Its relevance in this regard is not diminished.

A vote to leave would be to reject the economic benefits and political security that we enjoy as part of Europe. As an optimist, I am sure that this country will not sever its ties with the European Union, but just staying part of the EU is not enough. It will shape our future, for better or worse. We need to engage more deeply with the process of government in Europe and I want to make one point about that and about reform.

As the Government’s lead non-executive director from 2010 to 2015, I worked closely on this country’s Civil Service reform programme. I was always impressed with our civil servants. We pride ourselves on their analytical rigour, independence and skill at navigating government, and the creation of policy to its very important implementation. It is still one of the most coveted employers among graduates. It is a body that is ultimately responsible for the functioning of government in this country. We should use the experience of building an exemplary Civil Service to our advantage in Europe.

We currently have just over 1,000 officials in the EU. That is less than 4% of the total number of officials and roughly the same as the Romanians and the Greeks. The French have almost three times this number; the Italians almost four times as many. It also stands in stark contrast to our contribution to the EU economy, where we account for roughly 16% of total output. We complain about underrepresentation given our economic clout. The solution is not to withdraw altogether from Europe. In my experience, giving up your seat at the table is a surefire way to lose control. Instead, we must continue to work with Europe, as part of the EU.

Europe’s laws and regulations are largely made through technocratic processes. We must attract, train and send more of our best technocrats to work in Brussels for our mutual interests. In the pursuit of both practicality and excellence in Europe, we must remove the prohibitive and probably outdated requirement for British candidates to prove their proficiency in French or German. English is now the world’s working language and might well be enough. We must inspire the next generation of our most gifted public servants with a vision of what Europe can and should be, not just for business but for peace and security as well. Then we must motivate them to help us shape it.

Photo of Lord Cormack Lord Cormack Conservative 1:29 pm, 15th June 2016

My Lords, it is a great pleasure to follow the noble Lord, Lord Browne of Madingley. I wish that we heard him more often because he brings with him a wealth of business experience whenever he speaks in your Lordships’ House. Having heard every single word of this debate, it is quite clear that one thread is running through it and that is a degree of real disappointment in the tone, quality and content of the debate. Although I believe that more criticism can correctly be levelled at the Brexiteers, I do not believe that the Government’s case has been made as effectively as it should have been. The report which the noble Lord, Lord Boswell, introduced extremely moderately and persuasively, is itself a moderate and persuasive document that does great credit to the European Union Committee of your Lordships’ House. I want to quote just one paragraph towards the very end, paragraph 258:

“Finally, the EU has always been driven by values as well as pragmatism. We urge the Government, in putting forward its vision for the UK’s place in a reformed EU, also to affirm the shared identity and heritage of the peoples of Europe”.

Would that more attention had been paid to that particular paragraph. It is a great pity that so little vision has infused the speeches made on all sides of the debate. We do have a shared heritage and we need only to look around Westminster to remind ourselves of that. Go across to Westminster Abbey to the glorious chapel of Henry VII, to the monument for the King and Queen, made by an Italian, Pietro Torrigiano, to Westminster Hall, where we owe that wonderful hammerbeam roof, one of the glories of European civilization, to the master carpenter Henry Yevele.

I would also like to endorse most strongly the words of my noble friend Lord Howell of Guildford, who made a very fine speech. We are, whether we like it or not, part of the European continent. One of the most ill-advised speeches of the campaign was made by Mr Johnson—Boris, not the other one—when he talked about the domination of Europe. He cited everyone from Julius Caesar to Adolf Hitler and he suggested that there was now a great conspiracy within the EU for another dominant dictator. I have never heard a more grotesque misreading of history. All your Lordships need do is step a few yards from this Chamber and look at the marvellously recreated Armada tapestries in the Prince’s Chamber, or go in to the Royal Gallery and see the great Maclise paintings of Trafalgar and Waterloo, currently being restored, and you discover the real nature of Britain’s European involvement in preventing any one power having hegemony in Europe and bringing balance by its own participation.

Is now the moment for our great country to turn its back on its history and its destiny? The lesson of life—we all know this—is that no man is an island and no family or community can function sufficiently of itself; every country needs allies and partners. That is the lesson of history. On 23 June, the British people have a dramatic choice to make. Do they remain with their European allies and partners and seek to strengthen an imperfect but very remarkable union of 28 nations, or do they come out and seek new and different partnerships and arrangements, knowing that every agreement this country enters into always involves the pooling, sharing and indeed sacrificing of a degree of sovereignty? Do we forsake what we have, rather than seek to improve it, not knowing what we will get? The noble Lord, Lord Jay, touched on that issue in his admirable speech and we would be well advised to read, mark, learn and digest his words and those of my noble friend Lord Howell of Guildford, because we do not know how successful we would be.

First of all, in talking to 27 nations who would have every reason to feel aggrieved, we do not know whether we would be able to forge trade agreements and other alliances. As for this talk of emulating Canada or Norway—or, if you please, tiny Iceland—where do these people get their facts and logic from? It is absurd to suggest that this country can become another Norway, as wonderful as that country is; Norway itself has obligations to the European Union, without any of the reciprocal advantages that we enjoy.

I hope the message from this debate and from the more coherent and visionary exponents of the values of the European Union will begin to resonate with the British people over the next seven days, and that they will remember the one achievement of the former mayor, noticeable to all of us who live in London: gridlock. Rhetoric is no substitute for vision, and neither Mr Johnson nor indeed many of his colleagues have really articulated a vision of a Europe that we should be a proud part of. I believe we would be doing our nation a disservice and blemishing its history if on 23 June we voted to sever our ties. The noble Lord, Lord Maclennan, said that he hoped the moral of his speech would be that it is our function to lead and not to leave. I wholly endorse that. As I sit down, I look up at these windows above me, which I see every day, and there are three heraldic mottos there: mindful; Agincourt; que sera, sera. Let us draw some inspiration from each of them.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour 1:40 pm, 15th June 2016

My Lords, I thought that I was going to be late for the start of the debate because I spent part of this morning trying to get hold of a Polish plumber. He was going to ring me back, perhaps from Gdansk, I do not know. This was after I had tried a Cockney plumber who eventually called me back and said, “Sorry, mate. I am in Barcelona”. At least he is not causing mayhem in Lille. I shall come back to this because freedom of movement is one of the four freedoms, and it would be true in EFTA as well, so we ought to think about the reciprocal side of all of that.

I want to cover three points. The first touches on the malaise of voters, many working-class voters in particular, about the referendum. The second point looks at the tendentiousness of the slogan, “Take Back Control”. I would ask this: is it from Brussels that they want to take back control, is it from globalisation or is it from some other force? That is a different question entirely and it raises the twin question of the credibility or otherwise of unilaterally imposed regulation at the national level. The third point is the notion that there are no economic costs to Brexit when in fact they far outweigh the savings. There is indeed no such thing as a free lunch. Boris Johnson, Michael Gove, Iain Duncan Smith and all the rest of them are telling us a big lie about which someone in history would have been very proud.

On the first point, I am a convinced European. I have not been so all my life, but since I wrote in 1975 the TUC pamphlet saying vote no—an instruction I agreed with—I have been heavily engaged in the EU and have seen the inevitability and indeed the benefits and desirability of co-operation, of doing things together so that Europe is to some degree a more social-democratic part of the world than it would otherwise be. In terms of the present position in Britain, I do not think that “one nation” rings a bell in much of our industrial heartland. In terms of people’s identity, they certainly do not like being preached at about what they should like or not like, and coming from their experience we have to listen and understand that. In terms of our standard of living, our grandparents would have found the four freedoms—the freedom to travel, to work, to live as individuals and, of course, as businesses within the European Economic Area—almost unbelievably beneficial. There is a malaise about the type of work experience and the inequality we have.

I turn now to the second point about taking back control. In 2008-09 the crash of Lehman Brothers created a huge fall in the trend of the world economy and certainly in Britain as compared with the previous trend. It cost us a fall of many percentage points in national income, caused a flatlining of people’s living standards, and encouraged the growth of insecurity through things like zero-hours contracts. Whether they are called that in Gateshead, they are part of the malaise. Take back control, yes, but we can do that only on the basis of a degree of co-operation. Brussels is not the enemy when it comes to protecting us. Brussels is our ally. The Sun, the Daily Mail and the Daily Express are all telling people a big lie about their interests and it is clear that we have not done enough to put across our own explanation. However, I think that we are doing better as of now.

The third point is about the free lunch—the idea that we can get all the benefits and pay none of the costs. The noble Baroness, Lady Smith of Newnham, drew the analogy of marriage and divorce as if the experience of a divorce is that you get all the benefits but pay none of the costs. Surely the experience of most people, when looking at it from the outside, is that divorce is precisely the opposite. You have all the costs and none of the benefits. That is what would be true in this case, and I am glad that the European Union Committee has started to paint for us a picture of the leave scenario that exposes many of the fallacies which so far have not been adequately tested in the television studios and elsewhere.

There is a constituency that can be characterised as, “Stop the world—I want to get off”, but that is because in some respects we have ground to a halt on social-democratic workers’ rights reforms after a very good period inspired by Jacques Delors in 1988 which introduced many of the things that improved the quality of contracts of employment. Perhaps I may just underline the fact that reform has to be made at the level of Brussels because it would not be done by employers in Britain. They could be undercut and they were explicit in what they said: “We cannot do this on our own in Britain”. Even now, a lot of people do not understand that. It can be done only at the European level. Twenty-eight countries represents a big GDP. The GDP of the European Economic Area is larger than that of either China or the United States. We have to make sure that the positive picture is put across. I am quite sure that the big corporations of the world can live with a proper system of taxation and not take up the chicanery of McKinsey as reported last week by Gillian Tett in the Financial Times.

Finally, I shall put the actual numbers on the record. The Institute for Fiscal Studies has never hitherto been accused of being partisan. It has pointed out that the net figure for the so-called extra £350 million a week that has been promised is some £8 billion rather than £18 billion a year. When we look at the Norwegian and Swiss deals, the net saving on that basis would be £4 billion. That is to be compared with a hit to the public finances, leaving aside devaluation, of some £20 billion to £40 billion per annum against trend by 2019-20. Translate that into living standards.

The noble Lord, Lord Pearson, is not in his place. Some of us were accused of scaremongering when we—along with the Bank of England and others—said that the value of the pound would fall significantly. I suspect that not many noble Lords would disagree if I said that that has now become obvious to everyone. It is not scaremongering, it is the frightening scenario that Brexit would open up.

Photo of Baroness Sharp of Guildford Baroness Sharp of Guildford Liberal Democrat 1:49 pm, 15th June 2016

My Lords, I will speak mainly about the report from the Science and Technology Committee on European Union membership and science. Before doing so, I would like to say how much I agreed with the noble Lord, Lord Cormack, and the noble Earl, Lord Caithness, when they said how important it was that we should not throw away the lessons of history. I was born just before the Second World War. My parents experienced both world wars across Europe. Like them, I believed strongly that it was necessary to create a kind of united states of Europe, as Churchill put it—a confederation that would stop European nations constantly warring with one another. The project of my lifetime has in many senses been the construction of the European Union. It is a huge achievement. It would be very sad and retrograde if we were to throw that achievement away. As my noble friend Lord Maclennan suggested, that might happen if we exit the European Union.

I was not a member of the Science and Technology Committee. I was in the past, but I came off it at this time last year, and I have therefore not played a part in putting together the report on EU membership and science. My claim to speak in the debate on the subject is in having authored two books, in the 1980s and 1990s, on the early development of these European Union programmes.

It is interesting to note that in those early days when the programmes were being forged, first by the late Lord Dahrendorf when he was a European commissioner—and who until about 10 years ago was a member of this House—and subsequently and more decisively by Vicomte Davignon, in the early 1980s, they were to a considerable extent shunned by the British Government and British academia. The general feeling was that if the members of the then European Community wished to get together and collaborate over science, that was fine, but it had at that point very little to offer us. Our links were primarily with the United States and other English-speaking countries, such as Australia and Canada. The feeling was that the more profitable links were likely to remain that way.

In fact, measured by collaborations, in terms of publications, by the end of the 1980s UK collaborations with our European partners overtook our collaborations with our US partners, and it has remained that way ever since. As the evidence taken by the Science and Technology Committee demonstrated, these collaborations are now very highly valued. I was amused to compare the conclusion of the committee:

“It was repeatedly put to us that one of the most significant aspects of the UK’s EU membership is the provision of opportunities to collaborate”,

with the conclusion of the 1998 volume authored by me and John Peterson:

“What is striking about these programmes is the very high value placed by their participants on collaboration per se, as opposed to public funding per se, or the effects on competitiveness”.

Again, the Science and Technology Committee report states:

“We view the EU to have three main influences: the provision of collaborative funding schemes and programmes; ensuring researcher mobility; and facilitating and fostering participation in shared pan-European research infrastructures”.

The 1990s evaluation of what the UK gained from the framework programme, written by Luke Georghiou of Manchester University—now Vice-President for Research and Innovation there—identified four key benefits: access to funds for collaborations; enhanced skills training; access to improved and new processes; and commercial links.

It is important to remember is that the most effective way to transfer knowledge is through people. Collaborations and working together with other scientists and researchers in other countries, especially when accompanied—as many of these European Union programmes are—by exchanges of doctoral and post-doctoral researchers, involve learning about new and different approaches, ideas and processes. It is this interaction that has proved so valuable, especially for our younger researchers and for those countries in the European Union that are relatively new to research activities. The great benefit for the so-called cohesion countries of southern and eastern Europe was the opportunity for their researchers to work alongside scientists at institutions such as Imperial College or University College, London—or for that matter at the Institut Pasteur or the Max Planck institutes in Germany.

I have two further points in relation to the report. The first is on downsides. The report raises two issues, bureaucracy and low participation by industry. On bureaucracy there have been endless promises of simplification but very little seems to have been achieved. One can have some sympathy with the Commission, which is constantly being accused of being too lax with its money and of not having a proper audit trail. The science and technology field is one of the few areas where it has responsibility for disbursing resources. Agricultural and structural funds rely on national Governments, where it is often difficult to keep track of precisely who is spending what, and where. However, where it does have control the Commission rather overcompensates.

The issue of poor industrial participation has been around since the start of the programmes. It arises partly because the programmes aim at pre-competitive R&D. Originally the focus was on early-stage R&D. The development of the European Research Council has tipped the balance more towards blue-sky, pure research. Governments in continental Europe have been more sympathetic than UK Governments of all complexions to getting involved with applied research and helping companies bridge what is here called the “valley of death”. The Catapult programme was developed under the coalition to respond to this. But, as the committee notes, greater discretion given to regional governments in other European countries, combined with stronger regional banking systems, has often provided a better framework for industrial participation, frequently alongside university partners.

Finally, I would like to say a brief word about the role played by Britain in European decision-taking. There is a tendency to talk a lot about unelected bureaucrats in Brussels taking decisions. In this area the decisions are in fact taken by myriad advisory committees of one sort or another, with only the really contentious issues going to co-decision between the Council and Parliament. The key decision-makers are to be found in the nexus of these committees, which is effectively a complex and somewhat incestuous system of advisory committees and peer review. Many smaller countries do not have the experts or the capabilities to play a significant part in this process—but it is one in which many British experts have played a substantial role.

I will take the example of Horizon 2020. As the committee points out in its report, 46 experts have played a key role in advisory groups, developing the Horizon 2020 programme. The UK CEO of Syngenta, giving evidence to the committee, said that,

“if Britain went its own way in Europe, we would lose the most powerful, most influential, significant voice pushing for a rational, science-based regulatory system governing our technologies”.

There is no doubt that the British voice in science and technology is heard in Brussels. Its loss will be a loss not just to Britain but to the whole of the European Union.

Photo of Lord Bilimoria Lord Bilimoria Crossbench 1:59 pm, 15th June 2016

My Lords, there is a great deal I do not like about the European Union. No one knows who their MEP is. MEPs have no connection with the people they represent and are not accountable or representative. The EU Parliament moving from Brussels to Strasbourg every month for a week is a ridiculous waste of time and money. The euro is a complete failure—one size will never fit all. It is surviving only because it is more difficult to dismantle than keep together. I used to think we lost out on tourism and business visitors by not being in Schengen; now we are fortunate, given the migration crisis and security concerns, not to be in Schengen. I am a true Eurosceptic.

However, given a choice, I have no hesitation in saying that we should remain in the EU. I thank the noble Lord, Lord Boswell, and his committee for producing their reports. I came to this county from India as a 19 year-old student and I have seen the immense change in this country from the time I arrived in the early 1980s, when it was the sick man of Europe, to today being the envy of Europe. The transformation is remarkable. Back in the 1980s, this country had a glass ceiling. Today it is a country of aspiration and opportunity where anyone can get to the top, regardless of race, religion or background. We have seen the highest cumulative GDP growth rate in the European Union since the single market began in 1993. For the United Kingdom it is 62% versus Germany, for example, at 35%. On this point alone, the well-known economist David Smith said in the Sunday Times:

“Britain succeeds in the EU: we’d be daft to leave it”.

This country, with its flexible labour market and open economy, has given me the opportunity to build Cobra Beer from scratch. When we first exported Cobra we chose European Union countries to export to because it was so easy. Now we have exported to more than 40 countries.

I cannot believe that Vote Leave could put out a TV advertisement that states the UK pays £350 million into Europe every week, and then states the purported health spending that this could result in. This is complete nonsense. It should have been taken down by the Advertising Standards Authority. The Vote Leave campaign cannot even get its sums right. We get a rebate from Europe that brings it down to about £150 million a week. If we leave, our current growth rate of 2% a year might flatline or even go into recession. That would be a drop of well over £30 billion —four times our net contribution to the EU.

This country has to wake up and smell the coffee. The Vote Leave campaign is based on a number of bogus claims. Brexit bogus claim number one is about loss of sovereignty. What loss of sovereignty? We are in the EU, but not in the euro; we are in the EU, but not part of Schengen; we are in the EU, but we drink our beer in pints not litres; we are in the EU, but measure our roads in miles not kilometres. No one can tell this country what to do. We have total sovereignty.

Brexit bogus claim number two concerns the lack of democracy. There are elected Members of the EU Parliament. The EU Commission is appointed by elected representatives from each country. We are having a referendum on EU membership right now and we can pull out of the EU whenever we want. Where is the lack of democracy?

Brexit bogus claim number three: Vote Leave says EU regulations cost British businesses £600 million a week. Where has this figure come from? It is completely subjective to try to quantify the impact of red tape. The claims are made by people who have never run a business in their life. Of course there are unpopular regulations, but there are good regulations that protect workers’ rights. I can assure noble Lords that when you run a global business, as I have, you do not thinking about EU red tape, you just get on with it. The biggest barriers to business are the UK’s own overly complex, vast and continually increasing taxation, housing and planning laws. These are self-inflicted by the Government of the day and are nothing to do with the European Union whatever.

Brexit bogus claim number four concerns migration. Immigration has benefited this country over the decades. EU immigration has been continually demeaned and vilified by Brexiteers. There are 3 million EU migrants working in the UK. This has built up over a number of years and we know how hard-working they are. For example, surveys show that the Polish community is respected and appreciated by the British public and seen as contributing to our country. We have one of the highest levels of employment on record. We have one of the lowest unemployment levels ever seen—in fact, in practical terms we have full employment, despite 3 million EU migrants. Where is the problem? There are a few bad apples trying to take advantage of our welfare state, but, on the whole, EU migrants have helped us to become the fastest growing country in the EU and they contribute to this economy five times more than they take out.

People talk about a drain on public services. If we need 3 million people to boost our economy, our Government have failed if they have not been able to provide the necessary accompanying public services. In fact, our public services would collapse without the contribution of those 3 million people. Our country needs migration due to our ageing population. Misleading nonsense is proliferating from the Vote Leave campaign about immigration, which states that if we leave the EU we will be able to take in immigrants from elsewhere. Michael Gove has said that he wants to bring net migration down to the tens of thousands. We have net migration of 330,000 now, of which half—about 180,000—is from outside the EU. Even if EU immigration stops dead on Brexit, we still have well over the tens of thousands. Their argument is illogical and the public should not fall for it.

Brexit bogus claim number five is that we could negotiate more trade deals with other countries and we would be in control of our destiny if we left the EU—that we could engage in trade deals with India and America. We are the second-largest recipient of inward investment in Europe. Some 60% of companies operating in the EU have their headquarters in the UK. Would they continue to if we leave? Of course not. Our inward investment would dry up and London would no longer be the number one financial centre in the world. Other countries see the UK as the gateway to Europe. As a professor from the Harvard Business School, of which I am an alumnus, said, we would be mad to leave the EU. If we were to have a deal like those of Switzerland or Norway, we would still have to agree to free movement of people and we would still have to contribute—maybe not £8 billion, but maybe £4 billion.

The Brexiteers tell us that those advising against leaving the EU should not be listened to: “Who are they to tell us? They’ve been wrong in the past”. We do not live in a vacuum. We are an integrated member of the global economy. We are not a superpower, but a global power—we sit at the top table of the world: the UN Security Council, the G7, G8, G20, NATO and the EU. If we leave, we jeopardise our standing in the world and our future investment. I did not think I would ever quote the Prime Minister’s wife, but she said:

“I want my children growing up with the advantage of starting their careers in a country that is a big fish in a big pond, leading the way in Europe”.

If we leave the EU we will be a tiddler in an ocean.

Brexit bogus claim number six is that the EU is in a mess and our share of trade with it has been falling. That is quite obvious because we are trading more with emerging markets, but the EU still accounts for 44% of our exports and 55% of our imports. It is too big to jeopardise.

Brexit bogus claim number seven is that there will be further integration, leading to a superstate, and we will be dragged into EU bailouts. There will never be a united states of Europe. I come from India, a country that is a true federal state. Europe will never look like that. The Prime Minister’s negotiations have ensured that we are not committed to further unification and bailouts in the future.

Brexit bogus claim number eight is that there will be an EU army that will subsume the British Army. This is complete fantasy. This will never ever happen. It is also claimed that peace in Europe has been brought about by NATO. It has been brought about by NATO and the European Union.

Brexit bogus claim number nine is that Turkey will become a member of the EU and we will not be able to stop 75 million people coming here. Turkey is light years away from joining the European Union—this is scaremongering.

Lastly, Brexit bogus claim number 10 is that the EU is an economic mess, with youth unemployment up to 50% in countries such as Spain, Italy and France. These countries have been in a mess since 2008-09, when the financial crisis began. We, on the other hand, because of our flexibility and control of our destiny, have thrived. The fate of these EU countries has not prevented us succeeding and getting our economy back on track. Even if the economies of Europe absolutely implode and Europe breaks up, I would rather we were at that table trying to help out and knowing what is going on. As has been said, I do not want to jeopardise our own United Kingdom in a Brexit situation, where Scotland might want to leave. Then there is the huge number of years it has taken to get to the present Northern Ireland situation, which would be jeopardised.

Brexiteers try to say that they are the ones who are proud of Britain. I am proud of Britain—a country that has given me everything, that is not isolationist, selfish or blinkered. What speaks more about a country than anything else is its spirit and values. British people are respected around the world for their values. If we Brexit, we will be sleep-walking over the cliffs of Dover into huge uncertainty and instability. Even Brexiteers are saying that it will take years to renegotiate our position with Europe. A protracted period of negotiations, a possible recession, the loss of jobs—we have a fragile recovery and huge debt. We have a current account deficit and a budget deficit. Why risk all this when we do not have to? It is far wiser and far more productive for us to try to reform the EU from within. Why destroy the growth we have achieved? Why risk our standing as the fifth largest economy, with the highest growth rate in the EU and the largest amount of investment in the EU?

There is an African proverb: “If you want to go fast, go alone; if you want to go far, go together”. We are in control of our destiny and we have our sovereignty. I conclude with a very short poem—my favourite poem—written by the Indian Nobel laureate Rabindranath Tagore, which is so pertinent to what we are speaking about:

“Where the mind is without fear and the head is held high

Where knowledge is free

Where the world has not been broken up into fragments

By narrow domestic walls

Where words come out from the depth of truth

Where tireless striving stretches its arms towards perfection

Where the clear stream of reason has not lost its way

Into the dreary desert sand of dead habit

Where the mind is led forward by thee

Into ever-widening thought and action

Into that heaven of freedom, my Father, let my country awake”.

Photo of Lord Parekh Lord Parekh Labour 2:10 pm, 15th June 2016

My Lords, I have been in this country for more than 50 years and I cannot recall an equivalent occasion when it was likely to take such a momentous decision as to whether we should remain in or leave the European Union, on the basis of a rather shallow and polarised debate conducted in a mood of panic created or exploited by a motley crowd of politicians who are prepared to change their convictions as often as they change their underwear. I want to argue as forcefully as I can why it would be unwise of us to leave the European Union; or rather, more positively, why it is crucial that we stay.

First, as several speakers have pointed out, there is no clear alternative. There is all this brave talk about our being able to do this, that or the other, negotiating like Canada or Norway, but it is all based on fantasies. The European Union will not view us as kindly, and therefore will be less disposed to accommodate us. Other countries will not be able to deal with us because they have been dealing with us on the basis of our membership of the European Union and, once that is taken away, the assumption based on the fact that they will continue to co-operate with us does not hold. I therefore think that it would be absolutely mad to move in a direction about which we know so little rather than build on what we have achieved so far. The Prime Minister has brought back a settlement. In 2017 we have the unique opportunity to be president. There are all these possibilities whereby we can use our good offices to set our own agenda and take the European Union in the direction we want to take it.

The second reason that we ought to stay in the European Union has to do with the idea of sovereignty. We are constantly told that we should take back control over our affairs. Well, we already have control over our affairs, because our MEPs sit there and our commissioners take decisions. Getting out does not give us any greater control, because the forces we deal with are global and they require a global response. Sovereignty is ultimately about power and power is not gained in isolation, because isolation is impotence. Power is gained when we share with others in jointly collaborating and organising our affairs. The choice is therefore between insisting on being sovereign, going it alone and becoming impotent or being part of a larger unit and working together with it.

The third reason I think membership of the European Union is crucial to us has to do with the fact that Europe has been a constant point of reference and has provided standards of comparison. In all matters having to do with social and other affairs—for example, survival rates for patients after cancer, unmarried mothers, teenage pregnancies—there are comparative figures for other European countries and for our own. These hurt us when they show that we are not doing as well as other countries, because all European countries, more or less, are at the same stage of development. These comparisons inspire us, they shame us, they make us proud when we do better and they lead to important changes.

It is also very striking that membership of the European Union has been a force for great good for us. I can remember those occasions when people had to take matters to the European Court. In matters having to do with human rights, equal pay, paid holidays, maternity and paternity leave and health and safety standards, Europe has been a champion of social democracy and has helped us maintain a certain standard of decency in our country which otherwise might not have obtained.

My fourth reason has to do with the fact that our membership of the European Union has helped us create a stable and peaceful Europe. This is partly because of our great role in the Second World War and the policies we have followed since. If we leave, there are two possibilities. Either other countries may try to emulate us and the European Union may break up into a conglomeration of small nation states, or the process of unification may go further, resulting in a continental state. A powerful continental state can never be in our interest. It is striking that our foreign policy has always been based on a balance of power in Europe.

The other reason this is important has to do with the fact that nation states are becoming ever less important. All countries are forming alliances and it is only those countries that are part of stable alliances which are able to make an impact. The United States matters not just because it is large and independent but because it is able to work through international institutions such as the IMF and World Bank or its control over Latin America. Likewise, China matters because it has all manner of alliances with neighbouring countries. The EU is another example. Through it we are able to shape the global agenda. Outside it, we would not have any of the influence we currently have.

I readily agree that the EU has its economic and political problems, but these can be tackled by remaining within the EU. The Prime Minister’s proposal as to the kinds of changes he has been able to secure tells us how those changes can be brought about, and I therefore suggest that we should not only stay within the EU but show a greater degree of commitment and enthusiasm than we have done so far, rather than appearing to be sulky and constantly threatening to go home with our marbles if we do not get our way. That is not the way a great nation should behave.

Photo of Lord Hennessy of Nympsfield Lord Hennessy of Nympsfield Crossbench 2:17 pm, 15th June 2016

My Lords, I declare my membership of your Lordships’ Science and Technology Committee and my fellowship of the British Academy.

In the grand sweep of the wider history of our islands the science and technology element of our debate today is a tad strange, because the life of the mind should have little or nothing to do with customs unions, and that is what the European Union, in its various forms since 1952, has been and will remain. Free trade comes no freer than the global intellectual trade in ideas and research. A free trade of the mind is something we can all sign up to, wherever we stand on the great European debate. The United Kingdom was a very considerable player in the world when it came to research, science, technology and the arts and humanities before we joined the European Economic Community in 1973, and it will remain so whatever happens on 23 June.

The reasons for our global prowess in the little grey cells department, if I can call it that—our cultural World Service, as the noble Lord, Lord Bragg, of Wigton, likes to put it very well—are multiple. I am pleased to say that the British Academy will soon be mounting a study of its vectors and ingredients, with the encouragement of your Lordships’ Science and Technology Committee. All that said, research needs fructifying institutions and funding streams to irrigate the life of the mind at both the national and international levels, and it is my belief that our 43-year membership of the European community has, on balance, been a positive aid to this end. From the evidence sessions of your Lordships’ committee on today’s theme I acquired an impression that had not dawned on me before that this aspect of our relationship with Europe has been the least jagged and raw of all the other linkages which, taken together, have produced a very substantial emotional deficit with the European Union on the part of the people of our country, or many of them. This, I fear, will endure even if the country votes to remain.

I have often pondered the roots of this emotional deficit. It has occurred to me more than once that it is a tragedy that we did not invent the community. The European Coal and Steel Community came out of the minds of clever, Catholic, left-wing, French bureaucrats. Most Brits have a problem with three of those five. I have not, as it happens, but most have. If only we had invented it, it would be a very small secretariat in an area of high unemployment, sending perhaps two or three letters a year to the member countries: “Would you mind doing a little more on free trade here, here and here—but only if you’ve got time?”. We are not a directives people. The emotional deficit is very powerful. Of course I am being facetious in the way that I am regarding it—it is very deep and complicated.

Science and technology, plus funding for the arts and humanities are, as the committee’s report puts it,

“a major component of the UK’s membership of the EU. Nearly one fifth (18.3%) of EU funding to the UK is spent on research and development”.

There would, I believe, be a real loss to the UK on this front if we leave. It was put to the committee, as our chairman, the noble Earl, Lord Selborne, said earlier in the debate, that the funding streams we acquire from the EU—more than we put in—are the equivalent, at least, of an extra research council for the UK. We might also lose part of the human flow in and out of our labs that the free movement of people within the EU permits—in an era where ever more the prizes go to the international and the collaborative. It is crucial for our country to think heavier than our weight in the world, as we have done since at least the 17th century. I am convinced that our membership of the EU enhances our ability to do this.

Switzerland, another country that prides itself on thinking heavier than its weight in the world, is not a happy example for those who wish to leave, even though Switzerland has associated country status in its relationship with the EU. The committee received eloquent testimony on this from Professor Philippe Moreillon, vice-rector for research and international relations at the University of Lausanne. He said that when Switzerland,

“became an associate, it was much, much easier, of course, but we are still not sitting at the decision table or on the consultative committees where the decisions are made. We have a number of ways to interact, such as through university associations. We are still in the corridor, but at least we are part of the whole programme”.

The implication of this evidence is that if the UK leaves it will, in terms of European R&D funding, become a corridor nation, which is a condition not to be wished for.

Remainers, of whom I am one, have to recognise, however, that there are unsatisfactory elements within the existing scientific relationship, which the Select Committee inquiry illuminated. Harmonisation and EU regulations can bite into that prime principle of intellectual free trade. For example, the committee concluded that, in the area of genetic modification and clinical trials, UK business and research were placed at a disadvantage compared to non-EU competitors because of EU regulations.

This leads to my concluding thought. If we remain, how refreshing it would be if the Prime Minister quickly turned up in Brussels with a positive, constructive plan for a wider reform of the European Union. I was greatly impressed by what the noble Lord, Lord Howell of Guildford, said earlier in our debate about wider reform—a wider reform of which a greater slice of funding and trimming of bureaucracy for R&D could be a shining element. Not only would this be an inherently good thing, but just think of the shock value. To adapt that great expert on national identity, PG Wodehouse: for a very long time now in Brussels, it has always been easy to distinguish between a ray of sunshine and a British Prime Minister bearing a grievance.

Photo of The Duke of Montrose The Duke of Montrose Conservative 2:23 pm, 15th June 2016

My Lords, I also declare my membership of the Science and Technology Committee and express my thanks to the chairman and the clerk who led us so well on all these issues. The topics chosen in my time on the committee were the nearest thing one is likely to get in politics to a crystal ball, whereby we try to determine some of the future. Whether we have been able to determine anything meaningful in our report is probably up to others to judge, but I certainly hear some approval from around the House.

The United Kingdom has a reputation for invention but often, these inventions are not exploited by us but are taken up by others and turned into successes. We learned in the evidence how manufacturing companies in Germany are heavily integrated with government research. As my noble friend Lord Selborne mentioned, the committee was left wondering whether it was just a coincidence that no British manufacturing company offered to come and give us its views. Does this indicate where the lack of communication begins between science and the practical side of manufacturing?

We heard the views of various European-based companies about what our role has been in Europe. As the noble Baroness, Lady Sharp, reminded us, the representative from Syngenta told us that,

“if Britain went its own way … we would lose the most powerful, most influential, significant voice pushing for a rational, science-based regulatory system governing our technologies”.

That is very important. We heard a lot of statistics about the success of our research base in sourcing funds from Europe. When it comes to that most demanding element, the seventh framework programme, we are at the top of the league with Germany, gaining just under €7 billion. We heard from a variety of scientists who have had success in securing these funds. My noble friend Lord Selborne outlined the frustrations caused by certain EU prohibitions on research—the noble Lord, Lord Hennessy, also mentioned it—such as work on stem cells or with animals. However, our own politicians have supported several such causes, in both the EU and the UK; we cannot always say that it is because of EU regulation.

As a Scot, I found it particularly interesting to hear evidence of the experiences of Switzerland and its unconventional relationship with Europe, because there are certain parallels. In European terms we can see ourselves as small nations and inevitably, because we are both mountainous, we have historically been poor in natural resources. The Scots thought that they had escaped this element but it has now been re-established rather unexpectedly. In Scotland we have certainly had to survive on our brains and our brawn, and we have developed a culture of care and co-operation. We have had an emphasis on education and a readiness for invention. But there is one big contrast, in that Switzerland is geographically at the centre of Europe while we are on the periphery, so it is that much harder to make a success of our trading relationships. Switzerland wished to participate at most levels in Europe but did not wish to be a member of the EU or of the European Economic Area so, as your Lordships know, it has had associated country status but with a bilateral agreement to ensure free movement of people. This has allowed it to participate at many levels, particularly in the EU framework programme funding scheme, but the minute it implemented any participation, it had to apply all the rules we have heard about in those spheres. Even more significantly, when, as a result of a national referendum, it decided to rule out all immigration and free movement, it was immediately barred from all participation and co-operation within Europe and is now having to renegotiate its way back in.

From what I can see, there is a very clear divide with Europe—you are either in or you are out. Thoughts of some cosy compromise do not really have that much to offer. This is the choice we will be asking the people of this country to make next week. I hope that we will continue to participate in Europe.

Photo of Lord Howarth of Newport Lord Howarth of Newport Labour 2:28 pm, 15th June 2016

My Lords, I add my thanks to noble Lords for the sober analysis of the processes of change provided in these reports. Tragically, however, the European Union is not capable of the reforms that could justify Britain remaining. The dreams of the Prime Minister in his Bloomberg speech have been all too comprehensively dashed. The EU is failing both economically and politically and its member states are incapable of achieving agreement on the reforms that might save it. There is very little willingness even to contemplate the radical redesign that the noble Lord, Lord Howell of Guildford, called for in his thoughtful speech. The noble Lord, Lord Boswell, deprecated the failure of the Government to explain—as I think he put it—what, if anything, is wrong with the European Union. Perhaps I might therefore venture to assist.

Britain joined the EEC in the early 1970s at a low point in our national self-confidence, and just when the economic miracle that had brought the original six to new heights of prosperity was faltering. Self-inflicted wounds followed: the Maastricht criteria condemned Europe to weak growth, and the ultimate hubris, the disastrous turning point, was the formation of the eurozone. Without political consent to create a federal “United States of Europe”, the single currency project could not work. The Germans have enjoyed an undervalued currency but even in Germany wages have stagnated. The Mediterranean countries have suffered grievously from an overvalued currency. There has been little redistributive fiscal relief across the EU. Membership of the euro encouraged reckless borrowing and creditors have ruthlessly ensured that there is no debt relief. Across swathes of the eurozone, unemployment, particularly among young people, has been running at catastrophic levels.

The eurozone countries are incapable of extricating themselves from their predicament, either by advancing or by retreating. Britain is infected by Europe’s economic stagnation and chronic financial instability. The UK should continue to reorientate its exports and strategically disengage itself from our debilitating entanglement with the European economy.

Of course I acknowledge the ideal of peace, about which the noble Lord, Lord Browne of Madingley, and the noble Baroness, Lady Sharp of Guildford, spoke so feelingly. I do not belittle that at all but it is not our membership of the European Union that prevents the French and the Germans going to war in 2016. Europe’s economic failure now begets political division and crisis. For all the invocation of ever-closer union, the gulf between Europe’s haves and have-nots has grown ever wider. Market forces, to which EU orthodoxy is dogmatically committed, have concentrated wealth in certain regions of the north and west of Europe: Baden-Württemberg, the Rhône-Alpes and Lombardy. Your Lordships should note that these areas of prosperity are regions, not countries, and that one of the effects of the EU is to fracture the old nation states. Meanwhile, the south and the periphery struggle and everywhere the less-educated and less-skilled, the industrial helots, the culturally alien and the urban underclass are frustrated and angry. Migration, both into Europe and across Europe, intensifies resentment and generates extremism.

The democratic deficit and the governing structures of the EU threaten to be as disastrous as the euro. The system is an aggregation of democracies but it is not itself democratic. It was never intended to be so by its authors, rational public servants who were horrified at what they had seen weak democracies and populist fascism do. Policy initiative continues to rest with the unelected Commission. The Council of Ministers as such has no accountability. The inner eurogroup—of which, of course, we are not members but which commands the majority and has no regard for our interests—takes the major economic decisions. It has no status in European law and its proceedings are opaque. The European Parliament and national parliaments remain marginal. This is not a system of government that should be acceptable to the British people, who take pride still in a unique history of parliamentary democracy.

Photo of Baroness Smith of Newnham Baroness Smith of Newnham Liberal Democrat

Does the noble Lord not agree, however, that there is a directly elected European Parliament and that it has the right of co-legislation in EU decision-making?

Photo of Lord Howarth of Newport Lord Howarth of Newport Labour

It has indeed gained some powers but I would still contend that its influence is marginal. I certainly do not see that the European Parliament has any worthwhile accountability to the peoples of Europe.

Yanis Varoufakis has described how, when equipped with a democratic mandate from the Greek people, he sought to renegotiate the terms of Greek debt, Germany’s finance minister, Wolfgang Schäuble, told him:

“Elections cannot be allowed to change an economic programme of a member state”.

With rule by technocrats, troikas and creditors, the gulf between governors and the governed is increasingly offensive to the peoples of Europe.

Across the European Union, parties of the far right are gaining support: PEGIDA, Law and Justice, Jobbik, the Front National and Golden Dawn. There is the SNS and its rival, People’s Party—Our Slovakia, whose leader Marian Kotleba takes to the stage wearing the uniform of the wartime Slovak fascists. The two neofascist Slovak parties already have almost 20% of the seats in parliament. The Freedom Party of Austria came within an ace of winning the Austrian presidency.

It is complacent to suppose that we are immune from this pathology. If in Britain our metropolitan political elite continues to display contempt for people who do not share its enthusiasm for membership of the EU and for globalisation, the disturbing problem we already have of disaffection from mainstream politics will grow worse. People who loathe the EU will seek recourse in the nation and if their nationalism is not to turn ugly, they must be listened to and treated with respect. If reputable politicians will not stand up for the losers, disreputable ones will. Remain campaigners, I suggest, would be wise to stop giving the impression that they regard supporters of leave, who decline to be instructed by experts as to what they should believe or how they should vote, as ignorant, stupid and bigoted. Remain MPs who threaten to use a majority in the House of Commons to thwart the will of the people in the referendum seem bent on destroying our citizens’ trust in politics.

I hope that the British people will have the confidence to leave the EU. We should not doubt that we have the enterprise, skills and resilience to cope with the transition. Our businessmen will know how to seize their opportunities across the world. Our excellent scientists will flourish in the global academic community—the free trade of the mind of which the noble Lord, Lord Hennessy, just spoke. We will forge new relationships with the peoples of Europe, with whom we have always engaged and always will. It will be open to us to become more, not less, internationalist. We will be able to handle the issue of migration decently on our own authority.

The process of withdrawal should open exhilarating vistas. After reclaiming rights to take our own decisions and before activating Article 50, we should engage our people in an extensive national debate of new quality—and we will find that the people of Britain do not want workers to be stripped of their rights, or science to be stripped of its funding. We should seek to reach national consensus on our objectives in negotiations, tough as they will be, with the EU and other global institutions and powers. There will indeed be a great programme of legislation. In all this lies the opportunity to renew our parliamentary democracy.

Photo of Lord Taverne Lord Taverne Liberal Democrat 2:38 pm, 15th June 2016

My Lords, the last speaker was correct in telling us that there are some very unpleasant elements inside Europe in some of the parties. What the noble Lord did not mention is that all our friends—our allies, members of the Commonwealth, the democracies of the world—are desperate that we should stay a member, while the voices which are keenest that Europe should break up are those of Mr Donald Trump and Mr Vladimir Putin.

This has been an excellent debate and I have learned a lot from it. I had not appreciated fully, until I heard the speech of the noble Lord, Lord Boswell, and the very effective speeches from the noble Lords, Lord Liddle and Lord Jay, quite how huge the problems are of extracting ourselves from the European Union and how serious the consequences would be of the prolonged process which would have to take place.

I want to refer to a more particular issue: science and the European Union. A recent survey in Nature showed that 83% of scientists want Britain to stay in the Union because being in the European Union is good for British science. Sir Paul Nurse, for example, an ex-president of the Royal Society and a Nobel prize winner has written:

“Permeability of ideas and people is crucially important to science, and it flourishes in environments that pool intelligence, minimise barriers, and are open to exchange and collaboration”— a point which has been made by many people in this debate. The European Union, he wrote,

“helps provide such an environment, and scientists value it”.

Then there were the 150 fellows of the Royal Society who wrote in March to the Times warning that Brexit could be “a disaster for science”. The reaction of the leave campaign was, as usual, to trot out someone from the small minority who contradicts its views. That is its normal reaction to the majority views of experts who seek to destroy its arguments.

When the IMF, the OECD, the Bank of England, every international economic authority and 90% of British economists concluded that Brexit will reduce our growth rate and adversely affect wages and jobs, their views were contemptuously dismissed. When the universally respected IFS, whose objectivity has never before been questioned, confirmed the Treasury’s detailed forecast of the harm Brexit would cause, we were told that the IFS was a lobby for the European Commission. Here I should declare an interest, because a long time ago, in 1971, as a recent Financial Secretary, I was asked by the founders of the IFS to become its first director, was responsible for its launch and helped it take some of its early steps. I am rather proud of having been the midwife at the birth of this baby, which has grown into such a formidable adult.

This excellent and most informative report from the Science and Technology Committee illustrates many of the reasons why scientists are so strongly pro-EU. They want to be part of a body that promotes big science, that is, science that is now performed on an increasingly large scale. The report quotes Professor Cowley, head of the UK Atomic Energy Authority:

“In the years since the early 1980s, Europe has become the world leader in big science. More and more science is progressing towards big science”.

One could cite many examples, but perhaps the paragraphs that sum it up most comprehensively, and which have been referred to by the noble Earl, Lord Selborne, and others, including my noble friend Lady Sharp, are paragraphs 157 and 158. Paragraph 157 states:

“It was repeatedly put to us that one of the most significant aspects of the UK’s EU membership is the provision of opportunities to collaborate. We view the EU to have three main influences: the provision of collaborative funding schemes and programmes; ensuring researcher mobility; and facilitating and fostering participation in shared pan-European research infrastructures”.

The next paragraph continues:

“Many would maintain that the provision of collaborative opportunities is perhaps the most significant benefit that EU membership affords science and research in the UK. These collaborative opportunities are not just between Member States but can extend to non-EU and non-European countries”.

What are the arguments against? Several have been referred to, but the main culprit, as usual, is bureaucracy. As the noble Lord, Lord Hennessy, pointed out, there is an urgent need for reform of some of the regulations, but I quote Sir Paul Nurse again. He says:

The UK can be very bureaucratic. At the Francis Crick Institute, where I work, we recruit the best in the world, wherever they come from, so we plough through the paperwork. But it costs us effort that would otherwise be spent on biomedical science. In contrast, when we recruit scientists from within the EU, the bureaucracy is much less”.

Our excellence in science is one of our greatest national assets, and so is that of our universities. The effect of Brexit on science and our universities has seldom featured in media reports of the referendum debates, but let me once more cite the views of people who are not generally politically partisan but who know what they are talking about: Universities UK and the vice-chancellors of the Russell Group. They are unanimous in expressing their deep concern about the serious damage Brexit will do to both those precious assets. For example, Sir Leszek Borysiewicz, the eminent Vice-Chancellor of Cambridge, has warned that Brexit could mean that Cambridge could no longer expect to maintain its status as one of the very top universities in the world.

Brexit would harm science and diminish our universities.

Photo of Lord Hannay of Chiswick Lord Hannay of Chiswick Crossbench 2:45 pm, 15th June 2016

My Lords, every one of the three reports we are debating today is relevant to the event that will take place a week tomorrow and is given a great deal of added topicality by that event. Each one, as is invariably the case with such reports of our EU Select Committee and the Select Committee on Science and Technology, is a small part of the complicated jigsaw that makes up our EU membership—one which is so poorly understood, alas, by the electorate and one which, also alas, is so badly explained by politicians. There is plenty of blame to go around for that lamentable state of affairs, but none of it, I suggest, is attributable to your Lordships’ committees or to the admirable chair of the EU Select Committee, the noble Lord, Lord Boswell, who introduced this debate with such lucidity.

No one who has read Article 50 of the EU treaty even once—I fear that there may be some at least in this room who have not done that—can possibly doubt what a cat’s cradle we will enmesh ourselves in if next week we vote to leave. No one also can, or at least should, doubt that we will be at a negotiating disadvantage if we decide to go down that path of withdrawal—a negotiation in which we will inevitably be cast in an adversarial position from the outset.

Let me just make this point. Up to now, the other 27 member states have unanimously made clear—and they really mean it—that they want the 28-member European Union to continue. That is an entirely valid position, from their point of view and an admirable one in mine. But do not doubt: the day we vote to leave, that will change. Then, the 27 other member states will know that we are no longer to be a member of the European Union, and they will look after their national interests in that context. That will not take account of our national interest.

We would thus, under the Article 50 arrangements, lose control over the content and timing. That is all the more so, of course, given that the views expressed sometimes in this Chamber and by Vote Leave seem not to want to trigger Article 50 too soon—that is, in plain speak, to prolong the agony and uncertainty, which is likely to have an extremely damaging effect on investment in this country for even longer than would be the case if it was triggered straightaway. Indeed, it looks to me as if most of the two years provided for in Article 50 could well be taken up with the supporters of leave working out which of the future trading options with the EU we want to aspire to, because they certainly are not making a great deal of sense out of it yet.

On what basis do the supporters of Brexit base their sunny optimism as to the outcome of those negotiations? It is certainly not on any contact with the leaders of the 27 other member states who will be on the opposite side of the table from us—as far as I can see, none of them has had any contact with them at all. Meanwhile, the leaders of the leave campaign miss no opportunity to insult the other member states, and proclaim that they want to destroy the European Union or even, with supreme arrogance, that they want to give them a lesson and a wake-up call. Is that likely to encourage them to give us a good deal? I rather doubt it, even if they are not likely to be heavily preoccupied with the risk of contagion to their own protest movements if they are too generous to us. It is honestly no good saying that the Germans will still want to sell us BMWs and the French will still want to sell us wine. That is the politics of the saloon bar, not of the negotiating table.

The second report, on EU membership and UK science, on which I welcomed the introduction from the noble Earl, is equally sobering, as is the virtually unanimous view of our universities and research establishments that withdrawal would be seriously damaging to them. We have heard plenty of evidence of that. It is not just a matter of EU funding, of which, of course, we get a disproportionately large share—although, given the steady reduction in the Government’s own contribution to our scientific budget in recent years, it is a little hard to believe that they will leap forward and substitute for it with great alacrity. But there is also the important issue of collaboration, to which many noble Lords, including the noble Lord, Lord Taverne, referred. The studies done by Universities UK showed, if I understood rightly, that every pound, dollar or euro put into research in this country was worth 1.4 times as much if done within a collaborative European programme as if it was done in a purely national programme. That is not to be discounted. The scientific effort being made here and elsewhere in Europe is a crucial part of our national capacity to compete effectively in the decades ahead. It should not be subjected to a game of Russian roulette by politicians who have devoted a good deal more of their time to the humanities than they have to the sciences. I confess that I am one of those.

The noble Lord, Lord Boswell, was quite right to say that the three reports are not partisan, but I am sorry if I offend him by saying that all three are basically building blocks in the remain argument. They all represent compelling arguments why remain is in the national interests. When we meet next in this House, the die will have been cast. If, as I hope, the majority vote to remain, it will be important for the Government to set out and implement an agenda that enables us to play a leading role in a reformed European Union, to which we are committed as a wholehearted and constructive member. If the result goes the other way, some of us may be accused—I expect I shall be—of being bad losers. I would not accept that deploring an outcome that will, irretrievably and in a lasting manner, damage our economy, weaken our security and diminish our role in the world, is worthy of that characterisation.

Photo of Baroness Neville-Jones Baroness Neville-Jones Conservative 2:53 pm, 15th June 2016

My Lords, I contribute to this debate as a member of the Science and Technology Committee, which reported on EU membership and UK science. I declare an interest as a member of the Engineering and Physical Sciences Research Council. I take this opportunity to thank our chairman, the noble Earl, Lord Selborne, for the excellence of his chairmanship, and also thank our committee clerk and advisers for the support that they gave us, which was of the highest quality. As our chairman said, it was not our aim to pronounce on the merits of UK membership from the point of view of UK science—rather, our approach was forensic. Our chairman has laid out our conclusions clearly and cogently, and I am not going to repeat what he has said, or repeat the points of other members of the committee. Instead, I shall try to make a few additional and separate points.

There are many contributors to the debate today and I shall be brief. Before I make a few points that struck me in the course of the committee’s work, I want to say how dismayed and alarmed I am by the way in which the pied pipers of leave are attempting to lead the people of this country into a dark mountain from which we can only emerge reduced and poorer. Pace the noble Lord, Lord Howarth, I see no exhilarating distance in front of us, on that route.

My noble friend Lord Howell made some very pertinent points about how the world is going, and he is quite right about that. He is also quite right to suggest that the change and reform agenda in Europe has a long way to go. But the conclusion that I draw is that we are more likely to see that come about in a form that suits us, and sooner, if we are active from inside the political heart of Europe.

I turn to our report. Hardly surprisingly, we found that the overall picture was not one of unmitigated benefit. As our chairman has said, the biggest complaint was about regulation—not the principle of regulatory harmonisation, which was accepted as being necessary and valuable, but some of the EU regulatory regimes, which have been politically driven, with highly negative results for important things such as genomic science and clinical trials. However, we should not delude ourselves into thinking that we do not contribute sometimes to those outcomes—we do. A credible mechanism for the injection of scientific advice into policy-making in the Commission has at last come about, and that will be a very salutary safeguard, provided that it works well; we have yet to see how effective the scientific advice will be. The European Union is ahead of many member states in doing this—not the UK but many others—and I hope that it will contribute to preventing lobby-driven law-making, particularly in the European Parliament.

The overwhelming weight of witness opinion before us was in support of the value of EU membership to UK science. This positive verdict has, in the last few days, been strongly endorsed by British Nobel prize-winners. First, the funding coming from EU sources was very highly valued. As other noble Lords have commented, the UK does disproportionately well in getting hold of EU money, and I might add that engineering does particularly well. This country has a history of neglecting engineering—to our cost, I might say—and nearly half the increase in engineering funding has come recently from EU sources. EU funding might not be so important were the UK to put the level of funding into science that our comparators spend. Most countries are increasing their spending on scientific research, but we in the UK are cutting back. We consistently underfund by relevant international standards, so EU money helps to make up a gap that would otherwise be bigger. I would like to see those trends reversed but, in the present state of affairs, it matters to us a great deal that EU money is forthcoming. I do not believe that, were the UK to decide to leave the EU, that gap would be made up by national funding, let alone exceeded. No one before the committee gave any suggestion that EU scientific programmes were in any way misdirected. On the contrary, the general feeling was that they were extremely relevant to the future of big science.

Secondly, the enthusiasm for the scientific network built up and the work done in UK universities as the result of the free flow of scientists from other European countries was very marked. Enriching was the word used. There are many reasons for this, including the fact that the base is the Erasmus programme and students coming to this country for first degrees then stay and do advanced work. Twenty-eight per cent of academic staff in UK universities are non-UK nationals, of whom 16% come from other EU countries, often bringing salary funding with them, which helps our universities, and 60% of the UK’s internationally co-authored papers are with EU partners. That is not an insignificant intellectual and other contribution. Given the high reputation of UK science, it cannot be argued that EU quantity is at the expense of British quality. Something very precious to science in the UK has been built up which has helped to consolidate the leadership we hold. Collaboration is the key to that. I should hate to see it undermined by a sapping of the flow of students and researchers coming from our European neighbours.

Thirdly, our weakness in translational activity and the links between science and business which are so important to innovation showed up in the European story. British business did not respond to the call for evidence and, as our chairman has said, while SMEs evidently value European funding and apply for it, larger British companies do not. Our witness from Siemens commented on this and clearly thought the UK was missing a trick. He is right, so it is doubly important that the Government, in their forthcoming extensive restructuring of UK publicly-funded research and innovation do not mess up the role of Innovate UK. That, however, is a debate for another day.

Photo of Lord Judd Lord Judd Labour 3:01 pm, 15th June 2016

My Lords, like others, I thank most warmly the members of the committees whose reports we are discussing. I particularly thank the leadership of those committees. The noble Lord, Lord Boswell, made a fine, outstanding, balanced and telling introduction to this debate. I have been privileged to serve on a Select Committee under the chairmanship of the noble Earl, Lord Selborne. I remember and treasure that experience because he was a particularly effective chair, not least because of his open-mindedness and his firm views about where the committee should be going.

Those of us who come down in favour of remaining, as I heavily do, must not run away from the realities that surround us in society as a whole. There are real anxieties, however well or ill-founded, among the people of Britain. I shall pick two which in our future in the Union, which I hope we will have, we must take very seriously. The first is not so often expressed, but I am certain it is there. It is resentment at what people see as elitism in the working of the community, an arrogant bureaucracy which is, for many people, underlined by its very expertise. They do not feel involved in that expertise or relate to it, and therefore it can come across, however unfortunately and however far it may not be true, as a kind of institutional arrogance. What is more, those of who have been caught up—and I was a Minister working on European affairs way back in the 1970s—become part of that in club. We will have to tackle that issue resolutely in our future in the Union. It is unfortunate that we ever moved away from indirectly elected assemblies, as they then were, because with the large impersonal Parliament we have, there is a tendency for it to be remote from the people, not to have to take as seriously as it should the real issues and anxieties being debated in member countries and their Parliaments and to breed national Parliaments that do not have a feeling of responsibility for European success. From that standpoint, it was sad that we did not remain with an indirectly elected assembly.

The other big issue has hardly been mentioned in today’s debate. It is immigration. I live in Cumbria. All the social surveys done in Cumbia find that it is one of, if not the, counties with the smallest amount of immigration. They also find that it is one of the counties with the highest rate of anxiety and prejudice about immigration. That is interesting. National Parliaments and Governments have been responsible for greatly neglecting the realities of how immigration works. We have not been giving priority to the housing, schools, hospitals and infrastructure of the areas in which the majority of immigrants settle, and therefore existing issues of deprivation, the unequal provision of services and the rest become underlined. We should also help with positive social policies on integration and on how people can be helped with language and, let us face it, behaviour to become part of the traditions and realities of the society in which they are living.

If we are speaking of immigration, the point that must be made very firmly is that anything we are encountering and the pressures we see today are small compared to what is going to happen. It is certain that with climate change and the other issues, not least the associated political problems that will arise from them, we will see the issue of immigration growing all the time. Let us remember that countries such as Lebanon and Jordan already have migrant populations that almost equal the size of the population of the country concerned. We will have challenges ahead.

I have said before in this House that I am not ashamed of putting this as a father and grandfather, although I think it is true for our generation too. The overriding reality is that whether we like it or not or may wish it were not the case—I happen to enjoy it—we are part of a totally interdependent world. That cannot be escaped. It is true economically, in terms of security and increasingly in terms of health and in almost every dimension of life that one can think of. The challenge to us as politicians in various countries is to find a way of meeting that challenge of interdependence and a means of governance that can make a success of an interdependent community rather than turning into a frightened, paralysed international society. What worries me is that within so much of the Brexit debate there are—I am sorry to put this bluntly—all the manifestations of insecurity and inadequacy.

Do we want a Britain that is self-confident, outward-looking, sees and accepts the challenges and says, “It’s exciting and fulfilling to meet those challenges”, or do we want an introspective society frightened of the world and becoming, in its language and in other ways, increasingly aggressive in its defensiveness—a kind of raft floating out into the Atlantic, almost sinking under the weight of the missiles, defence systems and bureaucracies that will then become necessary? I want to belong, and I want my children to be able to belong, to a self-confident, outward-looking Britain that sees itself as part of the world, sees its challenges and says, “We are determined to play our full part in meeting those”. Of course Europe is not the total solution—after all, the size of the issues we face is global—but it is a very good starting point for playing a full part, together in Europe, in the wider world.

Photo of Lord Watson of Richmond Lord Watson of Richmond Liberal Democrat 3:11 pm, 15th June 2016

My Lords, I declare an interest as high steward of Cambridge University. In that context, I was particularly delighted by the remarks of my noble friend Lord Taverne. I endorse the harsh reality that the pre-eminence of our science, and the pre-eminence of Cambridge University in particular in science, would certainly be damaged by exit from the EU. It is simply a fact.

With every day that passes in this European referendum, I am seized by the folly of the enterprise. It has been born of divisions within the Conservative Party, and its outcome, whatever it may be, will certainly not resolve them. Thus far the referendum has in fact exacerbated them. It started before the last general election, essentially as a tactic to outmanoeuvre UKIP and Eurosceptic activists in Tory constituencies. As such, it was rendered pointless by the outcome of that election—but the die was cast, the commitment was made and the outcome can deliver one of only two verdicts on the Prime Minister: he will go down in history either as the Prime Minister who took us out of Europe by accident and miscalculation or as a kind of Houdini who, as with the Scottish referendum, at the last moment escaped fate with a final flourish.

Is “folly” the appropriate description of this enterprise? I believe so. It is hard to describe it as anything else when Boris Johnson, the most conspicuous contender for the hollow crown, thinks that the prize justifies questioning the motives of President Obama’s interventions on the grounds of his part-Kenyan ancestry, or feels persuaded to claim that the European Union is an attempt to impose Hitlerian unity on Europe by other means. These are surely the cadences of folly.

If the genesis of this referendum lies in the long-festering blue-on-blue clash within the Conservative Party, it has now enveloped all parties, all parts of the United Kingdom, all the nations of the European Union and the transatlantic relationship itself. The principal consequence of the referendum is division—indeed, a welter of different divisions that collectively and cumulatively jeopardise to a real extent the unity of the people and indeed of our society. These divisions pull us apart, as an authoritative analysis published by the Financial Times on 2 June demonstrated all too painfully.

There is the evident division between majority and minority attitudes in London, and between London and many other parts of England. Then there is the division between sentiment in Scotland and England and, possibly, between opinion in England and Wales. Within the framework of devolution and the evolution of separate parliaments, there is the promise of further serious trouble ahead. Then there are the divergences between young and old, between better educated and those less fortunate, and between those more prosperous and those less so. Above all there is a psychological divide, as has been referred to in the debate, between optimism and pessimism.

Both sides can and do claim self-belief, and I believe that both share patriotism. But the prominence of immigration in this referendum shines a harsh and revealing light on the whole enterprise. The division here is more than a row about statistics; it is a thermometer taking the temperature of who we think we are. Of course, this is not unique to us: the Americans are torn by the issue of immigration and it lies at the heart of Europe’s crisis. However, is our reaction to reject international interdependence, build walls and draw up drawbridges? If it is, we are indeed at risk.

There is of course nothing wrong in facing up to fundamental issues, even if so often they are deeply divisive and painful. It is the process of democracy. But we should remain increasingly vigilant that referenda are not allowed to replace the power and responsibility of Parliament. Here again, folly lurks in the wings. The public have been encouraged by both sides to see the referendum as decisive, and historically it may prove to be so. But if decisiveness is assumed to deliver instant or even rapid change, the public will have been misled and indeed deceived. The excellent and worrying report of the European Union Committee on the process of withdrawing from the EU contains judgments that make a mockery of the expectations engendered by the referendum. First, as paragraph 15 says:

“There is nothing in Article 50 formally to prevent a Member State from reversing its decision to withdraw in the course of the withdrawal negotiations”.

Secondly, paragraphs 31 and 34 of the report state that if a majority on 23 June is for Brexit, the United Kingdom will need to negotiate two treaties, one for withdrawal and, in parallel, one to establish our future relationship with the European Union, including terms of access to the single market. Given that the single market is where half our exports go and that it is vital for attracting inward investment from countries such as the States, India and South Korea, the second, parallel negotiation is vital to whatever Government negotiate on our behalf. The parallel negotiation will be tortuous and tense. As one witness to the committee said, the United Kingdom will be presented with “almost unimaginable … long-term ghastliness”, given the legal complications involved.

I shall cut to the point. The parallel negotiations, let alone those involving EU legislation embedded in Scottish legislation, may well outlast the life of this Parliament and indeed of this Government. Instant resolution is a myth; it is not going to happen, and to appear to offer it is folly. One matter is clear: this perilous and hugely demanding series of negotiations that Brexit must involve requires a Government who are united and command a majority in Parliament. For this to be achieved may require, whatever the constitutional difficulties, a further general election.

I have spent a large part of the last two years writing a book about Winston Churchill in 1946. During that period he made two very famous speeches. One was at Fulton, Missouri, where he revealed to the American public that Joe Stalin was not good old Uncle Joe at all but a tyrant determined to extend his control over the rest of Europe, and he appealed to the Americans to come to Europe’s defence—which, thank God, they subsequently did. If we ever wonder whether Mr Obama has a right to offer his opinion, surely what the Americans did then and in the post-war period justifies it.

Churchill made the second speech six months later in Zurich—the so-called “let Europe arise!” speech. In it, he said to his audience, “I am going to startle you”—and he did, because what he proposed was a kind of United States of Europe which would be led by a partnership between France and Germany. He did not propose that we should join it—it was not there—but he said that we should unequivocally support it, and he was absolutely right. That second speech had as much impact as the first. The first, arguably, kicked off the process that led eventually to NATO and the defence of Berlin. The second definitely kicked off the process that led to Marshall aid and eventually to the European Coal and Steel Community.

I have been asked by many people—it has been discussed in the media a great deal—what Churchill’s view would have been. Of course, we do not know, but there is something that we should remember. Churchill advocated and supported Franco-German unity and a kind of united states of Europe because he believed that Britain’s place in the world turned decisively on being at the centre of three great circles of influence: the English-speaking world outside the United States, the Commonwealth; the United States; and Europe. He also believed that if we allowed ourselves to be pushed out, or took ourselves out, of any one of those three circles, we would be critically damaged and diminished in the remaining two. If we do that now with Brexit, I believe that that will again be the case.

Photo of Lord Low of Dalston Lord Low of Dalston Crossbench 3:22 pm, 15th June 2016

My Lords, as I listened to the wonderful speeches of the noble Lords, Lord Jay, Lord Cormack and Lord Bilimoria—picking just three out of what could have been a much larger number; I could certainly have included the speech from the noble Lord, Lord Watson, which we have just heard—I found myself lamenting with a sinking feeling the fact that we did not hear more of them on the airwaves than Messrs Johnson and Gove and the other mendacious purveyors of snake oil, to whom we are so relentlessly subjected.

We should be grateful to the noble Lord, Lord Boswell, and his committee for making clear, particularly in their report on the process of withdrawing from the EU, a number of things that will be of pressing concern if the British people vote to leave the European Union. However, while the noble Lord’s committee has done us a signal service in helping to get to the bottom of these questions, I hope that they will remain purely academic, because I hope that the British people will not vote to withdraw from the European Union.

I say that as a disabled person because it is clear to me that disabled people will get a much better deal by remaining within the European Union. I therefore propose to come at this from a slightly different—I hope not too self-regarding—angle. In so far as it is self-regarding, I declare my interest as a disabled person, but I venture to think that what I say about the situation of disabled people could be said, mutatis mutandis, about numerous other specialised constituencies.

As president of the European Blind Union between 2003 and 2011, I was involved in advocating for disabled people’s rights at a European level. On the basis of that experience, I would argue that we were able to achieve a great deal for disabled people using EU mechanisms that we could not achieve at a national level. I said something about this in the debate on the humble Address three weeks ago, but I am even clearer about it now, having attended a seminar last week where disabled people considered whether they would be better off in or out of the EU. They were in no doubt that they would be better off in.

I could illustrate that by reference to a number of areas where the EU has competence to legislate, but I will limit myself to the single market, where disabled people probably have most to gain from remaining within the EU, and will take as examples just three pieces of legislation or proposed legislation.

In 2014, disabled people successfully influenced the revision of the EU’s public procurement directive. Accessibility is now a mandatory criterion for all public tenders above a certain financial threshold. According to the European Commission, public procurement accounts for 14% of the EU’s GDP. At home, according to a 2015 House of Commons briefing paper, in 2013-14 the UK public sector spent a total of £242 billion on the procurement of goods and services—33% of public sector spending. In sectors such as energy, transport, waste management, social protection and the provision of health and education services, public authorities are the main buyers, so public procurement regulations offer a substantial lever to improve accessibility and bring about change, just as they did in the United States many years ago.

Turning to accessibility of the world wide web, despite initial strong resistance from national Governments, we are now on course to have a European directive that will ensure the accessibility of all public sector bodies’ websites. It will cover their mobile applications and include an enforcement mechanism. This will ensure that disabled citizens can access e-government services right across Europe. In conjunction with the previously mentioned new rules on public procurement, this directive should ultimately ensure that industry delivers digital solutions that are accessible to all. We already have European standards for accessible information and communications technology—ICT—but technology is moving very fast in this area and it is good to have this new legislation to ensure that disabled people are able to keep up.

Finally, on accessibility of goods and services, the European Commission has now tabled a proposal for a directive that would harmonise accessibility requirements across the EU on a wide range of goods and services, including smartphones, computers, ticket machines, ATMs, retailers’ websites, banking, e-books and associated hardware, such as Amazon’s Kindle, as well as audio-visual media services and related equipment. Travel-related information is also included. Items not complying with the standards will not be able to be brought to market.

In the UK, neither the Disability Discrimination Act nor the Equality Act applies to manufacturers and manufactured goods. At first sight this is unfortunate, because that is where many accessibility barriers are built into the things that we need to use to live independently, to keep in touch with friends and family and generally to be part of the world in the same way as everybody else. But what initially looks like a major defect in disability legislation may ultimately be for the best. A harmonised market of 500 million EU consumers is far more attractive to industry than the much smaller UK market, and a common set of accessibility standards will drive innovation and encourage investment. This proposal does not include everything that one would want—it does not include white goods such as washing machines or microwaves—but it does provide a very good basis for legislative change.

Disabled people in the UK and across Europe have much to gain from the proposal for a European Accessibility Act, which is probably the most important piece of disability legislation yet to come out of Europe. In the debate on the humble Address, I spoke of one’s general philosophical orientation being more important than what the noble Baroness, Lady Ludford, who will be speaking after me, more aptly termed “bean counting”. What I omitted to say was that, whereas the UK is often spoken of as punching above its weight, I have absolutely no doubt that, if we were to withdraw from the European Union, we would soon find ourselves punching well below our weight.

Photo of Baroness Ludford Baroness Ludford Liberal Democrat 3:29 pm, 15th June 2016

My Lords, as a fully signed-up member of the Boswell fan club, I was very impressed not only by the report but by its introduction today from the noble Lord, Lord Boswell. It has been very useful to have the three reports melded into one debate. I was a little uncertain about that originally, but I have been proved wrong, not least because of the reform and withdrawal elements being brought together but also because we have had a very strong contribution on the scientific work that is supported by the European Union. I agree with the noble Lord, Lord Hannay, that, as an arts person, the more I learn about science, the better.

It has been amply demonstrated that the leave campaign has no feasible post-Brexit plan: it would be a leap in the dark, as the noble Lord, Lord Liddle, said. Others have also emphasised the dangers of a chaotic withdrawal in the context of a lack of trust, as my noble friends Lady Falkner and Lady Smith said. The noble Lord, Lord Jay, reminded us that the negotiations would be of a hardball nature, with up to 10 years of fraught discussions. The noble Lord, Lord Howell, recalled that we are not Canada or Japan. We are in Europe, and so we cannot use those models to guide us.

To the noble Lord, Lord Pearson, I say that what the remain campaign and most people in this debate are talking about is Project Reality, not Project Fear. It is about what will happen if, due to what I and others would regard as a very bad decision, this country was to decide on Thursday next week to leave the European Union and follow the Pied Pipers of the leave campaign—a phrase which I have pinched, and will probably use again, from the noble Baroness, Lady Neville-Jones.

I was impressed by the recent entry of former Prime Minister Gordon Brown into the heat of the campaign. He has not traditionally been associated with passion but more with post-neoclassical endogenous growth theory. However, he has come up trumps—not Trump, I hasten to add—with his video filmed in the ruins of Coventry Cathedral. I saw one reference to that video having had 2 million views, and that was a day or so ago.

The Select Committee’s report noted how the Government’s approach had downplayed any visionary or emotional element in their proposals for the future of the EU, focusing almost exclusively on pragmatic and transactional arguments—although that has improved in recent months. Of course, pragmatic arguments are essential, but a dose of what the noble Lord, Lord Boswell, called “feelings and ideals” has the advantage of putting everything in context, set against the past and looking ahead to the future. The noble Lord, Lord Browne, referred to his family history to illustrate the inspiration for the EU. That resonates, and is something that has not come out enough in the referendum campaign. I was at a meeting last night, and the biggest applause of the evening was when I got a bit emotional about the 70 years of peace that we have had.

It is not just vision and emotion that need to be taken into account; we need also to look at the factors beyond the economic, important as those are. The geopolitical and strategic implications of the UK’s exit from the EU are considerable, as is touched on in the EU Committee’s report, and would mean a hit to our security through the loss of key EU co-operation instruments and a loss of diplomatic and political influence.

Following a short break earlier, I came back to the Chamber in the middle of the speech by the noble Lord, Lord Howarth. He enumerated the very unpleasant political forces that are abroad on the continent. We are pretty disputatious as a nation, but we are largely free from the nastiest of the political elements. The injection of our history and stability is much needed in Europe. A couple of days ago, the Financial Times commentator Wolfgang Münchau said that,

“whatever the referendum’s outcome, the chances of the UK playing an active role in shaping Europe’s future are minimal”.

I hope that we will be able to prove him wrong.

I also hope that, in just over a year’s time, the UK will be about to assume the presidency of the EU as a leading, not a leaving, member—in the words of my noble friend Lord Maclennan, echoed by the noble Lord, Lord Hannay. I hope that we will be able to commit to making the EU more streamlined, more effective and possessing of greater legitimacy. I believe that the EU is democratic, with directly elected MEPs and elected Ministers in the Council. However, what we have is a legitimacy deficit. As the noble Lord, Lord Judd, mentioned, we can bring confidence and our outward-looking approach to improve the European Union.

The remain side is not complacent about the current state of the EU, which the noble Lord, Lord Howell suggested. However, he is absolutely right that we have to prepare the EU for the storms to come. It must lift its eyes to the horizon and not be introverted. We can contribute so much to making the EU stronger in addressing the many challenges that there are. For example, we can contribute to making Europe more competitive, with a growing economy, and more ambitious in trade deals. We can also contribute to a Europe that distributes more fairly the gains from globalisation, as the noble Baroness, Lady Armstrong, remarked.

The noble Lord, Lord Low, spoke very interestingly about the contribution of the EU to accessibility criteria for goods and services. That is essential. We all know what we need to compete in a single market, and there are digital, energy and financial services dimensions.

I absolutely agree with the noble Lord, Lord Boswell, that we have wasted the enormous asset that was the balance of competences review. No other member state has done anything so comprehensive. So please, after next Thursday, when, as I sincerely hope, we vote to remain, let us use the information and contributions in that review. It is disrespectful to everyone who did so much work in contributing to and writing up the report not to draw on that exercise. It would help the EU get smart regulation. Let us build the quality, not the width.

The noble Earl, Lord Selborne, strongly emphasised the importance of a strong regulatory framework in the EU as providing a good basis for scientific collaboration. He also highlighted the things that had not worked so well. However, I am glad that, for example, in the clinical trials directive, the Brussels machine did listen and improve that.

My noble friend Lady Sharp made interesting remarks on the bureaucracy around grants. There is a bit of a “cannot win” dilemma for the European Commission. With the Court of Auditors breathing down its neck, maybe 30-page forms are necessary to be able to audit and track the funds. What I would like to see is Finance Ministers and our own Chancellor sign declarations to say that all money spent in their member states is properly spent. Funnily enough, they never want to do that, because they quite like Brussels being blamed.

So many speakers—too many for me to name them all—emphasised how Brexit would severely hit our universities and scientific collaboration, which has been such a success story. That feeds into the reform of the European budget. Big progress has been made, but more needs to be done with the continued switch to innovation, research and infrastructure. We can do that only if we are in there arguing for those changes.

Also, of course, we are very aware of our unique contribution in security and counterterrorism. The UK is a crucial partner. Having the current director of Europol and the former president of Eurojust, the network of prosecutors, is, I think, a tribute to our first-tier legal and policing status. On defence, foreign policy and the European neighbourhood, we need to capitalise on what my noble friend Lord Watson called our “three circles of engagement”—Europe, the Commonwealth and the transatlantic relationship. There is no country in the world that has the networking assets that we have. We are a sort of Tatler of the diplomatic and political world.

I shall say a word on migration, which is an important part of this campaign—and not only external migration, where we must work with the rest of the EU to get a credible policy of migration management, whose challenge is only going to grow, coupled with development aid, as the noble Lord, Lord Hastings, said. On intra-EU free movement, we have had very helpful judgments from the European Court of Justice, including one just yesterday about the payment of child benefit, which have confirmed that free movement is the right to move for a job. It always was, but there has been clarification and firming up of the rules, including through the Prime Minister’s renegotiation. We need to do two tough things. One is making sure that public resources are targeted at areas in this country which are under migration pressure, and being more nimble in switching the money. The other is the investment in training and skills for our own young people so that employers do not automatically put advertisements in Polish newspapers.

Lastly, I shall say a word about our engagement with the EU institutions. It will not come as a surprise, perhaps, to the noble Lord, Lord Judd, that I, as a former Member of the European Parliament, do not agree with his regret regarding a directly elected European Parliament. We certainly need much better partnership between the European Parliament and national parliaments. Perhaps one little step that we could help achieve would be to give MEPs a pass for the Palace of Westminster. It is absurd that we regard MEPs as some kind of foreign body that should not be allowed on the premises. The stress in the reform report on allowing national parliaments a positive and proactive role—a green-card role, not just a reactive and negative red-card role—is very important.

Many remarks have been made, including by the noble Lord, Lord Browne, about the importance of having British officials in European institutions. I think that there are two things the Government could do. They could revive and beef up the fast-stream program in the Civil Service to prepare people for the “concours”, or competition. Also, as far as I know, they have not reversed the much-regretted decision of some years ago to cease funding scholarships at the College of Europe in Bruges—you could call it the Eton of Brussels—which helps provide a channel into the EU institutions.

We need to be careful what we wish for in a “flexible, multi-layered, diverse Europe”. That is fine, as long as it does not become a pick ‘n’ mix, where we end up losing out. Therefore, I end on the warning from Manfred Weber, the present leader of the EPP group, the biggest group in the European Parliament, who sounded a note of caution about British exceptionalism. We are not in the euro; we are not in Schengen; and I wish we had not been half-hearted about justice and home affairs co-operation—and thank you to everybody in this Chamber who worked so hard to get us opted back into the 35 measures. We need to be very careful that we do not undermine the voice of British Members of the European Parliament in getting senior positions, such as chair of the Committee on Economic and Monetary Affairs, which my colleague Sharon Bowles got in 2009. We should not undermine either the chance of that being repeated for the chair of the Committee on Civil Liberties, Justice and Home Affairs or our weight in the Council. I would say yes, perhaps, to a kind of special arrangement for the UK, because if that goes too far we will actually lose the leading voice that many of us here want.

Photo of Lord Collins of Highbury Lord Collins of Highbury Opposition Whip (Lords), Shadow Spokesperson (Foreign and Commonwealth Affairs), Shadow Spokesperson (International Development) 3:44 pm, 15th June 2016

My Lords, I, too, thank your Lordships’ EU Committee for its excellent reports, and the noble Lord, Lord Boswell. The reports have focused on key issues arising from the Government’s negotiations and have addressed that vital question of plan B. Since their publication, events have overtaken us. With just seven days left, the shape of the campaign has been pretty well determined. As the committee demanded of the Government, I shall today focus on a positive vision for a reformed EU. However, there is no disguising what the committee highlighted and has been confirmed by the IMF, the OECD, the Bank of England and many economists a vote leave will lead to a lengthy period of uncertainty while any future relationship with the EU is concluded, causing a serious shock to the UK economy.

The Brexit campaign cannot sweep away the effects of this period of limbo, as my noble friend Lord Liddle called it, nor can it dodge any longer the questions about what alternatives to membership may look like. Boris Johnson and Nigel Farage will take us back to a future reminiscent of the 1980s, when unemployment was said to be a “price worth paying” and things such as paid leave, health and safety and equality rights were considered red tape holding back progress.

However, as we have heard in this debate, the EU is not just about economic security; it is about a vision of a continent where co-operation overcomes conflict. As a nation, we have a moral and practical interest in preventing conflict, stopping terrorism, supporting the poorest in the world and halting climate change. Britain leads in Europe on these issues and, in turn, Europe helps to lead the world. Those who advocate that Britain should turn its back on the European Union have a very heavy responsibility to prove their case.

As the committee reminded us, the Government were clear throughout the negotiations that their support for continuing EU membership would depend on reaching a successful outcome. Yet the referendum question makes no reference to the “new settlement”. The simple truth is that this is not a referendum on David Cameron’s reforms; it is on weighing up the benefits of membership of the EU overall.

Nor is reform just about what Britain asks for now, as we have heard in this debate; it is a constant process of trying to make Europe more effective in generating jobs, investment, growth and security, and our influence in the world. Labour has an alternative agenda for progressive change in the EU: to strengthen workers’ rights in a real social Europe; to put jobs and sustainable growth at the heart of European economic policy; to democratise EU institutions; and to halt the pressure to privatise public services. It is a vision of a real social Europe, one which protects the “going rate” for skilled workers, prevents the undercutting of wages and directs EU funding to places where the pressures are greatest.

As Jeremy Corbyn has argued, the only way to secure these changes will be to remain in the EU. I am confident that the public will trust the Labour movement to stand up for working people rather than the likes of Nigel Farage or Boris Jonson. As we have read in the reports and heard in the debate, what progress we have made on reform will be lost if we vote to leave. Instead, we will be left with just two years in which to negotiate not only a new trading relationship with the European Union but also with the 53 other countries with which we currently have trade agreements because we are members of the European Union. We would be entering a negotiating process where EU member states would retain significant control despite the Commission having responsibility for its conduct. As the committee pointed out, there is the potential for some countries vetoing certain elements of the agreement to secure better deals on others. That is what negotiation is about, and if you think that can be conducted quickly, you are living on a different planet from me. In effect, nothing would be agreed until everything was agreed.

One of the most important aspects of the withdrawal negotiations would be determining the acquired rights of the 2 million or so UK citizens living in other member states and, equally, of EU citizens living in the UK. As my noble friend Lord Judd said, for many people, immigration is the issue in this referendum. They feel that our country has become too crowded, that our services are under pressure, that we are losing our identity and that leaving the European Union would restore control over these things. We have an obligation to be honest with one another about the nature of the world in which we live and the changes that have happened—and will happen whichever way people vote on 23 June. Immigration into Britain will continue whether we stay or go, as the leave campaign has now admitted. Immigration brings challenges to the UK, which is why Jeremy Corbyn and Andy Burnham said last week that we want to see EU protections for people’s wages and a special fund to help the most affected communities. But being in Europe helps Britain to control immigration so that it works for us. For example, it helped us to persuade France to move Britain’s border from Dover to Calais. Leaving would put that at risk.

Anyone who thinks that voting leave will solve problems—such as the shortage of housing and the crisis in the NHS—in time will be bitterly disappointed. As we have heard in this debate, failure to prioritise those issues is the fault of government, not Europe.

What is plan B if the UK votes to leave? Will the Minister address how the Government plan to deal with the fundamental issues raised by the committee? What alternative arrangements are considered for the UK’s Council presidency in the second half of 2017? What oversight will the UK Parliament have over the negotiations on withdrawal and the new relationship beyond existing ratification procedures? What is the Minister’s assessment of the timeframe to disentangle EU law from domestic law and how this may impact on the devolved nations? Does the Minister agree that it may be necessary in the national interest to maintain a significant amount of EU law in force in national law?

As we heard from the noble Earl, Lord Selborne, the excellent report by our Science and Technology Committee makes a number of interesting points about the situation facing UK science if there were to be a Brexit. For example, it stresses that the UK is one of the world’s leading scientific nations, in terms of both fundamental and applied research, and that we have retained this leading position in the face of growing competition from around the world. It also says that the overwhelming balance of opinion made known to the committee from the UK science community valued greatly the UK’s membership of the European Union.

That point was made effectively by Sir Paul Nurse in his article in the current New Statesman edited by Gordon Brown—I strongly recommend that issue to all noble Lords. Sir Paul highlighted the recent survey in the science journal Nature, which showed that 83% of UK scientists want Britain to stay in the EU—a much higher proportion than in the general population. That is because science flourishes in environments that pool intelligence, minimise barriers and are open to exchange and collaboration. The EU helps to provide such an environment, and scientists value it. There is no doubt that some will see no problems if the UK leaves the EU, but as Sir Paul says,

“the great majority of scientists”,

support remain. He goes on:

“In contrast, hardly any accomplished scientists are arguing that leaving the EU would be good for UK science”.

Does the Minister agree with Sir Paul when he says that superb science is one of the UK’s biggest assets, one that makes all our lives better? Over recent decades, the EU has played a critical role in helping UK science. What is good for science is good for the UK, and what is good for UK science is staying in the European Union.

In conclusion, I turn to my noble friend Lord Howarth and quote what I read in yesterday’s FT, which summed up the position in which we now find ourselves. It states that,

“the continent’s present troubles should serve as a reminder of its capacity for self-harm. The rise of populism, drawing from the well of economic and social discontent, carries disturbing echoes of the 1930s. A confident Britain would see this as a moment to lead rather than leave”. 

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch UKIP

Will the noble Lord explain the difference between populism and democracy?

Photo of Lord Faulks Lord Faulks The Minister of State, Ministry of Justice 3:57 pm, 15th June 2016

My Lords, this has been a fascinating debate. It has covered an enormous amount of ground and the House has displayed great expertise and, indeed, passion. I do not exclude from that observation, despite the fact that they were very much in the minority, the noble Lords, Lord Howarth and Lord Pearson.

I must say that I had no expectation of a reference in the debate to PG Wodehouse, which was provided by the noble Lord, Lord Hennessy, in his pertinent and witty speech. I am a little concerned that the great man might have supported Brexit, however. We even had an excursion into fairy tales. I got a little lost between the second bowl of porridge and the disadvantages of having a mistress, but, broadly speaking, I agreed with the noble Baroness.

I would particularly like to congratulate the noble Lord, Lord Boswell, chair of the EU Select Committee, and my noble friend Lord Selborne on their chairmanship of the committees which have produced the three reports before us today, and to record the Government’s appreciation of the work of the respective committees. Naturally, I understand that the committees wished to have their reports debated before the date of the referendum, notwithstanding the fact that the government response will not be available until after 23 June. I do not want to pre-empt the detailed response that will be provided. However, on this final day of business, I would like to take this opportunity to set out the Government’s position on the referendum.

First, I want to restate what my right honourable friend the Prime Minister achieved in his renegotiation. This is also set out in the government paper The Best of Both Worlds: the United Kingdom’s Special Status in a Reformed European Union. Last year, the Prime Minister set out to address four key areas in the EU where the UK wanted to see reform, and at February’s European Council he reached a deal that delivered on all those areas. The noble Lords, Lord Boswell and Lord Jay, and the noble Baroness, Lady Falkner, suggested that insufficient attention had been paid to the settlement. I think they were right. On economic governance, he obtained permanent protection for the pound and our right to keep it, as well as guarantees that UK taxpayers will never be required to bail out the eurozone. We have protected the UK’s rights as a country within the single market, but outside the eurozone, to keep our economy and financial systems secure and protect UK businesses from unfair discrimination.

On competitiveness, my right honourable friend secured from the EU and all member states commitments to reform the EU in line with the vision for a more globally competitive Europe which we and others share. The EU recognised the need to act to,

“promote a climate of entrepreneurship and job creation, invest and equip our economies for the future, facilitate international trade, and make the Union a more attractive partner”.

The Prime Minister also secured a clear commitment to,

“doing more to reduce the overall burden of EU regulation, especially on SMEs and micro enterprises”,

which account for 95% of all UK firms. There will be a new focus on further extending the single market to help bring down the remaining barriers to trade within the EU, particularly in key areas such as services, energy and digital.

Our new settlement has secured a clear commitment that the EU will pursue an active and ambitious trade policy with the world’s most dynamic economies, prioritising the US, Japan and other important partners in the Asia-Pacific region and Latin America to reduce or eliminate the tariff and regulatory barriers faced by UK companies in large and growing non-EU markets.

The UK benefits from the EU’s greater economic leverage, which has allowed it to negotiate advantageous free trade agreements with more than 50 other countries—agreements with terms that are far more favourable than any we could have negotiated on our own because of the combined negotiating muscle of a marketplace that is five times greater than our own. Concluding all the trade deals already under way could ultimately be worth in total more than £20 billion a year to the United Kingdom’s GDP. Once these deals are completed, around three-quarters of UK exports to non-EU countries will be covered by EU-negotiated free trade agreements.

On sovereignty, the Prime Minister secured formal agreement that the UK will not be part of ever-closer union, that it is not committed to further political integration, and that the treaties will be changed to that effect. We will also have new powers to block or remove unwanted European laws. Until now, there were insufficient means of stopping the EU from passing laws that should be left to individual countries. There was no way of introducing a “downward ratchet” to EU lawmaking, as the Foreign Secretary and others have long demanded. This has led to unnecessary regulation and interference. However, under the new settlement, the European Commission has committed to,

“establish a mechanism to review the body of existing EU legislation for its compliance with the principle of subsidiarity and proportionality”.

This mechanism will ensure that the EU acts only where it really needs to do so. The European Commission will report its findings to the Council of Ministers every year. If Ministers decide that the EU has gone further than necessary, they will be able to ask the European Commission to withdraw or amend the legislation in question.

Finally, on welfare and migration, the deal secured new powers to tackle the abuse of free movement and reduce the draw of our benefits system. This will help to meet our aim of reducing immigration, by making sure that new arrivals from the EU cannot claim full benefits for up to four years.

The decision of the Heads of State or Government agreed at the February European Council is legally binding and irreversible. It has been registered with the United Nations as an international treaty. The February European Council conclusions and the texts of the deal agreed at that Council clearly set out the legally binding nature of the deal. This was briefly an argument mounted by the supporters of Brexit, that it was not binding, but I think that their argument has largely evaporated. It was in any event supported by the legal opinions of both the Council Legal Service and Sir Alan Dashwood QC. The deal is irreversible because it can be amended or revoked only if all member states, including the United Kingdom, agree unanimously.

The Prime Minister has, however, made it clear that more reform is needed; Europe needs to improve. The task of reforming the European Union does not end with this agreement, a point made in his characteristically thoughtful way by my noble friend Lord Howell. But as I have set out, our new settlement will give the United Kingdom a special status within the EU that no arrangement outside the EU could match. As the Government have previously stated, the UK’s national interest will be best served by our country remaining part of a reformed EU. Membership of this reformed EU offers opportunity and security for jobs, investment and doing business, as well as for tackling crime and dealing with global issues such as climate change and terrorism. We also heard from the noble Lord, Lord Low, about the advantages to those who are disabled. It offers us certainty compared with years of disruption and the uncertainty of leaving for an unknown destination outside.

Ultimately it is of course for the British people to decide. The Government have a democratic duty to give effect to the electorate’s decision. Should the majority vote to leave the EU, we would start the Article 50 process. As set out in the Government’s own analysis, The Process for Withdrawing from the European Union, the EU treaties would continue to apply to the UK until the Article 50 agreement had entered into force, or for two years if no agreement had been reached and no extension to the two-year period had been granted. A request for an extension could be granted only with the unanimous agreement of the remaining member states, a point that is either ignored or not sufficiently understood by those who want us to leave. Perhaps I may refer noble Lords to Chapter 3 of the document, which makes this point:

“An extension request would provide opportunities for any Member State to try to extract a concession from the UK”,

which is hardly a strong negotiating position. Article 50 does not specify how much the withdrawal agreement itself should say about the future relationship between the EU and the departing member state. Any sort of detailed relationship would have to be negotiated separately from the withdrawal agreement using the detailed processes set out in the EU treaties. Article 50 does not specify whether these negotiations should be simultaneous or consecutive. This would be a matter for negotiation.

The use of Article 50 is unprecedented. Consequently, there is a great deal of uncertainty about how it would work. It would be a complex negotiation requiring the involvement of all 27 remaining EU member states and the European Commission. What is certain is that the UK’s withdrawal from the EU would mean unravelling all the rights and obligations that the UK has acquired since accession, a veritable cat’s cradle, as referred to by the noble Lord, Lord Hannay, ranging from free access to the single market, to structural funds for poorer regions of the United Kingdom, to joint action on sanctions. My noble friend Lord Caithness emphasised the complexity of the process and he was right to do so. Sir David Edward QC, a distinguished lawyer, said in evidence to the European Union Committee that:

“The long-term ghastliness of the legal complications is almost unimaginable”.

The noble Lord, Lord Watson, also referred to that.

We would also need to negotiate a new relationship with Europe outside the EU. The Government have previously set out their view that leaving the EU would begin a process that could lead to a decade or more of uncertainty for Britain and for the economy. But what about the alternatives: what would this new relationship look like? The Government looked at a number of options in the paper entitled Alternatives to Membership: Possible Models for the UK. These included Norway, Canada, Turkey and a World Trade Organisation-only relationship. The paper summarises that:

“These models offer different balances in terms of advantages, obligations and influence … the precedents clearly indicate that we would need to make a number of trade-offs”.

In return for full access to the EU’s free trade single market in key UK industries, we would have to accept the free movement of people. Access to the single market would require us to implement its rules, but the UK would no longer have a vote on those rules. There is also no guarantee that we could fully replicate our existing co-operation in other areas such as cross-border action against criminals.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch UKIP

Before the noble Lord leaves the trade aspects, is he going to answer the points I put to him? For instance, they have two and a half million more jobs selling things to us than we do to them. Taking as I did the specific example of our motor trade, given that they send us 2.4 cars for every car we send them, and they have 64% of our market, are the noble Lord and the Government really saying that the eurocrats in Brussels would actually try to impose a tariff on that? Is it not perfectly obvious to anyone used to international trade that all this would continue as it does now?

Photo of Lord Faulks Lord Faulks The Minister of State, Ministry of Justice

The noble Lord is very confident about the future. I do not share his confidence. Of course trade will continue in one guise or another, but how can we be certain that the trade arrangements will be exactly as he would want them, given all the uncertainty that exists?

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch UKIP

I am merely saying that they would continue as they are.

Photo of Lord Faulks Lord Faulks The Minister of State, Ministry of Justice

I do not think there is any guarantee of that. I will make some progress, if I may.

Full access to the single market would require us to continue to contribute to the EU’s programmes and budget. An approach based on a free trade agreement would not come with the same level of obligations, but would mean that UK companies had reduced access to the single market in key sectors such as services—almost 80% of the United Kingdom economy—and would face higher costs. We would lose our preferential access to 53 markets outside the EU with which the EU has free trade agreements. This would take years to renegotiate, with no guarantee that the UK would obtain terms as good as those we enjoy today. In order to maintain the rights of UK citizens living, working and travelling in other EU countries, we would almost certainly have to accept reciprocal arrangements for their citizens in the United Kingdom.

As the paper also sets out:

“Whatever alternative to membership the UK seeks following a decision to leave the EU, we will lose influence over EU decisions that will still directly affect us. We need to weigh the benefits of access to the EU and global markets against the obligations and costs incurred in return. It is the assessment of the UK Government that no existing model outside the EU comes close to providing the same balance of advantages and influence that we get from the UK’s current special status inside the EU”.

As to science and technology, we have seen both sides make their case for and against EU membership over the past few months. I am pleased that today, we have heard from members of the Science and Technology Committee, who bring another important angle to this debate, and to whose inquiry the Government have provided evidence. The UK plays a leading role in many aspects of EU research and science programmes. These provide access to opportunities of a different scale and scope from those that are possible nationally.

The UK received over £7 billion in EU funding for science and research between 2007 and 2013, second only to Germany. However, there is still scope for improvement, both in how the EU manages science funding and in simplifying the bureaucracy and transparency of funding instruments. The Government are keen to ensure that EU decision-making is based on the best scientific evidence. The UK has robust systems in place for providing science advice to government. Similar systems at EU level are currently being reformed.

Universities and science Minister Jo Johnson gave evidence to the inquiry earlier this year, saying that:

“Britain's success as a science powerhouse hinges on our ability to collaborate with the best minds from across Europe and the world. This report is further evidence that the UK’s influential position would be diminished if we cut ourselves off from the rich sources of EU funding, the access to valuable shared research facilities and the flow of talented researchers that provide so many opportunities to our world-leading institutions”.

I will conclude by once again welcoming these reports. The noble Baroness, Lady Smith, rightly described them—perhaps rather rare in this debate—as showing objectivity. The Government will respond in due course, but I am grateful for all the contributions noble Lords have made to the debate today.

I have described the reforms that the Prime Minister secured in the UK’s settlement with the EU. There is of course more work to be done in reforming the EU, but the settlement shows the commitment of the European Commission and all 27 other countries in the EU to taking action. The Best of Both Worlds: the United Kingdom’s special status in a reformed European Union sets out the Government’s view that the UK’s national interest is best served by remaining in a reformed EU.

I have explained that the process of withdrawing from the EU is untested. The UK and the 27 other member states, along with EU institutions, would need to negotiate the UK’s new relationship with the EU. There would be difficult trade-offs, and this would lead to a considerable period of uncertainty, as we set out in the government paper.

On EU membership and its relationship to UK science, I have taken note of the committee’s report and restated the Government’s position that they believe the UK’s influential position in this field would be diminished if we cut ourselves off from EU funding, shared facilities and talented researchers.

As my right honourable friend the Prime Minister has said, this will be a once-in-a-generation vote. The Government’s position is clear. Our new settlement resets the balance in our relationship with the EU. It reinforces the clear economic and security benefits of EU membership, while making it clear that we cannot be required to take part in any further political integration. It creates a mechanism for reviewing existing EU laws and ensuring that decisions are taken at the national level whenever possible. It is in our national interest to remain in that reformed EU.

My noble friend Lord Cormack rightly referred to paragraph 258 of the committee’s report on the EU referendum and reform, with its emphasis on values as well as pragmatism. What unites the 28 member states is much greater than what divides them. I hope noble Lords will forgive me one personal observation, just as the noble Lord, Lord Browne, provided one. My grandfather fought at the Somme. My father fought in a number of theatres of war between 1939 and 1945. My generation has been spared that. We should not take peace for granted. For all its imperfection, the EU has helped to provide peace. It represents values that endure. Let us remain within it.

Photo of Lord Boswell of Aynho Lord Boswell of Aynho Chair, European Union Committee, Principal Deputy Chairman of Committees 4:16 pm, 15th June 2016

My Lords, the House will be grateful to the noble Lord, Lord Faulks, for his generous response to our three committee reports collectively, and for the tone in which he explained the Government’s position. I was rather moved by his final remarks, although that will not shake our formal position of independence on this issue.

As the noble Lord said, this has been a very remarkable, extended and unusually balanced debate. The epithets I will attach to it are “rich” and “reflective”, because it has gone through a very wide area. As I indicated at the beginning, I have welcomed the contribution on science, which has added to the debate. We have ranged widely and properly through subjects such as, from the noble Lord, Lord Hastings, the position of the poorest countries of this world in relation to this, which we so often forget, and, from the noble Lord, Lord Low, disabled people. This matte touches us all.

Inevitably, I will concentrate more on the political, diplomatic and legal matters. There will not be time to comment on everyone’s contribution. If I may single out without invidiousness the noble Lord, Lord Howell, who often takes the House to another stage of perception towards the future, he chided us a little bit—and rightly so—for perhaps not giving a full flavour of that vision, although we said that the Government needed to do that. We certainly do have a contribution to make in this House and through our committees in taking the argument further, whether we stay in or move out. One of our sub-committees has very recently reported on digital platforms—one of the subjects that the noble Lord specifically mentioned. As it happens, its last report was on the control of pilotless drones, so we are keeping up with this. In fact, we took some of that sub-committee’s observations to an international meeting only this week, where we shared them with colleagues. So we will not mess about with that; we will do our wider duties as well as the more particularly political ones.

I will turn to two areas that I think have not had quite enough attention in this debate but which reflect, in a sense, the remit of our committee. Of course, we report to this House, but one area which is certainly not our direct responsibility but which we should bear in mind—some noble Lords referred to it—is the question of our colleagues, the other 27 members of the European Union. Occasionally, some of the public comment here suggests that we operate on our own without reference to them, but I will pick up, on this occasion entirely with approval, the remarks of the noble Lord, Lord Pearson of Rannoch, who said that we are not their enemies. Of course we are not their enemies. Indeed, we do not want to make them our enemies; we want to have a good relationship.

If I may refer again to the international conference I have just attended on behalf of the House with the noble Baronesses, Lady Falkner and Lady Armstrong, who both contributed so thoughtfully to this debate, we had all the other 27 member states represented, in one form or another. Though they did not make large, pro-forma pronouncements, the number of them who came up to us in the margins and said, “What is going on? We are concerned about this. We are concerned for ourselves as well as for you”, was quite remarkable.

The second constituency I am conscious of—and while I do not expect people to read every word of our report I hope that some of the messages will distil—is the wider constituency of the electorate who have to make this decision next week. We have a lot of people who yearn for clarity, objectivity and a degree of sensible, sober presentation, and, as a number of noble Lords have said, they do not feel that they have entirely had it yet. I would like, in concluding this debate, to draw out two areas.

The first is the complexity side of all this, perhaps best expressed in our short report on withdrawal. In looking at that, I would say to people who have not read it, “Just read the appended Article 50”. If that is too long—and the number is just a coincidence—just read Sir David Edward’s evidence at paragraphs 49 and 50, the latter of which has been referred to by a number of noble Lords, including the Minister. This is a very complicated process. It involves us all. We do not always remember that it involves us all. I have declared, although I did not mention it this afternoon, that I am in receipt of payments under the common agricultural policy. In that case, there does not appear to be a conflict, because in fact the leave campaign has undertaken to restore those payments. I will leave that one for contemplation.

Let me be a little more down to earth. I do not often bring out a visual aid, but here is a European health insurance card. I recently renewed this. It was done with huge efficiency online and came back virtually by return from the Department of Health. It tells me that I am covered until 18 April 2021. Well, I do not know whether I am or not. I do not know whether I would be told if I was not, or whether the UK Government would pay for me to be even if it were not part of a European scheme. I just mention that because it is a small, hands-on example of the complexity of this.

I can understand, in a sense, that that is adding to people’s difficulty in making their decision. We have had some indications of passion and vision from a number of noble Lords, including the Minister. There comes a time when you move from the tabloid headline or the saloon-bar comment, or the fact that you wrote to TripAdvisor after you had had a bad night. That is one area of how we live our lives and we do it perhaps too often, but you then move to the other decision, where you think, you reflect, you count twice and then you decide at the ballot box. That is the moment when it really matters. It is not the duty of this House to tell people how to do it, but it is our duty to tell them that we will help them to think seriously about it. It is a serious decision that we want them to take and we will then respect it. I beg to move.

Motion agreed.