My Lords, I beg to move that this Bill be now read a second time. I start by thanking all noble Lords who are to speak today. Other noble Lords who support the Bill but who are unable to speak include the noble Baronesses, Lady Cox and Lady O’Cathain, the noble Lady, Lady Saltoun of Abernethy, the noble Lords, Lord Gilbert, Lord Stevens of Ludgate, Lord Swinfen, Lord Tebbit and Lord Waddington, and the noble Viscount, Lord Trenchard. Noble Lords might also like to know that, somewhat surprisingly, the Bill was also supported enthusiastically this morning on the “Today” programme by no less a personage than the former Labour Minister for Europe, Mr Denis MacShane.

Students of the history of our ill-fated relationship with the European Union may like to know that a similar Bill was debated on 17 March 2000 and 27 June 2003, so four years have passed since we last discussed the desirability of a cost-benefit analysis of our EU membership—four more years of relentless erosion of what was once our proud right to govern ourselves. As before, the Bill does not call for the UK to withdraw from the European Union. It simply calls for an independent inquiry into what life might really be like for our economy, defence and constitution were we to withdraw from the political construct of the EU and continue in free trade and intergovernmental collaboration with our friends on the continent of Europe. The inquiry’s findings must be made public by the end of 2008 in time for the next elections to the European Parliament in 2009 and probably for the next general election as well. Supporters of the Bill hope that these findings will at last generate the widespread, informed public debate about our EU membership which the Government say they want, but which in truth they are keen to avoid.

In the past, the Government have always stonewalled our requests for an inquiry, claiming that the benefits of our EU membership are so wondrous and obvious that it would be a waste of time. I fear we may hear more of that today. The proposed inquiry would give us some unbiased answers to some vital questions. Why do we have this project of European integration? How does it actually work? How far has it got and how does it affect us? How much does it cost? Above all, where is it going, and do we want to be part of it when it gets there? There is widespread public ignorance about all those questions and, in recent months, even noble Lords have approached me after some of our debates with questions along the lines of, “Does it really work like that?”.

So, if your Lordships do not mind, I shall again place on the record the basic answers to the first four questions, leaving the last for the Minister at the end of our debate. Anyone who wants to understand in depth how we got to where we are has to read the enduring masterpiece by Christopher Booker and Richard North, The Great Deception, published by Continuum and now in its second edition. In the debate, I have time only to urge your Lordships to remember that the project of European integration is rooted in one big idea: that the nation states were responsible for the carnage of the two world wars and for the long history of bloodshed in Europe. Those European nation states, with their unreliable democracies, must therefore be emasculated and diluted into a new form of supra-national government run by a commission of wise technocrats.

This genesis explains why the project works the way it does as the very antithesis of democracy. It explains why the unelected bureaucracy—the Commission—has the monopoly to propose legislation, a function which it carries out in secret. The Commission’s legislative proposals are then negotiated, also in secret, by the shadowy Committee of Permanent Representatives or bureaucrats from the member states known as COREPER. This lines up the decisions to be taken officially in the Council of Ministers, still in disgraceful secrecy, where the UK is now reduced to some 8 per cent of the voting power. The Euro-phile EU Parliament naturally collaborates with all extensions of EU law, which is then executed by the Commission. The only arbiter of any dispute is the Luxembourg court, which is required by the treaty to find in favour of the ever-closer unions of the peoples of Europe. This it certainly does, often with admirable imagination.

For good measure, the treaties also ordain that areas of national life taken over by Brussels cannot be returned to national parliaments; the ratchet can only grind in one direction. This is known in Euro-speak as the “acquis communautaire”, or powers acquired by the community, and it now runs to some 170,000 pages, 100,000 of which have been passed since 1997.

Yet the heart of our democracy remains, and can only be, the hard-earned privilege of the British people to elect and dismiss those who make their laws. That is Members of the House of Commons, assisted under our constitutional settlement by your Lordships. Millions have died for this principle over hundreds of years, but it has been frittered away in pursuit of the outdated European dream by our political establishment without the people’s informed consent.

I am often asked how an unelected Peer such as myself dares to extol the value of our democracy over the brave new system of Brussels government. The answer is simple and comes in the form of a question: how would you feel if most of our law was proposed in secret by the unelected House of Lords; was processed in secret largely by collaborating bureaucracies; and was then executed by the selfsame House of Lords? When you put it like that, the penny begins to drop.

The chilling fact is that a large majority of our national law now comes from the EU. The Government do not want to admit this, of course, and so far have only confessed that a majority of law affecting our business is imposed by Brussels, which is bad enough. But we have it on the authority of the former German President, Roman Herzog, that 84 per cent of all German national legislation since 1998 has come from Brussels. On Monday of this week, Le Figaro carried the news that the same applies to 80 per cent of French national legislation. It is hard to see why we should be much different. The House of Commons and your Lordships’ House are powerless to reject or amend any of this law, much of which we do not even see. Our representative parliamentary democracy has therefore become largely redundant. We have lost the power to govern ourselves.

So that is about how we stand now constitutionally. But, of course, this debate takes place under the shadow of the next EU summit on 21 and 22 June, when some of the rejected EU constitution is likely to be revived, although it is not yet clear how much. One thing does seem clear, which is that the British people will not be given a referendum on whatever new treaty may emerge from the secret conclaves of Brussels. We will be told that the new arrangement does not alter the relationship between this country and Brussels. That will not be true, of course, but that will not stop them saying it. They will also say that there is no reason to hold a referendum, because referendums were not held on the Amsterdam, Nice or Maastricht treaties, nor on the Single European Act 1986, all of which drained our sovereignty to Brussels but which neither Labour nor Conservative Governments dared to put to the people.

When you come to think of it, that is a seriously dishonest non sequitur, even by the standards of our modern political class. It is as though you go into the cellar one day and find someone you thought was more or less a friend helping himself to the stored family silver. “Oh,” he explains, “I’ve been stealing it for years and you didn’t notice, so I thought it would be all right just to pinch the rest”. Well, it is not all right. What is more, we want all of it back.

Be that as it will be, I cannot understand why the Eurocrats bother about a new treaty at all. It is not as though they have let a small thing like the French and Dutch rejection of the constitution hold up the creation of their megastate. They told us repeatedly that the enlarged EU could not function without the constitution, but they have been passing legislation 25 per cent faster since its rejection. They are putting the constitution in place piecemeal, surreptitiously and illegally, using clauses in the existing treaties that were clearly not designed for the purpose.

One example is TEC Article 308, which allows Brussels to take power only,

“in the course of the operation of the Common Market”.

It was in the original Common Market treaty of Rome in 1957, designed to permit small tariff changes and so on. Use of Article 308 also requires unanimity in the Council, so the Government still have the veto but do not dream of using it. It was not designed to allow the corrupt octopus to take power in areas later covered by the 1992 Maastricht treaty on European union, such as justice and home affairs or foreign policy and defence. Undaunted, however, Brussels has used Article 308 to take control of civil contingencies and of the prevention and aftercare of terrorism, to launch a €235 million propaganda campaign and to set up its new fundamental rights agency in Vienna. The article has also been used to co-ordinate our social security systems, to impose restrictions on the Taliban and to regulate the use of glucose and lactose.

One does not have to be a legal genius to see that none of those initiatives is justified,

“in the course of the operation of the Common Market”.

In 1996, however, the Luxembourg court issued a judgment that sanctions all of them and many more. It did so with breathtaking simplicity, by flatly ignoring the requirement that a new power can only be taken by Brussels if it is necessary in the course of the operation of the Common Market. Instead, the court agreed that Brussels can take power to do anything that it thinks should have been sanctioned by the treaty but is not. Even then, we are talking about the treaty establishing the European Community, the Common Market treaty, and the initiatives I have mentioned cannot possibly be honestly included in its scope. There is no appeal against the court’s judgments, however. That is the system by which we are now ruled. I submit that you have to be pretty deaf not to hear the jackboots marching, and pretty naive not to realise that they are coming this way.

That brings me briefly to our national security and defence. Here, too, the failure of the EU’s constitution has done nothing to deflate its military ambitions, which continue to expand in several directions. It has set up a European Defence Agency in which member states pool research, technology and procurement, while the Commission is working on a defence procurement directive. European defence Ministers have also agreed to pool resources to develop a European defence technological and industrial base. They have called for less European dependence on non-European sources for key defence technologies—in other words, Europe must not go on depending on our most valuable ally, the United States of America. Continuing in the anti-US vein, the EU is about to open an EU military planning centre to enable it to plan and run autonomous military operations. NATO and the US have protested about the centre as it will duplicate NATO’s well established military planning staff.

Like the project of European union itself, much of this is inspired by France’s deep psychotic need to bite the hand that freed her in two world wars. But it cannot be wise for us to be part of it to the detriment of our special relationship with Washington. If the Minister disagrees with this analysis—as I fear he will—will he tell us what the Government think France’s attitude is now to collaboration with NATO and the United States?

Finally, I turn to the cost of our EU membership and its effect on our economy. Given our Government’s refusal to conduct an official cost-benefit analysis, there have been four private studies in the past five years. These put the annual cost of our EU membership at anything between 4 per cent and 10 per cent of GDP, or between £40 billion and £100 billion per annum. But even the highest of those estimates looks very conservative if we look at some of the official figures which have been published. For instance, the studies of both Commissioner Verheugen and of Her Majesty’s Treasury—Global Europe: Full-Employment Europe—published in October 2005 agree that EU over-regulation costs the economy some 6 per cent of GDP per annum, or £60 billion per annum for the United Kingdom. A Written Answer last Monday gives the net cost of the agricultural policy as £4 billion per annum and the net cash we send to Brussels each year now stands at £6.5 billion, which is likely to double over the next seven years. Those official figures come to a whopping £70 billion, or more than £1,000 per annum for every man, woman and child in the country.

The Treasury report goes even further, estimating that the common agricultural policy costs EU consumers up to 7 per cent of GDP. The present transatlantic trading barriers cost another 3 per cent. It also suggests that increasing euro-zone competition to US levels could boost output by no less than 12 per cent. Even if we leave this last one out, the Treasury report takes the annual cost of our EU membership to some 16 per cent of GDP, or £160 billion per annum, way above the private studies. No doubt the proposed committee of inquiry will look carefully at all these figures and reach its own conclusions.

Before leaving the economy, I remind your Lordships that only some 9 per cent of our economy trades with the single market. Some 11 per cent goes to the rest of the world, and 80 per cent stays right here in our domestic economy. Yet the diktats from Brussels strangle the whole 100 per cent of our economy. If we left the political construct of the EU and continued our free trade with it—which of course we would because it trades in surplus with us; we are in fact its largest client—we would not lose any of the 9 per cent which goes to the single market or any of the jobs which depend on it. Set free from Brussels over-regulation and unsuitable foreign trade arrangements, our economy would flourish. In fact, I think it is time to coin a new Euro-sceptic slogan: “Leaving creates jobs—millions of them”.

I come to my final two questions to the Minister. First, does he honestly think that the British people would have voted to stay in what they were assured was just a common market in 1975 if they had known that they would end up where they are today? Secondly, and most importantly, where do the Government think that the project of European union will end? I see three options. First, the octopus may turn into a cuddly teddy bear and decide not to devour any more of our sovereignty. Unlikely, I think. Secondly, the project may overextend itself and fall apart. That would be welcome and probably will happen, but it may take a long time and would be very uncomfortable when it did happen. Thirdly, the project will continue, on track, as it has done in the past, until the EU becomes a totalitarian state. I confess that I fear that this last destination now looks the most likely.

The inquiry proposed by the Bill would help the British people to decide whether they wanted to stay in an EU which is already very uncomfortable and which may go badly wrong or whether they would prefer to govern themselves again and reclaim their rightful place in the world. I look forward to the Minister’s reply and commend the Bill to the House.

Moved, That the Bill be now read a second time.—(Lord Pearson of Rannoch.)

My Lords, I congratulate the noble Lord, Lord Pearson, whom I still like to regard as my noble friend, on introducing the Bill. I would not normally be in your Lordships' House on a Friday afternoon unless I were required to do duty on the Front Bench, but I am here today, on our Back Benches, because I believe that the issues raised by the Bill are very important and I am pleased to take part in the debate.

I share many of the noble Lord’s frustrations with all that emanates from the European Union. Our membership of the European Union has created and will continue to create many problems for our country, but I am not convinced, as the noble Lord, Lord Pearson, is, that withdrawal is the only solution. We should search for ways in which to make our membership of the EU more flexible and focused on the trading relationships that are beneficial to us and our trading partners. I believe that we should extract our country from those elements that are driving towards a federalist future for Europe and excessive involvement in the daily life of our citizens. We should focus on those elements of our relationships with our European neighbours which are genuinely beneficial to us. That said, the differences between the noble Lord, Lord Pearson, and me on the endgame do not stop me supporting the thrust behind his Bill.

The Bill requires in effect a regulatory impact assessment of our membership of the EU. We did not carry out one in 1972, when the initial Act supporting our membership was passed, or in 1975, when a referendum was held because in those days we did not do regulatory impact assessments. But even if one had been done, it could not have predicted what has actually happened in terms of our membership. Then we talked about a common market and free-trade issues. Today, free trade is an issue but one that is more about global than local trade. More importantly, we never imagined how intrusive and costly our involvement with the EU would be.

The Bill is phrased in terms of withdrawal, and there may be some impact solely related to the process and fact of withdrawal. But the main effects of our membership of the EU, both positive and negative, will be evaluated from the fact of our membership rather than withdrawal. To that extent, this Bill offers a helpful way forward.

I do not understand why the Government resist the idea of a comprehensive and neutral analysis of the effects of our membership. I had always thought that it was the duty of a Government not just to make new policies but to examine critically whether existing policies continue to deliver value for citizens. I wish that I could detect this quest after the truth in the actions of the current Government.

As a general principle, the Treasury has been preaching the benefits of cost-benefit analysis for as long as I can remember and there is a well developed framework set out in its Green Book. The framework was designed for new policies and projects but it is quite flexible enough to accommodate the analysis of what happens if we do not carry on doing what we currently do. The Green Book requires an economic, financial, social and environmental analysis and a cost-benefit analysis, which includes items for which the market does not provide a satisfactory measure of economic value. It also gives guidance on the evaluation of social and economic dimensions for which there are no prices, using various other techniques of evaluation. This is exactly what we need for analysing our membership of the EU.

The Minister will be aware of the fact, to which the noble Lord, Lord Pearson, has already referred, that several cost-benefit analyses have been carried out in recent years. Organisations such as the Institute of Economic Affairs and the National Institute of Economic and Social Research found that at best the economic benefit to the UK of continued membership is marginal. But these analyses were undertaken before some major costs were known about. To give just one example, the financial services action plan will impose costs which some estimate at up to £24 billion over the next three years. More recent studies have found a significant disbenefit from our membership of the EU.

In the past, Ministers have dismissed such studies, saying that they did not recognise the analysis or that the analysis did not provide a comprehensive answer. That is surely an argument for the Government being fully engaged in the analysis, to tease out the areas of difference and to make a case for those elements that they believe have been ignored. Ministers have similarly been dismissive of the rigorous analysis carried out in Switzerland, which shows conclusively that membership of the EU would not benefit the Swiss economy. Is it not time that the Government started to engage in discussions of the cost and benefits, rather than ignore them?

Ministers usually say that membership of the EU is good for business and good for employment, and sometimes cite a figure of 3 million or more jobs that are dependent on the EU. There is a belief that we need to be members of the EU in order to trade with it. However, Switzerland is a very clear example of membership not being necessary; the Swiss economy is even more dependent on trade with Europe than our own. Indeed, it is very likely that the rest of the EU needs the UK more for trade than we need it. The balance of trade between the UK and the rest of the EU has been negative for some time, and reached a deficit of £32 billion in 2005. For several years, our exports outside the EU have been growing faster than those within the EU, which we should celebrate, because demographic trends show that EU growth is largely static compared with growth practically everywhere else. The EU’s long-term trading interests belong outside Europe.

The costs of EU membership are very great. In simple terms, we paid an average of £3 billion in the 10 years to 2006 through the net cash transfer to the EU budget, but that is set to double by 2011 to nearly £6.5 billion, largely as a result of the Prime Minister’s largesse with our rebate. On top of the direct cash flow into the EU coffers, most of our regulatory burdens come out of Brussels and add at least £6 billion a year to the cost of our business sector. That is the Government’s estimate; other people’s estimate is as high as £20 billion a year. There are also opportunity costs. The noble Lord, Lord Pearson, referred to the Treasury paper Global Europe: Full-Employment Europe, which basically said that the EU was costing anything up to 28 per cent of GDP in protectionism and the opportunity costs of not being competitive. If it is only a fraction of that amount, it is a massive drain on the UK.

A careful and balanced study could conclude only that the economic costs of our membership currently outweigh the economic benefits of our membership. That leaves the possibility of other benefits, although I have never heard a clear articulation of what those might be and how much value they deliver. In answer to a recent Oral Question from the noble Lord, Lord Pearson, the noble Lord, Lord Davies of Oldham, described the benefits as being,

“in a wider political context”.

When challenged about what that meant, the Minister said that it included such things as,

“leverage on the Russian Federation”.—[Official Report, 23/5/07; col. 645-47.]

in relation to energy supplies. I hope that the Minister today will not claim that Britain needs Europe to conduct its relationships with other Governments, because that really would be a very sad admission.

I conclude by recording one reservation about the Bill: the formation of a committee. The noble Lord, Lord Pearson, will expect me to say this, as I am usually the Opposition’s Treasury spokesman: committees can be very expensive, and can go on for a very long time. They attract large secretariats and produce tons of material. It would be nice to think that the committee specified in the Bill could be streamlined and cost-effective. Perhaps the noble Lord, Lord Pearson, would consider a time limit for its work, and a cost limit on its endeavours.

I do not doubt the benefit of the analysis proposed in the Bill. It would have my wholehearted support if the noble Lord, Lord Pearson, could find a way of ensuring that the Bill’s direct public expenditure implications were indeed modest.

My Lords, having had the pleasure of listening to the noble Lord, Lord Pearson, many times in this House, I retain a sense of wonder at the choice of words and the hyperbolic vocabulary. I noted just seven words in his speech, several of which appeared many times: shadowy, collaborationist, executed, jackboots, conspiracy, mega-state and totalitarian.

As a Liberal, I know the cost of promoting causes when the times are not propitious. The proposers of the Bill, who clearly believe that the time is propitious for their cause, are in my view quite wrong, inquiry or no. If ever withdrawal was clearly against the British national interest, it is now.

The Duke of Wellington is famously said to have remarked that interests never lie. Unless we are deceived by ideology and flattery—as, sadly, we appear to have been at a certain point over Iraq—historically the British have been pretty good at discerning where their best interests are. Now they are indeed to stay in the European Union and to increase our influence in it and our commitment to it. Of course, commitment and influence are important bedfellows in this sector.

I will focus on three reasons why maintaining our membership of and increasing our commitment to and involvement in the European Union are so clearly in our national interest. First, as regards economics, perhaps noble Lords remember the description of the euro as an exotic rain dance, which had no possibility of success. The rain dance has turned into a veritable harvest festival, with the euro being the strongest of the existing currencies.

For years we were told that the so-called failure of the German economy following the reunification of Germany and the fall of the wall in Berlin was evidence that Europe was not working. Anybody who has observed what has been going on in the largest economy in the European Union will be well aware that the German economy is doing very well: investment in it is increasing, productivity continuously improves and employment prospects are significantly enhanced.

We have also been told many times that one of the reasons why Europe allegedly does not produce a good return for us is that productivity in the European Union is far outstripped by that in the United States. The latest figures make it quite clear that productivity increases in the European Union are beginning significantly to exceed those in the United States. I take no particular pleasure in that, because we all have a strong interest in the success of the United States economy.

Enlargement is an enormous success story, not just for the European Union but for the whole free world. The growth rates in central and eastern Europe are one of the most important and interesting factors in the economic scene today.

What has happened politically? There is a new president in France—Sarkozy—and the very successful Chancellor Merkel in Germany. Although there will, of course, be differences between Merkel and Sarkozy, one thing links them—they are both significantly pro-Atlanticist. I well remember attending an event in London at the beginning of the Iraq war before Angela Merkel became the Chancellor candidate and then Chancellor in Germany. She was asked where she would stand between Europe and the United States. I thought that that was a slightly odd question in the circumstances. She replied without any hesitation and without notes that she had been brought up in formerly communist eastern Germany and never had any doubt at all of the enormous debt that eastern Europe owed to the United States for its resolution and ultimate victory in the Cold War. There is no ambiguity there. Sarkozy has been equally clear about his pro-American attitudes. The days when people could pretend that there was some magical gulf between us with our Atlanticist instincts, which I certainly share, and the continentals, who are hell-bent on trying to create rivalry with the United States, frankly have expired. It is no longer a credible argument. In promoting their cause, those people must think of new arguments.

Secondly, on the political side, enlargement has crafted a European Union that ideally suits the British national interest. The union that we originally joined—the European Community—was much smaller and was dominated for historical reasons by French-German agreements. There were economic agreements and, perhaps more significantly, there were political agreements. Our ambiguity and our delay meant that our influence was relatively restricted in comparison with that of that central alliance. The same is not true today. In the enlarged European Union of 27 countries, Britain has every opportunity to exert its influence and to create a Europe that is clearly in our national interest. In fact, our opportunity for influence and for real leverage in the European Union is the greatest for a generation.

There is also in the political debate and argument in the European Union an interesting and important pragmatic tone. I do not want to go into details, because we do not know yet what is going to emerge in the constitutional treaty—or whatever title will be chosen for it—but the approach is pragmatic. The argument in favour of a treaty is practical. It is about making sure that the institutions and the way in which they work can adapt to a membership of 27. It does not make sense that the European Commission should include one member from every member state. It does not make sense that the presidency of the European Council should change every six months. I mention those two issues because they are essentially practical. The effectiveness of shared or pooled sovereignty is real and dramatic, particularly if you compare it with the ineffectiveness of our very unequal special relationship. There is now for Britain a real chance of building the special relationship that can really make a difference in this century—the special relationship between the United States and the European Union, from which Britain has everything to gain.

The third factor, which may surprise your Lordships, is language. I declare an interest, as I have a long involvement with the English-Speaking Union. Last week, I was in Moldova, a land-locked and somewhat Russian-pressured piece of land in the centre of Europe, where we opened the 12th new English-Speaking Union in eastern Europe in the past 10 years and the 48th worldwide. Why are the Moldovans learning English? The young people to whom I spoke gave two reasons. First, they think that it will facilitate their membership of the global economy and that it is more useful to them in that regard than Russian or any other available language, although they do not wish to give up Romanian, of course. Secondly, they see their future eventually—they are not stupid about it; they are realistic—in joining the European Union and they see English as being a facilitator of that development.

It is important to note that slightly more than 70 per cent of all communication within and between the European institutions, and between them and the rest of the world, is conducted in English. As the working language of the global village, English has become the langue de travail of the European Union. It is an essential bridge. That is a huge advantage for us. I believe that many people in the last 20 years or so have been put off Europe simply by what they perceive to be the linguistic barrier, but that barrier no longer exists. The fact that our language has become the dominant language of the European institutions—I use the adjective advisedly—is a tremendous gift to us and a great enhancement of our influence.

I share one sentiment with the proposers of this so-called inquiry. They dislike ambiguity; the noble Lord, Lord Pearson, and I have always shared that distrust of ambiguity. I mentioned that last week I was in Moldova. I went to a reception for the new branch of the ESU at our embassy in the capital, and what were the two flags that flew in front of the building? The Minister will not be in the least surprised to know, of course, that one was the European Union flag and the other was our union jack—yet we still have that reluctance, which we have debated in this Chamber a number of times, to display the European Union flag in this country. That sort of ambiguity—that double tonality on Europe between what we do here and what we do abroad—is an own goal. We should maximise our influence, and to do that we need to demonstrate our commitment; our commitment is overwhelmingly in our national interest.

I shall conclude with a personal reminiscence. In the year before our entry into the European Community, as it then was, I was privileged as a BBC reporter to do an hour-long documentary on Jean Monnet. Incidentally, when I look back at that period, I have to contest the view so often expressed in this House by those opposed to the European Union that, when we joined the European Community, we were simply told that it was a common market and had no political implications. I can talk only from my own journalistic involvement at that time at the BBC, but that is completely untrue. We made the political dimension of membership absolutely clear in programme after programme. I personally did nine hours of broadcasting to that effect.

When I was doing the documentary with Jean Monnet and staying at his house in Houjarray, I asked him to explain why he and others had not tried harder to persuade the British to become involved in the initial European Coal and Steel Community. He said that the reason was that they understood the roots of British ambiguity—that it was all to do with the fact that the outcome of the Second World War was a profoundly different experience for Britain and the British people from that of countries that had been occupied and defeated. That is clearly so. He said, “The conclusion we drew was that only facts would persuade the British that involvement was in their interests”. With every month that goes by, the facts become more and more conclusive. The damage to the British national interest of withdrawal, or even the consideration of withdrawal, would be almost incalculable. We are looking a gift horse in the mouth. We face an open goal; let us not make it an own goal.

My Lords, I have always been a Euro-phile, if that term means someone who loves Europe and European culture. There was even a time long ago when I was a Euro-phile meaning one who thought that the European Union was a good thing to be in. Indeed my wife and I joined with the then Lord Gladwyn in hosting a conference called “Europe—after Britain joins”. Later, after we had joined, my wife and I were among the guests of honour at a dinner given by the European Commission for those who had worked for the Union at a time when the two major parties in this country—at that time there were only two major parties—were opposed.

Now I cannot wait until we are free, and I have no doubt that we will be free, although it almost certainly will not be in my lifetime. I should make it clear that in this speech I do not speak for my party, the Green Party. As a party we want to see many reforms to the European Union, none of which, in my view, we are likely ever to see. Therefore, I have been forced to conclude that, since we are not going to see those reforms, the sooner we get out the better.

I cannot bear it that our Anglo-Saxon heritage is being whittled away and that the Napoleonic system of constitution and statute is dealing a mortal blow to our system of law and precedent. We are now seeing a takeover by Germany and France of the United—or perhaps disunited—Kingdom, similar to those attempted previously by Napoleon Bonaparte and Adolf Hitler. That splendid woman Dr Dorothy L Sayers—and doomed be anyone who omits the “L”—got it right in her great patriotic poem printed in the Times immediately following Dunkirk:

“Praise God now for an English war

“This is the war that England knows

When all the world holds but one man—

King Philip of the galleons

Louis, whose light outshone the sun

The conquering Corsican

“This is the war that we have known

And fought in every hundred years,

Our sword upon the last, steep path

Forged by the hammer of our wrath

On the anvil of our fears”.

The threat this time is due not to one man but to a creeping bureaucracy, which that other great nationalist and internationalist poet Chesterton would have best known how to describe. We are not yet, thank God, called to draw our swords but to fight with reason and determination for our values and customs.

We have resisted the euro; for that, I breathe a deep sigh of gratitude to our next Prime Minister. Although we still may not deal in pounds and ounces or, for that matter, bushels and pecks, at last we are now allowed, I gather, to talk about them. But we in this Parliament are probably shortly to be called upon to resist the imposition of a constitution, which not just we, but the peoples of mainland Europe, do not want imposed by the back door.

The time has come not just to resist further encroachments but to take the offensive. All honour to the noble Lord, Lord Pearson of Rannoch, who is leading the charge, claymore in hand. We must be given the chance to examine the details of this Bill and its implications most carefully so that we may devise our route of escape from this prison in which, mea culpa, we have immured ourselves.

Every Government should have a plan B for every policy that they put forward. All that this modest Bill does is attempt to set up a framework for such a plan. Therefore, it is essential that we pass the Bill and examine it more deeply in Committee and on Report.

My Lords, this is a very timely debate. Day after day and week after week, changes are happening to the governance of this country and to our unwritten constitution of which today the British public are not generally aware. At Westminster, there is almost a conspiracy of silence regarding this intensely important issue. I realise that many on the opposite Benches welcome the surreptitious transfer of sovereignty to the EU. Presumably, when they see how inept the present Government are, they welcome any other form of administration. After 10 years of a Labour Government, I am not surprised that they have more confidence in the ability of others to manage our affairs. However, one has to ask why, and at what cost?

To many of us, the dream of Europe has turned sour. Here in the UK, our infrastructure is a shambles. We look like a third world country in contrast to the ports, roads and airports that one sees when one visits Spain, Portugal and Ireland; many of them have been generously paid for with the help of our money. The noble Lord, Lord Pearson, referred to the billions of pounds that we pay relative to the rebate that we get back. Just think what could be done to our infrastructure—our railways or roads—if we had kept that money and administered it ourselves.

Even more serious than the direct cost is the hidden cost of the never-ending cascade of EU regulations. The noble Baroness, Lady Noakes, made that point well. Some of those regulations may be helpful but the vast majority are unnecessary. The cumulative effect of those regulations—last year alone, there were more than 2,000—is very damaging, as is reflected in the UK’s declining productivity.

It is all very well to talk about the grand design of Europe but every now and again one has to see how in reality it affects other people’s lives. One needs to remember that the macro-economy is the micro-economy writ large. Take, for example, the way in which the working time directive is beginning to affect the management of old people’s homes. Sleeping in is now being classified as being on call and that counts as work. Consequently, the housekeeper who worked during the day is now no longer allowed to work overnight. Thus it is deemed that she need no longer be supplied with a flat. So she now has to pay tax on the estimated rental value of that flat and an extra employee has to be taken on to cover nights. That is a huge and wholly unnecessary addition to costs. This type of nonsense has been repeated thousands of times throughout the British economy. Increasingly, we see the damaging effect on drivers’ hours, junior doctors’ hours and even recruitment to the TA; all are choking on red tape.

That illustrates how our opt-outs, with regard to the working time directive, are being continually eroded. Rather than helping the British economy, we are now restricting our freedom to create the free and flexible economy that we need to succeed in the 21st century. The harmonisation of working hours is upon us; tax harmonisation will be next, to be followed by overtime restrictions. Overtime is the essential mechanism in a market economy that helps to bring supply and demand together. Limitations on voluntary overtime would be deeply resisted by the working man, as it is one of the few routes that he has to self-betterment.

It is through the window of such regulations that the British see the EU, and they do not like it. Not surprisingly, they are disenchanted. The reality is very different from the noble vision that is held by so many in Westminster. I am sorry that the noble Lord, Lord Watson of Richmond, is not in his place. All those ex-Eurocrats who are enjoying the comfort of their pensions should descend from their ivory towers and see the world as it is. The British people hate the impact of this bossy, regulatory approach by which new laws and interdictions endlessly necessitate the employment of new taxpayer-funded officials to enforce them.

I wonder how many people are aware that you can be fined £5,000 for burning a window envelope, as it is now illegal to burn plastic on an open hearth. You can bury a pet dog but you cannot bury a pet lamb. On the wider national scene, one cannot even deport convicted criminals who came to our country as illegal immigrants. Excessive regulation leaves no room for natural morality and common sense. Those sorts of nonsenses undermine the average citizen’s regard for the law, greatly to our national detriment. The more laws there are, the more they get broken.

As we adopt EU laws, we are, without recognising it, also changing the whole nature of our society. The tangible effects are obvious; the intangible effects are a cause for even greater concern. We take for granted our natural liberties without realising that these stem from common law. Under common law, everything is allowed except that which is not allowed. Roman law—EU law—works the other way round: nothing is allowed except that which is allowed. So, as we harmonise our laws with those of the EU, we are changing the whole relationship of the citizen to the state. The citizen becomes subservient, and civil servants are no longer servants to the public but masters. I give an example. Only last week, the Government announced that pregnant women “must not”—not “should not”—drink because they might overdo it and not drink in moderation. What does this do to the national psyche? It means that gradually our respect for government and the law changes into disrespect. A caring Government become an oppressive Government. We are destroying the Britain that we love and know.

That is compounded by the underlying weakness of the EU: its democratic deficit. It does not have a democratic structure, and the trappings that exist are largely a sham. There is no electorate to which the major EU institutions are generally responsible, and it is virtually impossible to unscramble bad regulation. The UK carries only 8 per cent of the voting powers, and most change needs unanimity. The undemocratic nature of EU law-making is clearly shown by the fact that our own Westminster scrutiny committee—

My Lords, I am most grateful to the noble Lord for giving way. I am simply curious. If he believes that the principal fault of the European Union is a democratic deficit, is he in favour of increased democratic powers for the European Parliament?

My Lords, if the noble Lord will give me time to finish my argument—he was not here earlier when I referred to his contribution—I should be delighted to answer. If he listens carefully, I think that he will get his answer. Perhaps I may continue.

The undemocratic nature of the EU can clearly be shown by the fact that our own Westminster scrutiny committee has passed 157 resolutions from the Lords and 180 resolutions from the Commons seeking change, and every one of them has been overridden. We thus have regulation without rectification—the direct descendant of that which caused the American War of Independence: taxation without representation.

It is the impotence of EU citizens, faced with no effective way of controlling what the EU does, that has done so much harm and led to the failing support for the EU. They see that micro-management does not work and they cannot do anything about it. I suggest that the chances of reforming it are almost negligible.

The EU is largely run by an unelected Commission buttressed by unelected judges at the Luxembourg Court. The European Parliament is a consultative assembly, not a Parliament which can decide who the Government should be and whom the electorate can dismiss when it has lost confidence, and the power wielded by the EU machinery of government steadily increases. One has to remember that, sadly, there are many Euro-philes who want to see the disintegration of the nation state.

It is the job of this House to make it clear that European integration by the back door amounts to a revolution of how our country is governed. If Members of this and the other place want to give our freedoms away in perpetuity, they should at least have the decency to ask the electorate first. I remind them that they got it wrong over the euro—we have done very well outside it—and they will get it even more wrong with further integration. If they say that we should be at the centre of Europe to command it and help it more, I also remind them that being at the heart of Europe when we had the presidency got us absolutely nowhere and proved rather an expensive operation. We should be bringing powers home, not surrendering them.

We are all concerned about the reform of this House. Far more serious is that there will be very little left for Westminster to do, whether it be the Commons or the House of Lords, unless we face up to the far bigger issue of the transfer of powers to a federalist Europe while we strut about enjoying a residual but fading glory. Indeed, this Government will have completed the job that Guy Fawkes failed to do many years ago.

The democratic deficit brings with it a crisis for democratic legitimacy when there is no workable framework for making and then unmaking the decisions that affect our daily lives. To quote Professor Siedentop, the recognised authority on these matters:

“That is why the greatest danger lurking in the process of integration is that democratic political cultures may be weakened in the nation states without being replaced at any other level”.

The ever-falling voter turnout at elections is a clear warning. It is all too easy to forget that democracy is an imperfect glue that holds society together. That glue is fracturing.

So how can we get out of this mess and put things right? The Government obviously fear a referendum on the EU constitution because they know they would lose. Such a referendum would give a signal that the British people have had enough of integration and we should start substantially repatriating powers. If this seems impossible—I think it will—then we should contemplate withdrawal.

What would be the consequences of withdrawal? Others in this debate will go into more detail, but I reiterate that Norway remains contentedly outside the common agricultural policy, the common fisheries policy—with its 800,000 tonnes of good fish annually thrown back into the sea—the common foreign and security policy, the common justice and home affairs policy, economic and monetary union and, critically, the EU customs union. We could do likewise and do better. The EU is not the UK’s main market; it is not even Germany’s main market. The world speaks English when it trades. The EU needs us more than we need it. Even the Institute of Economic and Social Research, in its report Continent Cut Off? says, of the macro-economic consequences of UK withdrawal that,

“most, if not all, UK jobs involved in exports to the EU would carry on as before”.

Every Gallup poll shows that a majority wish to change the UK's relationship with the EU. This is not an extremist view; it is a majority view. Britain’s economy has outperformed those of other major countries, a point so well brought out by the noble Baroness, Lady Noakes. China and India are now the major players. Britain as a major trading nation must be free and flexible to take every advantage, and not to have its hands tied by so much wasteful and stultifying regulation, so damaging to our competitiveness. The repatriation of powers would enable our budget contributions to be employed domestically by cutting taxes and improving public services. Britain could have a wonderful future, but it must be freed from the EU's political and regulatory shackles.

The EU appears unreformable. We have little to lose and much to gain by returning self-governance to this country, while working closely with our European colleagues and NATO, which has always provided our basic security. The consequences of withdrawal would be overwhelmingly positive. I hope that those who feel otherwise—and they are of course fully justified in airing their views—will support the setting-up of an appropriate committee to examine and report on the implications of withdrawal, as suggested by the noble Lord, Lord Pearson, to whom we are deeply indebted for this debate.

My Lords, like other noble Lords, I congratulate the noble Lord, Lord Pearson, on his persistence in bringing this Bill forward. I hope that it will have more success on this occasion than in the past.

The EU is an organisation to which a country either belongs or not. There is no halfway house. It is essential that there should be periodic examinations of the costs, not only in money terms but across the policy board, and any real benefits that might be obtained. It is absurd that the Government have not acceded to requests for an independent audit of United Kingdom membership of the European Union, so some of us have to try to do something, and the Bill is about the only means available to us.

First, the costs in money terms have been mentioned, and I want to comment on them further. On 4 June, the noble Lord, Lord Davies of Oldham, gave me an Answer to a Written Question about the gross costs that this country pays every year. In 2007, the gross cost is £14.2 billion, and, by 2011, it will have reached £14.5 billion. That is in 2004 money terms, so the actual figures will be much larger than that. Taking into account all the receipts from the European Union—money coming back to us—at 2004 prices, the amount in net terms will increase from £4.7 billion in 2007 to £6.8 billion in 2011. One could reel off a long list of services that would benefit from that sort of money, but it is unfortunately going to subsidise services in other countries, services that are sometimes better than our own.

The second cost is in trade. I again asked a Question for Written Answer, which was answered by the noble Lord, Lord Davies of Oldham, about the average deficit between 2001 and 2006. His Answer was that each year there was a deficit in trade of £27.1 billion. Going in was represented as being essential for our trade, but running a consistent deficit is not helpful. We are not doing very well on trade.

We have also heard about the cost to industry of regulation. The noble Lord, Lord Pearson, quoted a figure of £60 billion a year. That differs from the figure given to me by the noble Lord, Lord Davies of Oldham, in an Answer to a Written Question. That stated:

“the total administrative burden on business, charities and the voluntary sector in England derived from EU legislation is approximately £6.3 billion per annum”.—[Official Report, 15/5/07; col. WA23.].

I would very much like to know the exact cost, and I hope that the noble Lord, Lord Triesman, will be able to give it when he winds up.

The Government say that the costs are worth while because they allow us to trade freely with the European Union. However, countries outside the EU have trading relations, often better than our own, without incurring the costs that I have just mentioned. They are unnecessary costs and injure our competitive position. We are doubly disadvantaged in world markets. Furthermore, the annual total of some 2,000 laws and regulations from the EU affect all economic activity in this country, yet only 9 per cent of our GDP is involved in European trade. We have to incur huge regulatory costs for only 9 per cent of our GDP.

It is not simply trade and financial contributions. A Northern Ireland strategy paper indicates that more than two-thirds of administrative and legislative actions originate from or are influenced by decisions taken in Brussels. Huge areas of our national life are being decided not in this country by our own Government and Parliament but by a group of 27 countries, of which the UK is only one and in which it has only 8.5 per cent of the voting strength. There is a huge democratic deficit, which the noble Lord, Lord Vinson, mentioned and which the noble Lord, Lord Watson, wishes to close by giving the European Parliament a lot more powers. He has to understand that the more powers that are transferred to the European Parliament, the fewer powers there will be here, and that they will be exercised in an assembly where we have only 78 Members out of a total of some 730. If that is democracy as far as this country is concerned, I do not think much of it.

I am glad to say that the House of Commons is beginning to notice things. During the past 10 days, the Commons Foreign Affairs Committee has criticised the Government for failing to give timely evidence on the future of Europe, and the Home Affairs Committee has warned the Government not to give up the veto on justice and home affairs without first having a proper parliamentary debate. So the democratic deficit is being noticed not only here but, I am glad to say, in the House of Commons. The Home Affairs Committee is demanding that there should be a proper parliamentary debate before the veto is removed on justice and home affairs.

The EU’s policy is more and more integration. It is demanding more power over taxation and defence; it wants to police our seas and make the resources of the seas community property; it wants to take over much of foreign policy and diplomatic representation; and, of course, it wants a legal personality. That ongoing programme is bound to undermine the democratic Government in this country.

Those of us who oppose those developments and say that they will completely remove our national sovereignty are often told that we can always repeal the European Communities Act 1972. However, almost in the next breath, we are told that it is inconceivable that Britain should leave the European Union, so they do not think that it is a realistic option at the moment to repeal the 1972 Act. That is why the Government should accept this Bill.

The Government should understand that it is not only a few malcontents who wish to halt the drive to further EU integration. In a recent poll, 70 per cent of the UK population were against further integration, and 50 per cent wished for a simple free trade organisation. A poll taken by Eurobarometer, which is a European Union thing, found that 40 per cent of those aged between 15 and 30—throughout the European Union, not just in this country—think that the EU means an excess of bureaucracy and a waste of money, and over a third of them see it as a threat to cultural identity and diversity. So there is scepticism not only in this country; it is widespread throughout Europe. People simply are not convinced by the claims made for the success of the EU by the political and bureaucratic elites in the member states. They are deeply suspicious of the constant drive for ever more powers to be ceded to the centralised Brussels institutions.

We will be told that Britain would be marginalised and ineffective if it was outside the EU, but was that not what was said about ditching the pound and adopting the euro? In 2002, we were told that, if we did not adopt the euro, our country would be marginalised, our economy would stagnate, the City would go into decline, and the pound would be an unstable currency, but that simply has not happened. We are not marginalised. Our economy has performed better than those in the euro-zone and still thrives. The City has grown in strength and influence, and the pound has been a haven of stability.

The noble Lord, Lord Watson, instanced Germany as a success story within the euro. It is true that, in the past few months, Germany has picked up a bit, but, while we in this country enjoyed a 2.6 per cent increase in GDP from 2002, Germany either stagnated or had a fall in its growth. Unemployment in Germany rose from 4 million to 5.5 million in that period. So we who helped to prevent our going in to the euro did our country a very good turn. I sincerely hope that the future Chancellor of the Exchequer, supported by the future Prime Minister, will see that we never join the euro, because it certainly is not in the interests of this country to do so.

The proof is there. There is life outside the European Union. That is where the future lies, not in the backwater of Europe. It lies in the wide, wide world—for example, in the Commonwealth. The Commonwealth, which we ought to develop, still represents 25 per cent of world population. The markets of the future will not be in Europe, even though Turkey and one or two other countries might join. The real markets are China, India, the United States and South America. Far from putting all our eggs in the European basket, we should make sure that our eggs are widely distributed throughout the world. Our Britain was built on trading with the whole world. That is our past, and it will be our successful future. Anything else will not succeed. I hope that the Bill makes progress.

My Lords, I join other noble Lords in thanking my noble friend Lord Pearson of Rannoch for giving us the opportunity once again to debate this excellent Bill. I call him my friend because, first, that is what he is and, secondly, I hope that one day the views of my party may sufficiently coincide with his that we will be able to welcome him back into the Conservative fold.

Hear, hear.

My Lords, I believe that this Bill is well worthy of support and has much to commend it. It is short and succinct and its objects are clear and unambiguous, as my noble friend explained clearly in his opening remarks. We have been here before. Indeed, rereading the Hansard report of our proceedings on Friday 27 June 2003, one finds the thrust of noble Lords’ remarks in favour of the Bill just as relevant today as they were then. Some repetition will therefore be unavoidable, but I shall try to keep it to the minimum.

One of the great benefits of conducting a cost-benefit analysis would be to place an authoritative stamp on many of the figures that have been doing the rounds of the Chamber today. It is in everyone’s interest, Euro-phile and Euro-phobe alike, to do this. No one should have anything to fear from the exercise, and surely we have the right to ask our Government to carry out this research so that balanced judgments can be made. After all, if Switzerland can do it, we can, too. Unfortunately, the Treasury has so far shown no sign of subscribing to this view. It claims that the benefits of EU membership are self-evident and that therefore no detailed analysis of the costs versus the benefits is necessary. I fear that that is a view verging on the delusional; it is certainly not one shared by the majority of the British public.

Our outgoing Prime Minister will soon be attending the EU summit of European leaders and, as has been said, the prediction is that he will sign this country up to a watered-down EU constitution. Were that to happen, it would be a travesty and make a complete mockery of our democratic process.

A few weeks ago, ICM Research carried out a survey of the British public for the Centre for Policy Studies, an independent study group. Asked to choose their ideal relationship with the EU, 36 per cent of those surveyed said that the UK should have a looser relationship with Europe and 29 per cent said that the UK should withdraw from the EU altogether. Asked whether there should be a loosening of ties, 69 per cent said yes and just 22 per cent said no. That is fairly conclusive evidence of the views that our public hold on this matter.

Surely we should heed the words of Professor Willem H Buiter, professor of European political history at the London School of Economics. In a letter to the Financial Times published last Tuesday, he said:

“Any constitution, be it maxi or mini—and any treaty that involves either a material transfer of sovereignty (in either direction) between the member states and the EU, or a change in the balance of power among individual member states—should continue to be the subject of a referendum, if a referendum was part of the arrangements for the original treaty establishing a constitution for Europe”.

He went on to say:

“The mini-constitution/treaty revision is likely to be a major constitutional event involving significant transfers of national sovereignty. A British government … should ask the British people to accept it or reject it in a referendum”.

Can the Minister tell us whether the Government have any intention of heeding those wise words?

Can the Minister also explain why this Government are so set on tying us into a shrinking marketplace? Europe as a whole is in demographic decline—of that there is no doubt. Projections made by the United Nations population division show that, between 2005 and 2050, EU27 will lose 64 million of its working-age population, while the USA will gain 46 million. That is the equivalent of the EU losing the entire workforce of Germany over a period of 45 years. Indeed, the Chancellor’s own figures show that the EU’s share of global GDP fell from 26 per cent in 1980 to 22 per cent in 2003 and is expected to fall further to just 17 per cent by 2015. On the other side of the coin, the US share is expected to stay roughly the same at around 20 per cent, while India’s is expected to rise from 6 per cent to 8 per cent and China’s from 13 per cent to 19 per cent. Is any clearer sign needed to show that we are in danger of locking ourselves into an inward-looking and shrinking marketplace? History tells us that that was never our way, as the noble Lord, Lord Stoddart, has reminded us. We have traded on the world stage in the past and we have always sought to trade on a broad front. Indeed, our instinct has always been to look outward, not inward.

As I am talking about the world at large, I should like to touch on the EU international aid programme. In a report published last April by Open Europe, entitled EU Aid: Is It Effective?, one sees a very sorry picture indeed. While member states have been getting more focused on poverty and have moved away from the old-fashioned use of aid to prop up friendly regimes, the Commission has been moving in exactly the opposite direction and is seeking to use aid as a political lever. While most enlightened countries, including the UK, have been increasing their donations to low-income countries, EU aid to such countries has fallen from 63 per cent to just 32 per cent.

Regrettably, there are serious problems with fraud. A little over 7 per cent of the EU budget is spent on overseas aid, but OLAF spent 21 per cent of its total time investigating fraud in these areas. So fraud is a far greater problem in overseas aid than in other sectors.

If the EU is to show that it is serious about overseas development, it must reform its trade policies and farm subsidy programme. A study by Oxford Economic Forecasting found that trade liberalisation and the phasing out of farm subsidies could boost the GDP of sub-Saharan Africa by up to 6 per cent. But, sadly, we delude ourselves if we believe any such reforms are coming any time soon. In the conclusions of the report, one comes to the following damning paragraph:

“The Commission scores abysmally on policy coherence, it has no monopoly on things like democracy and human rights, any economies of scale in development projects are hard to substantiate, and it is not clear how the Commission’s global presence relates to the effectiveness of its aid”.

Time is marching on on this Friday afternoon but, as I mentioned the “F” word—“fraud”—earlier, perhaps your Lordships will forgive me if I add a few more words on that subject to those that have been contributed by other noble Lords. I believe that I am correct in saying that the accountants have refused to sign off the EU accounts for the past 14 or so years because of the level of fraud that they have uncovered. Figures vary, but it is widely believed that the amount misappropriated in this way each year amounts to about £3 billion. The UK’s net contribution to the EU is anything from £3.5 billion up to £7 billion and beyond, so, if you use my figure of £3.5 billion, it is possible to argue that some 85 per cent of our taxpayers’ money sent to Brussels each year is lost to fraud. To illustrate the point, that represents money disappearing down a black hole at the rate of £400,000 an hour or £8.2 million a day. This is an outrage. But year after year it goes on and, sadly, I see no sign of the situation resolving itself.

I shall end my remarks by quoting from a speech made by the late lamented Lord Weatherill. As noble Lords will know only too well, he was a past Speaker of another place, a fierce upholder of parliamentary democracy and a supporter of the democratic rights of every citizen in this country. It is indeed sad that he is unable to assist us in our deliberations today. In a short but valuable contribution when we last debated the merits of this Bill just under four years ago, he said:

“I hope that it is not being too dramatic to say that we are approaching one of the great crossroads of history. It is far easier to lose our freedoms than to regain them”.

He concluded his remarks by saying:

“As parliamentarians, we have a sacred duty to explain the pros and cons of ever-closer union with Europe. We would be failing in our duty if we did not do that, and we should not be forgiven. It is in that spirit that I support the Bill, which gives the electorate the opportunity to hear the other side of the story from politicians. We should tell them the truth”.—[Official Report, 27/6/03; col. 571.]

I hope that both the Minister and the Government whom he serves will ponder on these wise words and be persuaded that they offer the right and, indeed, the only path to follow.

My Lords, the Bill, for which the noble Lord, Lord Pearson, is to be thanked, ought to be welcomed with equal fervour by both Euro-enthusiasts and Euro-sceptics—to use the conventional, albeit misleading, shorthand—given that each side should theoretically be convinced that the results of such an inquiry would wholly vindicate their own position. However, the fact that the Euro-enthusiasts show little appetite for such a Bill, to put it mildly, indicates a decided lack of confidence in their own arguments.

I shall briefly revert to the matter of misleading labels or descriptions. Though an undoubted Euro-sceptic, the noble Lord, Lord Pearson of Rannoch, has made it plain on many occasions that he regards himself as thoroughly European in a genuine sense, revelling in the art, literature, music and history of the continent of Europe. He is also bilingual, as I believe is his UKIP colleague on those Benches, the noble Lord, Lord Willoughby de Broke. I think that the same applies to a good number of us, not least my noble friend Lord Moran, who will be speaking shortly, with his distinguished diplomatic background.

Though, alas, somewhat less linguistically accomplished, I, too, in common with the noble Lord, Lord Beaumont of Whitley, feel myself to be thoroughly European in a true sense. I lived in Geneva for a while. I have been to all but three of the well over 30 European nation states, if you discount some of the component parts of the former Soviet empire, and I know several of those countries rather well. This time last week I happened to be in Bosnia-Herzegovina, for what that is worth.

I mention all that to forestall the rather childish accusations of “Little Englandism” that get hurled at us. Of course there are Little Englanders in our ranks; that cannot be denied. However, they are more than counterbalanced by the “Little Europeans” on the other side, those who look back nostalgically to the imaginary golden age of the Carolingian Holy Roman Empire—which, as we all know, was neither holy, Roman nor an empire—and who tend to be averse, as other speakers have said, to the wider world, manifesting a particular distaste for the United States of America, as the noble Lord, Lord Pearson, pointed out, and for the Anglo-Saxon world generally. Two can play at that game, and if we could agree to avoid this rather juvenile name-calling we would have a better series of debates on this topic, both inside and outside the Palace of Westminster.

Inevitably the Bill concentrates on that which is measurable and excludes intangibles. There is really no other way I can see in which it could have been drafted. If an inquiry were to establish that Britain would be better off out financially, Euro-enthusiasts might well assert that prosperity is not everything and that they would feel happier and safer if Britain remained within the comforting bosom of the EU, even if it hit them in their wallets. In their view, our senior membership of the Commonwealth, NATO, the G8 and, by implication, EFTA and the EEA, were we to withdraw, would not be enough. Conversely, were the inquiry to find the opposite, that EU membership was on balance financially beneficial, many Euro-sceptics might feel that, rather than having the trains run on time—I use that phrase metaphorically—they would be happy with less punctuality in return for less bossiness and less bureaucracy. In other words, an inquiry can evaluate the practical consequences of staying in or withdrawing but not the psychological ones. Nevertheless, the practical consequences are the ones that are extremely important to the great majority of people in this country.

As to the wording of the Bill, one must assume that all references to,

“membership of the European Union”,

in Clause 1(3) are to membership of the European Union as it stands constitutionally and not as we might like it to be. Many Euro-sceptics would be a lot less sceptical if substantial chunks of the iniquitous acquis communautaire were to be repealed so that the proud nation states of Europe were once again, as an absolute minimum, allowed to enjoy the same degree of autonomy and self-government as Delaware, Rhode Island, South Dakota, Manitoba and Tasmania. But, realistically, that is not likely to be achieved, although I wish it were. So we have to accept the EU as it has evolved, warts and all—and what an awful lot of warts there are.

Inevitably, I suppose, opponents of the Bill will seize on Clause 1(3)(c). As I have said before, I do not think that there can be a single educated individual in the United Kingdom—apart, perhaps, from Peter Simple’s creation, the failed author Julian Birdbath, living down a disused lead mine in Derbyshire—who has not given at least some thought over the years to the EU and its precursors and the pros and cons of Britain’s membership of those organisations. But this minor defect can be easily remedied in one of two ways in Committee. The first is to substitute the words “be open-minded” for “hold no opinion”. The second is to adapt the formula designed to ensure the maximum impartiality when evaluating the advantages and disadvantages of implementing major legal changes, devised by my noble friend Lord Neill of Bladen and incorporated into Clause 212(3) of the Legal Services Bill, which has now gone to the House of Commons.

This Bill has the potential to clear the air and set the record straight in a most helpful and beneficial way. I wish it well.

My Lords, I am most grateful to my noble friend Lord Pearson for introducing the Bill at such a timely moment. It is timely because the nearly ex-Prime Minister, on the last lap of his world tour, will sign a document in Berlin later this month. It does not really matter whether we call it a treaty or a constitution; the only racing certainty is that it will involve transferring more power away from the nation states, the member states and Parliaments to the European Union and the Commission.

I am ready to give way to any noble Lord on any Bench who can give me an example of when powers were transferred from the Commission to nation states. I do not know whether the noble Lord, Lord Dykes, who is an experienced European politician, could give me an example. Perhaps he will in his winding-up speech. Has there ever been an example of the Commission transferring powers to the member states rather than the reverse, as has been the historical reality?

If we are looking at the cost/benefits, the costs are not just financial, as my noble friend Lady Noakes so ably said, but also political, and it is the political aspect which I should like to focus on. The political costs should concern members of all parties and all shades of opinion, whether they are Euro-phile, Euro-sceptic, or among the great “don’t knows”. It would certainly concern the people of this country if they were told the truth or knew the truth about the political cost of this great construct. They may still touchingly believe that they vote in a democracy, but I am afraid I can demonstrate that it is getting increasingly remote. But perhaps they have understood that, which is why the number of people voting has dropped so significantly in the past few years.

The transfer of power away from Parliament and the people it represents has been inexorable. The EU has always used the deliberately insidious but highly successful Monnet model—the method of moving ahead by small but incremental movements. It is a political grandmother’s footsteps, if you like—what my noble friend Lord Tebbit calls the salami-slicing and I call the Euro-creep method.

My noble friend Lord Pearson mentioned the former German president, Roman Herzog, and a paper produced by the Germany Ministry of Justice, which came up with the figure that 23,167 legal Acts were adopted in Germany between 1998 and 2004. Of those, 18,917—about 80 per cent therefore—were of EU origin. The former German president said earlier this year in an article in a German newspaper, the Welt am Sonntag, on 14 January:

“By far the largest part of the current laws in Germany are agreed by the Council of Ministers and not the German parliament ... Therefore the question has to be asked whether Germany can still unreservedly call itself a parliamentary democracy”.

Those are not my words but the words of a distinguished former president of the Republic of Germany. If he says that, surely we should start taking it seriously as well.

The same supranational laws to which Roman Herzog referred have to be adopted by all 27 member states, including the United Kingdom. The proportion of supranational law will of course vary from country to country. However, it is safe to say that in every EU state, again including ours, something like 60 or 70 per cent of our laws—let us just say the majority; we are not going to argue about precise percentages—now come from Brussels.

By lucky chance, an interesting research paper was published earlier this week by the legal information research firm, Sweet and Maxwell. The paper showed that 98 per cent of British legislation in the past 10 years has been introduced by statutory instrument. This drew the comment from Professor Len Sealy, Professor of Law at Cambridge University, who advises Sweet and Maxwell, that the past 10 years have also seen a massive increase in EU law that becomes UK law without it ever having passed through Parliament, as statute or statutory instrument. Is that not shocking? Professor Sealy pointed out that there were over 2,100 EU regulations in 2006; their scope is astonishing, including cross-border insolvency, importation of bed linen, values of certain fruit and vegetables, the buying-in of butter, evaluation of statistics and labour costs and access of poultry to open-air runs. As he underlined, all became law without our legislators having to lift a finger.

Let us be absolutely clear: these were laws passed by the Commission and the Council of Ministers and became UK law without being seen by either the other place or this House. To this annual cascade of imposed legislation we must add all the directives, which are transposed into UK law by Parliament—not that Parliament has anything at all to do with the process, except to reach for the rubber stamp. Those include the vehicle end-of-life directive, the landfill directive, the WEEE directive on electrical goods, the drivers’ hours directive, the shameful curd cheese regulations, which we passed earlier this year with a rubber stamp, not to mention the 21 directives making up the financial services action plan, which the noble Baroness, Lady Noakes, mentioned and which will be hugely expensive. We do not know the full cost yet—nobody does—but it will be absolutely massive.

Not a word, not a syllable, not a comma can be changed by our elected Parliament or this House—what some of us were pleased to call the Mother of Parliaments, which is now more the Zimmer of Parliaments. We may amuse ourselves by sounding off about them and passing harmless time discussing these regulations, but it makes no difference. I have to ask: are we really content with this? Are we really content that a majority of our laws are not only untouchable by Parliament but are not even seen by Parliament? Is that what we have come to? If so, why do we need so many highly paid MPs? Never have so few done so little for so much. I dare say that we could also ask why we need so many Peers, given that we cannot touch some 70 per cent of our legislation. What is the point?

It is clear that the system is not working very well. The EU Select Committees do sterling work—it would sound rather silly if we said “euro work”. The noble Lord, Lord Watson, was a member of one of them, as I was until 2000. I know that they do very hard and very thorough work, but their only power is the scrutiny reserve, which I am afraid is routinely overridden— 400 times, to be precise, in both Houses since 2001. Ministers’ letters are invariably polite and thank the sender so much for that interesting report—“Now, where did I put the wastepaper basket?”. Why should it be otherwise, when Parliament has no power? The electorate seem to have got the message—witness the much lower voter turnout—but has Parliament? I am slightly encouraged that members of the Conservative Party, my erstwhile friends, have got around to sniffing the wind. Its Democracy Task Force under Kenneth Clarke has at least thought about strengthening Parliament, but its proposals are really much too timid and do not go nearly far enough to do what should be done to restore some authority to Parliament over EU law. If Parliament is serious about regaining some of the power that has been so arrogantly given away, it should give itself the right to mandate Ministers. Governments would have to have mandates from Parliament on what they can agree to in Brussels. That would be a frightfully good idea, but I can hear the sound of pigs getting ready for take-off.

Without real power being given back to Parliament, the arguments about the constitution, to which my noble friend Lord Liverpool referred, are irrelevant. It does not really matter whether we have a constitution or what it is called. Dancing around the constitutional maypole in Berlin is simply a quaint folk ritual. The EU will carry on as it has always done. The apparatchiks will continue to use—or abuse, as my noble friend would have it—Article 308 and get into new legislative areas without having the legal basis on which to do so. They will, however, award themselves the legal basis on which to do so. Things will carry on.

I have a copy of the Commission’s work plan for 2007 in my hand. It is illuminating. It is 19 pages of closely typed script, and it covers all sorts of areas: the strategic view of the energy policy; migration initiatives; social reality stocktaking—that should interest Members on the Liberal Democrat Benches, as it certainly would the Commissioners; space policy; the European space programme; defence initiatives; and so on. I can provide noble Lords with the rest of the documents if they are interested. All this means that it does not matter whether we sign the constitution or not; the machine will grind on anyway. That is what has been happening, and it will go on happening; so it does not matter whether we have a constitution or not. The EU has got on very well—or very badly, according to one’s point of view—without one.

This is fundamentally about democracy. MPs should not have given away powers that were only lent to them by the electorate. They were not theirs to give away. No one under 50 in this country has ever had a chance to vote on anything to do with the European Union. The last vote on it was in 1975. They have not had a chance to stop the juggernaut. The real debate, which the noble Lord, Lord Watson, should welcome, is about the facts. This is what the Bill should be about; finding out the facts and determining whether it is right for this country to be swept up in this supranational avalanche of legislation, which affects the whole country but which is unseen, or unamendable, by Parliament. I am not in the business of rubbishing the EU for anyone who wants to be in it. Let us have it, by all means; we will trade with it and have a relationship with it. Other states may be happy to be part of it. I wish them joy of it, I really do. For us, however—this view is widely shared outside the Westminster bubble—the financial and political costs really are too great. I am confident that when the Government have the result of the committee of inquiry, as set out in the Bill, they too will agree that we are better off out.

My Lords, this House should seek as far as possible to be in tune with public opinion in the country. The more it is, the greater the respect it enjoys and the more influence it has. But on our relationship with Europe neither the Government nor we in this House are in harmony with public opinion.

The Government’s enthusiasm for the EU was expressed most recently in the House by the noble Lord, Lord Davies of Oldham, on 23 May, reported at col. 645 of Hansard, and this House is predominantly Euro-phile. People outside take a different view. They are perhaps most exasperated by the continued flow of regulations affecting nearly everything they do. But, increasingly, well informed people recognise the massive disadvantages of our membership—our net contribution, already £3.4 billion a year, which with the surrender of our rebate is set to double before very long; the lamentable CAP and CFP, the latter now described by the responsible commissioner as “morally wrong”; the level of mismanagement and fraud, and the blizzard of new laws and regulations, about which the noble Lord, Lord Willoughby de Broke, spoke so eloquently. Above all, there is the unending pressure forcing us towards a single European state.

Numerous polls show that two-thirds or three-quarters of the public believe that we should leave the EU, or at any rate have a much less constricting relationship, while only a small minority favour continuing membership. The latest poll I have seen found that 69 per cent would either like to leave the EU or would like a looser relationship with it and that only 27 per cent said that they wanted to remain in it. The majority of our people apparently regard the great benefits claimed by the three major parties as largely illusionary, while they are increasingly aware that our laws are now largely made in Brussels and that what remains of our national sovereignty is being steadily eroded. This disillusion is steadily growing, but it does not seem possible for us to continue to ignore it. It has become clear that withdrawal or loosening up are real options.

Against this background we ought to know what the real implications of a change of direction are. Therefore, I welcome the Bill of the noble Lord, Lord Pearson. I shall be surprised if he persuades the Government to agree to set up a committee, as proposed in the Bill, but even if he does not it is nevertheless important to bring this question before the House and to test public opinion outside. The noble Lord, Lord Pearson, whose knowledge of the ways of the EU is unrivalled and whose determination and persistence are exemplary, tried this with a very similar Bill four years ago, as has been mentioned. When we gave that Bill a Second Reading I said that we had been advised that there was no authoritative and impartial report on what detachment from the EU, in whole or in part, would mean for the United Kingdom. I said then that I did not suppose that this Government, or any other in sight, would do as we proposed, though, of course, they should, and I suggested that a Select Committee of this House should do so, enabling all of us to judge whether withdrawal would be a catastrophe or bring benefits to this country. Fifty-one Peers, many of considerable distinction, joined in a consequent request to the Liaison Committee, comprised of the great and the good in this House. But, sadly, it turned us down, saying darkly:

“The establishment of such a committee is likely to be regarded as a negative intervention in the process by this House and we doubt whether it would be possible to isolate the committee’s deliberations from wider political consequences”.

The House supported the Liaison Committee, so a good opportunity to give us a solid basis for our deliberations was lost.

Meanwhile, matters are getting worse. We await the EU summit on the 21st of this month with apprehension. Will it abolish more national vetoes, set up an EU foreign Minister and move towards giving the EU a legal personality, so making it a state? Mr Blair has not consulted Parliament, so we do not know to what he may commit us in the last days of his premiership.

The power-hungry European Commission forges on. It has just, with the assent of the European Parliament, destroyed the livelihood of our traditional makers and restorers of barometers. It wants to submerge our universities in a European higher education area. It never stops meddling in our affairs. Only very occasionally is there some relief, notably in how Mr Gordon Brown has so far saved us from the euro. Perhaps his imminent succession gives us a ray of hope.

I do not think that the Government can continue to ignore the views of the British people and condemn us to subjection to a centralised European state that the British people emphatically do not want. Is there no alternative? I believe that there is. We could take a stance similar to those happy and prosperous countries Norway and Switzerland. Then, perhaps, we might cease to be a worried and depressed country and become instead a lively, merry, tough and successful little country. We once were that, in the time of the first Queen Elizabeth. I was recently in the National Portrait Gallery and saw there hanging next to each other the portraits of her three chief advisers, Cecil, Gresham and Walsingham. I felt like saying, “Come back and help us”. On our own, we would be much happier and much more prosperous.

My Lords, in one sense, this has not been a debate in the balanced sense across the Benches of the House. Rather, it has mainly been a fascinating debate of the old-fashioned, reactionary Tory party right wing in this House, with two UKIP Members, the promoter of the Bill and his colleague, and some on the Cross Benches as well. For us, as spectators, it has been interesting to listen to the long litany of very familiar arguments that one has heard over many years. There is a funny phenomenon—

My Lords, the noble Lord mentioned old-fashioned Tories being against membership of Europe. I remind him that until 1985 the Labour Party had a policy of withdrawal, and it was the Tory party that took us into Europe and which has consistently given us more Europe.

My Lords, I accept that entirely. I pay tribute to the way in which the noble Lord, as an independent Labour Member, has kept his long-standing traditional views. He sounds like a Tory when he speaks about Europe. I was talking about the Tory party right wing; I was not talking about the party as a whole. Even in the Commons, I assume that there are still some Members of that party who can be characterised as pro-Europe.

The astonishing thing is that we are told on good authority that ours is the only Parliament of the 27 member states in the EU where this existential original debate still goes on, with all those old repeated arguments and discussions from the days when we joined and when that was endorsed in the 1975 referendum. Some Members might wish to say that that is a good thing, but I think that it is rather a pity, because it is living in the past. The nostalgia that the noble Lord, Lord Moran, very movingly expressed—I share many of his views about Queen Elizabeth I and our glorious periods of history subsequent to that—has nothing to do with our membership of the European Union nowadays. One detects some nostalgia for a world that no longer exists. As the global village gets more and more united, with all the countries in the world working together, the EU is just the European logical representation of that process.

Why do more and more countries want to join? Norway and Switzerland have been mentioned as countries that do not want to take part, but that does not change the central argument. Ten countries joined recently, including the two Mediterranean islands, and subsequently two Eastern European countries came in, making 27. Eighteen of them have ratified the old text of the constitution, let alone what happens with the negotiations for a revised constitutional treaty. It should not be called the constitution; that was always a misnomer. The original document was far too long-winded and boring. It is not just Giscard d’Estaing who should be criticised for those 300 pages but also the noble Lord, Lord Kerr, who was the scribe or secretary to that process. He went along with it; it was a mistake and put people off.

I rather congratulate the noble Lord, Lord Pearson, on introducing the Bill, although I was not in the House when he introduced his Bill four years ago. I do not know whether he had the Second Reading at an earlier date in the parliamentary calendar then. It seems funny that, as I recall, his Bill was one of the first to be introduced in this Session, yet the Second Reading is taking place on 8 June. I would have thought that he could have easily secured an earlier date for Second Reading, which would have then given us a chance to get the Bill into Committee. When I had my own European Bill—it was somewhat different, being about European flags, town-twinning and so on, and was supported by my noble friend Lord Watson, whom I thank again for that—the noble Lord, Lord Pearson, not only kindly did not press his amendments but did not ask for any vote against the Bill, although normally we do not vote against Bills on Second Reading. I was grateful for that. I would welcome the chance of discussing these matters in Committee, but I fear that that will not now be easy from the point of view of the Bill making any realistic progress.

My Lords, I understand that there will be time for Committee. I look forward to the noble Lord’s contribution.

My Lords, I meant the crucial stage. My Bill went long ago to the Commons and is awaiting Second Reading; as we know, the stages and procedures in the Commons are extremely difficult.

My Lords—

My Lords, I do not want to be discourteous and I ought to give way, but if I do the time will go quickly and I will not have a chance to make my arguments. However, I shall give way.

My Lords, there is no reason why this Bill should not reach the Commons this Session.

My Lords, did the noble Lord say “next Session”?

This Session, my Lords.

My Lords, the realities of the Commons are different from that very optimistic idea. Be that as it may, we have to be realistic. I hope that noble Lords agree that in reality we are talking about a collection of sovereign countries. In the same way as the United Kingdom has signed treaties all over the world with the different bodies of which we are members—NATO, the United Nations, the WTO—and has defence arrangements in other parts of the world through treaty arrangements, we are talking about a treaty basis for the development of the Union but it just happens to be on a much bigger scale. But where does that scope come from? It comes from the normally collective will of the—yes—sovereign member Governments deciding to do things together. There is no loss of sovereignty intrinsically in that process at all; in fact, each member state gains in sovereignty.

I hazard a guess, from his appearance, demeanour and manner, that the noble Lord, Lord Pearson, is a member of a number of posh London clubs—perhaps not. Other colleagues here are; I am not very posh but I am a member of a couple of clubs. The principle is that people are members of clubs to gain greater, collective strength from the collective actions of that club and its decisions. We accept that. There is no loss to the individual rights of the member therein; nor is there for any member state in the European Union as a result of agreeing to the European Union treaty and the revised text of the constitution that is about to be negotiated. Eighteen countries have ratified it, so we have to give due respect to the fact that the majority of member states presumably want an agreed revised text to facilitate the efficient functioning of the European Union and make it easier for it to move ahead on the collective decisions that it needs to make to increase the individual strength and cohesion of the sovereign member states, including Britain, and the collective strength of the Union.

The attribution of a legal personality may or may not end up in that text; we do not know. If it does, it does not mean the creation of a superstate—far from it. There has never been any suggestion in recent years from any enthusiastic supporter of the European Union that the sovereignty of the member states is not the key—the fulcrum—of how it functions through all the arrangements. The Commission is now making less legislation. In fact, all too often it is obliged to respond to the member states, making suggestions along the lines of “Study this, look at that, do this”. There are far fewer directives, and when they come along they are much more of a broad framework. The noble Lord, Lord Willoughby de Broke, asked for an example of transfers back to the member states. Subsidiarity will presumably be negotiated again in any revised text for the constitutional treaty—I hope so.

My Lords, will the noble Lord give way?

My Lords, I was referring to the noble Lord, Lord Willoughby de Broke, so I would prefer not to.

My Lords, I want to raise a point with the noble Lord about subsidiarity. We were promised, I think five years ago, that subsidiarity would result in powers being remitted to us. Has he any examples?

My Lords, I shall not deal with that because the noble Lord did not answer the points made by my noble friend Lord Watson, and I was referring to something that was said by the noble Lord, Lord Willoughby de Broke. I do not want to take up too much time today.

The realities of these matters are not at all along the lines enunciated by the Euro-sceptics and anti-Europeans today. The joint article by the Spanish Foreign Minister and the Deputy Prime Minister and Foreign Minister of Luxembourg in the Independent newspaper on 16 January this year states:

“Europe’s challenge at the beginning of the 21st century is firmly to anchor the European integration project”—

all that that means is sovereign countries working together—

“in a rapidly changing and complex world. To embark upon this journey we will need both to revive the spirit of the founding fathers, men such as Schuman and Monet,”—

I only wish that the British had been there at the inception—

“and to arm ourselves with the necessary means. The [new] Constitutional Treaty is without a doubt, the best tool in our bag. If it did not already exist, we would have to invent it”.

Without it, we will not have the machinery to ensure that the European Union functions efficiently in the future.

We insisted, as a Conservative Government under Mrs Thatcher, on majority voting to ensure that the single market would work. The bulk of the European Commission’s legislation, voted for by the European Parliament and by sovereign member states on an equal basis at the Council of Ministers, was to ensure that majority voting existed to make the single market work properly. The bulk of the current legislation made by the Commission still reflects the gradual, painful and often slow completion of the single market. That process is continuing.

The British public are very realistic about these matters. Consider the British diaspora in other European countries. Nearly a million British people live in south-east Spain, 600,000 live wholly or partly in France, 55,000 work in Germany, and the diasporas of other countries live in this country, too—in Britain, there is the revered figure of the Polish plumber. All these represent mobile populations who travel around the member states. Why should we have a rigid separation, with Britain standing alone saying, “We are different from all the others”? We can be proud and patriotic Britishers, but we can also be enthusiastic Europeans.

The President of France, Mr Sarkozy, said that he was worried that the Prime Minister-designate—I am not sure whether that is his official title—might not be sufficiently European and that he might not agree to the extension of qualified majority voting to certain areas, to pass decisions that would undoubtedly very much help this country.

A noble Lord referred to us as being oppressed and ruled by “jackboot”. I share the objections of my noble friend Lord Watson to the use of that obvious reference to Germany. That country became a model of democracy in the period after the nightmare of the Third Reich and the Second World War; we were involved in that process; we worked with the Germans, and they worked with us. I cannot think of a more democratic country, and their English is often better than ours.

The danger, as suggested in this debate by the “antis”—who are living in the past, old-fashioned and unable to see the modern future—was that we would be outvoted, oppressed and bullied into doing things against our will. We have been outvoted on only two or three occasions in a formal vote, with or without the use of qualified majority voting in the modern sense. Normally, decisions are made unanimously; and that process preserves even more the intrinsic, national and individual sovereignty of each member state. So what is the anxiety all about? I cannot understand it.

In conclusion, if the Bill makes progress, we can hold further discussions. The Independent newspaper, on Wednesday 21 March, published a long list of 50 reasons to “love the EU”. All of those reasons concerned practical, home-spun issues such as reducing the cost of mobile telephone calls. That is a good note on which to end my remarks.

My Lords, did I understand the noble Lord to say that he supported the Bill because he looks forward to the Committee stage?

My Lords, I suppose that I might say, cautiously and grudgingly, that I support it in the “Denis MacShane” sense.

My Lords, I think that most noble Lords, perhaps not all of us, have agreed that this debate has raised extremely valid and interesting issues which we have debated often and will certainly return to again. I am only slightly sorry—and I apologise if this sounds a shade partisan—that not a single government Back-Bench Member has attended this debate. I know that these matters are not important to them on a Friday afternoon, but actually they are important, even on a Friday afternoon. I had to get that crack in before I move on to more neutral and non-partisan observations.

As for the Bill and the promotion of it by the noble Lord, Lord Pearson of Rannoch, I doubt whether these issues, important as they are, can be encased in a legislative instrument or, heaven preserve us, yet another committee. That is reflected rather well in the obvious problems in Clause 1(3), in which the noble Lord, Lord Pearson, makes heroic efforts to define how on Earth one would construct an independent committee on a subject of such vast extent and where there are such strong and polarised opinions, which the noble Lord, Lord Monson, bravely tried to modify. Frankly, I cannot for a moment see that part of the exercise succeeding but I suspect that that was not the Bill’s main purpose anyway.

I am left wondering whether I would fit into any of the categories. I do not fit into the wonderful, old-style view of the noble Lord, Lord Dykes, of left and right and that sort of thing in the Tory party; we do not live in that world any more. I am not at all sure whether I am left or right. Nor am I at all sure where I fit into the categories of the noble Lord, Lord Pearson. I personally believe that Britain should play a leading part in Europe in a union—not the Union that we have today but a revised one. I do not know where that puts me on his committee; it probably keeps me off it altogether.

If one is calm and sensible, one will see that the issues are vastly important—they are vital—and are much too pervasive and complex to be locked away in any committee. My noble friend Lady Noakes rightly said that we must give the most profound attention to them. The Government’s handling of them is far from satisfactory; we need a much better approach all round.

The debate has raised four key areas for attention: the UK economy and the EU; our national security and defence; our law and constitution; and our budgetary and public spending policies. Let me go through those. On the economy, almost everyone—maybe not one or two who have participated in this debate—accepts that our economy is now hopelessly overloaded with regulations; very much so for our smaller businesses. The costs of compliance with regulations are rocketing; the estimate is that since 1997, the costs to British business have risen by £55 billion, of which three-quarters or more are of EU origin. I am told that the EU working time regulations alone cost £1.8 billion every year; that sum is probably rising.

The whole process of incorporating EU regulations and other burdens into our lives is sloppy, full of holes and should long since have been tightened up. Whether one can blame one Government or another, we have allowed a wholly inadequate and almost insultingly casual process to develop. As the noble Lord, Lord Willoughby, pointed out, we are governed increasingly not merely by secondary legislation and statutory instruments that slip through but by instruments and legislative devices that do not even pass through Parliament or which do so without touching the walls either side. I am personally coming to the view—I first put it forward with my colleagues in another place more than 10 years ago—that we must follow the Swedish and Danish example. We must ensure that our Ministers are controlled by mandatory concession, by mandatory agreement, by our two Houses of Parliament before they agree to things in the Council of Ministers. I know that that sounds like a big step forward but if we—the Government or my own party—seriously believe that we will have more open, effective and democratic government in our own country, we may have to go the way of the Danes and the Swedes in that regard.

My Lords, may I assume that that suggestion is the agreed policy of the shadow Cabinet?

No, my Lords. The noble Lord should certainly not think that everything that Conservatives say is agreed policy because we are not yet in government. We are formulating and thinking about these things. I shall have a thing or two to say about his party’s rather strange policy on these matters in a moment. The noble Lord can take it that we are seriously thinking about better ways in which to control this flood of instruments and legislation and to bring before Parliament and the people certain decisions before they gel or are formed in concrete and it is too late to change them. I believe that this may be one way of doing it, but I shall not go further than that at the moment.

The second matter—national security and defence—raises even deeper issues on which, frankly, we are not being kept up to date in either Parliament. Our fear continues to be that NATO is being damaged by EU military aspirations and duplication. On the soft-power side of security and defence, there is the development aid issue, which is not mentioned in the Bill of the noble Lord, Lord Pearson. As my noble friend Lord Liverpool rightly said, it is common knowledge that the EU aid processes are bureaucratic and inefficient and that they fail totally to focus on the lowest-income countries. There really is a case for urgent review in that regard and for reclaiming our national aid and development policies, given the general sense of failure and betrayal from all the high-flown promises for Africa at Gleneagles and elsewhere and at various EU summits.

The Bill does not say anything about the latest EU passion for binding targets on the climate and global temperatures—targets which will not bind anyone in the end and will distract us from many more practical measures to upgrade our environment. Nor does it say anything about energy, which we will no doubt debate further in the future. I forget which of my noble friends mentioned it but the EU continental system declares that it wants to reduce dependence on Russian gas. In fact, there will be a vast increase in dependence on Russian gas, and we should be very careful not to become caught up in the extremely vulnerable systems that will then emerge. We need to look for other ways of ensuring our energy security.

Then we come to the third issue: the constitution. On that, our position is clear, which is more than can be said for that of the Government. We say, quite simply, that a new transfer of powers from the UK to the EU should be subject to a referendum. That is what the Government used to say as well, but now they have reneged on that and I do not think that the British people will take kindly to this particular U-turn.

We obviously need to keep a special eye on criminal law powers, labour relations and, above all, foreign policy, but keeping a special eye is extremely difficult because, as the noble Lord, Lord Monson, and others said, we are being kept in the pitch dark about what is going on. Even the Foreign Secretary will not tell the House of Commons Select Committee what our approach is to be at the meeting in a few days’ time to determine the whole pattern of constitutional reform. We know what Mrs Merkel in Berlin wants; we know what Mr Sarkozy in Paris wants; we have a pretty shrewd idea of what the British people want, if they are allowed a say; but we have no idea what the Government want. Frankly, that is disgraceful and a total snub for all the talk about open government and transparency which so fills official rhetoric.

Then we come to the subject of hard budgetary economics, which I think is the main interest of the noble Lord, Lord Pearson, who has produced a great many papers and done a great deal of work in this area. Under the current less-than-brilliant budgetary deal secured by UK Ministers, the UK will raise its net—I repeat “net”—payment to the EU annually by £2.5 billion to £6 billion over the period from 2006 to 2013. This compares—it is a comparison near to my heart—with around £40 million a year which the British Government pay to support the Commonwealth. The disparity—at a ratio of about 100:1 or 150:1—is so vast that it makes one pause when one thinks that the Commonwealth network is probably more valuable in terms of British influence than anything that the EU can offer today. The contrast really should make policy makers pause, and make the dear old Foreign and Commonwealth Office remember the second and third words in its title—and Commonwealth. Until there is more evidence of that, we shall not regain the balance in British foreign policy that we have so tragically lost over the past 10 years.

By contrast, along the way, the EU's administrative costs alone involve more than £4 billion a year, and that is now set to rise by a further 20 per cent. We also know that the UK will be paying 20 per cent more to the EU budget than France and get back less EU money per head than any other of the EU’s 27 members. These are matters about which we must pause and think very hard indeed. Even if setting up a new committee, with a feverish, almost snark-like search for independence, is going to do the job, those are nevertheless matters on which we should remain intensely focused at all times, particularly in the coming weeks and months.

There are all sorts of other profound issues about the EU situation and the current trends that we obviously need to discuss. In fact, we will be returning to the constitution issue next Thursday on a Liberal Democrat Motion. That is perfectly acceptable, and we will no doubt deal with it thoroughly. However, I find the Liberal Democrats’ wish that the UK can be defeated in the coming negotiations—that England should be defeated, to use their words—leaves a very unpleasant taste indeed. I hope that we will hear no more of that in the coming debate.

However, as well as doubting the efficacy of a Bill or a committee on such momentous matters, we in this party do not favour a withdrawal strategy at all. We see that as defeatist. Obviously the EU’s nature will be transformed. The noble Lord, Lord Watson, mentioned Moldova. Turkey is in the wings along with Ukraine and Georgia; and even countries beyond Georgia, including Azerbaijan, are seeking to join a wider European—by then it will be Eurasian—Union. That transformation is going on slowly but all the time. Secondly, the people of Europe at the grass roots are beginning to speak. Until the referendum defeats of a couple of years ago, one could say that they had never spoken yet, but then they did speak. It was not the people of Britain—who got such stick from the noble Lord, Lord Dykes, as though we were the only offenders—but the people of the Netherlands and the people of France who spoke out and said they did not wish any further centralism and that the whole doctrine of bigger, larger and more remote blocs and more remote systems of government, undermining people’s identity, closeness and intimacy, was one that they rejected. They were the people who spoke out.

We favour vigorous and extensive EU reform and the confining of EU activities and ambitions to sensible, reasonable goals which we can achieve by working together with our neighbours, as good Europeans, as we always will be and always have been. Today, the EU has its place—its local place—but there are much wider worlds to conquer, and by whom we may be conquered if we do not look out.

My Lords, the noble Lord referred to the Netherlands and to France. Of course, both Governments now accept the need for a revised new treaty text of whatever comes out of negotiations. That will presumably involve a vote of their sovereign national Parliaments, if no referendum is proposed for the revised shorter text.

My Lords, the noble Lord is presuming a lot, and perhaps some of the people in those two Governments are presuming. There remains a very strong wish throughout Europe for matters involving the further transfer of powers—particularly when those powers are transferred away from rather than nearer to the people—to be subject to referendums. That is the wish in this country. That is the wish among many Frenchmen and the wish of many of my German friends. For Governments anywhere—though I speak for none, because I am a member of no Government—to ignore that or cavalierly to assert to the contrary that Europe is fine, everything is fine and we should stop worrying, is a dangerous path indeed. I think that those who hold that view will live to regret it.

My Lords, I, too, thank the noble Lord, Lord Pearson, for introducing this debate on the United Kingdom’s membership of the EU. It was actually a debate about that, and I appreciate the contributions made by the noble Baroness, Lady Noakes, and the noble Lords, Lord Watson of Richmond, Lord Beaumont of Whitley, Lord Vinson, Lord Stoddart of Swindon, Lord Monson, Lord Willoughby de Broke, Lord Moran, Lord Dykes and Lord Howell of Guildford, and the noble Earl, Lord Liverpool.

I always enjoy speeches by the noble Lord, Lord Pearson, as he knows. In particular, I enjoy the vehemence of his hostility to Europe because it has a colourful quality that enlivens what would otherwise be a gloomier debate. However, I say to him—and I shall make the point in more detail as I go on—that I cannot always recognise the sources of the facts that he adduces. I regret to say that I agree with point made by the noble Lords, Lord Watson and Lord Dykes, about the language that he chooses to use. I fear that certain kinds of language and rhetoric get in the way of the debate rather than help it.

The noble Lords, Lord Pearson and Lord Willoughby de Broke, started by saying that the Bill is not about withdrawal but about an investigation. I looked at the transcript of the entertaining discussion that the noble Lord, Lord Pearson, had with Dr MacShane on the “Today” programme this morning. If he has drawn support from Dr MacShane’s words, I must say that he may, in retrospect, detect a certain playfulness on Dr MacShane’s part. That bears on what this legislation is about. It is not called the Let’s Get the Facts Right Bill; it is called the European Union (Implications of Withdrawal) Bill. One does not have to be Einstein to understand from the speeches what those words mean. They are so neutral, so fact-finding and so impartial that the noble Lord, Lord Pearson, was able to tell Carolyn Quinn this morning that the effect on our economy of EU membership is clearly pretty disastrous. I regret that I did not hear the programme, but I read the transcript, and I suspect that the investigation may, at least in the mind of the noble Lord, Lord Pearson, have come to an end.

We should be honest about this. On all sides of the House there is a great deal of judgment about where we already are. That has been expressed, so I am not saying anything unfair. The noble Baroness, Lady Noakes, at least supports involvement in the European market, if little else. Between her and the noble Lord, Lord Vinson, I detect serious confusion in the position of Conservative speakers in this debate. The balance in what the noble Lord, Lord Howell, said is plainly not reflected elsewhere in his party. I hope that on Thursday, when I think we will see much more systematic intervention from all the Benches, we may get greater balance.

I want to take on the issue of what we should think about the research in Switzerland, which has been used as an argument in favour of the Bill, because the argument does not appeal to me. The United Kingdom’s GDP is 7.5 times greater than that of Switzerland and the United Kingdom’s labour force is approximately eight times greater. The very efficient Swiss economy is highly dependent on a number of niche production areas and niche markets. By contrast, we have a much larger domestic market and export a far wider range of goods. I make the point as an economist more than anything else, but the idea that a serious comparison can be made does little service to the argument as a whole.

We have transformed Britain’s standing within the EU and have played a central role in all the key debates in recent years. We have also played a major part in promoting enlargement and reform—the noble Lords, Lord Howell and Lord Dykes, emphasised the enlargement factor. There are strong reasons why continued active engagement in Europe is essential for Britain. Unlike the noble Lord, Lord Moran, I suspect that while this country will always have a healthy scepticism about almost any international entity beyond its island shores, most of its people are pragmatic—thank goodness. They see benefits and disadvantages, but, on balance, I think that they will be unwilling to throw away those advantages.

I can quickly illustrate the point. There are things that it is not wise to be afraid of. Universities were mentioned in this context. Almost all universities are chartered. They are governed and were brought into creation by Acts of Parliament with an absolutely inflexible independence. I do not believe that they are about to be corralled by anyone. I would advise anyone who even thinks of spending time trying to do so to use their time more effectively. I know the university world well. It is not biddable; let me put it that way.

Of the many great challenges that we face in today’s globalised world—and these are the pragmatic points—we need to work with partners, including EU partners. By doing so, we can achieve much more than we can on our own on some—not all—important issues. I shall not over claim. We can do more on climate change, energy, cross-border crime, counterterrorism and the development of assistance to developing countries. I say to the noble Lord, Lord Howell, that our own aid programme for developing countries is not trammelled by any EU decisions taken on aid. There are some differences in the nuancing of how the aid arrangements go. Our aid is increasing and we take the decisions on it. That is why we put the issues I have described at the top of the EU’s agenda during our presidency of the EU in 2005. We are working successfully with partners to drive forward practical change.

My Lords, I am most obliged to the noble Lord for giving way. He mentioned aid, and he rightly claimed that it is well administered in this country. Is it not a fact that one-third of development aid is administered through the European Union? That is what people have been talking about; that money that could be fully used in Africa and other places is not being fully used because of the administrative differences—if I can put it that way—in the European Union?

My Lords, I am particularly unwilling to get into a contention with noble Lords on aid because I suspect that there is no need for one, but I just give a very quick illustration of the use of European aid. We have used some of our aid, together with other Europeans, though the European aid system to support the AMIS force in Darfur. It is not a wholly unusual circumstance. A lot of the peace and security operations in Africa have the same characteristic. We have done so because, by doing so, we could encourage a number of other nations to put money into the same pot, to match us in some cases and to get close to matching us in others. The net result of it—and this is a matter of record which can be checked by any noble Lord, and I encourage anyone to do so—has been that the AMIS force has been sustained. That has had not all of the impact we would have wished to have in Darfur, but it has had a very serious impact. We are now seeing similar outcomes in the Democratic Republic of Congo, and I could name others.

These issues of what we can do together are important. There are excellent examples in the agreements that were reached by the EU leaders in March this year. They agreed a critical package of measures on climate change and energy, which I suspect may well lead in discussions elsewhere in the world, stretching targets for tackling greenhouse gas emissions; agreements to embrace new, climate-friendly technologies; measures to maximise the efficient use of existing energy supplies; and measures to continue to open up Europe’s energy market to free competition.

Through these agreements, the EU is setting itself on the path to becoming the world’s most competitive, energy secure, low-carbon economy and to continue to lead global efforts for effective measures in this area. We have been a positive influence on those discussions. I would much rather that we had been in the position of taking part in those discussions and helping guide them than not.

The noble Lord, Lord Pearson, referred systematically—I understand why—to the implications of membership for the UK economy and public expenditure. As the noble Lord will know, the EU is the world’s largest multilateral trading bloc. I want to talk about other trading areas in a moment, but we are in the world’s largest multilateral trading bloc, a single market of more than 490 million consumers with others wishing to join. Membership of this market brings significant opportunities to business and consumers in this country, and allows us to trade freely within Europe. For example, according to statistics from HM Revenue and Customs, which I hope people will accept are objective, in 2006 British companies exported almost £150 billion-worth of goods to EU countries. This represented 62 per cent of our total exports, a rise of 24 per cent on the year before. But it is true that there are other, wider markets, including China, the United States, India, Brazil and those in the Commonwealth.

My Lords, before the noble Lord finishes extolling the wonders of the European single market, is he really saying that, if we left the political construct of the treaties of Rome and were no longer members of the European Union, any of our trade with the single market would suffer or any of our jobs would be lost? Is he really saying that?

My Lords, that is an entirely fair point. Of course I am not saying that. However, as you watch the economies and the internal performance of the economies of every nation that has joined the EU, you see that they have taken a step-change leap up in trade arrangements and the value of their exports. It is extremely hard to imagine that this could have happened outside the stability of the arrangements that have been achieved in Europe.

In response to the noble Earl, Lord Liverpool, I entirely understand the point about other markets, but I cannot see that these matters are mutually exclusive. I observe, as he does, that other markets are growing, but we should be careful not to conflate arguments about the proportion of trade with the absolute figures on trade. Part of the reason why the proportions are changing is that China, India and others are growing massively as economies and present us with new opportunities, but that is not an argument for being outside our trading arrangements now.

Membership of the EU is also important to the United Kingdom when negotiating external trade agreements around the world, because of the power of the world’s largest trading bloc. It is a driving force in the launch of the current round of World Trade Organisation trade negotiations. The fact that the EU acts as a single voice, on the basis of a mandate given to the Commission by member states, provides the EU and the UK with far greater clout in trade negotiations.

This Bill calls for studies, but there have been a great number of studies by universities and university academics, who, as professional economists, have been, I hope, independent in what they have done. A major HMT/DTI paper earlier this year, The Single Market: A Vision for the 21st Century, goes through a huge number of the details. In response to the points made by the noble Lord, Lord Stoddart, about the euro, it would be hard to say, given the performance of the Chancellor, that the Government have been an absolute fan of joining the euro. I do not think that that can be said with any realism. Among the documents that have been so useful in the study of the economic performance of this country in relation to other countries, I ask with caution—I know that I am asking for a very big favour—Members of the House to go back to the 18 volumes that Gordon Brown published on whether we should be in the euro. They contain a huge wealth of evidence about the nature of our trading relations and the structure internally of our economy.

In answer to the noble Lord, Lord Stoddart, we estimate that the total administrative burden on business in the voluntary sector—because I do not have the figures in front of me, I exclude here the financial services sector—in England derived from EU legislation is £6.3 billion. That represents 1.05 per cent of the amount spent in Europe, but I shall cross-check the figure to make sure that I have not myself confused euros and pounds in the data that I was provided with. That estimate suggests that other estimates are somewhat overstated.

The other points made by the noble Lord, Lord Howell, about costs are also important, and as he and the noble Baroness, Lady Noakes, said, they arise particularly in relation to regulation. I do not know whether this will gain great popularity on my own Benches, but I am a deregulator by instinct, and I have often said so. I am in favour of sensible regulations, but it is possible for all countries, however free their markets, to end up with a level of regulation for which they had not calculated. I recall a speech made by former President Clinton, who said that, when he became the Governor of Arkansas, there were 135 state regulations in place on the use of a hammer by craftsmen. I do not believe that the state of Arkansas is one of those places where people have no regard for a proper and free market. We need to reduce regulation, and I accept that. It is undoubtedly true that we must see a change in the culture and the approach of Europe in this respect.

In March, European leaders approved the Commission’s ambitious target of reducing administrative burdens on business by 25 per cent by 2012. The Commission estimates that that will add 1.4 per cent to the European GDP. The Commission is starting to deliver by identifying the first four major burdens that have to be tackled, and, in my view, the emphasis on delivery is absolutely vital. There is no point in just writing these things down; they have to be done. Some 78 proposals have been withdrawn so far; the Commission is continuing to simplify the existing acquis, and around 140 simplification initiatives have been proposed. The proof of the pudding will be in the eating, of course, but at least we are beginning to move along a helpful path.

There is an important role for legislative activity as well. The single market would not be able to operate without some rules and regulations that allowed competition but prevented protectionism and meant that cartels could not be readily built. We are looking for and are probably seeing a somewhat smarter and more flexible approach. For example, the emissions trading scheme and the code of conduct for clearing and settlement are innovative market-based approaches. I say to the noble Lord, Lord Willoughby de Broke, that I welcome a means of making sure that the disposal of old vehicles takes place safely without the escape of heavy metals, thus reducing the potential for disfigurement such as that in countries where cars are sometimes abandoned in heaps. The United Kingdom has driven this agenda. The 25 per cent EU recycling target reflects our domestic ambitions, and we are aiming for better regulation in general.

Questions have also been raised on national security and the defence of the United Kingdom. I want to make the point to the noble Baroness, Lady Noakes, that of course our foreign policy has to be constructed in part through bilateral arrangements—indeed, she may have suggested that it is almost wholly due to them. If I have misunderstood the noble Baroness, I apologise unreservedly. Of course, even with bilateral arrangements, we have to have the capability in foreign policy terms of acting for ourselves. Of that there can be no question, but we are also a nation historically very dependent on our alliances. We work with others, and our security is in no small part due to that. I cannot imagine the past 50 to 60 years without the European security arrangements and NATO, and it is for that reason that I say to the noble Lord, Lord Howell, that I would not want to see any tangling-up that made the role of NATO more difficult. It has been unquestionably one of the bastions of our freedoms, and that should be acknowledged.

I shall reiterate the points that I made in the debate on 9 May. We can easily take Europe’s stability for granted, but Europe has for centuries been disfigured by conflicts. Tens of millions of innocent Europeans have died in two world wars, and, in the second half of the last century, it was evident that we had to forge a different way. President Clinton rightly described this new architecture as the greatest and most successful example of “fixing in place”—I use his words—peace and community. Today the common foreign and security policy is delivering for the UK and the EU around the world. Twenty-seven member states are able to agree on common positions on issues ranging from regions in conflict through to Darfur and human rights around the world. Belarus, Burma and others are coming into the club and others are taking those positions; that is helpful.

There will be a long discussion on the constitution next Thursday. I will not say a huge amount about it today because I have no doubt that a great deal will be said then. However, in response to the noble Lord, Lord Dykes, the strength and cohesion of sovereign states must be the key—the fulcrum, as he described it—and it is right that there is a balance between that and the advantages or otherwise of being in this club. The noble Lord, Lord Dykes, and I may or may not agree on exactly where that balance is, but there certainly has to be one.

The EU is not in crisis in this respect; it is tackling important issues. The spring European Council agreement on climate change and on phone roaming charges, for example, shows that the work can be done.

Institutional reform, though, is unquestionably required. I do not accept that we have reneged on anything. I do not at the moment know of specific new proposals that I can share with the House. I know what the general aspirations expressed by President Sarkozy and Chancellor Merkel are but I do not know what the specific proposals will be. I do know that there needs to be some tidying up of the arrangements in this club of 27, otherwise the inefficiencies that noble Lords have described will simply become embedded systematically. There is no purpose in that. If there is some tidying-up work of that kind to be done, it will not be a constitutional treaty. We want some limited amending arrangements for treaties, and that is not what was proposed in respect of a referendum, but we will have the chance to see them.

I emphasise again—I know there is a great deal of common ground in the House on this—the importance of enlargement, for all the objectives I have described. Those include the attempts to bring Turkey closer to the family of nations.

The Government attach huge importance to the United Kingdom’s membership of the EU. We have strong reservations about the value of a committee of inquiry. It would be expensive and is likely to duplicate work done elsewhere. It would not help to forward the objectives we have either in Europe or for the United Kingdom—perhaps I should put them in the opposite order: for the United Kingdom and in respect of Europe—when we consider the key global challenges we face.

I pay tribute to the noble Lord, Lord Pearson, for initiating the debate. I will close with his two questions because he is the fulcrum of the debate. There have been several signals during the day—I think it was five clubs, or perhaps one club. The noble Lord’s first question was: do I believe that people really wish to stay in? Is there evidence of that?

My Lords, that was not the question. The question was: does the Minister believe that the people of the United Kingdom in 1975 would have voted to stay in what they were assured was a common market if they had known they were going to end up where they are today?

My Lords, I think the answer is yes. I remember that as one of the most political and, in a funny way, least economic debates I ever took part in.

What is the organisation for? One of its purposes must be to address globalism. We will all look at the benefits and the disadvantages, but if we are not in groups capable of addressing a globalised world, we will be in huge difficulty.

My Lords, I posed the specific problem that we have a condition of regulation without rectification: the inability, when regulations come here, to give feedback on their inadequacy and inappropriateness. I see no mechanism for doing that. It seems a core weakness of our whole relationship with Europe. Has the Minister any suggestions on that front?

My Lords, greater scrutiny by Parliament would unquestionably be a helpful reform.

My Lords, before I start, I shall just mention the other question that I put to the Minister: where do the Government think the project of the European Union is going? Where will it end up? Is it going to go into reverse? Will it change its continuing aggrandisement and search for ever greater power?

My Lords, I do not believe that it is about to become a single-state entity taking power from sovereign states.

My Lords, I am grateful for that reply. I am grateful to all noble Lords who have spoken—perhaps especially to those who do not agree with the Bill, because they have at least given us the opportunity of a lively and wide-ranging debate.

I shall sum up with some comments on some of the remarks that have been made. I was most grateful to my noble friend Lady Noakes, if I may call her that. I was interested in her ideas that there should be a time limit to the inquiry and a limit on costs. I accept that, and I will have to think between now and Committee how that might be done. Most of the work has in fact already been done; it is out there in academic studies and so on.

The noble Lord, Lord Watson, and other noble Lords confused the Bill with a Bill to withdraw from the European Union. He said it was not the time; if ever there was a time to withdraw from the European Union, it is not now. But that is not what the Bill says. It merely asks for an inquiry so that there can be a more informed public debate. The noble Lord also asked my noble friend Lord Vinson whether one solution to the democratic deficit might be to give the European Parliament more power. That is not a realistic question. It is impossible to imagine that the 27 Governments of Europe would agree to abolish the Commission’s right of proposal and the whole of the existing system of lawmaking and to pass that power to the European Parliament. One of the fundamental flaws of the European Union that has not been mentioned today is that there is no European demos. There can therefore not really be any European democracy to be reflected in any European Parliament. The noble Lord, Lord Dykes, said something from a sedentary position.

My Lords, I think people would agree, in the sense that it is just sovereign member states working together.

My Lords, I thought the suggestion was that the Parliament should take over. We would not go along with that.

The noble Lord, Lord Monson, as usual, made an interesting suggestion for the Committee stage. I accept that Article 1(3)(c) would be much better if people who were open-minded were included in the Committee.

The noble Lord, Lord Dykes, said that we supporters of the Bill are old-fashioned, old fogies, out of touch and all the rest of it. That is not what modern opinion polls suggest. They suggest that around 65 per cent of the British population would like either to leave the European Union altogether or to reduce our relationship with it to one of simple free trade with the single market. One of the most delightful aspects of those recent polls is that the most Euro-sceptic people in the country are actually the 18 to 25 year-old age group.

I was grateful for the comments of the noble Lord, Lord Howell. He says he is in favour of reform, but of course that is not possible. The treaties make it impossible. Realistically, there is no way that this creature can be reformed. He wanted the disgraceful foreign aid process of the EU in the Bill, along with its passion for binding targets on the environment and energy. I am sure we can accommodate all those areas in Committee.

Finally, the Minister says that he cannot recognise the facts that have been put forward by supporters of the Bill today. I have to tell him that pretty well all the facts that we put forward are extracts from official reports and statements and, of course, the Pink Book. He said that the Bill is really about withdrawal—he was agreeing, I think, with the noble Lords, Lord Dykes and Lord Watson, about that—but it really is not. Of course I confess that I believe that an unbiased inquiry would confirm the overwhelming and unanswerable case for the United Kingdom to leave the European Union, but only such an inquiry can show whether I am right or wrong. I am in favour of it and am prepared to live by it. That does not apply to the Minister, the Government, the Liberal Democrat Benches or, I fear, the Conservative Party.

The Minister thinks that the British people are very pragmatic and not worried about our EU membership. That is not what the polls seem to show. But if it were right, why not trust them with the results of this inquiry? Why not trust them in a referendum on the further transfers of power to Brussels that will be agreed at the forthcoming summit? The answer can only be that the Government wish to avoid the results.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

House adjourned at 5.22 pm.