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European Union Bill

Volume 728: debated on Monday 13 June 2011

Report (2nd day) (Continued)

Schedule 1 : Treaty provisions where amendment removing need for unanimity, consensus or common accord would attract referendum

Amendment 22A

Moved by

22A: Schedule 1, page 14, leave out lines 32 and 33

My Lords, it would be possible to make a well founded and persuasive argument to get rid of all the provisions of Schedule 1. At this point, however, I will focus on one provision where there is an absolutely demonstrable, concrete, national, economic and industrial issue at stake. I hope I shall persuade the House, and indeed the Government, that there is more than good reason to think again about this element of Schedule 1. The House will be well aware that military equipment is one of the rare exceptions and exemptions from the single market. That is achieved by Article 346(1)(b) of the treaty, which states:

“any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material; such measures shall not adversely affect the conditions of competition in the common market regarding products which are not intended for specifically military purposes”.

That is an explicitly protectionist measure that allows individual member states to protect their own markets, as in generations gone by before the single market, or Common Market, were ever conceived of. It is an anomaly in what is otherwise a free market, and it is very difficult for some member states to give this up because they are protecting industries with considerable lobbying potential in their own countries.

I have no financial interest to declare in the British defence industry. When I became Defence Procurement Minister, I made sure that I had no shares in defence industries and that has remained the case. I have not developed any relationships with the defence industry since I left government. Indeed, it would have been impossible under the rules for me to have done so in the last year. I acknowledge an admiration for the British defence industry, which I was able in the course of my job to get to know extremely well. The technologies that it has developed over the years, many of which you cannot even talk about the existence of let alone describe the nature of, are extraordinary. We really are at the front line in this area of technology. It is not surprising, and a demonstrable fact, that the British defence industry is by far and away the largest in turnover in the European Union. In other words, we are the losers through this protectionism.

The EU market for defence procurement is roughly €70 billion, say £55 billion, or something of that order. Our own element in that is about £15 billion—say €18 billion—so we are talking about a potential market of some €50 billion to €55 billion. The French, who are very protectionist and make considerable use of Article 346, have about the same spend. The Germans and the Italians have rather less and are also very protectionist. Everyone else in the EU adds up to that sum. There is at stake a market for something like €55 billion, or £45 billion to £50 billion. Of its own nature and operating against the largest most productive sector in the EU, this protectionism deprives us of the opportunities for sales and therefore for employment and for investment, not least for sharing the considerable overheads of R&D with the Ministry of Defence, which is very much in the interests of this country—the interests of defence, the taxpayer and industry.

It might be thought—indeed, I hope it would be—that any rational Government, and I am sure that the coalition Government are in no sense irrational, would want to seize any opportunity that could be identified to deal with that anomaly in the single market. We have been pioneers in, first, opening the single market initiative under Margaret Thatcher and Lord Cockfield and, subsequently, in pushing through the opening of financial services, intellectual property and many other areas in which there was hesitation on the part of our partners in moving forward to implement the principles of the single market.

One would assume that it would be common ground between all the major political parties, in addressing the electorate in our own ways and in addressing the economic interests of the nation, to want to get rid of the protectionist barriers that face that particularly important industry. I think it would also be common ground to agree that the defence industry, perhaps after pharmaceuticals and biochemistry, is the area of manufacturing in which we have the greatest competitive technological advantages in the world market. It is very important, and we ought to be able to come, more or less, to a consensus on what should be done about it.

How do you generate an opportunity to get rid of a form of protectionism when certain member states find themselves subject to considerable pressures and lobbies and find it difficult to move? It is difficult for some of them to vote openly, clearly and decisively for the abolition of Article 346. As I said in Committee, and as all of us with experience of negotiations in any context will know, often the best way to solve a substantive problem or make progress on a substantive issue, especially in a complex negotiation where people have strong and differing interests at the outset, is by a procedural route. I gave the example of setting up a committee to solve the problem rather than taking a decision around the board table, the Council of Ministers, or whatever. The qualified majority voting system is undoubtedly a very useful weapon that has proved its worth over the past generation in achieving substantive progress through procedural routes.

I can see one or two noble Lords looking for the text of the provision in Schedule 1, so let me say that it is on page 14, the penultimate element in Schedule 1, and states:

“Article 346(2) (changes to list of military products exempt from internal market provisions)”.

The provision does exactly the opposite of what I suggest is the obvious thing to be done in the national interest. It makes it impossible for us to agree to, let alone to propose, QMV to decide the future of that derogation from the single market without a referendum. We are putting a ball around our own necks, we are shooting ourselves in the foot, with that provision. It makes no sense at all. Where we have an interest in liberalising trade—I think I would carry a number of people on the opposite side with me in saying that we surely do—and where that means might be the only way to make progress in the area, as has proved to be the case in other similarly difficult areas in the past, we are preventing ourselves from doing so.

We all know that if a British Minister is not allowed to agree and says, “Well, we've got to have a referendum beforehand”, that in effect denies us the chance to seize the opportunity rapidly. It might need to be seized there and then, because if it is not you have lost it. You have your interlocutors in a favourable frame of mind in a particular situation when they agree to resolve the question through QMV. That element in Schedule 1 is entirely perverse. It goes in exactly the opposite direction from that in which any responsible Government would want to go. It is contrary to rationality and good sense; it is directly contrary to the national interest.

The Government have been very statesmanlike in saying in the course of our debates that they will listen to new arguments, that their minds are not closed. Both noble Lords, Lord Wallace and Lord Howell, have said that in answer to me and to other noble Lords. I am sure that that is true, because they are both sophisticated men of the world who know that one always needs to look carefully at these things. When you have a schedule of 56 items, it is almost certain that something somewhere will have crept through when it should not really be there, and it needs to be looked at again.

I claim no monopoly of wisdom in this matter, but I raise it because, as I said, I have a background in this subject and I was struck very forcibly on reading the text of the Bill. I hope that on the basis of the considerations that I have just set out there will be scope to reconsider this important matter. It is important for a major British industry which I think we all wish to support in every way we can. I beg to move.

In moving his amendment, the noble Lord has not explained to my satisfaction, or perhaps to the satisfaction of others, why the removal of these two lines from the text of the Bill, which would result in QMV rather than a veto on the protectionism of military products, would assist the development of the free market, as he and I wish to see. From my experience in Brussels, sometimes sitting in the chair on common security and defence policy debates, it was very clear that some member states—particularly some of the smaller and newer ones—wished to pursue protectionism to an extent that would have been extraordinarily unhelpful both to the defence of the European Union and to the wider defence policies of countries such as the United Kingdom. In other words, we need the veto and I cannot understand why the noble Lord wishes to remove it.

Perhaps I may try to help the noble Baroness. Of course I did not suggest that adopting QMV in this case would guarantee that we would solve the problem. I said that the problem had not been solved until now but an opportunity might arise to solve it via QMV. Many problems that were solved by QMV did not prove to be solvable when each individual member state was put on the spot with a requirement that it make an explicit and public declaration and hold a public vote in favour of a change, particularly when the change was to remove protectionist support for a domestic industry. I am saying simply that it would be quite perverse to deny ourselves the opportunity of using QMV as an instrument. Of course, there is no guarantee that it would work, but that is no reason for not trying it or keeping it open as an instrument that we might need.

My point was purely that from my experience and that of others in Brussels, a number of member states wish to keep protectionism. As the noble Lord has already clearly indicated, it is in Britain’s interests to have an open system, and in the case of the defence of the European Union and beyond it is in all our interests to have an open system. I cannot see how QMV will assist an open system when Britain may need a veto.

Since the noble Lord was involved in the defence industry at an earlier stage in his political career, the European Union has widened immensely. Some of the newest member states have had a significant interest in keeping protectionism moving in the defence industry, with some of them having very large interests in it. The contracts are massive; the potential for dealings that are less than transparent is huge, as some of the biggest contracts on the globe are before individual member states; and one of the great strengths of the potential of the EU common security and defence policy is an open system of military equipment, which would stop the protectionism to which the noble Lord rightly refers. I have failed to be convinced so far by what the noble Lord has said about the loss of the veto and the introduction of QMV.

I think that the noble Baroness has the wrong end of the stick. I do not see how on earth Britain keeping a veto on a matter where there is no liberalisation will help us to achieve liberalisation. What are we going to veto—protectionist moves by other member states? This is absurd; it is another world. To do what the noble Lord, Lord Davies, suggests does not involve a decision to move to QMV. The noble Baroness implies that if we took the two lines out of the Bill, we would automatically and at that moment accept QMV. We are not doing that; we are simply making it possible, at a putative future moment and if we felt that it was to our advantage, to do so by means of simple legislation in Parliament without a referendum.

I accept that the noble Lord, Lord Hannay, wishes to exemplify the argument that the noble Lord, Lord Davies of Stamford, has already put forward—in which case it must be rather weak. I cannot see why bringing in QMV is a better option than the veto, which I prefer. I cannot see how the proposal will strengthen the hand of the United Kingdom. Although I have a long and personal friendship—and indeed a good neighbourliness—with the noble Lord, Lord Davies of Stamford, and a high regard for his massive intellect and his knowledge of the defence industry, none the less he has failed to convince me.

Does my noble friend not feel that if the argument of the noble Lord, Lord Davies of Stamford, is so compelling, he would probably win it in a referendum?

I must admit that this is a very compelling argument from this side of the House. I am sure that the noble Lords, Lord Davies and Lord Hannay, will attempt to knock it down, but I suspect that they will not succeed.

My Lords, it may dismay the House, but I will pick up from the point where this argument has arrived. Like the noble Lord, Lord Hannay, when I looked at the proposal put forward by my noble friend Lord Davies of Stamford, it did not seem to me that the consequence of it was that there would be an immediate move without any further ado to qualified majority voting. Instead, there would be a very substantial process before anybody got there, even if they had the desire to get there. It seemed that whatever difficulties and barriers were raised by those who thought it best to have a closed-market system rather than an open-market system in the defence industry, it would be harder in the middle and long term for them to sustain the restriction on free markets were they to be deprived of the veto as the automatic response. In short, over a period of time—I am sure that it would be over a period of time if it happened at all—it might be possible through a different mechanism to change from this restriction to a free-market solution.

It may be thought curious that from this opposition Bench I argue trenchantly for free markets in Europe. However, it does not seem odd to me; I have held this view consistently for a very long time. Like my noble friend Lord Davies, it appears to me that when we take a serious and hard view of the areas in our manufacturing industry where we might be very successful, among them are the products of our defence industries. They are very fine industries; they are hallmarked by exceptional research and development; they are among the industries that co-operate most successfully and most frequently with the best of our university departments that are working in the same areas of research and development; they manage to do it on a large scale; and they manage to create extremely valuable intellectual properties of a kind that we cannot always achieve in many other parts of our manufacturing life.

As a former Minister responsible for intellectual property, I frequently came at this from a different ministerial portfolio from that of my noble friend Lord Davies, but none the less I was frequently full of admiration for the high quality of patents that were created in that industry and very well aware of the value that they could inject into free-market circumstances. It is very easy to see why, even when there is a concrete commercial rationale for this country, there will be others who will seek protectionism because they are fearful that their industries cannot compete in industries of this kind, particularly where those industries are so driven by outstanding research and development and by their links with the university research world. It is a tough environment to compete in—that is for sure—but that does not seem to me to be a reason to protect those kinds of industries in other countries any more than somebody could argue that we should simply protect them in our country from any difficult winds and buffeting of international competition in a fully commercial sense.

I can also understand the argument that some of those countries will be looking at industries—as we have in defence in the past—as being of considerable strategic importance and we have been cautious about whether that strategic importance should be so lightly set aside. Westland helicopters and so on have been examples of it. However, broadly speaking, we have been at our best as a country when we have been prepared in free markets to compete where we can and to achieve results on the basis of the excellence of what some of our manufacturing industries can do with freedom to operate properly in markets.

In summary, I return to the point that the noble Lord, Lord Davies, has made, that the noble Lord, Lord Hannay, was making and that I made at the beginning of my remarks. Nothing in this proposal moves us with any suddenness onto a different trajectory. I am loath to believe that the House and the general sentiment in this House would be against the possibility of the full operation of free markets and the benefit to United Kingdom industry of competition in a free market, especially where we believe that we can succeed way beyond many of our competitors in that market. It is a very strong argument and I hope that it will appeal to any free marketer looking at the benefits of the European Union in free market terms, which, many noble Lords have urged, were among the founding reasons that they could see for the rationale of the EU in the first place. I support this amendment and I believe that, on free market arguments alone, it should succeed.

My Lords, this amendment seeks to remove Article 346(2) of the Treaty on the Functioning of the European Union from Schedule 1 to the Bill. The article has appeared verbatim in every European treaty since 1957, so it is not new on the scene. At present, unanimity is required for changes made to the list of military products for which single market provisions do not apply. Under the Bill, a proposal to move to QMV would require approval by Act and by referendum. The noble Lord, Lord Hannay, and others are correct that it does not immediately mean that the veto is removed. It merely means that the move would require approval by Act and by referendum. The amendment of the noble Lord, Lord Davies, would remove that requirement.

The noble Lord, Lord Davies, spoke at length on this issue during day six in Committee, and he has spoken again now. Of course, he has considerable experience as Minister for Defence Equipment and Support, and in my view he has made the case extremely well that there could be some benefits to the UK from a move to QMV in this area. Having conceded that point, I hope that he and other noble Lords will excuse me if I now at least set out the other side of the argument, particularly as the noble Lord, Lord Davies, has just said that there is no guarantee that his proposal would work. Why is that so? It is because a move to QMV would also come at considerable cost to the UK, which a responsible Government have to consider. We must remember that this article is sensitive, as it applies to national security and defence. It is one of the wires that feeds directly into the red lines that all parties in the United Kingdom and other member states have always maintained during treaty change negotiations. Obviously that applies to previous Governments as well as this one.

The noble Lord, Lord Davies, said with some passion that Article 346 of the TFEU is a protectionist measure and he portrayed the Government as,

“using a referendum to block the removal of a derogation from the single market legislation”.—[Official Report, 17/5/11; col. 1364.]

The noble Lord, Lord Triesman, has spoken in the same vein just now. I have to point out that the UK’s veto could be used also to block any proposals to extend the protectionist measures with which the noble Lord understandably takes issue. A qualified majority could push through decisions which would favour greater national discretion and protection. The list, which has been unchanged—

I thank the Minister for letting me intervene. The point that he is making is absolutely right—it could work either way—but the trouble is that the list is very long now. The UK interest is to have the list reduced. The list is very long because particular countries have particular little defence industries which they are keen to protect. The chances of it being possible to reduce the list are therefore low but would be enhanced if there were qualified majority voting on the composition of the list. We are starting from a bad place. It is unlikely to get worse; it is difficult to get it better; but you cannot get it better without qualified majority voting.

It is unlikely to be shortened, but I do not think that any of us can be sure. Protectionist pressures operate all the time, particularly in the defence industries. as the noble Lord, Lord Davies, knows better than all of us, and will continue to do so. The noble Lord said that the position is unlikely to get worse, but I think that we have to guard against that. A qualified majority could push through decisions which favoured greater national discretion and those pressures exist. The list has been unchanged since 1958 and can be expanded as well as contracted. I have before me the list as it is at present; it is a long list. It could certainly be expanded, so keeping the veto is as much, if not more than, a guard against protectionism as a barrier to liberalism, much as one believes, as I believe very strongly, in liberal free markets. The noble Lord’s zest for liberalism, which is certainly equalled by mine, could end up the opposite way round.

The Minister is now making a general argument against the Single European Act and against having qualified majority voting on any area of the single market because it might go the wrong way and in a protectionist direction. All history suggests that the Single European Act was a good bargain. On the whole, it got us a more open market. It was a good, Conservative, market-driven measure which worked pretty well. The exception of defence goods is there because it was there before we joined the European Union. We have to my knowledge always argued against applying single market disciplines, which we believe in, to all sectors of the economy. That is the argument for the amendment.

I am not a Latin scholar, but I have a feeling that there is a Latin phrase to describe what the noble Lord is doing, which is projecting from a particular area which has its particular features and qualities, with which we are all quite familiar, on to the general case for free markets and expansion of trade, which we all seek, as we have done throughout the history of our membership of the European Union and will continue to do. I suppose that the noble Lord’s proposition is that the interweaving of political pressures and the defence and security industries operates just the same as everything else. I do not believe that it does; I just have to disagree with him. In this case, we are dealing with different pressures which are evident to those who examine these patterns. There are dangers as well as gains.

Retaining unanimity does not prevent product list changes, but it ensures that we can oppose any decisions that seek to install greater, inappropriate levels of protectionism for products—weapons, equipment, trucks, APVs and all the rest—that we feel should not be exempt from single market provisions. This allows us to take decisions on the basis of what would be best for the effectiveness of the single market and our own defence industry. Unanimity enables us to oppose removal of any products in the list where that would have unwelcome consequences for the UK and might prevent us from acting quickly to secure the right equipment for our troops in times of urgent need. I reassure noble Lords that, despite the doubts that have been expressed, the Government fully support the goal of better value for money through collective arrangements for identifying gaps and procuring equipment, pooling our multinational capabilities and forces wherever we can.

However, in the support of our Armed Forces and their capabilities, any initiative that had the potential to reduce our ability to protect our operational advantages and freedom of action in protecting the essential interests of security will be a matter for serious concern. We must ensure we can sustain our defence industrial capacity in sectors deemed essential to our national security interests, such as military equipment for counterterrorism or cryptographic equipment. Retention of the veto provides this safeguard.

I am not arguing that the noble Lord, Lord Davies of Stamford, who speaks with passion on these matters, is wrong in the general point he has made so eloquently. I am saying that there are arguments on both sides and that the potential consequences could have a serious impact. Given the national security implications, it is right that any move to qualified majority voting be subjected to the highest level of scrutiny. That is not to say that it will not be achieved in part but it must be subjected to the highest level of scrutiny. If there were ever a proposal to remove a veto in this area and if a future Government felt inclined to agree, it should have the support of Parliament and the people before being allowed to proceed.

The chance of a future Government agreeing to give up this veto in practice is vanishingly small. The chances of this being proposed as a separate one-off move are zero. A remote possibility is that it could be put forward as part of a package of transfers of competence and powers to the EU, however undesirable it seems to us at present that it should be so. That would be the sort of event where people rightly want and expect their say. If denied their say people would feel that, once again, powers were being transferred without adequate public accountability. For those reasons, although I salute the feeling and validity of half of the noble Lord’s argument, I hope that he respects my half of the argument and I ask him to consider what he has said and withdraw his amendment.

My Lords, I am deeply grateful for the consideration which the House has given to my amendment and for the warm and supportive words of the noble Lords, Lord Hannay and Lord Triesman, and the noble Lord, Lord Kerr, who seized on an argument that I was about to deploy myself in response to the noble Lord, Lord Howell. I will address the points of the noble Lord, Lord Howell, in a moment and bring my remarks to a conclusion by addressing the Government’s response. I am grateful too for the contribution of the noble Baroness, Lady Nicholson. Frankly, I did not understand her argument that somehow possession of veto was going to help us in any circumstance in advancing the cause of reform of Article 346. I shall correct her on a practical point: she says that since I was involved with defence there have been a lot of changes in the world, including the end of the Cold War. I think she is going back to the time when I was a defence spokesman in the Conservative Party. My experience of defence in government ended 13 months ago, in May last year.

I always enjoy the contribution of the noble Lord, Lord Hamilton, to these debates. He deployed an argument today which I have heard him deploy in other contexts. It is, “If it is such a good idea, why not have a referendum and you will win it? The public will support you”. I am not sitting close enough to see whether he has a twinkle in his eye when he says it but I think he has. He knows as well as I do that there is no prospect of having a referendum on a subject as esoteric as Article 346. If we have a serious opportunity to change it, it is no use saying to our partners, “For once we have got the chemistry right—there is an opportunity to go for QMV on this, and then maybe there will be a consensus and we’ll get some reform. But sorry, chaps, you’ve got to wait for two, three, four, five or six years, when it is particularly convenient for us to have a referendum with a whole package of measures”. Even then, as I have said before in these debates, it would be quite unsatisfactory for the British electorate to do their homework on a whole series of rather technical matters. It is just not practical politics. The noble Lord, Lord Hamilton, knows more about politics than I do; he has been involved in politics longer than I have, and I am quite certain that he had his tongue in his cheek when he said those things.

I move to the points made by the noble Lord, Lord Howell, on behalf of the Government. He started off by saying that Article 346 had been in the treaties in one form or another—of course, it had different numbers—since 1957. What is new is the idea of having a referendum on a change. That is brand new. It has not come in yet—it is in the Bill before us. That is what I want to change. It is not an argument against changing this new measure that the instrument that we might want to use to reform Article 346 is now under threat from a new provision in this Bill, so it would be sensible for us to remove that threat. I do not think that there is a logical argument there against my proposal.

Like the noble Lord, Lord Kerr, I really wondered how serious the noble Lord, Lord Howell, was when he said that it may be in our interests to prevent protectionism to have a veto, because then we could stop our partners from being even worse protectionists than they were before. As the noble Lord, Lord Kerr, pointed out, in that case the noble Lord, Lord Howell, would have logically opposed the whole single market programme. It would not have made any sense at all. So the noble Baroness, Lady Thatcher, and Lord Cockfield were actually doing something very dangerous in threatening greater protectionism by agreeing to have qualified majority voting in the Single European Act.

The noble Lord, Lord Howell, tried to justify that approach with the distinctly implausible suggestion that different rules applied to defence. I do not think that different rules applied to defence; I think that the argument is rather different from that. That is why, for two reasons, I think there might be an opportunity to achieve QMV, if only the British Government have not deprived us of that opportunity in advance, ab initio. First, there is a positive incentive on Governments to reduce the costs of their defence procurement—and protectionism, as we know, is extremely expensive. If they opened their markets they would be able to purchase more cheaply, given a measure of defence capability. When I was the Defence Procurement Minister—and I was very proud of this, because I did it for the first time—I introduced a unilateral open market in the EU. I said, “Sorry, we’re going to buy the cheapest and the best, wherever it is. We’re not going to be protectionist”. It is only when there is inequality of quality and price between the British supplier and non-British supplier that I will favour the British supplier. I made that absolutely public, and it was what I operated on. For example, I bought the 42-millimetre cannon for the Scout vehicle and potentially for the Warrior upgrade from France. Why? Because it was the best. The French were obviously delighted. There was no quid pro quo. I said to my French colleague, Laurent Collet-Billon, “You know, you and I must do something”. He said, “Of course, mon cher collègue, we will see what we can do”. But of course nothing has come through. Unless we do something about this protectionism, it will probably not.

As the noble Lord was responsible for the posting of the aircraft carrier orders, why were they not submitted to bids from all round Europe? Why were the bids all placed with British shipyards in this country?

As a matter of fact, I would be very proud to take credit for those particular contracts, but that contract was let before I came into my job in the MoD. However, I did manage to save that project when it was under very severe threat, in similar circumstances as last year. But unfortunately the new Government decided to throw in the project and deny us carrier strike capabilities for at least the next 10 years—disastrously so. Let me answer the question hypothetically, therefore, and say what I would have done had I been there at the time. Undoubtedly, I would have been delighted to have had those carriers procured on the best bid from within the European Union basis, as long as it was reciprocal and we had some chance of getting an order for a French frigate from a British shipyard. It has to be reciprocal. That was a particularly big order, and the protectionism the French afford to their shipyard, the Chantiers de l’Atlantique, is particularly great, so there would have been a situation in which competition would have been completely false.

I would have been delighted to have had the opportunity to procure on a common EU basis because that would have enabled us to bring the costs down further and it would have meant that our yards, over time, would have done very well. If you just look at two—the Type 45 destroyer and our submarine-building capability in Barrow—I am convinced that they are the best in the world, including the United States, when it comes to building very sophisticated warships. We would have done very well with that solution.

As I said, there are two reasons why there is a chance of Article 346 being reformed. It is particularly unfortunate, therefore, that we should be about to make it much more difficult for that to be achieved through QMV, if that seems the most likely way forward, which I think it is. The second argument is that, unlike us, our continental partners always have a sense of guilt in acting in a non-communautaire fashion. They are signed up to the principle of the single market. They find it very difficult and embarrassing to argue for derogations, though of course they do so when they are under great political pressure. Therefore, it is the sort of situation when agreeing to the intermediate stage of going to a QMV decision-making process has some hope—I do not put it more strongly than that—of achieving the substantive change that we all want.

I put to the Government, in my last comment on the subject, that when you have some realistic hope of something—it does not matter whether it is 20 per cent or 50 per cent or 70 per cent or even 10 per cent—but there is no downside, logically you do it. In this case there is a real hope of moving forward. There is no possibility whatsoever of extending the list under Article 346. The list is already far too great, as somebody has already said in the debate. Nothing that could conceivably be argued to be military materiel is not currently included, and this clause has been used to cover things like trucks, notably in the case of the Italians—I do not mind embarrassing them by mentioning this now—who claimed that because they were military trucks they were military materiel. There is no chance; I am quite convinced that the European Court of Justice would rule out any further use of Article 346 because such a use would no longer be consistent with the description in the article itself.

There is no downside. I ask the Government to look at that point again. There is a potential upside through using QMV, and the stake is important. This is a major national industrial interest for one of the major British industries in which we have a worldwide capability. There is a direct benefit to us—the taxpayer—as well, because if we can expand the sales which carry the overheads, including R&D, of the British defence industry, it will mean that we can achieve given levels of military capability from that industry when we procure from them at lower cost. It will be a win-win situation if we can break through here and we would be very foolish to deny ourselves any opportunity or instrument which made it even slightly more likely that we would achieve that.

On the basis of that, you would expect me to put my amendment to a vote. However, I am conscious that we are after dinner and that the Whip has been withdrawn, so there may be an uncharacteristic result from any particular vote, and I am also anxious not to take up too much time. We have already had a very good debate. I think I have said enough and colleagues have said enough. I trust to persuade the Government to look at this again. The noble Lord, Lord Howell—I am very grateful for this—was kind in his remarks about my intervention and he said that there were strong arguments on my side, though he said there were strong arguments on the other side as well. I understand that. That indicates to me that despite what is in the Bill the Government are a little bit more open-minded, perhaps, than one might have thought at the beginning of this debate. On that basis, I beg leave to withdraw my amendment.

Amendment 22A withdrawn.

Clause 7 : Decisions requiring approval by Act

Amendment 23 not moved.

Clause 8 : Decisions under Article 352 of TFEU

Amendments 24 and 25 not moved.

Clause 9 : Approval required in connection with Title V of Part 3 of TFEU

Amendment 26 not moved.

Clause 10 : Parliamentary control of certain decisions not requiring approval by Act

Amendments 27 to 29 not moved.

Amendment 30

Moved by

30: After Clause 12, insert the following new Clause—

“Repeat referendums

Where a referendum has been held in pursuance of any of section 2, 3 or 6, a further referendum on the same treaty or decision, or treaties or decisions, cannot be held until a period of three years has expired.”

My Lords, I brought a similar amendment to this in Committee which did not find favour with the Government. That was in the name of the noble Lord, Lord Stoddart of Swindon, and my noble friend Lord Pearson of Rannoch. I listened to the arguments then that the five-year gap that we proposed was perhaps too long, so this amendment proposes simply a mandatory three-year gap between referendums. When he replied to that similar amendment on 23 May, the noble Lord, Lord Wallace, went off on a rather bizarre tangent about the European Gendarmerie Force, which I had not even mentioned in my speech. I do not know quite what that was all about. However, in reply to my amendment he went on to say:

“If the Government were defeated in a referendum, it would be tantamount to a defeat of the Government”,

and they would have to reconsider the matter. He went on to say:

“It would be unusual for the Government then to consider asking the public the same question in short order, having failed to convince them”—[Official Report, 23/5/11; col. 1623-24—]

at the time to change their minds the second time around.

The point of my amendment is that this is what has happened in the EU in the past. It is exactly what happened on the Maastricht treaty and in Ireland with the Nice treaty. It happened on the constitutional treaty. When the French and the Dutch voted that down, it was brought back under the cloak of the Lisbon treaty with a rather unsavoury démarche which allowed the then Government to pretend that it was not the same thing at all as the constitutional treaty. Yet a stinkweed by any other name still smells as foul. This constant backsliding, weaving, dodging and bobbing and ducking are what have given the European Union a bad name. Several speakers made the same point on the amendments that we discussed this afternoon: that there is a very prevalent distrust of the EU in this country, and not only in this country but throughout the European Union now.

In many of his remarks during both Committee and Report, the noble Lord, Lord Howell, has repeatedly underlined that the purpose of this Bill is to reduce the distrust of the British people in the institutions of the EU and in the way that the Government deal with EU matters and directives which have, so far, gone through without any influence by the people of this country. The amendment really should be there to reassure those people that if they vote in a referendum under this Bill, it will not be interfered with again by a Government, who may be more manipulative than this one, for at least three years. That is helpful to the Government and I hope that they will take it in that spirit. I beg to move.

My Lords, I find this a fascinating amendment because those of us who are opposed to referenda in any case are now presented with somebody who is in favour of a referendum but does not want to have it when it is inconvenient. This is a most peculiar amendment. I think that referenda are always wrong in a parliamentary democracy and I have always stood by that. I have never changed my view from that and I am not changing it now, but if we are to have a referendum, the concept that we must not have one except in three years’ time, irrespective of what the public think, seems a most peculiar argument. To complain about the fact that in a second referendum people made a different choice seems an odd thing. After all, that was the choice the people made. I think that this is proof of why referenda are not an acceptable way forward, because the truth is that a referendum analyses what people think at a particular moment.

I became opposed to referenda at my father’s knee. I remember just after the war he was explaining to his infant son about politics. He said that he remembered the peace pledge. Eleven million people signed the peace pledge and two years later one could not find any of them. Once we got near to the war, they all disappeared. That is the problem with a referendum, because it is an irresponsible act—one is not responsible for the vote that one makes because it is secret and private. Surprisingly enough, I found a number of my constituents who voted one way in the referendum we had about remaining in the European Union and who within two or three years decided they had really voted the other way. I gave them the benefit of the doubt and felt that they had mistaken themselves, but if one is going to have a referendum, one has to have it without strings.

The noble Lord is presenting something that gives the lie to the whole referendum argument. People who want referenda want referenda because they want a particular response. That is why they want them. They want it because they think it will produce a particular answer of which they approve. When they find that there is a possibility that it might not produce that, they want rules to make sure that the public cannot have another go. I beg your Lordships’ House to accept that if we are going to have referenda, we had better have them on a fair deal and not on the basis that we restrict them in case the public possibly take a different view the second time.

My Lords, I cannot really follow the points of the noble Lord, Lord Deben, on referenda. I disagree with his initial argument, but I support the principle about the people having their say, whether one agrees with it or not. I find it understandable that the noble Lord, Lord Willoughby de Broke, proposed the amendment, given the frustrations that he and his colleagues clearly feel about both the Irish and Danish referendums on treaties in the past, but it seems to me that there are two reasons to oppose the amendment.

In Committee, the Minister made the valid point that it would be very unlikely that two successive referendums would be called, not least for the important political reason that it would be likely to cost the Government of the day dear—assuming that it were the same Government—with a cynical public punishing them for so doing. Secondly, the Bill is not a crystal ball attempting to predict the future, no matter how much the noble Lord would wish it so. The Bill must allow for flexibility for a future Government and this amendment would tie their hands.

There are checks and balances within the Bill: a second referendum would require a second Act of Parliament with the detailed and appropriate scrutiny that comes with that—and that is before the Government of the day would have to start convincing the public of the need for that second referendum. There might be rare circumstances in which a second referendum were relevant—the checks and balances that I have outlined will force politicians and the public to think carefully about returning down the road of another referendum. To ban it completely for three years, or even five, as we looked at in Committee, removes that option for those circumstances which, though rare, are not impossible. There might be changes to the treaty that significantly benefited our country and other member states, which it might therefore be appropriate to consider. Or there might be a financial crisis in the eurozone—as there has been recently—in which the circumstances have so substantially changed that it might be appropriate to go back for a second referendum.

To conclude, the amendment seeks to remove the flexibility and the voice of Parliament and the people should there be a rare but necessary need to consider a second referendum.

My Lords, I very much sympathise with my noble friend Lady Brinton because it is unlikely that any Government would be brave enough to hold another referendum on the same subject when the country had made it quite clear that it did not want the measure put forward originally. However, to turn to the distaste of referenda generally expressed by my noble friend Lord Deben, presumably that distaste is slightly tempered by the referendum confirming our membership of the European Union. Let us face it, this referendum was put forward by Harold Wilson to solve a problem that he had within his own Labour party and settle the issue for good. Many people—I am one of them—voted in favour of our remaining in the European Union and it seemed to settle the issue for some time after that.

I was opposed to that referendum, as I have always been opposed to referenda. I am absolutely consistent on that matter, whether they were favourable or unfavourable.

My noble friend prides himself on his consistency, but that decision put the issue to bed at the time. That would seem to have certain advantages that he does not acknowledge in any way.

My Lords, I supported this amendment in Committee and we had quite a good debate about it. I am not going to repeat everything that I said at that stage but I want to say a couple of things. First, I regret that the noble Lord, Lord Willoughby de Broke, has reduced the amount of time from five years to three.

Secondly, second referendums have been quite common in Europe. When Governments do not like an outcome, they are quite prepared to hold a second referendum in order to get it changed. Second referendums per se are perfectly logical and legitimate in the European Union. Surely we should not arrive at the decision that once a referendum has been held on anything there should be no second referendum. That would be quite absurd. It would bring Governments in particular into disrepute, because it is usually they who call for second referendums, if they said to the electorate, “You have voted but I’m afraid we don’t like what you have told us. We must therefore ask you to vote again, and indeed again, until you provide the right answer for the Government”.

My Lords, the Opposition cannot support the amendment. The reasons why many have spoken against it are very true. I agree with what the noble Baroness, Lady Brinton, had to say. I agree with the noble Lord, Lord Hamilton, that in our political culture a precise repeat referendum would be extremely unlikely. However, we should not tie our hands. As the noble Lord, Lord Deben, said, you vote under a particular set of circumstances but circumstances can change at remarkable speed. We do not need these kinds of constraints on our politics.

My Lords, this is the second time that we have examined an amendment of this nature. It did not find much sympathy around the Chamber in Committee and it has not found much more now. The amendment stipulates a lesser period of three years rather than the original five but the principle remains the same.

In Committee I set out some of the Government’s objections to an amendment of this nature and I will recapitulate some of those now. First, were the British electorate to vote no in a referendum, it is clear that the Government would have to consider their future action carefully. It would be difficult to view the result as anything other than a firm rejection of a proposal for treaty change. If the Government wanted to hold another referendum for whatever reason, under the terms of this legislation, as my noble friend Lady Brinton said, they would first need to secure parliamentary approval to do so by Act. Primary legislation would be necessary to enable the referendum, so Parliament would have to consider that request very carefully and itself be persuaded to agree, which is not necessarily a given.

Secondly, the amendment reduces flexibility, a quality that has attracted a lot of support from all Benches. We do not know what will happen in the future, and as the noble Lord, Lord Liddle, has suggested, sometimes we do know what will happen in the short term future. As noble Lords have argued on a number of occasions, and in this case following the rejection of a proposal by the British people in a referendum, circumstances could change. There are “events, dear boy” and unexpected crises whether they be security crises, financial collapse, economic recession or even crises of energy supply or surges in immigration. All might conceivably transform the situation. So there could be previously unanticipated grounds for the Government and Parliament to believe that the treaty change on the table was in the national interest of this country. As a consequence, if both the Government and Parliament were to decide that there were good reasons for putting a question to the British people in a further referendum, Parliament should be able to do so without having to disapply an inflexible provision.

I have to say to the noble Lord that I would be surprised if any Government in the future would wish to hold a referendum in the hope that the people would be somehow persuaded to change their minds merely by the Government cajoling them rather than in response to a substantial change in circumstances. I agree with what the noble Lord, Lord Triesman, said in Committee. He pointed out that the people of Denmark, Ireland, France and the Netherlands,

“were perfectly capable of settling the first propositions put in front of them and they were perfectly capable of assessing the changes”.—[Official Report, 23/5/11; col. 1621.]

Those changes were any changes that had taken place or had been made to the treaty before them between the holding of the first and second referendums. People are clear in their own mind and will not easily be browbeaten into giving a different answer just because the Government—any Government—would like one. As the Minister for Europe made clear in the other place, it is a recipe not only for the public to say no again, just as firmly if not even more so, but also an invitation to be voted out of government at the next election for treating the public with contempt. But I reiterate that there might be circumstances where a repeat referendum may be in order before the three years suggested by the noble Lord had elapsed.

We were running through a most wonderful boom at the end of 2007. The recession hit us rapidly and sharply thereafter, with the financial collapse of a number of banks. We face a potential crisis in energy supply. At the moment there is a range of possibilities where crises might erupt that would affect us and our European partners. Therefore I see no reason for reducing flexibility, as this amendment would, and I urge the noble Lord to withdraw it.

My Lords, I am grateful to all noble Lords who have spoken in the debate. The noble Lord, Lord Deben, made his position on referendums perfectly clear, so I do not think there is any point in pursuing that. I am grateful to the noble Lord, Lord Stoddart, for his support. The noble Baroness, Lady Brinton, said that a new treaty might possibly have some advantages for Britain and therefore the Government should not have their hands tied on another referendum. But the whole reason for the Bill—I hope that the noble Lord, Lord Howell, will concede this—is that, so far, all the new treaties have given power away from Parliament and the British people to the European Union. That is the nature of treaties and it is what has happened. That is also why we have the Bill in front of us right now. It is to stop this constant, undemocratic transfer of power from Parliament and the British people to the European Union. It has been one-way traffic all the way, and while this Bill is not perfect, at least it is a step in the right direction.

I am sorry that the Government do not feel that the amendment is helpful. I think it would be helpful because it would persuade the British people that in spite of the protestations of Ministers—no one believes any longer what they have to say—they will not be double dealt yet again. But, having heard the opinion of all those who have spoken and from the Government, I beg leave to withdraw the amendment.

Amendment 30 withdrawn.

Amendment 31

Moved by

31: After Clause 13, insert the following new Clause—

“Promotion of United Kingdom’s membership of EU

In participating in a campaign for any referendum held in pursuance of section 2, 3 or 6, or in taking other steps required by this Act, Ministers of the Crown must have regard to the desirability of promoting the United Kingdom’s membership of the EU.”

My Lords, this is very close to an amendment that my noble friend Lord Radice moved in Committee. For that reason—aside from that of plagiarism, having reproduced the amendment so closely—I shall be very brief.

It appears that the circumstances in which the referendum on whatever subject—an omnibus referendum on a treaty or a more limited one—would be held would be those in which the Government had concluded that it was right to take matters to both Houses. They would have secured a majority in both Houses, including —critically, because of the confidence issues—the House of Commons. Legislation would have been approved by Parliament and would therefore have become the position that Parliament had adopted. That is the decision that would then be put to a referendum—put before the people of the country to overturn it, should they choose to do so. Throughout that process there can be little doubt that it would be incumbent on the Government, and anybody who supported them, to pursue as vigorously as they could the case for the change that they advocated. It would be pointless—indeed, frivolous—if a Government did not, by the time they had reached that point, argue fiercely for the substantive issue.

It is particularly true that that would be the case because, so often when we were dealing with matters to do with Europe, the previous Government did not argue effectively or convincingly. The case was never put with the level of conviction that, on reflection, I should have liked to see. In those days, the Opposition—now the Government—never pursued an argument for Europe with any great vigour that I could detect. There was in general no great desire to do so. However, it will become very important that it should be done—that the argument should be pursued, and that there should be some proper presentation that will enable people to understand why any kind of decision is being put in front of them at all.

I say that in the briefest terms for this reason. I have no doubt that if and when any referendum takes place, whatever the substantive issue being put before the people of the United Kingdom, there will be those who regard the occasion as an ideal opportunity to argue against membership of the European Union per se. It will come up and it will begin to look like the opportunity—for which some people outside this Chamber and some within it have urged—for another decision to be taken on Europe. We shall find that that is how the argument will be displayed in much of our media. It will not necessarily be about the issues; it will be about whether people really want to be in Europe. The media will campaign vigorously around that. Of course, the decision will be on the substantive issue in the referendum, but I have little doubt that the campaign will be disfigured by the argument over whether we should be in Europe at all. That is why there is a great deal of merit in asking the Government to have regard—not a very high hurdle to climb over—to,

“the desirability of promoting the United Kingdom’s membership of the European Union”.

My noble friend Lord Radice put that point in very convincing terms in Committee. There are extremely good reasons for it, not least that we have all failed so abjectly to argue the case for Europe with great effect in the past. I beg to move.

My Lords, I very much agree with some of the underlying sentiments of the noble Lord, Lord Triesman. There are powerful reasons for us to be part of the European Union and to have a positive view of it. Of course that is the case. Sometimes that is completely lost in the wash, which is regrettable and unfortunate. However, on promoting the desirability of our membership, I just point out that we have to take great care over what we do in this respect. One of the most extraordinary episodes under the previous Government was their attempt to explain the euro. We had the exceptional sight of the then Europe Minister, Mr Keith Vaz, going round in a white van to various market towns, handing out literature explaining why the euro was a very desirable thing. The net effect of this risible campaign was to cause support for the euro to diminish, so we have to undertake these things with great care.

The amendment implicitly reflects concern about the lack of popularity—

I am most grateful to my noble friend for giving way, but has he not left out the vital fact that a lot of support for Europe grew out of Mr Keith Vaz having learnt the trick of taking Mr Eddie Izzard round with him on the campaign?

I discussed this episode with Mr Keith Vaz and I am not sure that he felt it was one of the high points of his political career, but we can leave it at that.

The amendment implicitly reflects our concern about the EU’s lack of popularity, but I fail to see the point of it. It is completely unnecessary. To have a referendum the Government need to have agreed the relevant treaty in Brussels in the first place, and Parliament will have enacted an Act of Parliament, having debated and scrutinised it. I entirely agree that a referendum campaign should educate the public in the fullest sense of the word. Presumably, having decided on a referendum, the Government would like to win it. The notion that they would somehow be against the EU, implicitly or explicitly, makes a nonsense of the whole situation. Why waste money on such an exercise? The case for membership is explicit in the whole referendum process. The way to change the view of the desirability—

I am most grateful to the noble Lord for giving way, but I am rather intrigued by his clear statement that the Government will want to win a referendum. Is he absolutely sure that they will not do a Pontius Pilate in some cases in a referendum?

If a Government have got that far and want to test public opinion, it is very unlikely that they would behave as the noble Lord suggests. It is not likely that a Government would embark on a referendum if they thought that they were going to lose it. That is not the natural course of political events, but perhaps the noble Lord—

Surely it goes somewhat further than that; if the Government put forward a referendum that they are trying to win and they lose it, that damages their credibility.

That would certainly be the case; I entirely agree with my noble friend. The way to change people’s view of the desirability of EU membership is simply to prevent them believing that we have been on a conveyor belt to greater integration without their assent. That is the real point; it is better than any publicity campaign. The real reason for negative attitudes is because over the years when there have been European Council meetings or discussions over treaties such as at Nice, Amsterdam or Lisbon, we have had the whole “Grand Old Duke of York” activity on the part of successive Governments. Statements have been issued by Downing Street, particularly more latterly, that indicated that great victories had been won for Britain, which no other European nation would recognise as being the truth at all. The good thing about the coalition Government is that all the spinning and posturing that characterised our relationship with the European Union has stopped. Where has anyone seen it in the past year? That is an admirable change for us all. The Bill will give us a better chance of restarting our relationship with the EU by addressing public attitudes than any publicity campaign could possibly do.

My Lords, I support the amendment in the names of the noble Lords, Lord Triesman and Lord Liddle. I could hardly do otherwise as it is an exact replica of the amendment that I moved in Committee. I thought it was a good thing then and I that it is a good thing now. In Committee, I made a general case for Ministers—the amendment refers to the general case—making a positive case for the European Union.

We have been members of the European Union for 40 years, but government Ministers have consistently been hesitant about putting the case for the European Union. Unfortunately, that includes members of my own party. For example, Tony Blair, when he was Prime Minister, was far better at making speeches about the EU and British membership when he was on the continent than when he was in the United Kingdom. One of the main reasons for that was that he was frightened of the Eurosceptic press. He was frightened of the reaction in the Murdoch press. Any time he said anything positive about the European Union, he was almost always in trouble. I still remember the headline in the Sun, asking,

“Is this the most dangerous man in Britain?”,

when he said that there might be a good case for Britain joining the euro. It was not surprising that he was a bit more cautious afterwards about making that kind of speech.

One reason for the disconnect that the noble Lord, Lord Risby, has just talked about is that successive generations of British Ministers have failed to make the case for British membership of the European Union. Of course I agree with the noble Lord that there must not be foolish propaganda that can easily be knocked down. However, that is no excuse for Ministers not making a positive case based on the facts. Such a case should also admit some of the weaknesses. It does not have to be propaganda; it has to be a genuine case.

I congratulated David Lidington, the Minister for Europe, who explained very well in a Written Answer why he believed that European Union membership was in our national interest. The noble Lord, Lord Sassoon, from that Dispatch Box, said in very positive terms following a Eurosceptic attack from somewhere behind me that the United Kingdom got more out of the EU than it put in. It is good to hear Ministers with the courage to say that. I was delighted that the noble Lord, Lord Howell, in answer to my speech, stressed the need for the Government,

“to be a more vocal and effective advocate of the European Union”.—[Official Report, 23/5/11; col. 1646.]

That is absolutely right, and I hope that he and his colleague next to him will continue to do that, because it is their responsibility.

However, this is not just their responsibility but the responsibility of those much higher up—the Prime Minister, the Deputy Prime Minister, the Chancellor and the Foreign Secretary. I want to hear them all make constructive speeches about the EU—not spinning speeches and saying “game, set and match”, as John Major was reputed to have said when he came back from Maastricht. We need to hear the case for why membership of the EU is in Britain’s interests, because if you ask the British people whether they are aware of some of the benefits, they are not because they are never told about those benefits, which certainly never appear in most of the newspapers, and Ministers are frightened to mention them.

That was the purpose of my amendment, and I want the coalition to live up to the constructive part of its agreement on Europe. We know what the negative part is; we have heard it time and time again in our debates. The case is that you will have a lot of referendums that will re-establish the connect between the British people and the European Union. However, there is another responsibility on Ministers: to put the constructive case for the European Union. That was the purpose of my amendment and is partly the purpose of the amendment moved by my noble friend.

My Lords, I have considerable sympathy with this amendment. In the course of the last three months we have heard from all sides of the House the collective failure of politicians to articulate a vision of why Britain needs to co-operate with members in her region to advance her interests. Putting an obligation on Ministers to spell out positively a vision for the EU seems eminently sensible, given the context of the Bill. This is, as the noble Lord, Lord Risby, said, that once the Government have passed an Act, they would presumably like to win an amendment. It seems odd to resist an amendment such as this when we are clear that the Government would have passed an Act proposing the policy solutions that there would be and, as the noble Lord, Lord Hamilton, said, would wish to maintain their credibility by seeking actively to campaign in a referendum. I cannot see why there is such resistance to this amendment.

I remind noble Lords of some of the things that have been said about the media. Even if the Government of the day were determined to win a referendum, it is entirely conceivable that a sceptical media would choose to ask questions about why the Government were spending money. We have known from the several months of debate over referendums in this House in relation to other matters that large amounts of money have been set at the door of the practicalities of holding a referendum. It would be entirely possible for our media, which did not wish us to promote that measure that was meant to be discussed in the referendum, to say that this was a huge waste of money. The fact that a requirement for promoting that measure would be enshrined in the Bill would allow the Government to say that they were carrying out what statute and legislation required them to. We have had arguments for months on the lack education and the lack of information about the European Union. This would be an opportunity for the Government of the day to move beyond those technical measures to use that process to educate the public about their vision.

I turn to the final point in the amendment that I do not think the noble Lord, Lord Triesman, in moving it, quite brought out to the extent that I would wish to do. It states,

“in participating in a campaign for any referendum held in pursuance of Sections 2, 3 or 6 or in taking other steps required by this Act.”

The discussion we have had so far pertains only to the holding of referendums. There are other measures in this Bill that do not call for the holding of referendums. Sometimes they call simply for an Act of Parliament, or for a Statement to be made to Parliament. In doing these things, an obligation would be put on the Ministers of the day to have regard for the desirability of promoting the United Kingdom’s membership of the EU. This amendment says to us as politicians that we have to step up to the mark and that if we believe that the legislation that we are passing is good legislation, we have to go out and explain why we think that it is good legislation. While I would love to say that I wholeheartedly support the amendment, I will only go so far as to say that I can see a lot of merit in it and I look forward to hearing from the Minister why he does not think that it is extremely useful and long overdue.

My Lords, I am afraid that, although I listened with great interest to my noble friend Lady Falkner, I cannot agree with her that the amendment makes much sense. I listened carefully to the noble Lords, Lord Triesman and Lord Radice, in putting forward the amendment. It is an odd amendment. What does it actually mean? Any referendum that might be held under the Act is not going to be a referendum as to whether our membership of the EU is or is not a good thing. By definition, if the Government want to put a referendum event to the people, it follows that they must already have decided that it is a good thing, so to get the result they want in the referendum, they will obviously explain the benefits as energetically and positively as they can.

There is something strange about the language of the amendment, because the desirability of promoting the United Kingdom's membership of the EU sounds rather as though we are not a member but perhaps should be. We are a member, so obviously Ministers must explain what being a member of the EU means and must honour the obligations of being a member. I fear that that is rather subjective.

Furthermore, under the Bill, a referendum other than one which the Government wanted to win might be triggered. There are many ways in which a referendum can be triggered under the Bill, as noble Lords have said. Ministers of the Crown might be obliged to put a certain point to the country but they might not necessarily want the result to be yes. The noble Lord, Lord Radice, said that Ministers have not positively made the case in public for membership of the EU on a continuing basis. I suggest that that is because many Ministers of the Crown have felt that our membership of the EU is no longer so clearly wholly beneficial as they had thought it was, or as people thought it would be 10 years ago, or longer ago than that.

The amendment does not add anything to the Bill. It is somewhat subjective and I cannot support it.

My Lords, I agree very much with the earlier utterances and express regret that I cannot agree with what the noble Viscount, Lord Trenchard, said. I do not think that there is any evidence that Ministers have become less enthusiastic about our membership of the European Union. That is irrespective of the colour of the Government. That applies to both parties in power in recent times and, as far as I can detect, definitely applies to the coalition—very positively so in respect of the first part of the coalition statement about their aspirations on Europe.

I am sure that it is because of what the noble Lord, Lord Radice, mentioned and what the noble Lord, Lord Triesman, hinted at less directly: because of what the British press say. It is mainly the tabloids—the comics that masquerade as newspapers in Britain. They are more and more like magazines rather than newspapers. That is affecting the broadsheets as well, particularly those with owners living in tax havens overseas, not normally living in the UK and not paying UK direct taxes themselves, mainly the Murdoch press, but all of them anti-European and attacking our membership of the European Union in a most extraordinary and vicious way, which has not been seen in any other member state that I can think of.

I have to declare an interest as I also live regularly in France at weekends whenever possible. The French press are not at all like that. My colleagues in politics in Paris express astonishment that we allow the overseas-based owners of the press here who do not pay UK direct taxes themselves to attack our fundamental membership of the European Union in such a way. That has been the reason.

The most astonishing contrast that I noticed was just at the moment of the IMAX launch by the new Prime Minister Blair, with his new Government, still very, very popular, not quite walking on water but pretty close to it in those early days and causing a lot of inspiration and enthusiasm among the British public for the new Labour Government. That launch was the beginning of the decline in the new Labour Government's support for Europe in atmospheric and psychological terms. That was tragic. Britain in Europe was destroyed by it. So was the European Movement—although it still exists, it is struggling along as a very truncated body doing noble work but very much at the fringes of British life.

It is a tragedy for this country that we have had this nonsense for so long: politicians refusing to stand up bravely and correctly for the benefits of our membership of the European Union. Therefore, I very much welcome the proposed new clause. It was debated in Committee and therefore we need not go into all the arguments now. We particularly thank the noble Lord, Lord Howell, for repeating that the purpose of the Bill is to oblige Ministers to promote the cause of our membership of Europe in what he would describe as a more correctly balanced sense because the public would have much greater participation through the referendum mechanism. Like the noble Lord, Lord Deben, I do not agree with that because I am against referendumitis and the populism that comes from it, but I can see his arguments. The proposed new clause would be a good thing, as we would return to promoting our membership—not in a propagandistic sense but in the practical sense of reassuring the public, explaining in detail many of the complicated matters and getting away from the dreadful xenophobia that is being allowed to develop because of the insouciance, nervousness, recalcitrance and hesitation of British politicians. There is a danger that that will start to affect the coalition if it continues, and I hope very much that it does not.

I do not want to take up too much of the House’s time but I conclude with an issue that may seem small, although it is very important. I refer to the display of flags—one of my favourite subjects. There is only one European flag within the vicinity of Westminster. It is on the Slovenian embassy building and we thank the Slovenians for their courage in daring to show it. It is the only one, apart from the one displayed on Europe Day in Parliament Square each year. All other major countries, together with some of the new ones, routinely proudly display the European flag alongside their patriotic national flag. Our national flag should be alongside the European flag on government buildings, as is routinely the case in France. When President Sarkozy makes a television broadcast, he always has the European flag alongside the tricolor. Why have all parties in this country been so hesitant and pathetic about this in the past? It is now time for the matter to be corrected. I have been encouraged by the words of the noble Lord, Lord Howell, on previous occasions in these debates and believe that the Government should accept this imaginative new clause.

My Lords, I have heard my noble friend Lord Dykes say on previous occasions that the only cause of Euroscepticism in this country is the Murdoch press, but I find that very difficult to go along with. I always reckon that to some degree the press has to reflect the national mood and, if it does not, it does not sell any newspapers. I also have a slight problem with the fact that Euroscepticism is growing at a pace in Germany, where I am not aware of the Murdoch press owning any newspapers. Therefore, I think that it is a little too simple to blame the whole thing on the Murdoch press.

However, let us get to the basis of the amendment and, for the sake of argument, start at the beginning, which seems to be a useful place to start. The Government will bring forward a measure to be put to a referendum of the people of this country only if they think they will win it. I do not accept the view of my noble friend Lord Trenchard that the Government might put something forward to be addressed by the country in a referendum if they want to lose, as I think that they can only possibly want to win it. If they do want to win it and if, as I think the noble Lord, Lord Triesman, said, this is an opportunity for UKIP to say, “Ah, we don’t want anything to do with the European Union at all. We must pull out”, then of course the Government will be compelled to argue the virtues of remaining in the European Union, and all his problems will be answered by the referendum. For that reason, the amendment is completely otiose and I shall not support it.

My Lords, I think that this is rather a sad amendment. It demonstrates the Europhiles’ lack of confidence in their case in trying to put into the Bill a requirement for Ministers, frankly, to propagandise. I know that the noble Lord, Lord Radice, says that it is not propaganda but let us look at the words of the amendment. It says,

“must have regard to the desirability of promoting the United Kingdom’s membership of the EU”.

That sounds exactly like a recipe for propaganda to me. There is no balance there whatever—it requires Ministers to promote our membership of the EU. Like the noble Lord, Lord Hamilton, I find it extraordinary that the noble Lord, Lord Dykes, should keep saying that the only reason for Euroscepticism is the Murdoch press or the Barclay press or whatever. They have absolutely nothing to do with the rise of the new Finn party, for example, or of Euroscepticism in France, Germany or Hungary. I am afraid that there is a growing realisation that Europe is going the wrong way and that the desire for more and more integration is not what people in member states want. To put this amendment in the Bill would be absolutely contrary to what people in this country think is right.

The noble Lord, Lord Dykes, said that the noble Lord, Lord Howell, had encouraged him in some of the things that he had said. I have listened to many speeches by the noble Lord, Lord Howell. He is extremely balanced in his view of the EU. He takes a critical but on the whole positive approach, which is right; Ministers in the Government will always do that. There is absolutely no need to put this sort of demand for propaganda in the Bill, and I hope that the Government will reject the amendment.

The noble Lord, Lord Willoughby de Broke, has perhaps underestimated some of the forces out there that make it difficult to explain what the European Union is doing. I shall speak briefly. Despite the fact that we have been, as my noble friend Lord Trenchard said, citizens of the European Union for 50 years, we have never spoken about it or taught it in our schools in any adequate way. We are almost unique in Europe in the fact that our syllabuses carry very little information about the common market and very little understanding of this additional citizenship, which is part of the law of the land.

This is an issue now with a new Education Bill that is considering what should be in the syllabus for English children. Ministers should encourage the idea that if we are part of the European Union—and we still are—there should be at least a limited level of education about Europe in our schools so that our children know what we are talking about and are capable of making critical judgments about statements made in the press and deciding whether or not they agree with them.

I will give a second example. There was a good deal of discussion in the House today and on previous occasions about the level of distrust in the European Union. The noble Lord, Lord Liddle, made powerful points about the level of distrust in Parliament and in the whole democratic process. The distrust is part of the atmosphere of the present time; it is not specific to the European Union but much wider and in many ways more disturbing.

My final point is that we have some of the responsibility in this Parliament for the level of distrust. I will give just one example; I will not go into the expenditure crisis and so on. We heard much earlier in the debate about the number of occasions on which the scrutiny reserve imposed by Members of this House in the European Scrutiny Committee on the mandate given to Ministers in the European institutions has simply been brushed aside and disregarded. That has not been the act of the Commission or even of the Council of Ministers; it has been the act of our own Government in our own Parliament, despite the efforts of Parliament to persuade them to show caution or not to go ahead with a particular measure in Brussels.

We have to accept that our own Governments—I am not pointing at any particular one—have been part of the level of distrust created by a consistent disregard of Parliament expressing doubts and concerns about pieces of European policy pursued by those Governments. We have many times disregarded Parliament's doubts. That is not a way to build trust or to build a sense that Parliament has real power over what happens in Brussels, because often we have let that power disappear by failing to recognise what Parliament has urged us to take very seriously.

This is an important amendment. I do not terribly like some of its drafting; it should be much wider and, rather than referring simply to a referendum campaign, should concern the whole attitude of British citizens toward Europe. However, I commend the noble Lord for moving it.

I will always take instructions from my former colleague, the noble Lord on the other Benches. I commend him on the pressure that he has brought to bear on the issue, which is of immense importance.

My Lords, when my noble friend Lady Williams speaks about the need for strengthening the teaching in schools and in citizenship classes of Britain's role in, and relationship with, Europe—and dare I say in the Commonwealth generally and in the new landscape that is building around us—it strikes a chord with me. She is absolutely right that the quality of teaching needs a considerable uplift in this area.

I will begin with a tiny bit of propaganda for the Foreign and Commonwealth Office. We have supported the Hansard Society in producing a new booklet to help citizenship teachers teach secondary school pupils about the European Union and our role—our very effective role, despite some minor criticism in the European Union and in Europe generally. We are taking action to improve the resources available, as citizenship teachers asked us to do. That is the kind of way forward that we should all work towards instead of spending a lot of time sitting around talking down our nation and its extraordinary talents and abilities to adjust to the new world situation.

I wish I could say such enthusiastic things about this amendment. It strikes me as a bit curious because it seeks to place a statutory requirement on the new Bill that, during a referendum held under the provisions of the Clauses 2, 3 and 6, or in implementing any of the other provisions of this legislation, the Government of the day should have regard to the benefits of the UK’s continued membership of the European Union. This sounds as though there is a desire to switch on a light at this particular moment rather than concentrate on the broader issues reflected in the observations of the noble Baroness, Lady Williams, and of the noble Lord, Lord Radice, that these matters cannot just be switched on and off but require sustained and effective narrative—not propaganda but an effective story to show how we fit into, how we contribute to and how we are able to draw strength from associations in the European Union and elsewhere.

As the noble Lord, Lord Triesman, candidly admitted, the past record has not been too brilliant, to put it mildly. If one just looks at those who have been in government over the last decade—which happens to be one party—one can see that they have not achieved a dazzling success in uplifting public support for, or even public awareness of, the role that this country has played, is playing and is capable of playing in the future in the European Union. When we discussed this amendment in Committee, the noble Lord, Lord Radice, said that the EU Bill was,

“based on the wrong premise about our membership",

and that instead,

“we should recognise that the sharing of responsibilities with our partners has been good for Britain and good for Europe”.

We have no difficulty with that. As I tried to make clear in Committee, we fully recognise the benefits of EU membership and the flow both ways of advantage of our being a key member of the European Union. This Bill does nothing whatever to alter our current commitments within the European Union, nor our current active engagement within the existing powers and competences of the EU, which are very extensive, nor indeed our positioning to reform and equip the EU for the 21st-century challenges that lie ahead, because, just as we are trying to adjust the position of this country to the new landscape, so everyone recognises that the European Union as a whole needs to do the same.

The noble Lord, Lord Radice, also said,

“according to public opinion polls, the British remain reluctant Europeans and fairly ill informed about the EU”.—[Official Report, 23/6/11; cols. 1626-27.]

That just about sums up the key concern that this Bill has been crafted to focus on. It is that reluctance that the Bill seeks to address by making clear to the public that they will have their say over any future transfers of power and competence and that a future Government will have to make the case as to why such changes are in the national interest. That is the aspiration of this Government for the future. It is nonsense to say that it binds future Parliaments, which we cannot do, but that is our aspiration. This is a construction, an architecture that will be sustained and built to help the EU in the future.

Let me remind noble Lords that for a referendum to be held under the terms of this Bill, both the Government and Parliament have to be in favour of the proposed treaty, as many of my noble friends and indeed almost every speaker have recognised. That is the starting point for any referendum activity. Otherwise, if the Government did not like the measure, they could block it at the European Council, or Parliament could simply legislate against it. Parliament would be fully in control. Therefore, the change in question would have to be considered by the Government to be in the national interest before it could be put to Parliament. That would be the necessity, the sine qua non. While the referenda provisions will help address the reluctance that exists in Britain and that must be faced, no one is claiming that they are sufficient to address the general lack of information on, understanding of and enthusiasm for the European Union. Clearly, that cannot be done just when action under the Bill is needed. The oddity of the amendment is that it so inadvertently implies that action is switched on only when there is activity under the Bill, not least because the EU Bill focuses on future changes to the treaties and does not call into question our membership of the European Union.

We all recognise that it is essential to promote with vigour and depth and without shallow propaganda the positioning of Britain in the Union, our contribution to it and the benefits that we draw from our alliances. That is why we give such high priority to our positive agenda, ensuring that the Government work to make positive progress on the things that really matter to the people of this country and to give them pride, purpose and a sense of belonging. That is the best way to show people the benefits of European Union membership. That is why my right honourable friend the Prime Minister has been leading an initiative on jobs and growth within the European Union. This approach has been exemplified by the UK’s leadership in the EU during the recent stormy events in north Africa and the Middle East. I am advised that when the Croatian Prime Minister visited London on Friday, our own Prime Minister made it clear that Croatia belongs in the European Union and that it is very exciting for Croatia and for Europe that this day is getting ever closer.

As I said in Committee, the sentiments behind the amendment can be agreed with, but the idea that one can somehow carry this cause forward, make the case or build up the narrative with vision by popping this kind of amendment into the Bill is unfounded. While I applaud the intention, I think that the action is wrong. For those reasons, I ask the noble Lord to withdraw his amendment.

My Lords, I thank all noble Lords who have taken part in the debate, particularly the noble Baronesses, Lady Williams and Lady Falkner, the noble Lord, Lord Dykes, and my noble friend Lord Radice. My noble friend was quite right to point out that it would have been ideal to have a much more widely constructed objective, but I doubt that we could have got it into the Long Title, although it would have been well worth it for all the reasons that have been argued. Perhaps I may express a word of appreciation to the noble Baroness, Lady Falkner, for pointing out the phrase in the middle of the proposed new clause that was intended to broaden the scope of what is intended beyond a referendum. I had not made that point, so I greatly appreciate that it was.

I am quite sure that the noble Lord, Lord Radice, did not intend last time around, as I did not this evening, to advocate some system of propaganda of a narrow and fruitless kind or publicity stunts. I can promise the noble Lord, Lord Risby, that if anyone approaches me in a white van, they will see me heading rapidly in another direction. I have no intention of engaging in a serious matter with anyone in a white van. I have nothing against white vans in general, but if there is anything emblazoned on the side that tells me that they are part of a propaganda campaign, I shall head off—on a bicycle, of course—in another direction.

I accept the point made by the noble Lord, Lord Hamilton, that it is not only the media who criticise the EU, but they do play a dynamic role in these things, as they do in Germany and elsewhere.

I was reflecting on the difficulty of dealing with the media. Not all that long ago, I remember reading a detailed account—albeit in relatively short paragraphs and sentences—in one of the newspapers of the European Union’s desire to insist that in future we should have only straight sausages in the United Kingdom. Such was the level of debate. I would have taken that seriously but for the fact that I turned over a couple more pages and found that it also reported that Elvis was alive and well and driving a bus in Stalybridge.

My point is that you do not always get a fair crack in the media. I do not attribute all the difficulties that I have described to the media but the balance in the media has not been the balance which we have sometimes achieved in debates in your Lordships’ House. The point is to try to seek further rebalancing. The noble Lord, Lord Howell, was fair enough in mentioning one decade and pointing to the fact that we were the Government. However, he might have been a bit more generous and gone back a couple of decades to the impromptu words that the Prime Minister of the day was caught saying on television about some of his colleagues and their attitude to Europe.

In the recent past, we have not had a glorious history of a balanced debate. Indeed, on occasions we have not had any debate. In seeking to withdraw the amendment, as I now do, I hope that it if has done nothing else, the initiative of the noble Lord, Lord Radice, which we followed up this evening, will make us reflect on the fact that we are unlikely, whether in the context of anything in this legislation including referenda, to have an intelligent discussion about Europe if we continue to pillory it without any serious attempt to tell the other side of the story.

Amendment 31 withdrawn.

Consideration on Report adjourned.

House adjourned at 10.23 pm.