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House of Lords Hansard
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European Union Referendum Bill
23 November 2015
Volume 767

Report (2nd Day) (Continued)

Amendment 25

Moved by

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25: After Clause 5, insert the following new Clause—

“Report on the United Kingdom’s future relationship with the European Union in the event of withdrawal from the European Union

(1) The Secretary of State shall report on the relationship with the European Union which the Government envisage in the event of a referendum vote to leave the European Union.

(2) The report provided for by subsection (1) must be published and laid before each House of Parliament, no later than 12 weeks prior to the appointment date of the referendum.”

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My Lords, Amendment 25 stands in my name and those of the noble Baroness, Lady Morgan of Ely, the noble Lord, Lord Tugendhat, and the noble Baroness, Lady Smith of Newnham. Before I speak to it, I should perhaps comment on an important point raised by the noble Lord, Lord Pearson of Rannoch, who, sadly, is not in his place. I was secretary-general of a small institution in Brussels throughout its brief life. It paid me expenses. Having clearly got a good judgment of my qualifications and qualities, it neither paid me a salary nor pays me a pension. I should put that on record. It was good to have a guest star appearance from the noble Lord, who seemed to have missed Committee but made a very interesting contribution on Report.

I should perhaps also comment on an important speech made by the noble Lord, Lord Owen. We were privileged to have him with us on Report, although not before. I found one point in what he said with which I strongly agreed, which I will come to in a moment. One point with which I did not entirely agree was his concern that we should not get too big for our boots in legislative scrutiny. The way that this House has scrutinised the Bill is a good example of constructive work. I think the Bill is better today than it was, partly because of the amendments with which the Minister has come forward, including Amendment 24B, which we debated earlier. As she fairly said in introducing it, it contains a provision, proposed new subsection (1)(b), designed to pick up a point that some of us had been making and which is encapsulated in Amendment 25.

Amendment 25 goes a little further than proposed new subsection (1)(b) in Amendment 24B, because some of us not only believe that the country does not need to see examples of other people’s relationship with the European Union but would like to know in advance of the referendum what the Government would do in the event a vote to leave: what immediate steps they would take and what permanent relationship with the European Union they would seek. Listing the arrangements of the Norwegians, the Swiss or the Turks does not quite do that. We would want to know what would actually happen.

In Committee, the noble Lords, Lord Hamilton, Lord Forsyth and Lord Stoddart, criticised me for my description of others’ arrangements. They did not find others’ arrangements very relevant; they were sure that, being bigger, we could do better—I paraphrase the argument of the noble Lord, Lord Hamilton. Several of us were not so sure about that, because in an Article 50 negotiation, if that is what we would be in, the Commission would be across the table from us and no other member state would be in the room. The Commission would be acting on guidelines laid down by the European Council by unanimity: everybody will have had to agree. The outcome of the negotiation, assuming there was one, would need qualified majority approval in Council and a simple majority in the European Parliament. That is quite a high hurdle. It was the noble Lord, Lord Bowness, who made the point in Committee that what we would seek,

“in exit negotiations, if that is where we get to, are not a fait accompli. They are not ours to demand. We cannot assume that all the other 27 states will agree. It will be for the 27 to decide and agree, and we do not have a vote in that”.—[Official Report, 2/11/15; col. 1441.]

That is correct; that is the case.

There is a second point. Several noble Lords—in particular, the noble Lords, Lord Stoddart and Lord Hamilton—made a point frequently made these days by Mr Redwood and some others in the other place. It was alluded to by the noble Lord, Lord Pearson of Rannoch, in his exhaustive analysis earlier, and was highly relevant to the speech of the noble Lord, Lord Owen. The Redwood argument, as I understand it, and the argument advanced against me by the noble Lord, Lord Stoddart, in Committee, was that Article 50 is irrelevant. We could and would simply repeal the 1972 Act. We would then stop paying our subscriptions, we would not go to the meetings, and we would have left. With one bound, we would be free.

I think we can deduce from what the Minister said in answer to Amendment 24C, tabled by the noble Lord, Lord Hannay, that she does not agree with that and does not believe that that is the course we would take. I hope it is not the course that we would follow, because with so much UK legislation—although not quite as much as the noble Lord, Lord Pearson, likes to argue—depending on the 1972 Act, the uncertainty that would ensue if we followed the course of the noble Lord, Lord Stoddart, would be quite damaging. There would be a serious risk of a legal vacuum.

Moreover, although I am not a lawyer, I believe that it is clear in international law that when a treaty expressly provides a basis for withdrawal from its obligations, a state party cannot escape such obligations by enacting its own domestic legislation. That is my understanding of the international law of treaty on this question. When the noble Lord, Lord Owen, reminded us of what Foreign Secretary Callaghan would have done in the event of a vote to leave in 1975, he was careful to say that Article 50 did not then exist. That is correct. Nevertheless, the Redwood thesis is that one would do exactly what Mr Callaghan apparently had in mind in 1975.

It is very important that the country should be clear about what will happen. I do not think the Government would act in breach of international law. Whether it is a good thing or a bad thing, Article 50 is there and I think the Government would use it, even though in Article 50 there is the difficulty that you need to persuade all 27 other member states to instruct the Commission, which enables it to reach an agreement.

I do not want to go again through why I do not think the Norwegian deal is particularly good. The noble Lord, Lord Forsyth, encourages me not to do it again. The noble Lord, Lord Hamilton, would hate it if I did it again, because he agrees with me that the Norwegian deal is not very good. He believes we can get a better one. The Prime Minister certainly said very clearly that the Norwegian terms would not suit the United Kingdom. That is my view, too. Where I differ from the noble Lord, Lord Hamilton, is in his certainty that, being bigger, we would get better terms. That is a dispute that we will not settle between us. I understand his point of view, although I happen to think it is wrong.

It is important that, before it votes on whether we should stay or leave, the country should know what the Government would do on day one, what process of negotiation they would then follow and with what aim. Where would they want to end up? The noble Viscount, Lord Trenchard, said in Committee that, however difficult that may be, at least the Government should say what kind of association with the EU they think it would be desirable for the UK to pursue in the event that it votes to leave the EU. That is not an unreasonable position. Of course, it is well-judged wording, which says,

“desirable for the United Kingdom to pursue”.—[Official Report, 2/11/15; col. 1454.]

Because of how the Article 50 negotiation is structured and the rules of the game, we could not say where we would end up. There would be considerable uncertainty: it would be quite unpredictable.

I am grateful to the Minister for the various moves she has made. My amendment is in a cut-down form in response to her scathing criticisms of my feeble public service drafting. I thought her best barb was when she described part of my amendment, which has now vanished, as wholly speculative and completely unacceptable, and said that I was,

“asking the Government to put the cart before the horse before the horse has even bolted”.—[Official Report, 2/11/15; col. 1506.]

It seems to me that if you are going to put the cart before the horse, it would be good to do it before it had bolted. However, I am not pursuing any of that; mine is a cut-down version of the previous versions of this amendment and I very much hope that the Minister can now accept it.

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There is a rumour that the noble Lord is the author not just of Article 50 but of the entire treaty. Can he therefore explain to us what happens if the two-year period permitted under Article 50 expires and we cease to be a member? What happens then?

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There are probably greater experts on Article 50 than me; but, as the noble Lord undoubtedly knows, paragraph 3 makes it clear that the two years is extendable, if all parties agree. I believe that, if we were in an Article 50 negotiation, it would almost certainly be necessary to extend it. I beg to move.

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My Lords, do I understand Mr Redwood’s position to be that, if we repeal the 1972 Act, all the other treaties that come after that Act—the Single European Act, Maastricht, Amsterdam, Nice and Lisbon—are all amendments to the original 1972 Act? If we repeal the 1972 Act, the other 27 member states may start getting difficult with us, but it is unlikely. We should be in the driving seat, not least because of the amount of money we give them, which of course we need not decide to axe overnight. We could say that if they behave themselves, we will taper the £20 billion a year we give them nice and slowly. Likewise, it is in their interests to go along with us and our free trade with them, the single market and all the rest of it, because we are their largest clients—as I said earlier. We have a certain amount of pressure with the non-EU free trade agreements, some of which have been organised entirely by the Commission and some by the European Commission and us in our sovereign right, as I am sure the noble Lord knows. It is a boggy area, but surely it depends on the political will of the Government of this country, and the political will of the Prime Minister.

Therefore I put it to the noble Lord that he is seeking to gaze into a crystal ball that is somewhat clouded. If the Prime Minister has negotiated a reform and comes back from Brussels with a piece of white paper saying “Reform in our time”, but the British people do not like it—if the British Prime Minister wants to stay in the European Union on those terms but the British people throw it out and vote against him—surely it is unlikely that he would survive as Prime Minister. Therefore, we would be dealing with a new Conservative Prime Minister, presumably somewhat less Europhile than the present one, and the whole ball game would change in the negotiations over Article 50, if we decided to go down the Article 50 route. Surely, though, we are in a position to say that we are not going to do that. Our position is so strong that we require our own free trade agreement. I do not want to follow the Norwegian/European Economic Area red herring anymore, because none of us has ever wanted to do that. How does the noble Lord react to that position, with a Prime Minister who has gone, a new Conservative leader who wants to get on with it, and a European Union that perhaps will not be as recalcitrant as the noble Lord hopes?

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I am grateful to the noble Lord, Lord Green, for telling us that the noble Lord, Lord Kerr, drafted all this legislation. I think he should have declared an interest, because the last thing he will want to admit is that the EU is going to completely override everything that he drafted. When the eurozone was set up, I remember it was thought that there would be a big problem if Governments borrowed excessively and cumulative debt built up to very high levels of GDP, so limits were put in on how much Governments should borrow in the eurozone. The Germans found that too inconvenient, so they just overrode it. Then the French followed, and everybody else said, “If they are not going to follow the rules, why should we bother?”. So why are we obsessed with the legislative integrity of Article 50? It has never been tested; no one has ever left the EU. If we were to leave, it would be a unique situation. They would be losing their second biggest economy, and they would have to accommodate us.

Let us remember another thing that the noble Lord, Lord Kerr, omitted to tell us. This referendum will be advisory, not mandatory, and that is very significant.

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My Lords—

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I shall give way in a moment. All we have to do in response to a leave vote is repeal the 1972 Act. After that we have to enter negotiations, and we can apply for Article 50 at the end of the negotiation.

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I think it is not for me, but for lawyers, to discuss what would ensue were we immediately to repeal the 1972 Act. I do not think it is a pretty picture, but it is not for me to depict it. On the noble Lord’s argument that we would have all these cards in our hand, I was trying to extend an olive branch to him earlier. There is a point that nobody would want us to go—that is correct. The Germans would want to go on selling cars, as the noble Lord, Lord Hamilton, reminds us almost daily.

My argument is that it might prove difficult to get 27 member states, many of which have a negative trade balance with us and not all of which are as friendly to us as our friends in Germany, to agree all the detail. The noble Lord, Lord Green, is right: the process could be prolonged and quite tricky, and the country should know before the referendum that that is the case.

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We come back to the point that was made earlier by my noble friend Lord Lamont: all this is down to interpretation. There is no fixed thing that is going to happen, and we do not actually know how it will map out, but it seems highly likely that the EU will do everything it possibly can to accommodate us. The Germans are going to be very distressed if they lose all their exports to the UK, and I know they will be very much in the driving seat to ensure that the other members of the EU abide by some sensible agreement. I see no reason why there should not be a free trade treaty between us and the EU. I am not saying that it will happen tomorrow, but then for that matter that is true of all the EU trade treaties; they seem to be taking an interminable amount of time with China, India, Russia and practically every other country in the world.

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My Lords, I am sorry if my remarks offended the noble Lord, Lord Kerr, or made him a bit unhappy. I would not do that for the world; not only do I like him but I respect him and understand his expertise in these matters. However, I still have a difference of opinion with him, although quite frankly I would be quite happy if his amendment were accepted. If the EU behaved as he was intimating earlier on, it would help my cause. It would show that the EU, instead of being a partner, was in fact rather spiteful if, after the British people had voted a certain way, instead of accepting it with good grace the EU would want to be spiteful and put obstacles in the way of agreements that we could make outside the members of the EU. We ought to take that into account.

I return to the original contention, which is this: whether this is a binding referendum or some other sort, I do not know, but if the people have spoken then they will have to be listened to. There is no question about that. It is not a question only of the Government listening; it is more about Parliament listening. It is Parliament that will have to take action after the people have spoken, and the action it must take is to repeal the European Communities Act 1972. Once it did that, everything would fall into place; after the repeal it would then have to embark upon negotiations.

I think that the Vienna convention governs the unmaking of treaties. We would be acting within the Vienna convention if we adhered to the two-year period of negotiation and, after that time, either accepted the agreements that were made or not. Basically speaking, though, once the people have spoken, if they have said that we are to come out, no treaties or conventions will prevent this country coming out. If this Parliament decided otherwise, there could be a revolution.

I hope that I have made clear what my view is and that the noble Lord, Lord Kerr, is now unoffended. If his amendment is accepted, I am quite sure that later on we can make use of it.

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My Lords, I am quite tempted to intervene in this debate. We had a full discussion of this issue, as noble Lords who were there will remember, when the European Union Referendum Act was being discussed here. The question arose of the basis on which European law applies in our country. The answer is clear: the 1972 Act makes European law the law of this country. We could get rid of that immediately by repealing the 1972 Act, but under international law we are also members of a treaty organisation. If we are going to observe international law, which on the whole I hope we would want to do, then we would have to go through the proper procedures for renouncing or denouncing a treaty. That is the next stage in the matter. It is clear that the law would no longer apply in this country as a domestic law, which is the result of the 1972 Act, once Parliament decided to repeal that Act. I think that that would be true of all the European law that has come in since 1972. None of it would apply here any longer, but the treaty obligations would apply and we would be obliged to follow the mechanisms laid down in international law for denouncing a treaty.

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Before the noble and learned Lord sits down, would he accept that what has actually happened is that EU law has been enacted into British law? Anything that has been passed down from the EU is therefore on the statute book of the British Parliament, and therefore that would continue.

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No, because that is all done under the authority of the 1972 Act by subsequent amendments under it. We had a lot of discussion about this last time and I do not want to start that up again if I can avoid it. Some of the devolution statutes had reference to Acts, for example, but they all flow from the 1972 Act. That Act is the authority for applying European law in the UK. That is why the courts of the UK are obliged to follow it because that is the law laid down by the Parliament of the UK. If that law were repealed, it would become a question of international law, and the rules of international law do not apply to domestic law except in so far as they are incorporated. It is only then as treaty obligations that the state proceeds thereafter.

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My Lords, I was intrigued that the noble Lord, Lord Kerr, did not deny authorship of Article 50 of the treaty. I am rather sceptical that he is the author because Commissioner Christophersen assured me that he was the author of Article 50 and that through it he had laid a deep trap for the British. The noble Lord always had a great reputation for masterminding so much in Brussels, but I am not sure that Article 50 is actually his creation.

The noble Lord, Lord Kerr, made a powerful speech against my noble friend Lord Hamilton, and my noble friend Lord Hamilton made a powerful speech against the noble Lord, Lord Kerr. That seems to illustrate that the amendment the noble Lord is putting forward is really one of the arguments being used by those who wish to remain in. Their argument is that it is going to create an enormous amount of uncertainty, that it is incredibly complicated, that we have got all these trade negotiations and the repeal of British legislation has to take place before we can feel the effects of being outside. This seems to me to be what the campaign ought to be about. For the noble Lord, Lord Kerr, to think that the Government ought to publish a document detailing all this is to invite the Government to publish a document taking one side of the referendum question.

The amendment is redundant because of the government Amendment 24B and particularly subsection (1)(b) of the proposed new clause to which the noble Lord, Lord Kerr, referred, in which the Government have said—slightly to my distress—that they are going to bring forward examples of countries that do not have membership of the European Union. No doubt they will have in that that Norway is governed by fax, something that I absolutely dispute despite the intervention of the noble Baroness from the Liberal Benches. This amendment, requiring a report that would be pure propaganda, is therefore completely inappropriate when we have subsection (1)(b) of the proposed new clause inserted by Amendment 24B, which it would duplicate.

To go back to Article 50 and address the alarmism, I accept that there is going to be a degree of uncertainty. That uncertainty is going to be one of the arguments deployed by the people who do not wish us to leave. However, we are, as the noble Lord, Lord Green, pointed out, going to have two years in which these negotiations take place. The roof is not going to fall in nor will the buildings crumble while these negotiations go on. I am unsure whether we repeal the European Communities Act 1972 at the beginning of the process or at the end, but I should imagine that things would remain during the period of the negotiation for at least two years, and, as the noble Lord, Lord Kerr, has said, the two-year period is extendable. Life would probably go on much as it is now while the negotiations took place.

The noble Lord, Lord Kerr, tried to chill our blood even further by saying that we would be left alone in the room with the Commission. My goodness, that is one of the things that I regret that the Government did not try to achieve in the negotiations. They have done nothing to reduce the power of the Commission. If we had just one reform in the EU it should have been to reduce or get rid of the Commission’s power of initiating legislation. I do not see why civil servants should have the right to initiate legislation in the way that they do.

The image that, rightly or wrongly, I have of the Commission was reinforced by the way that the noble Lord, Lord Kerr, portrayed it. I do not believe that the Commission is going to act in some way completely divorced from the political will of member states. The noble Lord, Lord Kerr, said that there are some European Union countries that have an unfavourable balance of trade with the UK. I do not know which they are. There cannot be very many since we have a socking balance unfavourable to us. I cannot believe that Germany, which seems to call the shots within the European Union on almost every issue today, will not be able to persuade Slovenia, or whichever country it is, that it ought to come into line with the outcome of the negotiations. I do not believe that the Commission can act without political will. I believe that the Economics Minister of Germany has already publicly stated that he believes that Britain could get a free trade arrangement with the EU if it left. If Germany thinks that, there is a good chance that we could get it. However, all this is an argument for the referendum. It should not be in particular amendments to the legislation.

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My Lords, the noble Lord, Lord Kerr, played a formidable role in the Scottish referendum and in the discussions of the rules that should surround it. I can just imagine how he would have been appalled had anyone tabled an amendment that the British Government should publish in advance of the referendum the arrangements that they would make if Scotland decided to leave the United Kingdom. It would have been an utterly ridiculous proposition, and there is no way that the noble Lord, Lord Kerr, would ever have proposed it.

As my noble friend Lord Lamont has pointed out, there is a golden thread through all the amendments that the noble Lord, Lord Kerr, has tabled. It is all about trying to rig the referendum in favour of the position he favours. That is what this is about. Having worked with the noble Lord and knowing the precision with which he operates, I am amazed that he should suggest that the Secretary of State should report on the relationship with the European Union that the Government envisage in the event of a referendum vote to leave the European Union.

The Prime Minister has said that he wants to stay in the European Union and that he is going to do this fantastic negotiation that is going to change the European Union and reform it. It is ridiculous to ask him to go out and campaign for what he believes in and at the same time explain what he would do if he lost the argument. That is an impossible position to ask even of a very flexible Prime Minister.

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Will the noble Lord accept that the Prime Minister has also said that he would not rule out calling for a no vote if he does not get satisfaction in the negotiations? Therefore, what the amendment moved by the noble Lord, Lord Kerr, is calling for—that the Government set out what they envisage could happen in a scenario that the Prime Minister has not ruled out—is perfectly reasonable. What so shocks him to the core about that idea?

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I know that the Liberals find it easy to occupy two opposite positions at the same time on a number of occasions but we cannot ask the Prime Minister to do that. Subsection (2) of the new clause proposed by the amendment states that this has got to be done no later than 12 weeks prior to the appointment date of the referendum. I should like to think that 12 weeks before the referendum the Prime Minister will have decided whether he is going to rule anything out. The Prime Minister will have a position, so that point simply falls.

In Committee, I used the analogy of the European Union being like a bear trap. No one in Britain today would want to put their foot in the bear trap and join the European Union as it is. The question is how to get your leg out of the bear trap. People like the noble Lord, Lord Kerr, say that it is just going to be too painful to remove our legs from the bear trap and therefore we must just accept the risk that we might be bleeding to death but that is much less painful. In this amendment he has now come up with the proposition that because of Article 50 it is not just one bear trap: if you take your leg out of the bear trap there are 26 others to get through, each one of which could cause enormous grief, so it is better to stay in the one bear trap. This is a ridiculous position. I am deeply shocked that he should put forward an amendment of this kind.

Perhaps the Minister can tell us whether Ministers are going to be bound by collective responsibility in respect of the Government’s position. If they are, it is asking a lot of them that they not only have to stand up and support something in which they may not believe, but they have also got to go out and explain what would happen if the opposite happened.

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My noble friend has just referred to something called “the Government’s position”. Does he accept that if the Government have a position, they owe it to the country to campaign on that position?

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No, I would not accept that. If the Government are people who genuinely have differences of view as to what is right for the country, then those members of the Government should be free to argue their case. As the noble Lord, Lord Stoddart, said, this is matter for Parliament, not for the Government and not for the Executive. It is for Parliament to decide what is in the best interests of our country. I hope that Parliament, by passing this Bill, will decide that the people should have an opportunity to express their view. That will then be advisory for the Government and I would expect the Government to carry on on the basis of what is suggested.

I shall make one other point. Even if the Government wanted to do it, it would be impossible to report on the relationship with the European Union that the Government envisage in the event of a referendum vote to leave the European Union. We do not even know what the European Union will be like. It is the European Union that is leaving us as it struggles with the disastrous consequences of monetary union. It is the European Union that will have to move towards a more integrated fiscal arrangement if the euro is to survive. The amendment is asking the Government to predict what it will do to maintain the stability of the euro and at the same time to predict what they will do.

In response to my noble friend, I have just thought of another argument. I would like to think that in the referendum campaign the Government will be respectful of the arguments which are put across and the way they are received by the public and that they will acknowledge and respond to these arguments.

I know why the noble Lord, Lord Kerr, has put forward this amendment. Of course it would help his case if the Government had to make these points. I have always thought that he was very even-minded and impartial on all these matters, but now he has left his former position he has turned into a politician, and a campaigning politician at that. I hope that my noble friend will not feel able to accept this amendment in any way.

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My Lords, I rise to speak, not that I intended to do so, because although we have been going over the same ground this evening that we have gone over before, and although no doubt many of these points will be debated passionately during the referendum campaign, I had rather hoped that the effect of these debates would be to separate out a bit the wheat from the chaff in the arguments and that those arguments that were found to be obviously unviable would be dropped by the various parties before the referendum campaign started. Therefore we would have a function here of hoping to clarify some of the essential arguments before the public debate begins in earnest.

In that context, I am quite amazed and very disappointed that two grossly invalid arguments continue to be put forward by the Eurosceptic representatives in your Lordships’ House. I thought that we might have seen the end of them. Those two arguments are so irresponsible and illusory that it amazes me that men or women of the world can seriously want to take them any further, even on an electoral platform, where I know the same qualities of intellectual analysis are not always deployed as they are in other contexts in life.

The first argument is the suggestion that this country might simply walk away from an international treaty in breach of that treaty. We have a long tradition going back over centuries of respecting international agreements, and it would be quite extraordinary for us seriously to propose to do that. We all know that Article 50 of the treaty of accession has a precise procedure to be adopted in the event that a member state wishes to withdraw; therefore withdrawal was properly and reasonably discussed at the time we signed that treaty. There was no material non-disclosure of relevant information or anything of that kind. No one was under any illusion. We signed that treaty with open eyes. Now, 40 years later, or whatever it is, suddenly to turn round and say, “We’re tearing it up and walking away”, is extraordinary.

I am amazed that anybody thinks that this country should behave like that. I would have thought that even those who are not influenced by the element of principle in this matter, which seems very obvious, or who cannot estimate or appreciate the diplomatic value—the soft diplomacy and soft power value—of having the reputation we have had until now of being a nation that takes international agreements and international law seriously might at least from sheer cynical pragmatism have realised that the last and worst thing you want to do when you are about to engage in a difficult negotiation with a group of countries, with whom we would be having a difficult negotiation to try to restore some access to the single market with our former partners in the European Union, would be, on the eve of beginning such a complicated, difficult and important negotiation, to tear up a treaty that we had previously had with them.

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Has the noble Lord not missed the point, which is that the key to all this is when you invoke Article 50? Do you do it at the beginning of the negotiations, when we have just voted to come out, or at the end, after two or three years?

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My understanding is that from the very moment you initiate the process you invoke Article 50, which sets out the procedure to be followed. I have certainly read Article 50, and that is the way I read it. I do not think that any interpretation we have heard this evening, including from the noble and learned Lord, the former Lord Chancellor, is inconsistent with that reading. The fact is that we must act in good faith in these matters. If we do not act in good faith out of moral principle, we should do so out of sheer selfish pragmatism because we will need to get a deal with the people who account for about 50% of our exports in the event that we want to leave the present arrangements we have with them. The idea that we start off by breaking an international agreement solemnly entered into is quite extraordinary.

The second extraordinary thing—I have heard this argument before and I hope I will not hear it again, although I am sure I will; I expect that it will be in the Daily Mail every day during the campaign—is that because we have a balance of payments deficit with the rest of the European Union, we have more leverage on them in these negotiations than they have on us. That is complete nonsense. I dealt with this argument before, and I used an analogy, which no one quarrelled with at the time, to try to make clear that the fact of having a deficit or a surplus is neither here nor there. What is important is the proportion of one’s total exports and, behind that, the proportion of one’s GDP which is exposed in a negotiation of this kind and which could therefore be subject to something nasty happening to it, such as having tariffs imposed or no longer being able to be sold at the same favourable terms as competitors could offer the relevant customers. The proportion of exposure of gross domestic product, and the employment that goes with it, is important.

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I am very sorry to ask the noble Lord a question, when he has made it so abundantly clear so many times before to the schoolchildren what the real situation is. However, when he says that what matters is the percentage of GDP represented by a market, does he seriously advance the position that Germany would not care if it did not get access to its largest customer for exports just because that is a smaller percentage of German GDP than our exports are to it?

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Everybody would be a loser in this game. I do not hide in any sense my conviction that we would all be losers. It would be a very sad day if we broke up the European Union or moved out of it. Therefore my point is that the Germans would lose, but we would lose more.

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Does the noble Lord recognise that if the UK were to withdraw from the European Union, the Germans could then find themselves quite frequently outvoted by QMV by the southern members of the union, who have very different interests?

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It is quite obvious. The Germans have made it very clear indeed, from the Chancellor downwards, that they do not want us to leave the EU, and that is one of the reasons why. In fact, in many cases we have very much the same view about markets as the Germans have, and on deregulation, an entrepreneurial economy, labour market reform and what have you. We have undergone the same kind of supply-side changes, they with the Hartz reforms, we with the Thatcher reforms in the 1980s. All of that is true and is appreciated in Germany. I repeat: the Germans think that it would be a great disaster if we left. However, it would be an even greater disaster for us than it would be for them. It would be a disaster for everybody. Sometimes you break up a relationship and all parties lose. It is an extraordinary idea to think that if you break up a relationship, some parties are bound to win. That simply does not happen. Therefore that is the logical situation.

When I talk about exposure, let me put it this way—I have used this analogy once before. If Micronesia had $1 million-worth of trade with China, and it sold the Chinese $100,000-worth of products every year and bought $900,000-worth from the Chinese, they would have a massive balance of payments deficit with China, which would have a proportionate very substantial balance of payments surplus with Micronesia. Would that mean that Micronesia would have the slightest leverage on China? Of course not. It is not, in fact, the deficit that counts but the extent of the exposure of exports, and the relevant dependence on exports is very simple. I repeat: our leverage—if you like to put it in mathematical terms—would be a positive function of their dependence on us and a negative function of our dependence on them. Our dependence on them is about 14% or 15% of our GDP, which is accounted for by exports of goods and services to other members of the European Union. If you look at it the other way round, there is no member state in the European Union other than ourselves, except for the Republic of Ireland, for whom that figure is higher than 3%. That literally means that there is a 500% greater degree of dependence on our part towards them than on their part towards us. That is an extraordinarily bad basis for going into a negotiation. I do not say that there would not be a negotiation or a conclusion to a negotiation, but I am quite certain that the terms we would get would not at all be the ones we had hoped to get when we started out.

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I will make two quick points in support of the amendment in the name of the noble Lord, Lord Kerr. The speech of the noble Lord, Lord Forsyth, was rhetorically brilliant, as his contributions in this House so often are. However, his brilliance displayed a weakness on the part of those who want to leave the EU: they are frightened of the argument about what the alternatives to membership really are. That is why he is so reluctant to support the amendment.

There are two points which have not been made in this debate about the wrong assumption, made by many people who favour leaving the EU, that the UK would be able to retain most of the advantages of EU membership without actually being a member of it. That is what one hears from UKIP and the leave campaign. I question this on two grounds. The first ground is the politics of us voting to leave. In the Prime Minister’s renegotiation, which I want to succeed, many member states will make concessions to Britain that they do not actually want but make because they want to keep Britain in the EU. The politics of this is that there will be a great deal of bitterness if they have gone a mile to help the UK and we then vote to leave.

What is more, there is a significant—20% to 30%—anti-European element in the politics of many EU countries today. The last thing in the world that the leaders of other EU countries are going to want to see is Britain able to negotiate a good deal from being out, because that will just strengthen the voices of the right and left populists in their own countries who are arguing to get out of the EU. So the politics will be extremely difficult for us if we vote to leave.

My second point is about free trade. I agree with all the arguments that our bargaining position is not as strong as is often claimed. However, a lot of this debate ignores the modern facts of free trade. It is not about tariffs and access, as it used to be. It is about sharing the same rules as the people with whom you are trading. That is why most banks in the City of London want to remain in the EU: if they do not share the rulebook with people on the continent, they will not be able to trade in euro business. I do not know how big an element of their business that is, but it is certainly substantial. A friend of mine in Brussels told me what happened in the recent fracas about Volkswagen. The initial proposals to deal with the problem of diesel engines, which the French and Germans had cooked up together, would actually have meant that half of Ford engines could not have been exported to the continent because the British methods of production would not have been compliant. It was only because we were in the room and making the arguments that we could do a deal with our partners to make sure that the rules would not disadvantage British-based manufacturing.

So it is about rules and, if we want to trade with the EU, either we have got to stick with their rules and all the talk about repealing regulations is complete nonsense, or we abandon the rules and we do not get the trade. That fundamental point is why the British public need to have it objectively explained what the consequences of leaving the EU would be, and what the nature of our future relationship with the EU would be.

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I pick up the noble Lord, Lord Liddle, for saying that to export to the EU we would have to meet the rules it imposed. Of course we would. It is the same position as America, India, Australia, New Zealand, Brazil or any other country that is not in the EU—or, for that matter, Switzerland, which manages to export more per head to the EU than we do and it is not in the EU. It is not a convincing argument at all. We already meet the rules now with our motor car exports. Why should that change? If change is required we will, of course, have to change—and so will other manufacturers who are outside the EU.

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I am glad that the noble Lord, Lord Willoughby de Broke, defines British sovereignty as simply having to accept whatever changes in the rules the EU makes without our participation.

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My Lords, I do not normally find myself in close agreement with the noble Lord, Lord Stoddart of Swindon, but on this occasion what he said was absolutely correct. If the British people speak in a referendum, Parliament must follow and the United Kingdom will inevitably, in the circumstances which he envisaged, be leaving the European Union. I would very much regret that: it would be contrary to the interests of this country. However, were the electorate to make that decision I would hope, as would others who campaign for Britain to stay in, that we would negotiate the most favourable deal possible with the European Union. Our loyalty to this country would be unaffected by the result and would remain a primary consideration.

However, it is absurd to suppose that we will not enter into a period of very considerable uncertainty. Anybody who knows anything at all—and noble Lords know a great deal—knows that the worst possible thing for an economy and investment is uncertainty. It may be that we would negotiate a favourable agreement in the end, but there would be a period when a great deal would be unknown and people would be very reluctant to invest. I hesitate to talk about the Scottish referendum in the presence of my noble friend Lord Forsyth, but there was evidence in Scotland, as there was in Canada on an earlier occasion, that a referendum casts a shadow ahead of it which deters investment. If there was a period of considerable uncertainty at the end of the referendum before the outcome was known, the economy would suffer, even if one was optimistic about the outcome.

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Does the noble Lord agree that the noble Lord, Lord Kerr, has lifted a very interesting stone as to the exact process following a vote to leave the European Union? Would it be helpful for business confidence, which he has just mentioned, if the Government were to produce a report on the process, not the alternatives, that would then entrain?

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I was going to come to that point, although not in exactly the form that the noble Lord put the question. I have now rather lost my train of thought. As I was saying, we would have a period of uncertainty.

Some noble Lords have suggested that, inevitably, a free trade agreement would be negotiated, but they talk about free trade agreements rather as if they are all the same. It is like saying a car will meet you at the station, but you do not know whether it will be a Rolls-Royce or a Mini—both are cars, but they are very different. Free trade agreements are all very different. To draw attention to what Singapore, Switzerland, South Korea or anyone else has done is hardly relevant to the situation that we have. The single market is a unique structure and finding a formula that will replicate the advantages of the single market would be very difficult to do.

Given that there would be a period of uncertainty and that we would not know what the outcome would be, although all of us would hope that it would be as favourable to this country as possible, the thrust of the amendment put forward by the noble Lord, Lord Kerr, which I support, to try to secure as much guidance from the Government as possible is an extremely useful exercise. Indeed, it has proved its utility, as the noble Lord said earlier, because it has enabled the Minister to look deeply into these matters and come up with an amendment of her own that goes a fair way towards meeting the objectives of the amendment to which I put my name. That seems a model way for this House to proceed—for noble Lords who have a concern to table amendments and for the Government to seek to react to them, as the Minister has done. Therefore, I am glad to have supported the noble Lord, Lord Kerr, in this matter and I congratulate the Minister on the progress that she has made in seeking to meet the point that we put forward.

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My Lords, I am somewhat surprised that many Members of your Lordships’ House seem to find the idea of understanding what leaving would mean somewhat strange. The question that will be put to the people of the United Kingdom is:

“Should the United Kingdom remain a member of the European Union or leave the European Union?”.

The Electoral Commission, in its briefing to us for the second day of Report, points out that:

“It is important for voters to have access to information about the consequences of voting to remain a member of the European Union or leave the European Union, to help ensure they are able to make an informed decision on how to vote. However, any provision in legislation for this should ensure that voters can have confidence in the accuracy and impartiality of the information. There should also be sufficient balance given to the consequences of both a majority vote to remain a member of the European Union and a majority vote to leave the European Union”.

Amendments 24A and 24B went quite a long way in that regard but, if the Minister may not be able to envisage what the Government might say in terms of the relationship, can she at least tell us a little more about what “leave” might mean? The voters of the United Kingdom need to understand what “leave” means just as much as “remains”. We are almost there, but not quite.

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My Lords, in Committee and this evening, a number of amendments have requested reports on a large range of subjects. I suggested in Committee that the extent to which these reports are likely to be read by the majority of people voting in the referendum is small. The reports might be of some use to parliamentarians and other people preoccupied with the issue, but they would be of very little use in determining the outcome of the result of the referendum. However, it suddenly seemed to me that there was some case for a particular report on a matter where there seems to be some confusion—namely, a report on what the process of withdrawal would be.

I was most interested in the point made by my noble and learned friend Lord Mackay that seemed to suggest that in the course of that process we would necessarily, and perhaps almost as a first step, repeal the 1972 Act. There was a large amount of other legislation, including that on devolution, that was based on that Act. I imagine that that would create an enormous problem in terms of the legislative programme that would follow any decision to leave. I do not know whether my noble friend on the Front Bench can shed any light on that, but the case for rather more attention as to how it would be done if there were to be a vote in favour of withdrawing may well have a rather strong argument in favour of it.

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My Lords, I support the view outlined by the noble Lord, Lord Kerr, in suggesting that the amendment proposed by the Government in the last debate, when we addressed this question very briefly, does not go far enough in addressing the issues set out in Committee and again on Report.

The noble Lord, Lord Kerr, eloquently addressed the need for the public to know what “leave” looks like. We actually know what the alternative existing models are. In fact, the shadow Minister for Europe, Pat McFadden, has produced a comprehensive report on this which could simply be copied in order to conclude one’s own amendment. We are not asking for the same things as we did on the last amendment, which was more of an objective statement of facts. We are going further here and asking the Government, who we assume will still be holding the reins of power in this country—albeit maybe with a new leader, who knows?—what they would want as an alternative to membership. It is a question that they would be asked the day after any vote to leave the EU.

We understand that it would be ridiculous for us to ask for this to be set out prior to the end of the Prime Minister’s task in trying to renegotiate the position with his EU colleagues, so we would not expect this to be done until the end of that negotiation. I heard the Minister state when she introduced the last amendment that the Government “in due course” will set out what the process of withdrawal will involve. Will the Minister clarify what “in due course” means? When will that happen? Will it happen before the referendum vote? How much before? That would be very useful, because one thing has become clear this afternoon. There is a need for some sort of procedural clarity. It has provoked a debate. I understood the Minister to have suggested earlier that the Government would not want to repeal the 1972 Act, so even if we had absolute clarification on that, we have gone a step further. It would be very useful to the public in this country. At the very least, we need those procedural steps to be set out very clearly for the public.

We still do not know which way the Government will recommend the British public to vote. If the Government were to suggest a “leave” vote, are we seriously expecting the country simply to follow them to some unknown destination with no idea what that would look like? I suggest that the public have a right to know the answer to that question. If the Government were to recommend us to stay, they still have the responsibility to set out what the position would be if the public went against their recommendation. They will still be the people sitting in that seat when those alternative arrangements will have to be made.

If the Government will not set this out, then who will? The leave campaign may have a mandate from the public to ensure that we leave the EU, but it would have no legitimacy in securing or putting in place alternative arrangements. They would not be in the driving seat for subsequent negotiations. So far, I do not believe that the Government have gone far enough in addressing this issue and I hope that the Minister can give us some clarification, at the very least on the procedural steps, but ideally on what the Government would like to see as an alternative to EU membership if we were to vote to leave the EU.

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Before the noble Baroness sits down, can I ask her whether—either on the previous occasion when we had the Scottish referendum or in the event that there is another Scottish referendum—it is the Labour Party’s policy that the Government should in advance set out what the procedures would be and how they would set about breaking up the United Kingdom? The parallel is clear: this is an important policy view that she is taking. Is that the view of the Official Opposition?

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It is far more complicated. We are talking about 28 member states which will all have a say on our destiny in terms of our relationship with them in future. That is a completely different situation from the situation in Scotland. So no, I do not think there is a parallel here but the Government should come forward with some clarity, in particular on the procedural process.

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My Lords, the noble Lord, Lord Kerr, made important points in his speech earlier this evening about the nature of this referendum and the fact that what the leave scenario will look like will be less clear to the public. That is certainly true by the very nature of this referendum. He has called for the Government to set out the relationship that they envisage for the European Union in the event of a vote to leave the EU, and he rightly highlights that it would be for the Government to negotiate on any future relationship in the event of a vote to leave.

The noble Lord, Lord Kerr, and just now the noble Baroness, Lady Morgan, have made it clear that it is the matter of the process which is important for the Government to clarify, and I shall certainly seek to do that among giving other answers to questions that have been posed.

The second part of the government amendment earlier today—Amendment 24B, which the House agreed to—seeks to address the earlier call of the noble Lord, Lord Kerr, for the Government to set out what some of the alternatives to membership might be. In response to the noble Lord’s amendment, we have proposed a duty that would require the Government to describe some of the existing arrangements that other countries have with the EU, where they are not members. I believe that this is as proportionate and reasonable a response as we can provide.

Noble Lords have called for any government amendment to set out evidence-based and authoritative information in a way that is as useful to the public as possible. However, I do not believe that it would be helpful, or indeed appropriate, for the Government to have a commitment in legislation to confirm at this early point exactly what the UK’s envisaged relationship would be with the EU, should the UK electorate vote to leave. I think that I can be more helpful to the noble Lord, Lord Kerr, as a result of the conversations that we have been able to have today, and look more deeply at the intention behind the amendment. I hope to come to that fairly shortly.

My noble friend Lord Hamilton correctly referred to the fact that this referendum is advisory not mandatory, but I can assure him that my right honourable friend the Prime Minister has said that we will abide by the decision of this referendum, whatever it is. The Prime Minister has said that the Government, of course, are now focused on delivering a successful renegotiation. Therefore, we feel that we cannot speculate on the types of possible arrangement that could be negotiable—not negotiated, but actually achieved—with the EU. In my right honourable friend’s speech at Chatham House, the Prime Minister gave his view on some of the existing alternatives. He made clear that Switzerland has had to negotiate access to the single market sector by sector. He pointed out that Norway is part of the single market but has no say in setting its rules.

What we sought to do, through my earlier Amendment 24B, is to provide the public with useful information about those existing models and others that other countries may have. We sought to meet the aims of the amendment of the noble Lord, Lord Kerr, as far as possible at that point. We made it clear then, and we have throughout our discussions at Second Reading and in Committee, that it is the campaigners on both sides of the debate who will have strong views about the arrangements. Any information published by the Government will be heavily scrutinised and interpreted in different ways by the campaign groups to make the strongest arguments for the case for remaining or leaving. One side is likely to argue that the Government have not been ambitious enough and that far more should have been possible, and the other side, I suspect, will argue the opposite.

The result for the public may be confusion—I appreciate that—rather than providing useful information. This would have the exact opposite effect from that which noble Lords have said they wish to support over the course of our debates. Indeed, if we were to set out early and in statute an envisaged relationship in the event of a vote to leave, it would simply invite media headlines because it would be interpreted that the Government were sending a strong signal that we had already prepared to exit the EU. I confess that I do read the Daily Mail and I can see the headline hitting me already. If I were to accept the amendment tonight I would be stepping into that bear trap. I know that that is not the bear trap that the noble Lord intended—that was not his intention.

As I said earlier in the debate, should there be a vote to leave, the Government would then at the appropriate moment need to engage with processes provided under our international obligations, including those under Article 50 of the Treaty on European Union. Of course, processes such as Article 50 have never been used in the past. This would be a precedent if it were to happen and that would make it all the harder to speculate on how such a negotiation might play out. Indeed, there could be unpredictable consequences to entering into a process to leave under any scenario, including that which encompasses the Article 50 process. Much play has been made about Article 50—I said to the noble Lord, Lord Kerr, earlier today that I now carry it around with me in my handbag wherever I go. Therefore I know that I also referred to it in some detail at an earlier stage in Committee and set out the processes that it engages. I will not abuse Report stage by reading again from the full text of that.

As I mentioned briefly but will now say more fully to the noble Baroness, Lady Morgan, before the referendum we will of course lay out what this process would involve. In this scenario, as in any scenario, the Government would seek to protect the interests of the British people. That is exactly what noble Lords would expect us to do. There has been some question about the whole issue of the process being tangled in international law—yes indeed. The noble Lord, Lord Kerr, raised an important question about whether the UK would abide by its international obligations. I can reassure him concisely that, of course, the UK will abide by its international obligations. The Government are committed to upholding the rule of law, including under any of the different scenarios for withdrawing from the European Union. I was most grateful to my noble and learned friend Lord Mackay of Clashfern for crystallising so clearly the problem at hand, as he so often does in this Chamber, and making it clear that international law requires the Government to go through the proper procedures if they wish to resile from a treaty obligation. That is certainly the case.

Indeed, my right honourable friend has made it very clear throughout his time as Prime Minister that he holds dear the golden thread. The golden thread means not only that we have government that is not corrupt and is careful of people’s interests, but involves strengthening international law, not weakening it.

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Given that the Prime Minister said that he rules nothing out, and that the Government will abide by any result in the referendum, surely we must assume that the Government are absolutely confident that they can make the necessary arrangements to enable us to leave the EU, and therefore this is a bit of a red herring.

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My Lords, I am not quite sure what the colour of a herring may be, but all I can say is that I am sure that my right honourable friend could fillet it quite nicely.

However, the problem is that the result would not be predictable. This is the picture that the noble Lord, Lord Kerr, has carefully teased out. Clearly, there could be unpredictable consequences; that is why I am not in a position tonight to accept the amendment. There is also an issue about timing. It is simply not feasible, or indeed in the national interest, to tie the Government’s hands in legislation by setting out our preferred, almost negotiable, alternative before we have had the referendum, let alone before we know the consequences of the vote. We are focused on delivering a successful renegotiation. This debate, led by the noble Lord, Lord Kerr, has teased out the implications of the process. I hope therefore that I have put on the record more clearly the Government’s view of how those processes would be engaged. Although I am not able to accept the noble Lord’s amendment tonight, I hope that I have put on record sufficient information to enable him to withdraw his amendment.

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I thank the noble Baroness and all those who took part in this debate, particularly those who supported me. However, I am left worrying what the Scots have against me. When you think about it, everybody who spoke in support of my amendment was not a Scot and everybody who attacked it was a Scot—the noble Lords, Lord Hamilton, Lord Forsyth and Lord Lamont. I believe that the Stoddart family hailed from Scotland. Anyway, we Scots are a cantankerous lot.

I wish to comment on only three points from the debate. First, I totally agree with the noble Lord, Lord Stoddart, and indeed with the Minister, that the fact that the referendum is advisory, not mandatory, is a distinction without a difference. If the country votes to leave, we leave—that is for sure. I say to the noble Lord, Lord Hamilton, that I thought we had an agreement that we both were clear that any free trade agreement was perfectly possible. I am sure that it is perfectly possible although, of course, as the noble Lord, Lord Tugendhat, reminded us, there are free trade agreements and free trade agreements. Saying that it is possible does not guarantee that it is perfect. Where I cannot agree with the noble Lord, Lord Hamilton, is that I do not believe that it would be possible to secure full voting membership of the single market with no concomitant obligations on expenditure commitments. I do not believe that that is on offer or that it could be offered. That is where I differ from the noble Lord, Lord Hamilton. I am very grateful to my only Scottish ally in this matter—the noble and learned Lord, Lord Mackay of Clashfern—for confirming that my understanding of the law, although amateur, was in this case, by great good luck, correct.

The noble Baroness has moved a long way, for which I am very grateful. She has listened to what has been said in non-Scottish accents in various parts of the House during this debate. I think she is saying that, in the event that the country voted to leave, the Government would invoke Article 50—that that is the process that would be followed. I think she is also saying that the country would need to know before the referendum that, because we would be in an Article 50 negotiation, we would be unable to dictate the terms of our withdrawal—that that would be a matter for negotiation and that there could be, in her words, unpredictable consequences. I think she is saying that that is factual information, not speculative, which it would be the duty of the Government to make clear. The leave campaign will assert that we can dictate whatever terms we like. The stay campaign will assert that an Article 50 negotiation would, indeed, be a bear trap, as the noble Lord, Lord Forsyth, said. But what is important is that the Government should say what in their view would be the—

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My Lords, I apologise for interrupting the noble Lord, but does he agree that—

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I do not think this is the time for interruptions. Noble Lords should remember that we are on Report.

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He was asking a question.

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The noble Lord, Lord Green, and I are diplomats. We do this stuff all the time.

I shall look very carefully at what the noble Baroness has said. It seems to me she is saying that the country would be entitled to know in advance whether Article 50 would be invoked; that that article is not a fait accompli, as the noble Lord, Lord Bowness, said; that we would be unable to dictate our terms; and that there would be unpredictable consequences. If that is what the noble Baroness is saying, I see no need to press my amendment now. If that is not what she is saying and I have misheard her, we might refer to the matter again at Third Reading, but I hope that we shall not have to. I beg leave to withdraw the amendment.

Amendment 25 withdrawn.

Amendment 26

Moved by

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26: After Clause 5, insert the following new Clause—

“Report on the consequences of the United Kingdom staying in the European Union: net migration

No later than 12 weeks prior to the appointed date of the referendum, the Secretary of State shall publish, and lay before each House of Parliament, a report on the impact of continued membership of the European Union on the scale of net migration to the United Kingdom and its consequential effect on the future population of the United Kingdom.”

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My Lords, I shall speak also to Amendment 27. I can be very brief, as the ground is familiar but very important.

I welcome the Minister’s introductory remarks. She steered a very careful course to avoid advocacy. However, her presentation seemed a little one-sided. There would be very serious consequences of staying in the EU as well as of leaving it. Unpredictable consequences apply to both staying and leaving. The EU is not a stationary ship. It has considerable momentum in various directions, as the noble Lord, Lord Lamont, pointed out. Therefore, it is only right and fair that both scenarios should be considered and that factual and objective information should be provided on both.

I have selected two consequences of great concern to the public. Amendment 26 draws attention to net migration and its consequences for our population. Noble Lords will be aware that migration from the EU has doubled in two years. At 180,000, it is now about half our total net migration and will have a huge impact on our population—indeed, an inevitable impact. The latest population projections are based on net migration of only 185,000, but even at that rate we will have to build a city the size of Birmingham in the next five years. In the next 25 years, our population will go up by 10 million. I make no apology for repeating that key point. Any report from the Government will have to set out this stark prospect. I say “stark” because 79% of the population of England—if I dare refer to England—believe that our country is already overcrowded.

Amendment 27 addresses the medium-term consequences for the UK of the situation in southern Europe. In Committee, the noble Baroness, Lady Royall, questioned the advisability of mentioning refugees in the context of a referendum campaign. I entirely accept the need for care but I also believe that we should level with the public, especially perhaps when the issues are, indeed, sensitive. It is now apparent that the European Union has lost control of the borders in Greece and Italy. The number of migrants is likely to run into several million over the next several years. More importantly for us, because we do not have a land border, under present arrangements all those who will acquire EU citizenship will gain the right to move to the UK. What is more, they will get an automatic right to bring family members who are not EU citizens. This is clearly a matter of real importance to the public and should be covered in any reports that the Government might issue. I beg to move.

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My Lords, I support the amendment of the noble Lord, Lord Green. It is important that these matters of immigration, however unpalatable they may be sometimes, are brought out into the open. The point that he made, which I also made in my speech, though it did not seem to find favour with noble Baroness, is that we should also look at the consequences for this country of staying in the EU. This amendment touches on that and is worth supporting. Surely this will be one of the pivotal arguments. Again it might not be popular to say so, but immigration and control of our borders will be a major topic during this referendum campaign. To have something about it in the Bill would be very useful.

I hope the amendment of the noble Lord, Lord Green, will find favour with the Government, because the public will certainly be interested in it, given the huge waves of immigration that are coming our way and will continue coming our way—I agree with the noble Lord—with huge consequences not just for numbers but also for infrastructure, schools, hospitals and accommodation. There are many consequences here and I know people are concerned about this. This is an important amendment to look at carefully and I hope the noble Baroness will follow that.

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My Lords, I apologise for missing the first part of the noble Lord’s short speech. Since he referred to the population issue earlier, perhaps I might be allowed to say a few words. Incidentally, the reason the balance of competences report did not include population is that it is not one of the issues on which the European Union has any competence. There have been indirect references to population issues in one or two of the provisions of the treaties. I think it is the treaty of Amsterdam that has an obscure protocol in which the Republic of Ireland says that nothing in the treaties should be construed as countermanding Article 41 of the Irish state constitution, which is about abortion. While we are on the abortion issue, the efforts that Catholics in Scotland are now making to ensure that abortion law is not only not pulled up to the European level but pushed down to the Scottish level demonstrate that population issues are extremely sensitive.

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My point is not that population falls under EU competence. Our membership of the EU and the fact that we have no way of limiting the number of migrants from the European Union obviously feed directly into net migration, which accounts for virtually all the long-term haul of our population increase.

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My Lords, as the noble Lord knows, I follow the Migration Watch UK publications in detail. One way or another, I have also been involved in migration issues since the end of the Cold War. One of the things by which I am most struck is that population and migration flows are very complex. When you close one door the flow comes in from another, as we see at the European level and also at the British level. It is very hard to close our doors more than we do.

The issue of secondary migration that the noble Lord raises in the second half of his amendment is also complex and delicate. I agree that it is one at which we need to look in more detail. But much of what Migration Watch does, and this amendment, ignores the important pull factor in British migration. I am struck, for example, that the newspapers in recent days have talked about the NHS going out to recruit additional nurses from abroad, while at the same time we are being told in the comprehensive spending review that the Government will cut nurse training and impose fees on nurse training in Britain. A better example of a pull factor in migration could simply not be found.

I am conscious that, for their plumbers, their bricklayers and others, building companies in Yorkshire recruit directly from eastern Europe. I happen to be associated with a housing association in Bradford that has an apprentice scheme, which is enormously oversubscribed. I suspect that when the new rules on selling off social housing come in that housing association will find it more difficult to run its apprenticeship scheme. It is producing skilled British workers, of whom there are not enough in that area. This is why more Poles, Slovaks and others come in.

I am also conscious that our Armed Forces are engaged in recruiting soldiers from abroad, largely from Commonwealth countries, because we cannot find enough here. That is a problem that we have in Britain. It is a problem of not providing the skills and right motivation for our young people, and we should pay more attention to that. If we invested more in making sure that our population had the right motivation and skills, the important pull factor that we have for so many of our semi-skilled workforces and public services would be a great deal less than before. That is one of the most important aspects in the current pull factor in British migration.

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My Lords, the noble Lord, Lord Wallace, has made some very interesting comments. I learnt two things. First, I understand now why migration was not included in the review of competences. He explained that that was because the word used was “population”, whereas had one asked the question about movement of labour or migration, perhaps it would have been different. Secondly, the noble Lord made quite a persuasive case, on one ground, for the necessity of migration and the inevitability of a degree of migration. I found it interesting that he was a regular watcher of Migration Watch. I was fascinated to hear that. But the arguments that the noble Lord put forward are the very things that would be considered in the Government’s publication if the amendments in the name of the noble Lord, Lord Green, were accepted.

I was somewhat neutral towards the amendment in the name of the noble Lord, Lord Green, because I have been trying to argue that all these reports that have been called for are the issues that ought to be debated during the referendum campaign. But everybody else has been coming forward and saying we ought to include this and that. When I look at the list compiled by the noble Lord, Lord Hannay, of things that ought to be considered in the publication, the one thing that is obviously missing is migration. Why did the noble Lord, Lord Hannay, not say that the publication ought to include migration?

I have been converted to the amendment in the name of the noble Lord, Lord Green, both by the noble Lord, Lord Wallace, and the noble Lord, Lord Hannay. I wish the noble Lord, Lord Hannay, were here to support it.

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My Lords, I, too, would like to say some words in support of the noble Lord, Lord Green. He says that we have to level with the public on this and I think that is absolutely right. Net migration into this country last year was 330,000 people. That is a very large number of people. I totally accept that perhaps only half of them came from the EU but this is certainly something that we have to address.

I am particularly interested, as was the noble Lord, Lord Wallace, in Amendment 27. I would like to know from my noble friend the Minister exactly what the mechanics are with regard to people who have come from outside as part of this refugee crisis into somewhere such as France, who then apply for a French passport, which then enables them to come to the United Kingdom under the free movement of labour. Can she fill us in about how this process takes place? This is obviously an extremely worrying aspect of these migration flows. At the moment we are in a position to say that we are not members of Schengen and we can probably do something not to have to accept any of these people. But of course, if they are given European passports, that is rather a different story. Can she give us an insight into her understanding of this process?

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My Lords, we do not support the amendments tabled by the noble Lord, Lord Green, mainly because, as the noble Lord, Lord Lamont, said, they are highly speculative, impossible to calculate, unpredictable, and not based on factual information that the Government have. Confusing the free movement of labour with migration and simply putting everyone in together will not lead to a rational debate.

The free movement of labour has been an important component of the EU. Certainly, people have come here to work. Where they have not come here to work, the Government have been addressing those issues in terms of the benefits system, as the Labour Party has also committed to do.

I have no doubt that in the course of this referendum campaign, the noble Lords, Lord Green and Lord Willoughby de Broke, will repeat what they have said. They will make this issue part of the referendum campaign and I will take great pleasure in making sure that other voices are heard in that debate which challenge some of the assumptions about migration. But for the purposes of the EU referendum campaign, it is wrong to confuse the free movement of labour with migration, and it certainly is not capable of being subject to a rational report.

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My Lords, Amendments 26 and 27, tabled by the noble Lord, Lord Green of Deddington, would create a statutory requirement for the Secretary of State to publish two very specific reports no later than 12 weeks before the date of the referendum, and to lay these reports before each House of Parliament.

The first of the reports, in Amendment 26, would focus on the effect that remaining in the European Union would have on net migration to the United Kingdom. The second would include information on access to citizenship for non-EU citizens within member states. As I have set out, and as the noble Lord, Lord Collins, just alluded to, the Government have come forward with amendments designed to provide information that is as useful as possible to the public, ensuring that they are able to make an informed choice. In addition, these reports should be appropriate for the Government rather than the kinds of reports that campaigning groups or other groups not related to the campaign might commonly issue in any event. We have said throughout that whatever the Government produce in the way of reports must be objective and grounded in fact.

The Government already publish information on migration issues in this country. The Home Office issues a quarterly release of immigration statistics from administrative sources. These statistics are complemented by the Migration Statistics Quarterly Report of the Office for National Statistics. Indeed, I understand that the next set of figures is due to be published this Thursday. In addition, the Office for National Statistics periodically publishes quantitative projections, looking at future figures and trends. That is it—they look at the likely future figures and trends. The Government should publish only reports that are grounded in fact and objective.

The wording of Amendment 26 is clearly speculative, because it asks the Government to publish,

“a report on the impact of continued membership of the European Union on the scale of net migration to the United Kingdom and its consequential effect on the future population of the United Kingdom”.

One can speculate on that, but one cannot provide statistical information grounded in fact that would guide the public in a non-directional way about how to vote in a referendum. I understand the noble Lord’s concern, but there are ways in which information is already provided, and it is better provided by others rather than by a statutory requirement on the Government.

On Amendment 27, my noble friend Lord Hamilton raised the issue of free movement. The amendment asks the Government to lay a report giving information,

“on the current length of time taken for people who are not European Union citizens to acquire citizenship in each member state”.

That in itself is not information to which the Government would have right of access, so I am not sure how a statutory requirement could be placed upon us. The amendment also asks us to report on,

“the extent of free movement within the European Union that accompanies such citizenships and accrues to family members of those citizens”.

Again, this is a matter of reporting on the law of other countries rather than conditions in this country. My noble friend Lord Hamilton raised a serious point about migration, and my right honourable friend the Prime Minister has made it clear that in his negotiations with our European colleagues—the other 27 states—one of his four requirements is that there should be reform of the impact of migration, particularly as it relates to welfare law.

I am afraid that my noble friend will have to wait a little while before we have a debate on exactly what the impact of the law on free movement is. But I am sure that the usual channels will arrange good opportunities for debate, because if they do not, the Government will not be able to set out our case—which we need to do. I feel confident that the usual channels will be there first, before I can even ask. I understand the concerns underlying the amendments. I hope that I have been able to explain why it would be inappropriate for them to go into the Bill—but also why their content will, indeed, be the focus of much debate, not just by Government and by Parliament but by all the campaigning groups. I therefore urge the noble Lord, Lord Green, to withdraw his amendment.

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My Lords, I thank the Minister for that response. The hour is late, so I shall be even briefer. There certainly are pull factors. There has been inadequate training in the past, and we have even cut our budgets for training. Secondly, I think that it was the noble Lord, Lord Collins, who spoke about EU migrants coming here to work—but 75% of them are in low-paid employment, so they are not a huge benefit to our economy. As for speculative projections, the Government produce population projections every two years. I assume that those are objective and grounded in fact, and could therefore be published, with the immigration assumptions underlying them.

As for Amendment 27 and the Government’s right of access to the citizenship laws of other countries, they have already answered Parliamentary Questions on that subject, so they clearly have some information. If they need any more, they have 27 embassies that could, I hope, help them. Apart from that, the noble Lord, Lord Lamont, has already said it all, so I shall say no more. I beg leave to withdraw the amendment.

Amendment 26 withdrawn.

Amendment 27 not moved.

Amendment 28 had been withdrawn from the Marshalled List.

Amendment 29 not moved.

Amendment 30

Moved by

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30: After Clause 5, insert the following new Clause—

“Guidance for charities on engagement with the referendum

The Electoral Commission, in collaboration with the Charity Commission for England and Wales, the Charity Commission for Northern Ireland and the Office of the Scottish Regulator, must issue joint guidance confirming the principles that apply to the engagement of charities with the referendum.”

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My Lords, I apologise for submitting this amendment at such a late stage in our discussions, but I believe that essential clarification for charities about their ability to be involved in the EU referendum campaign needs to be set out. This is a probing amendment.

The EU referendum is essentially a single constituency vote, and charities from across the UK should be able to engage fully and equally with that referendum if they wish. The problem, however, is that existing guidance from charity regulatory bodies differs across the UK. Charity law that regulates political campaigning should be the same UK-wide, and I am sure the Minister will agree that there should not be any cross-border disparity. What we need, therefore, is a single set of rules which will create a level playing field across the UK and clarification for charities that are registered with more than one of the charity regulators.

We believe that it makes sense to base this guidance on the tried and tested model of the charity guidance for the Scottish referendum. Let us remember that this has been proven in a fierce campaign north of the border, facilitating engagement while ensuring that charities are still subject to strict rules to act prudently and independently. Let me be clear: we are not setting out what the joint guidance should look like in this amendment. We accept and suggest that it should be carried out by the regulators themselves.

I request that the Minister gives us an assurance that she will seek the full co-operation of the various national charity commissions, so that common guidance can be issued for the whole of the UK in adequate time, prior to the start of that referendum campaign. I beg to move.

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My Lords, as far as I can see, the noble Baroness, Lady Morgan, has put her finger on a slight problem here. The Bill, as I understand it, allows some charities to become permitted participants and permissible donors. But at the same time, Charity Commission law basically says that charitable contributions should not be used for political purposes. I understand that Justice Hoffmann—now the noble and learned Lord, Lord Hoffmann—ruled in 1991 that:

“There is no doubt that campaigning, in the sense of seeking to influence public opinion on political matters, is not a charitable activity … it is not a proper object of the expenditure of charitable money”.

It seems that we have two conflicting judgments being made, one by the Bill and the other by charity law. It would be very helpful if my noble friend the Minister could cast a bit of light on this. Are we now saying that charities are to be allowed to involve themselves in campaigning, against the judgment of Justice Hoffmann? I am a little confused about where we stand on this.

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My Lords, I am glad to have the opportunity to welcome the amendment put forward by the noble Baroness, Lady Morgan, because it touches on an area that could cause considerable confusion and difficulties to charities. I am involved with a number of them and have known some of the problems that have arisen in the context of elections. It is quite clearly not a question of campaigning in a party-political sense but, equally, charities have a viewpoint on changes that can affect their fundamental raison d’être. They need to be able to put forward information for people to consider without being seen as campaigning. That dimension is complicated by the difference in the legislation that exists in different parts of these islands.

This is clearly a probing amendment and I very much hope that the Minister will at least be able to come back at Third Reading on this matter, if not tonight. Before I sit down, I thank her very much indeed for the way in which she and her colleagues have handled the Committee and Report stages of the Bill, and the outcomes we have had from it.

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My Lords, I am grateful to the noble Baroness, Lady Morgan, for pointing out that this is a probing amendment. She was able to give us enough advance notice of this late-stage amendment to enable us, I hope, to gather together the reassurances that she and others rightly seek. Under charity law, political activity by charities is subject to strict rules. Charities are also subject to requirements of electoral law. My noble friend Lord Hamilton asked for some clarification on what appears to be obfuscation. That is what I hope to do at this stage, because he is right: it is important that the role of charities is clear and respected.

In England and Wales under charity law, a charity may engage in non-party political activity to support its charitable purpose where the trustees consider it to be an effective use of the charity’s resources. One is thereby pursuing the reason why the charity has been set up—what its mission is—but one is not permitted to take part in party-political activity. A charity must never support a political party or candidate, and must always take care to preserve its independence when engaging in any political activity.

Charity law is devolved in Scotland and Northern Ireland, but the rules are similar. There is already guidance for charities on referendums: for example, the Charity Commission for England and Wales published guidance in July 2014 entitled Charities, Elections and Referendums. The Office of the Scottish Charity Regulator published guidance last year ahead of the referendum on Scottish independence. The Charity Commission for Northern Ireland has produced general guidance for charities in Northern Ireland on political activity.

So we have had Charity Commission guidance in England and Wales, and the Scottish Charity Regulator and Northern Ireland Charity Commission have issued guidance. To complete the picture, the Charity Commission for England and Wales has already said that in principle it will be happy to work with the Electoral Commission, the Office of the Scottish Charity Regulator and the Charity Commission for Northern Ireland on this subject. However, it does not believe that there is a need for much additional material given the existing guidance for charities across the UK, some of which I have just referred to.

The Charity Commission for England and Wales and the Electoral Commission are meeting tomorrow to discuss the joint promotion and communication of their guidance in order to promote charities’ awareness and understanding of the rules that apply. I also understand that the UK charity regulators are due to meet later this week, providing a timely opportunity to discuss this issue and consider the potential for collaboration on such guidance. While the provisions of the Bill apply across the UK, we must recognise that charity law is devolved in Scotland and Northern Ireland. We must therefore also respect the independence of the different regulators and their entitlement to reach their own views in particular cases.

Given my explanation about the collaboration that is not just happening normally but is happening now, we do not believe that the amendment is necessary, given the willingness of the Electoral Commission and UK charity regulators to work collaboratively on this specific subject.

I do not think that the noble Baroness intended her amendment to be self-operative, because clearly it will create an unnecessary burden for the regulators, which she does not intend. She asked me to say whether the regulators have demonstrated a willingness to collaborate on guidelines. I say yes, and they are coming up with the evidence for that, as well.

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Before the Minister sits down, I am intrigued by whether she is saying that this is a one-off issue of conversation to do with the referendum, or is the word “political” and how it is used by the Charity Commission for England and Wales going to be subject to some new regime?

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My Lords, perhaps I can unpack two parts of my response. With regard to the word “political”, clearly there are regulations and guidance that cover political activity across the whole range of what may happen in the United Kingdom, obviously including Scotland and Northern Ireland. So there is therefore a basis on which the regulators and charities work.

I then referred separately to the meetings that are taking place this week, which are looking specifically at the referendum and what it might entail. So we are applying the general to the particular to ensure that the way they collaborate is effective for the particular referendum. I hope that that is helpful.

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I thank the noble Baroness for that clarification. I think we have to remember that charities are anxious to be careful in terms of how they get involved politically—obviously, party-politically would be impossible, but they have a duty to further their charitable purposes. That means, for example, that if they were in receipt of EU funds and if they found the EU regulatory burden too much, they would need to be able to express that in some way. So I think that clarification is necessary. I thank the Minister not for pursuing that not just with the Electoral Commission but with the regulators.

I finish by thanking the noble Baroness for the way she has conducted the whole of this European Union Referendum Bill. It has been very interesting. It has been difficult, sparky and fractious at times, but we have got through it, and I thank the noble Baroness for the way she has conducted the whole debate. I am glad that we have managed to collaborate in the way that we have.

Amendment 30 withdrawn.