HL Deb 28 November 1996 vol 576 cc376-8

3.19 p.m.

Lord Pearson of Rannoch asked Her Majesty's Government:

Whether they accept the findings of Better off Out?, recently published by the Institute of Economic Affairs, and, if they do not, whether they will commission a cost-benefit analysis of the United Kingdom's membership of the European Union.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish)

My Lords, we believe that the United Kingdom must remain a member of the European Union. The European Union has been the basis of western European economic and political organisation in the second half of this century. As the Government said in their White Paper A Partnership of Nations earlier this year, the United Kingdom's role as a leading member of the EU is vital to our national interests. We do not therefore intend to commission a cost-benefit analysis.

Lord Pearson of Rannoch

My Lords, I am grateful to my noble friend for that reply. Since this highly respectable publication finds that the United Kingdom might be better off outside the European Union altogether, would not the Government at least be wise to analyse the benefits that we may receive from our access to the single market and set them against the calamities we suffer from our imprisonment within the Treaty of Rome? Without such an analysis, are not the Government like a foolish businessman who negotiates at the IGC the future of his company with a deceitful predator, not knowing the moment when he should get up and leave the table?

Lord Mackay of Ardbrecknish

My Lords, at least my noble friend suggested that the Government might be like a foolish businessman and not a foolish anything else, which rather worried some of us on the Front Bench. As I have said on a number of occasions, this is a difficult Question to deal with in the short time available at Question Time. Perhaps I may recommend to my noble friend that he looks at page 21 of the document he has asked me about. He will there see, as regards the costs and benefits, this passage:

"Some of these, such as net budget contributions and the cost of tariffs saved are, at least in principle, quantifiable. Other costs and benefits are real and substantial but difficult to quantify. In this category are the intangible (but real) benefits of having a harmonised single market, as against the costs of the regulation which goes hand-in-hand with the harmonised market under the European system. These categories of cost and benefit do not admit of ready quantification".
Lord Bruce of Donington

My Lords, is the noble Lord aware that the book in question is a very well-documented piece of work and that it certainly merits a specific answer from the Government, even though they may not wish to circulate it among their own officials? Is the noble Lord further aware that the content of this excellent work is fully justified in its historical context by the work of the noble Lord, Lord Beloff, a distinguished historian, whose book Britain and the European Union should also be read in conjunction with the book mentioned in the Question?

Lord Mackay of Ardbrecknish

My Lords, it is indeed an interesting book. As I have quoted a small part of it, I believe that your Lordships can see that it illustrates the difficulty of coming to a clear, bottom-line answer because set against the economic points I have made are points about political stability in Europe. Very few in your Lordships' House would find it easy to quantify the value of the political stability which the European Union has brought to western Europe.

Lord Campbell of Alloway: My Lords

Lord Taverne

My Lords, does the noble Lord agree that it is evident from this Question and many similar ones asked in this House and in another place that the real drive against progress towards monetary union comes from those who want us to leave the European Union altogether? Can the Minister convey to the Prime Minister that it is futile to make continual concessions to those who oppose closer co-operation and union because every single concession will be gobbled up and more will be asked for?

Lord Mackay of Ardbrecknish

My Lords, when the Government decide on issues such as whether to join a single currency, we shall not do so on the basis of what some of the advocates of joining or not joining may have as their underlying motivation. We shall take steps in what we believe to be the correct interests of Britain. The fact that the single market has worked and that we have had a great many advantages from the European Union without having a single currency is one of the arguments put forward by those who say, "You do not have to have a single currency in order to have a single market".

Lord Campbell of Alloway

My Lords, I apologise to the House because earlier I was under the impression that it was the turn of our side to ask the next question. Is my noble friend aware that the real and essential benefit of the European Union cannot be measured in terms of cost but is the freeing of the soil of Europe from the miseries of another war?

Lord Mackay of Ardbrecknish

My Lords, I believe that my noble friend is in a far better position to make that point than I could ever be because of the experiences he had on the European mainland half a century ago. I believe that what he says is very valid and should be taken to heart by your Lordships.

Lord Jenkins of Putney

My Lords, is the noble Lord aware

Lord Eatwell: My Lords

Lord Jenkins of Putney

My Lords, let the Back Bench have a go!

Lord Eatwell

My Lords, while considering the issue of costs, does the noble Lord agree that the continuous noisy dissension in Britain's party of government over Europe has, by creating uncertainty, placed a considerable financial burden on British industry in the form of the 1.5 percentage point premium that British industry must pay for its money over and above the borrowing rate on the mainland?

Lord Mackay of Ardbrecknish

My Lords, I do not believe that the two things are in any way connected. As far as the Government are concerned, we believe that we should take the decision about economic and monetary union and the next step towards a single currency when the time comes to make that decision, and we shall take into account the interests of the British people. If the underlying point of the noble Lord's question is that his party would not do that, then I shall certainly welcome a clear definition of it.

Lord Jenkins of Putney: My Lords

Noble Lords: Next question!

The Lord Privy Seal (Viscount Cranborne)

My Lords, with the greatest respect to the noble Lord, Lord Jenkins, I wonder whether your Lordships feel that we should give a fair crack of the whip to the next Question? I am sure that we shall be returning to the present one.