Lord Lawson HARDtalk

Now on BBC News, HARDtalk.

Welcome to HARDtalk, I'm Stephen Sackur.

The British referendum on whether to stay in or leave

the European Union may well be held this coming summer.

It will be a vote of momentous significance for Britain,

and for the EU.

The polls suggest it could be a close run thing.

My guest today is Lord Lawson, president of the Conservatives

for Britain group, which is campaigning for a British

exit, in defiance of Prime Minister David Cameron

and his Conservative Government's official strategy.

The Eurosceptics have an historic opportunity.

Can they seize it?

Lord Lawson, welcome to HARDtalk.

Thank you.

Was your decision to back a British exit from the European Union an easy

decision or a pretty tough decision for you to reach?

Well, obviously it was a tough decision in the sense that it's

a very complicated issue, and it needs to be thoroughly

thought through.

But once I had thoroughly thought it through, and I have been doing

so over a long period, I'd come to a very clear conclusion

that we would be better off outside the EU, for a number of reasons

which I can explain.

Well, we will go through some of the detail.

I'm interested in your mindset.

I think back to 1975 and that first British referendum

about whether to stay in what was then called the Common

Market.

You at that point were quite clear that you believed

it was in Britain's interest to be in.

Yes, at that time I did in the referendum vote in favour

of staying in.

I didn't campaign at that time, even though I was a member

of Parliament, because I did have some reservations.

But I felt that, on balance, it was better to stay in.

But, of course, the whole thing has changed very considerably

in two important ways.

First of all, even in the 1970s - or, certainly, the 1960s -

I was still concerned about a recrudescence

of German militarism.

We had already suffered through two world wars,

and I was alive and survived and remembered the Second World War.

And it was important that there should not be a third

world war started by Germany.

Well, that's still important... That's no longer a risk.

Germany suffered horribly as a result of the Second World War

and the defeat in the Second World War, which was a terrible defeat...

Well, Germany and German nationalism may not be

a risk, but...

Insofar as they have ambitions, they are economic ambitions,

they are not military ambitions.

And, anyhow, we have Nato, the Nato alliance which they are part of.

So that's not a reason.

And then the European Union has moved on and it's particularly moved

on with the creation of the euro as the currency for most

of the European Union countries, and the Eurozone, which makes up

that basket of countries which we are, quite rightly,

not a part of.

So we are already, in a sense, half out.

And this has greatly diminished what little influence we ever had.

There are a number of other grounds, but there is a strong case for us

being wholly out.

So if your proposition is the power of Brussels has run far too far,

much further than was ever, perhaps, dreamt possible in 1975,

if that's your fundamental case, why not wait until David Cameron has

delivered on what he has promised, which is a significant renegotiation

of the settlement between Britain and the European Union?

That is precisely why, he says, the British public should trust him,

because he can win back significant powers, put those before the people

as part of the referendum package?

He hasn't even asked for significant powers to come back.

I think the reason he hasn't asked for them is because he knows

he would not get that.

What he has asked for, and we all know what he has asked

for, it is public knowledge, it is nugatory, insignificant,

piffling, it makes absolutely no difference.

So the idea that somehow he is going to produce a reformed

European Union, it is not...

With respect, if I can interrupt for just a second,

you, with respect, had decided that this political game was lost

before a ball had been kicked, because you declared that whatever

Cameron achieved in this quote unquote renegotiation

would be entirely unacceptable.

No, I didn't say that.

I said that unless there is a fundamental reform

of the European Union, we should leave.

And then when he wrote his letter to President Tusk

of the European Council setting out his four demands,

none of them amounted to a row of beans.

To be clear, for people who don't know what those four demands are,

to run through perhaps the headline ones, he's fighting for -

and it looks as though he may well win - a curtailing of EU migrants

to Britain access to benefits for four years, that is what he says

is very important, both in work and out of work benefits,

EU citizens who come to the UK will not be able to claim those

benefits for four years.

It's been controversial, but it looks as though he may

well win that.

He may well also win a British opt-out from this idea that Europe

is moving toward an ever closer union.

Are those nugatory, as you say?

They are, and let me explain to you why.

He is absolutely right to have something in his demands,

as you put them, on immigration from the European Union,

but what we need is to have control of our own borders.

And we don't have control of our own borders,

and we won't have control of our own borders even if the people coming

from Europe have to wait four years before getting in-work benefits.

They don't come here for in-work benefits,

they come here to work, and to work because the conditions

are better and, indeed, where benefits come in,

much less important...

So you're saying that your red line would be the fundamental principle

of freedom of movement?

The fundamental principle of control of our own borders.

I'm in favour of a liberal immigration policy, I think

we benefit, but I think we should decide on who we allow

in and who we don't.

And, at the present time, we don't.

And we certainly don't, even if he gets his four-year

stoppage, delay, in in-work benefits.

And there are plenty of people who are not on my side of the debate

who are experts in the immigration field, and they have all said

that it would make no significant difference whatever to the level

of immigration from the European Union into this country.

As for the other thing you mentioned, if I may,

because you raised it...

The closer union and the opt out.

He is again right to say that ever closer union is a crucial element.

Ever closer union means the move towards a political union,

a full-blooded political union, a United States of Europe.

That is what the European Union is all about.

We don't share that.

And the problem with just getting a British opt-out

is that the European Union will continue to legislate

towards a full-blooded political union, and we will not be able

to stop that at all.

We might have an opt-out, but that is just a form of words.

We will still be liable to all the legislation they produce

to that end.

If he could have got the European Union as a whole

to resile from the objective of ever closer union,

that would have meant something.

But a UK opt-out means nothing at all.

I hear your analysis, it seems, though, that most British voters

don't share it.

A recent survey by YouGov of Tory voters in the UK found that more

than 60% of them are saying they will base their final vote,

in or out, only after they have seen what David Cameron has negotiated,

ie they are very interested to see what he can deliver,

unlike you, who have already decided you are not interested

because you don't think it is significant.

I have followed the thing more closely, perhaps,

than most British voters, and I have studied the letter

and the demands he made to President Tusk.

I don't know how many of the voters have.

I think most of the voters are very sensibly saying "We find this

we will make up our minds when he comes back."

That's fair enough.

But when he does come back, and when there is exposure

and analysis by you and all sorts of people about what he actually

comes back with, then they will make up their mind,

and I hope, nobody knows what the result of the referendum

will be, it is unpredictable, but I very much hope

they will conclude that we are better off out.

There are three reasons for that, very briefly.

One is that we do not share the objective of political union

of a United States of Europe, two is that it's economically

damaging to us, and three is that it is profoundly undemocratic.

And, as a country, we have an addiction to democracy.

Do you find it awkward that you, as a very senior Conservative voice

are, in effect, rubbishing the strategy of the leader

of your party and, indeed, the leader of the country?

No, the strategy of the Government is to have a referendum,

and then people can take one side or the other.

But more specifically Cameron's strategy is to say,

"Look, trust me, I can negotiate a better deal for Britain

and I will put that before the people."

And you are saying, "Nonsense, the basis for your negotiation

is entirely irrelevant to the issue."

So you're rubbishing his strategy.

I'm not rubbishing his strategy. He has gone fishing.

And he will catch whatever fish he can.

My guess, and we shall see, my guess is that all he will

catch is tiddlers.

And so the huge objections, the lack of self-government

that we have in this country, to an increasing extent,

the huge objections will not be overcome.

Just a quick point on the handling of the issue in political terms,

inside the government and the Conservative Party

in particular, Mr Cameron just in the last few days has written

a letter to ministers, saying to ministers,

"Look, I've decided for those of you who have long-term sincerely

held doubts about the European Union, I'm going to allow

policy, ie, to that extent, it's a free vote.

But you are not going to be able to express any opinion before

I finish this renegotiation and, even then, you are not to say

anything from the front bench in terms of your capacities

as a minister.

You've got to do it from the backbenches

as an individual."

What do you think of the way Cameron is setting the rules for the debate?

I think it's very sensible of him to say that Cabinet ministers

and other ministers can campaign on both sides.

There were a lot of people who said, no, he shouldn't allow them,

or he should say you can only do it if you resign from the Government.

He has quite rightly decided to follow the precedent

which was set in the previous referendum in 1975, and to allow

ministers to remain within the Government

but still campaign on both sides.

It is for the British people to decide.

It is not a question of speaking from the backbenches,

they will be out in the country campaigning.

It's a pretty chaotic picture, isn't it?

Ken Clarke, who is on the opposite side of the fence from you,

he is one of the most inveterate pro-Europeans

in the Conservative Party, he says that collective unity

is collapsing in the Cameron Government and that Cameron

was forced into this decision to allow a free vote.

Is that the way you see it?

No, I see him as sensibly basing himself on the precedent set

in the previous referendum in 1975.

Look, the Conservative Government and the Conservative Party is united

on pretty well everything.

There is a great division on whether we should be

in the European Union or better off outside it,

and I believe better off outside it.

And that, I think, reflects views in the country at large.

Irrespective of party political things, there are divisions.

So what you want is for...

Once the referendum is over and the result is declared,

the party will then completely come together again.

And you don't want...

Can I stop you there, I have one specific question

on that, and then we'll get to the detail of how you think

Britain can get out of the EU.

But on the specific question if there is a victory for the no

camp, David Cameron says "I'm going to stay Prime Minister

come what may."

Many in the party think that is extraordinarily unrealistic.

What do you think? That's his right.

He is entitled to stay if he wishes to.

Of course he's entitled to. Could he credibly?

I think he could, yes. I think he could.

But it's a matter which will have to be...

He will have to take a view of and, to some extent, the party will.

But I'm talking about the members of the House of Commons,

and I'm not an MP any more.

I was once.

He will have to decide, and they will have to decide,

and there's no reason on earth why he should have to resign...

Except that his credibility will be shot.

No, it won't. His credibility would not be shot.

He would have lost a particular battle.

That doesn't mean his credibility is gone.

The most important battle of his premiership, arguably

of a generation in British politics.

It's a very important matter indeed. It's a hugely important issue.

But as to whether he will resign or not if we vote...

If we the British people vote in favour of leaving

the European Union, then that is a matter for him,

and you should have him on this programme and interview him

and ask him about it.

We would love that opportunity, and we will pursue it.

Let's now get to the detail of what a no vote would mean.

It would mean, would it not, years, many years of uncertainty,

chaos and confusion as Britain tries to divorce itself,

disentangle itself from the EU?

It's a complicated process, but it wouldn't be chaos

and confusion, and it could be done perfectly well,

but it is a complicated process, you are absolutely right.

But what we have to do is to decide what is in the best interests

of the British people.

Is it remaining in the European Union, which is a political

project, it's not an economic project, it's a political project

whose objective is one we don't share, it is economically damaging.

It's not surprising that it's not economically beneficial,

because it's not an economic project.

But how long would it take?

The Lisbon Treaty has an article in it which suggests it could be

achieved within two years, but anybody who knows anything

about the EU thinks that's extraordinarily unlikely.

Greenland, when it tried to divorce itself from the EU even though

it was part of sovereign Denmark, that took three years to achieve,

and that's for a population of fewer than 100,000 people.

The treaty does say two years, and there's no reason why it

shouldn't be done in two years.

You seriously think it could be done in two years?

Absolutely.

And there is no reason there should be any confusion and chaos

during that period.

There seem to be all sorts of reasons, not least the trade

union between the UK and the EU, that would have to be completely

reconfigured for a Britain that was no longer a part

of the union.

50% or more of Britain's trade is done with the European Union.

That in itself, just one aspect aside from immigration rules,

migration rules, anything else, would be hugely

complex to disentangle.

First of all, it's not 50%, it's under 50%.

And it is only 15% of our total economy is concerned...

Oh, only? 15%.

The word "only" surprises me. Let me conclude, if I may.

It is about sales to the rest of the European Union.

And, of course, being outside the European Union doesn't stop

you selling to the European Union.

Trade, indeed, between the European Union and countries

outside it has been latterly growing faster than trade

within the European Union.

You seem to believe that Britain can disentangle itself,

can then develop bilateral trade relations with a host of countries,

really important countries, which it currently trades

with as a member state of the EU, with an EU trade deal

with said country.

You seem to think all of this can be done in two years,

a whole host of experts in trade policy think you are plain wrong.

We would continue initially exactly on the same basis

until the conclusion of the settlement.

So there would be no chaos, no confusion and, indeed,

the fortunate thing is that the common external tariff

of the European Union anyhow is very small.

But they will want a deal.

They will want a deal much more than we do,

because the British market is hugely important to them.

The British market is as important to them as the American market is.

But they are going to maintain their rules,

and if we are prepared to play by their rules, that's fine.

But we will have to if we want to continue our trading

relationships with them.

Look at Norway, for example. No, that's a complete confusion.

It is not a confusion that Norway, for example, is part

of the European Economic Area.

Although it's not a member and has no say in EU regulations

and policies, it has to abide by them.

And we would be just the same if we were in a position like

Norway's.

If you're in the European Economic Area, then you have to accept this

huge burden of EU regulation over the whole of your economy,

over companies that don't do any trade with European Union at all,

companies which may trade a lot of countries outside

the European Union.

If you're going to trade within the European Union,

then for trade within the European Union you would have

to accept European Union regulation.

The Americans, when they export to the European Union,

for their exports to the European Union, have to accept

European Union regulations.

But they do not have to accept it over the whole of their economy,

and nor would we.

Does it worry you that, internationally, I'm thinking

from the words of Barack Obama to the words of the Chinese

leadership, the message from the key players in the global economy,

global politics, is "We can't understand why Britain want to leave

a bloc which gives Britain power, and without being in the bloc,

Britain doesn't have that voice and power?"

It doesn't give Britain power at all.

Not only within Europe are we disadvantaged

because the Eurozone countries have an in-built qualified majority,

so we get outvoted every time.

But we are not allowed to do our own trade deals

because we're not allowed to be a member of the World Trade

Organisation.

Switzerland, for example, which is a member...

Do you think Barack Obama is wrong?

Obama says, it's hard for me to imagine it could be advantageous

for Britain to be excluded.

I'll come to Barack Obama, who is talking as a politician...

The most powerful man in the world who speaks for the United States.

Let me finish this. We would do much better outside.

Now, Barack Obama is an American, and he thinks that it is in

America's interest that we should be in the European Union

because he thinks that we are innately pro-American,

and there are many people in the European Union

who are not so pro-American.

So he thinks we're a pro-American force within the European Union,

therefore it would be good for America for us to be there.

But it's not good for Britain and not good for the British people.

Well, I tell you who debated this the other day and said something

very interesting about whether it was good for Britain,

William Hague, a former Conservative colleague of yours,

a former Foreign Secretary, a man who has been sceptical

about Europe for a long time, he came out and declared

that he would vote to remain in the EU, and his argument

was largely this.

He said, "If we leave, it could end up destroying

the United Kingdom and destroying the UK, gravely weakening

the European Union as well would not be a very clever day's work."

No, I heard him say that and I was astonished.

I don't believe for a moment that it would break up the United Kingdom.

It has been made plain by the Scottish Nationalists,

who are overwhelmingly in the majority in Scotland today

in terms of the political control, if the United Kingdom as a whole

voted to leave the EU against the wishes of the vote

in Scotland, then they would regard that as grounds for another vote

on independence for Scotland.

Well, first of all, they can't have another vote,

one way or the other, another referendum about independence

unless the British Parliament votes to have one.

You would have a constitutional crisis at the very least.

Secondly, of course the Scottish National party want

independence, so they will use every argument they can think of in order

to promote it.

But this is not a random argument, this is a very real point.

And the Scottish people can't have a veto over the English.

The Scottish people are very important, but they can't

have a veto...

So you're prepared to drag the Scots kicking and screaming out of the EU

against their wishes?

It's in their interest.

What if they, as the Scottish people, vote to stay in?

I think there will probably one day be a referendum in Scotland,

and I think the referendum will have the same result

as the last one, that Scottish people, being sensible,

will vote to remain...

May I just...

Can I just continue with the other part, because you have raised this,

the other thing that William Hague said, which was absolutely

staggering, because he said that it might well destroy

the European Union if we leave.

Now, if that were the case then the European Union countries

would be begging us to remain in.

They would be offering us whatever we wanted in order to remain in,

to prevent the European Union from being destroyed.

In fact, they are not prepared to make any significant changes

whatever, which I think demonstrates very clearly that William Hague has

got the wrong end of the stick.

We've talked a lot about what would happen if there is a no vote,

if your side is victorious.

If your side loses, if the British people vote to remain

inside the EU, will this put the argument about Britain's place

in Europe to bed forever?

Well, it depends on how close the result is, doesn't it?

You mean if it's close you will just carry on campaigning to get

Britain out?

If it is very close and it is a close result for in,

based on the myth that the European Union has changed,

and then the British people find they have been conned,

that in fact the European Union hasn't changed at all,

our relationship to all intents and purposes with the European Union

is the same, they will feel very bitter and there will be huge

pressure, nothing to do with me, there will be huge pressure

for having a second go.

Lord Lawson, thank you for being on HARDtalk.

Thank you so much.