European Community (Intergovernmental Conferences)

Part of the debate – in the House of Commons at 8:06 pm on 20 November 1991.

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Photo of Ian Taylor Ian Taylor , Esher 8:06, 20 November 1991

The right hon. Member for Chesterfield (Mr. Benn) made an extremely powerful speech. It throws up an interesting possibility which we shall not have the chance to explore. If my right hon. Friend the Member for Finchley (Mrs. Thatcher) was still in her former position and the right hon. Gentleman had not been passed over for leadership of the Labour party, perhaps we would now face the possibility of a Finchley-Chesterfield coalition.

I differ from the right hon. Member for Chesterfield on the powers of the House. Many of the powers which he attributes to the House have been taken away from us, not by our choice but as a result of changes in the world. Many decisions about monetary policy over which the House would like to have control have not been made by the House in the years that I have been here—which is few compared with the 41 years of the right hon. Member for Chesterfield.

Early in the right hon. Gentleman's career in the House, many of the powers to which he assigns great democratic importance were taken away by the process of the market and the relationship between nation states. Money now moves through the exchanges 24 hours a day. The Chancellor of the Exchequer cannot suddenly decide that British monetary policy will be such-and-such without paying any attention to what is happening elsewhere in the world. The Chancellor does not ask the House what we should do about monetary policy: he tells us what he is doing. He tells us that he might not like to take a certain step but that interest rates in America are changing, the yen is changing on the world market, the deutschmark is doing this and the French franc is doing that.

It is no good deluding ourselves that we can hang on to something that we do not have. It is much more important to seek ways of overcoming the deficiencies in our control over our national affairs. That has been best achieved by the European Community, despite its faults and the justifiable criticisms that I and many others make. It has ensured the peace of a turbulent continent and the prosperity which acted as the catalyst for the changes in eastern Europe. It was not just the defensive alliance that made that change, important though it was. It was the catalyst provided by the proof that nation states could come together and co-operate not only politically but economically.

The Community enshrines 12 nations—340 million people. It was proof that a liberal, democratic, free-market system was infinitely superior morally and in terms of performance to that which existed in the east.

The origins of the Community were political. They were an attempt to avoid what happened after the first world war as a result of the treaty of Versailles, when the French and others tried to impose stiff conditions on Germany. In a generous gesture, the French understood that they could not do so again after the second world war. They decided that they had to try to build structures which would enable Germany to recover without its recovery impinging on French security. If they were to achieve that, it could best be done through common institutions. The House made a classic mistake in the mid-1950s, because we thought that they could not achieve it. We thought that the free market was sufficient as a way for nation states to join together. We were wrong, and the price of our error was that the early character and developments in the Community were not under our control. When we eventually joined in the 1970s, we had not formulated the rules.

Quite unashamedly, the reason that I hope our Prime Minister gets the deal at Maastricht on the conditions that he has laid down, not under any conditions—that is what only the Leader of the Opposition would do—is that I do not want us to make another great error. We have a remarkable opportunity, and that is often not realised in this country. The German Government are prepared to do a deal on the deutschmark, on German foreign policy and on many other aspects of German power because they do not want Europe to return to a battle over spheres of influence. Germany does not want the changes in eastern Europe to be turned into a battleground for western European countries.

The German Government are prepared to give up something and, along with the other 10 countries, they are even prepared to say to the British, "We want you to help us formulate the rules of this club on economic and monetary union, but you do not have to commit yourselves to joining it." That is a remarkable deal. Whether we debate some of the finer points about what might happen pales into insignificance. We have the right to join later; we do not have to join now. That is a clear option and I am sure that it will be achieved. When the details come forth from Maastricht, I am sure that there will be no binding conditions on this country.

Many hon. Members who do not believe, for example, that we need fiscal harmonisation as well as monetary union could argue over the details, but the reality is that within the context of what we are achieving it is a great benefit to this country and we would be sorely wrong if we did not seize it, if we can get in the negotiations what we want.

The same is true of foreign policy. We are not being asked to give up all control over foreign policy, any more than the French would wish to give up control over their foreign policy. We are being asked to try to find common ground with our Community partners, and, if we do so, not to be held up by any one member over detail. That is a solution, albeit not yet perfect. Incidentally, it is important to me that it is not under the full weight of the treaty of Rome, but is on an intergovernmental, parallel basis, as part of a wider treaty of union. Therefore, I support what the Government are doing.

This is a terrific opportunity for us to ensure that our voice, on world affairs and on the great uncertainties that exist close to western European lands, is heard on a basis of coming together to make agreements between countries. If that can be made effective, we shall all feel that we are not only more influential but are likely to be safer.

We should view these big opportunities positively and not merely as negative encroachments on powers that we no longer have in reality. The British Government have a voice in world affairs, but clearly that is because their voice is used to influence countries which are in union with us so that when we go to the United Nations or try to seek solutions to crises we can do so as an effective, combined force. The objectives of the British Government can be better secured by encouraging other people to back us within the Community. That is the definition of a common foreign policy. It does not mean that the Foreign Secretary is tied and must silently do what someone else wants. We should be more proud of our strength of argument than that.

There is a possibility of achieving a Community which can sort out problems that, as many people in this country recognise, are no longer confined by national borders. we have achieved a remarkable development through the objectives that we set out in the Single European Act—an internal market of 340 million people, growing to 380 million with the inclusion of the EFTA countries. People can move between countries. Opportunities are opening up for companies and for people of all ages.

It is inevitable that measures flow from that which will affect the entire Community. After all, it is because of a British initiative that that has been achieved any way. The Government should be trying to ensure that decisions are taken on an enabling rather than an interventionist basis. Of course, we should oppose the imposition of controls which prevent proper competition. That would deny the basis of the success, to date, of a liberal, free-market economy. However, we should not deny the possibility of a Community level of decision-making which, by setting a framework and ensuring by subsidiarity that it is carried out by national Governments, can make Europe richer, better, environmentally safer and a better place in which to work, for all our people.

That is another goal. It is the goal that is opening up at Maastricht. We should seize that opportunity, and we are close to achieving terms of which the House would approve.