Orders of the Day — European Communities (Amendment) Bill

– in the House of Commons at 3:35 pm on 20th May 1992.

Alert me about debates like this

Order for Second Reading read.

[Relevant documents:

Treaty of Rome, as amended by the Single European Act (Cm 455)

Treaty on European Union (Cm 1934)

Fifteenth Report from the Select Committee on European Legislation (House of Commons Paper No. 24-xv of Session 1991–92)

Second Report from the Foreign Affairs Committee (House of Commons Paper No. 223 of Session 1991–92) on Europe after Maastricht and Observations by the Government on the Report (Cm 1965)

Third Report from the Health Committee (House of Commons Paper No. 180 of Session 1991–92) on the European Community and Health Policy

Minutes of Evidence taken before the Home Affairs Committee on 5th, 12th and 26th February 1992 (House of Commons Paper No. 215 of Session 1991–92 on Migration Control at the External Borders of the European Community

Minutes of Evidence taken before the Treasury and Civil Service Committee on 19th February 1992 (House of Commons Paper No. 285 of Session 1991–92) on Economic and Monetary Union

Fourth Special Report from the Treasury and Civil Service Committee (House of Commons Paper No. 334 of Session 1991–92) on European Community Finances

The White Paper on Developments in the European Community, July-December 1991 (Cm 1857)

The White Paper on Developments in the European Community, January-June 1991 (Cm 1657).]

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Before I call the Prime Minister, I should inform the House that I have selected the amendment standing in the name of the Leader of the Opposition. I have also determined that today I shall not invoke the Standing Order on the 10-minute rule for speeches, but in response to my generosity in that respect, I hope that individual right hon. and hon. Members will exercise some self-restraint. There are a large number of Members who want to speak. We want all their voices to be heard in the debate.

Photo of Mr John Major Mr John Major , Huntingdon 3:41 pm, 20th May 1992

I beg to move. That the Bill be now read a Second time.

When my right hon. Friends—

Photo of John McAllion John McAllion , Dundee East

On a point of order, Madam Speaker.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

I am sure that the hon. Gentleman does not want to disrupt our proceedings at this stage.

Photo of John McAllion John McAllion , Dundee East

The Government are denying Scotland its democratic right to—

Hon. Members:

Name him.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. I do not wish to name anyone. I understand the passionate feelings that run high here, but I am confident that the hon. Gentleman, who I am sure represents his Scottish constituency very proudly, is not seeking to disrupt our proceedings today, which—

Photo of George Galloway George Galloway , Glasgow Hillhead

They are misgoverning our country.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. This is a very serious matter. Let us deal with it in a serious way.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. I ask the hon. Gentleman to reconsider what he is asking me to do.

Photo of John McAllion John McAllion , Dundee East

On a point of order, Madam Speaker. I spy strangers, and the strangers are those who are denying Scotland its rights in this very important debate.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

In that case, I must put the motion.

Notice being taken that strangers were present, MADAM SPEAKER, pursuant to Standing Order No. 143 (Withdrawal of strangers from House), put forthwith the Question, That strangers do withdraw:—

The House divided: Ayes 13, Noes 284.

Division No. 17][3.43 pm
Adams, Mrs IreneMcKelvey, William
Canavan, DennisSalmond, Alex
Chisholm, MalcolmWigley, Dafydd
Connarty, MichaelWray, Jimmy
Dafis, Cynog
Ewing, Mrs MargaretTellers for the Ayes:
Galloway, GeorgeMr. Mike Watson and
Jones, leuan (Ynys Mön)Mr. John McAllion.
Llwyd, Elfyn
Adley, RobertBrown, M. (Brigg & Cl'thorpes)
Ainsworth, Peter (East Surrey)Brown, N. (N'c'tle upon Tyne E)
Alexander, RichardBruce, Ian (S Dorset)
Alison, Rt Hon Michael (Selby)Bruce, Malcolm (Gordon)
Allen, GrahamBurns, Simon
Ancram, MichaelButcher, John
Anderson, Donald (Swansea E)Butler, Peter
Arbuthnot, JamesButterfill, John
Arnold, Jacques (Gravesham)Campbell, Menzies (Fife NE)
Arnold, Sir Thomas (Hazel Grv)Carlisle, John (Luton North)
Ashby, DavidCarrington, Matthew
Ashdown, Rt Hon PaddyCarttiss, Michael
Ashton, JoeCash, William
Aspinwall, JackChaplin, Mrs Judith
Baker, Rt Hon K. (Mole Valley)Chapman, Sydney
Banks, Matthew (Southport)Clapham, Michael
Barnes, HarryClark, Dr David (South Shields)
Bates, MichaelClark, Dr Michael (Rochford)
Batiste, SpencerClifton-Brown, Geoffrey
Battle, JohnClwyd, Mrs Ann
Beckett, MargaretCoe, Sebastian
Beith, A. J.Colvin, Michael
Bellingham, HenryCongdon, David
Bennett, Andrew F.Conway, Derek
Biffen, Rt Hon JohnCoombs, Anthony (Wyre For'st)
Blair, TonyCoombs, Simon (Swindon)
Booth, HartleyCorbett, Robin
Bottomley, Peter (Eltham)Cran, James
Bowden, AndrewCryer, Bob
Bowis, JohnCunningham, Dr John (C'p'l'nd)
Boyes, RolandCurrie, Mrs Edwina (S D'by'ire)
Boyson, Rt Hon Sir RhodesDalyell, Tam
Brazier, JulianDavies, Quentin (Stamford)
Bright, GrahamDavis, David (Boothferry)
Brooke, Rt Hon PeterDay, Stephen
Devlin, TimLait, Ms Jacqui
Dicks, TerryLang, Rt Hon Ian
Dixon, DonLawrence, Ivan
Dorrell, StephenLennox-Boyd, Hon Mark
Douglas-Hamilton, Lord JamesLester, Jim (Broxtowe)
Dover, DenLidington, David
Duncan, AlanLightbown, David
Duncan-Smith, IainLilley, Rt Hon Peter
Dunn, BobLivingstone, Ken
Dunnachie, JimmyLord, Michael
Durant, Sir AnthonyLynne, Ms Liz
Dykes, HughMcAvoy, Thomas
Elletson, HaroldMacDonald, Calum
Enright, DerekMacKay, Andrew
Evans, David (Welwyn Hatfield)McNair-Wilson, Sir Patrick
Evans, Jonathan (Brecon)Maitland, Lady Olga
Evans, Nigel (Ribble Valley)Major, Rt Hon John
Evans, Roger (Monmouth)Mandelson, Peter
Evennett, DavidMans, Keith
Fairbairn, Sir NicholasMarland, Paul
Fenner, Dame PeggyMarlow, Tony
Foster, Derek (B'p Auckland)Marshall, John (Hendon S)
Foster, Donald (Bath)Martin, David (Portsmouth S)
Foulkes, GeorgeMartin, Michael J. (Springburn)
Fox, Dr Liam (Woodspring)Maxton, John
Freeman, RogerMerchant, Piers
Gale, RogerMichael, Alun
Gallie, PhilipMilligan, Stephen
Gardiner, Sir GeorgeMills, Iain
Garel-Jones, Rt Hon TristanMitchell, Andrew (Gedling)
Garnier, EdwardMoate, Roger
Gill, ChristopherMolyneaux, Rt Hon James
Golding, Mrs LlinMonro, Sir Hector
Greenway, Harry (Ealing N)Montgomery, Sir Fergus
Greenway, John (Ftyedale)Morley, Elliot
Hague, WilliamMoss, Malcolm
Hamilton, Rt Hon ArchieMurphy, Paul
Hargreaves, AndrewNeubert, Sir Michael
Harman, Ms HarrietNewton, Rt Hon Tony
Harris, DavidNicholls, Patrick
Hawkins, NicholasNicholson, David (Taunton)
Hawksley, WarrenNicholson, Emma (Devon West)
Heathcoat-Amory, DavidO'Hara, Edward
Henderson, DougO'Neill, Martin
Hendry, CharlesOnslow, Rt Hon Cranley
Heseltine, Rt Hon MichaelOrme, Rt Hon Stanley
Higgins, Rt Hon Terence L.Ottaway, Richard
Hill, James (Southampton Test)Paice, James
Hogg, Norman (Cumbernauld)Patnick, Irvine
Hoon, GeoffPawsey, James
Hordern, Sir PeterPeacock, Mrs Elizabeth
Howarth, Alan (Strat'rd-on-A)Pike, Peter L.
Howell, Rt Hon David (G'dford)Porter, David (Waveney)
Howell, Ralph (North Norfolk)Portillo, Rt Hon Michael
Howells, Dr. Kim (Pontypridd)Powell, William (Corby)
Hughes, Robert (Aberdeen N)Randall, Stuart
Hurd, Rt Hon DouglasRathbone, Tim
Illsley, EricRaynsford, Nick
Ingram, AdamReid, Dr John
Jack, MichaelRenton, Rt Hon Tim
Jackson, Ms Glenda (H'stead)Richards, Rod
Jenkin, BernardRiddick, Graham
Jessel, TobyRobathan, Andrew
Johnson Smith, Sir GeoffreyRobertson, George (Hamilton)
Johnston, Sir RussellRobertson, Raymond (Ab'd'n S)
Jones, Barry (Alyn and D'side)Robinson, Mark (Somerton)
Jones, Nigel (Cheltenham)Roe, Mrs Marion (Broxbourne)
Jones, Robert B. (W H'f'rdshire)Rogers, Allan
Jopling, Rt Hon MichaelRooker, Jeff
Kaufman, Rt Hon GeraldRowe, Andrew (Mid Kent)
Kellett-Bowman, Dame ElaineRowlands, Ted
Kennedy, Charles (Ross, C & S)Rumbold, Rt Hon Dame Angela
Kilfedder, JamesRyder, Rt Hon Richard
Kinnock, Rt Hon Neil (Islwyn)Sedgemore, Brian
Kirkhope, TimothyShaw, David (Dover)
Kirkwood, ArchyShaw, Sir Giles (Pudsey)
Knapman, RogerSheldon, Rt Hon Robert
Knight, Mrs Angela (Erewash)Shepherd, Colin (Hereford)
Knight, Greg (Derby N)Shepherd, Richard (Aldridge)
Kynoch George (Kincardine)Skeet Sir Trevor
Skinner, DennisTipping, Paddy
Smith, Sir Dudley (Warwick)Townend, John (Bridlington)
Smith, Rt Hon John (M'kl'ds E)Tracey, Richard
Soames, NicholasTrend, Michael
Spearing, NigelTrimble, David
Speed, KeithTwinn, Dr Ian
Spencer, Sir DerekViggers, Peter
Spicer, Sir James (W Dorset)Walker, Bill (N Tayside)
Spicer, Michael (S Worcs)Waller, Gary
Spink, Dr RobertWard, John
Spring, RichardWareing, Robert N
Sproat, IainWells, Bowen
Stanley, Rt Hon Sir JohnWheeler, Sir John
Steel, Rt Hon Sir DavidWhitney, Ray
Steen, AnthonyWhittingdale, John
Stott, RogerWicks, Malcolm
Streeter, GaryWiddecombe, Ann
Sumberg, DavidWilkinson, John
Sweeney, WalterWilletts, David
Sykes, JohnWilliams, Alan W (Carmarthen)
Tapsell, Sir PeterWilshire, David
Taylor, Ian (Esher)Winterton, Mrs Ann (Congleton)
Taylor, Rt Hon D. (Strangford)Winterton, Nicholas (Macc'f'ld)
Taylor, Sir Teddy (Southend, E)Wood, Timothy
Temple-Morris, PeterWright, Tony
Thomason, Roy
Thompson, Sir Donald (C'er V)Tellers for the Noes:
Thompson, Patrick (Norwich N)Mr. Tim Boswell and
Thornton, MalcolmMr. Robert G. Hughes.

Question accordingly negatived.

Photo of Mr Bill Walker Mr Bill Walker , North Tayside

On a point of order, Madam Speaker.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Is a further point of order necessary at this stage?

Photo of Mr Bill Walker Mr Bill Walker , North Tayside

I am sure that you would always wish to defend the rights of Members, Madam Speaker, but you will be aware that the recent disruption was not spontaneous: it was in the Scottish press yesterday, and we knew that it would happen. It is an abuse of the House.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

In response to that point of order, I made the point earlier to the House—I do not come in to this Chamber entirely unprepared.

Photo of Mr John Major Mr John Major , Huntingdon 3:55 pm, 20th May 1992

I beg to move, That the Bill be now read a second time.

When my right hon. Friends and I went to Maastricht we went with a clear mandate from this House. The agreement that we brought back honoured that mandate in every respect. It was approved by a large majority in the House in December, and by the electorate last month. I believe that the Maastricht agreement protects and promotes our national interest. The Bill before us carries that agreement into law.

Clause 1 carries into United Kingdom law amendments to the treaty of Rome and other Community treaties. It reflects the European Parliamentary Elections Act 1978, which provides that there can be no increase in the powers of the European Parliament without the express approval of this House.

Clause 2 implements the agreement we secured at Maastricht to ensure that it is entirely a matter for this Parliament to decide whether, and if so when, to join a European single currency. We are under no obligation to do so.

Clause 2 provides that a separate Act of Parliament would be required before the United Kingdom could notify its partners in the Community of its intention to move to the third stage of economic and monetary union. That provision for primary legislation is not a legal requirement which flows from the treaty. It does, however, reflect the Government's belief that it will be for Parliament to determine the issue, and to do so in the way in which Parliament most clearly demonstrates its sovereignty.

I do not believe that it is right to predetermine a decision that should only properly be taken by Parliament, in the light of the circumstances then prevailing across Europe. This decision is too important to be an act of faith—it must also be an act of judgment, and that judgment cannot sensibly yet be made.

Before I turn to the substance of what is in the Bill, let me stress for the convenience of the House what is not there. The Bill contains no provision for those aspects of the Maastricht treaty which cover foreign and security policy, and justice and home affairs issues. If it did, we would have failed at Maastricht to meet the commitments that we gave this House last November. The virtue of those provisions in the Maastricht treaty is that they are outside the treaty of Rome, outside the competence of the Commission, and wholly for agreement between Governments, on a case by case basis. They need to be put to the House, but quite specifically have no direct effect in United Kingdom law.

The content of the Maastricht treaty is well known to the House. The draft of the treaty was debated before Maastricht, and the treaty itself was debated afterwards— a total so far of some 30 hours of debate.

What we kept out of the treaty at Maastricht is as important, in the event, as what went into it. There is no social chapter—[HON. MEMBERS: "Shame."]—and I shall come to that later.

Photo of Mr John Major Mr John Major , Huntingdon

Not at this stage.

There is no social chapter, there is no diminution in the role of NATO, there is no power for the European Parliament to approve decisions rejected by the Council of Ministers, no weakening of our power of national decision-taking in foreign policy, no word "federal" and no commitment to a federal—by which I mean a centralising—Europe.

Photo of Mr Ieuan Wyn Jones Mr Ieuan Wyn Jones , Ynys Môn

Will the right hon. Gentleman give way?

Photo of Mr John Major Mr John Major , Huntingdon

Not at this moment—later, perhaps.

Many in this House and throughout the country have expressed anxiety that decision making in the Community is becoming too centralised. In fact, many of the issues which are most problematic for us—I shall talk about some of them later—arise from the application of the original treaty of Rome, not the Maastricht treaty. The Maastricht treaty marks the point at which, for the first time, we have begun to reverse that centralising trend. We have moved decision taking back towards the member states in areas where Community law need not and should not apply.

Let me inform those who are unaware of that fact that we have done so in a number of ways. We have secured a legally binding text on subsidiarity. That text provides that any action by the Community shall not go beyond what is necessary to achieve the objectives of the treaty. More specifically, it provides that, in areas that do not fall within the exclusive competence of the Community—such as environment, health, education, social policy—the Community shall take action only if and in so far as the objectives of the proposed action cannot be achieved by the member states.

Photo of Mr John Major Mr John Major , Huntingdon

A little later, perhaps.

We need to ensure that the Commission gives full effect to that requirement. I believe that it is obliged to give full effect to that requirement. Were it not to meet that requirement, we now have the power to take the issue to the European Court of Justice for adjudication. That is a right that we argued for at Maastricht and obtained.

In the published work programme for 1992, the President of the Commission said: If a success is to be made of Maastricht and the Single Market, the Commission will have to comply fully with the principle of subsidiarity. Indeed its future existence depends on this. The Commission … will have to ensure that no attempt is made to regulate matters that are best dealt with at national level, and to avoid a surfeit of legislation. Those are not my words, but those of the President of the Commission, but upon that matter I agree with him. Subsidiarity is vital. If that failed, we would not be the only member state that would insist on reviewing the policy to ensure its effective implementation.

Photo of Alun Michael Alun Michael , Cardiff South and Penarth

As the Prime Minister is so keen to stress the importance of subsidiarity as between Europe and the United Kingdom, does he agree that the same principle should be applied by him and his Government within the United Kingdom?

Photo of Mr John Major Mr John Major , Huntingdon

We are a single United Kingdom, and we are going to remain a single United Kingdom, for it is in the interests of every part of it that we should do so.

Photo of Mr Ieuan Wyn Jones Mr Ieuan Wyn Jones , Ynys Môn

Will the Prime Minister accept that that is his definition of subsidiarity and not the definition of the Spanish or German Governments? Does he not understand that in Spain, for example, the countries of Catalonia and the Basque will be able to benefit from the principle of subsidiarity? Why not Wales and Scotland?

Photo of Mr John Major Mr John Major , Huntingdon

The hon. Gentleman is well aware of the traditions of this Parliament and the methods by which this whole United Kingdom is governed. I believe that they represent the right way for every single part of the United Kingdom, and the Government have no plans to change them.

Photo of Mr John Major Mr John Major , Huntingdon

The hon. Gentleman has had plenty of opportunity in recent weeks to make his case, and, by and large, the electorate rejected it.

Nor does subsidiarity mean that relatively minor issues are returned to the member states in exchange for a growth of power at the centre. I know that that is what many people fear, not least some hon. Members. They fear that the institutions of the Community will increase their powers step by step so that, in the end, we create what we understand by a federal Europe: a strong, central Government in Brussels with some powers devolved to the individual nation state.

I understand those fears, but that is not the route foreshadowed by the Maastricht treaty; nor is it a route down which this country will go. The question is not whether the risk of centralism exists: the question is whether we have the confidence to exert our influence to build the Community we want to see. We have, we can, and we are building such a Community. We can win those arguments. We are doing so. I must say to those hon. Members who dissent that I frankly do not understand why so many people must always assume that we will lose policy arguments in Europe when we so often win them, as we did at Maastricht.

Let me explain why I am confident of that. For the first time in a single treaty, agreements between Governments are given equal standing with action under Community law. In foreign and security policy, and in justice and interior matters, the member states will work together when it is in their common interest to do so. What exactly does that mean? It means that, where such co-operation is helpful to this country, we shall co-operate with our partners in Europe. It also means that we cannot be forced into policies we do not approve of. We keep our ability to act on our own where we need to do so. We shall co-operate within a framework of international law but outside the framework of Community law.

For example, any dispute would go to the International Court of Justice, not the European Court of Justice. I believe that that marks a vital and important change in direction for the Community. It strengthens the unity of the member states but reinforces the case for tackling our common problems by the most effective means available to us. That may on occasion be the treaty of Rome. It may equally well be intergovernmental co-operation. The Maastricht treaty provides for both, and it allows for neither—where the member states can act better on their own. That opens fresh opportunities for the future development of the Community.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness, Nairn and Lochaber

If we proceed in foreign security matters on the basis that we shall co-operate if it is convenient for us, that applies equally to all other countries in the Community. How can we achieve a coherent policy in that way?

Photo of Mr John Major Mr John Major , Huntingdon

The hon. Gentleman should ask that question in the reverse way: would he prefer our foreign policy to be determined by the majority vote of other countries? That is not a proposition to which I am prepared to agree on behalf of this country. I am prepared to agree to the pooling of foreign policy where it is in the interests of this country and Europe, and where we agree that it will be to the communal benefit to do so. But thus far and no further.

Photo of Mr Tony Benn Mr Tony Benn , Chesterfield

Will the Prime Minister touch on one aspect of the treaty with which he has not dealt: the transfer of power from the legislature to the executive? The Prime Minister, using the Crown prerogative of treaty making through a Cabinet Committee, can agree to laws in Brussels at the Council of Ministers, which take precedence over laws passed by the House. For the first time since 1649, the prerogative controls the House, instead of the House controlling the prerogative.

Photo of Mr John Major Mr John Major , Huntingdon

As the right hon. Gentleman knows, he is referring not to the Maastricht treaty which we are debating, but to a principle that goes right back to the 1972 Act. In practice, greater control over the European executive was ceded at Maastricht as a result of the treaty—predominantly, in this case, to the European Parliament—but no authorities were taken from the Council of Ministers, and Ministers remain responsible to this House.

The strength of what we have achieved is not just that the choices that I mentioned a moment ago are in the treaty but, equally important, that they reflect the growing wish of the member states. The old tendency among some of our partners to think that action by the Community was always the answer is diminishing. Many countries joined the Community to strengthen their own national democracy. Now that their own democracy is strong and more firmly rooted, it is becoming much more possible in the Community to have rational discussion about what should be done at Community level and what should be done at national level. That is a healthy development for the future of the whole European Community.

Within the framework of the Community treaties, we have secured amendments to the treaty of Rome to reflect important United Kingdom objectives. We have strengthened the rule of law in the Community by stricter rules on the implementation of agreed provisions. In future, if directives are agreed across the Community, they must be implemented across the Community, or penalties will inevitably follow. That provision directly responds to the concern felt by many that, while our domestic law compels the United Kingdom to implement Community law speedily, others sometimes do not act with the same dispatch.

Photo of Mr John Major Mr John Major , Huntingdon

If the hon. Gentleman will forgive me, I should like to make more progress.

We have also secured better financial accountability. At Britain's insistence, the Commission will now have to provide an assurance that sufficient resources are available for any proposed Community action. It can no longer commit itself to expenditure for which resources are not available, and we keep a complete lock on the overall resources available to the Community. There can be no increase in those resources unless we agree with our European partners that there should be. There can be no change in our abatement without our agreement, and I have no intention of agreeing to any adverse change in our abatement in the discussions that lie ahead.

The Court of Auditors, which now becomes a Community institution, will present the Council and the European Parliament with a statement of assurance on the reliability of the accounts and the legality of the underlying transactions. The treaty contains new provisions to counter fraud.

In the agreements reached, we have also extended democratic control over the Commission. The European Parliament will in future have authority to call the Commission to account for its expenditure and for the operation of financial control systems. Individuals will be able to petition the Parliament about abuses by any of the Community's institutions. The Parliament will appoint an ombudsman to investigate maladministration by any of the Community's institutions, including the Commission.

The treaty also sets exactly the framework that we want for economic and monetary union. It provides a commitment to open and competitive markets, a commitment that this country has sought for years and that many felt might never be available from our Community partners. It sets tough economic tests that any member state wanting to move to stage 3 would have to pass. The framework contains a commitment to price stability. Above all, it contains an absolute right for the United Kingdom—its Parliament—to decide later, and at a time of its own choosing, whether or not it wishes to move to the third stage of economic and monetary union. Those are arguments that we have won in Europe and that set policy in the direction in which we believe it should go.

There are differences in the House and across the House about some of those issues. The Opposition, notably the right hon. Member for Islwyn (Mr. Kinnock) and many of his right hon. and hon. Friends, have said that they would be prepared to throw away our carefully negotiated right to join the single currency or not. One may ask precisely what they mean by that. They mean that they commit themselves now to enter a single currency in unknown economic circumstances in the future, with the Community at an unknown size and with economic convergence at an unknown level. They would have had to commit this country to a procedure whereby, regardless of Parliament's views, other member states could oblige us to move to stage 3, which would be a profound mistake for this country.

Photo of Mr John Major Mr John Major , Huntingdon

No, I shall not, as I wish to make more progress.

The Opposition have also latched on to the social chapter in what I consider to be a triumph of ideology over common sense. Signing the social chapter would have removed from employers and employees in this country their right to determine for themselves such matters as working conditions. The social chapter would have given the unions at European level new powers to negotiate employment conditions on behalf of employees, whether or not they were trade union members, and to have agreements imposed through Community legislation on British employees. That is corporatism at its worst. Worse than that, it is the negation of subsidiarity. Those Opposition Members who support subsidiarity cannot, in logic, support the social chapter. Characteristically, the Opposition's reasoned amendment does both those things.

Photo of Dr Norman Godman Dr Norman Godman , Greenock and Port Glasgow

How does the Prime Minister's interpretation of article 3b encompass the stocktaking exercise that he claims to be conducting on the government of Scotland?

Photo of Mr John Major Mr John Major , Huntingdon

The hon. Gentleman does no good to his arguments about Scotland by bringing them into this instance. I have made it clear to the House that I will take stock of the Scottish position quite apart from the Maastricht treaty, and that I am doing. The hon. Gentleman must be patient. I will take stock in my own time and then bring out proposals.

The Opposition have learnt only one thing. Over the past 20 years, they have held six different policies on Europe. The Leader of the Opposition has held two contradictory views at the same time. Now it seems that Labour accepts and supports Britain's membership of the European Community. I welcome that unreservedly, not least because, if there is broad agreement about membership, it will lend more strength to Britain's voice in Europe.

Labour's vision of Europe, however, is distorted. Labour Members can hardly wait to sign up to every centralising dream; to every high-spending regional policy; to every statist attempt to regiment working practices; to every central effort to direct industrial policy. Where they have failed at home, they hoped that they would succeed in Europe.

The future of Europe is now based on a different foundation. It is based on free trade and competition, on openness to our neighbours, on a proper definition of the limits of the power of the Commission, and on providing a framework for co-operation between member states outside the treaty of Rome. That is the Conservative vision of Europe; it is where the future of Europe will lie; and it is a future based on Conservative principles.

In this House and across the country, we debated the Maastricht issues before and immediately after the last European Council. In some of our partner countries, that debate is only now being held, but I have little doubt that all our partners will ratify the treaty by the end of our presidency in the second half of this year. As we debate the treaty, it is right to look at some of the issues that we shall have to tackle during our presidency and beyond.

The concept first put forward, I think, by Ernest Bevin—of being able to buy a ticket at Victoria station and travel freely anywhere in Europe—is attractive. It appeals to the instincts. The freedom to move goods and services lies at the heart of the single market which we British pressed on the Community. But there is a practical problem, recognised in the text of the Single European Act and its accompanying declarations.

All of us in this country live daily with the evils of terrorism and drug smuggling. No one doubts that we have to control immigration, in the best interests of everyone who lives in this country. The issue of the open frontier must be treated rationally, not ideologically. For most of our partners, the idea of an open frontier does not mean that there should be no limitations on what goods and people travel from one country to another. It reflects the fact that they cannot control these matters at the frontier and have therefore devised internal controls to do so.

Our practice is different by virtue of our island status. Experience has shown us that control at the frontier gives us the best possible chance of containing smuggling, terrorism and illegal immigration. We accept the right of Community citizens to move freely between member states, but we must, as we agreed under the Single European Act, keep the controls that we consider necessary to control immigration from third-world countries and to combat terrorism, crime and trafficking in drugs. That means that we must retain frontier controls, and we intend to do so.

Photo of Andrew MacKinlay Andrew MacKinlay , Thurrock

Does the Prime Minister recall publishing on Thursday last week in the Official Report a reply to a question by me in which he admitted that neither he nor the Government had the foggiest idea of the number of constables in this country and in particular of their numbers at British ports? That makes nonsense of all the humbug in his remarks that we need to control what comes into and goes out of British ports.

Photo of Mr John Major Mr John Major , Huntingdon

The hon. Gentleman has clearly not understood a word of what has been said in the past five minutes but that—if I may say so—is his problem, not mine.

I believe—

Photo of Rt Hon David Trimble Rt Hon David Trimble , Upper Bann

I thank the Prime Minister for giving way to me on that point. Will he recall that we are not only one island but that we have a land frontier in the same way that other member states have a land frontier, and that therefore the control—the necessary control—of immigration and other matters is not merely a matter of port controls?

Photo of Mr John Major Mr John Major , Huntingdon

We are well aware of that, and the special relationships that exist between Northern Ireland and the Republic of Ireland have existed for a long time, as the hon. Gentleman well knows.

I believe that the development—

Photo of Mr Teddy Taylor Mr Teddy Taylor , Southend East

The Prime Minister expresses excellent sentiments, but it is widely reported that the European Commission is likely to challenge in every respect our attitude to frontiers, and to call for the free movement of people and vehicles, as stated in the Maastricht treaty. In such circumstances, which seem likely to arise after 1 January next year, will the Government make it clear what their attitude would be to a decision by the European Court insisting that all frontier controls must be removed?

Photo of Mr John Major Mr John Major , Huntingdon

If indeed it challenges them, as my hon. Friend fears, I have just set out the view that the British Government will take. We believe that those frontier controls should be maintained, and we believe that the declaration that Mrs. Thatcher obtained in 1985 recognised that fact. We shall fight very fiercely for the fact that that is the position in law.

I believe that developments in the former Soviet Union and in eastern Europe are more significant—

Photo of Mr Peter Shore Mr Peter Shore , Bethnal Green and Stepney

I thank the right hon. Gentleman for giving way on this extremely important point.

It is absolutely right and rational that we should have control over goods and people coming into our own land—that is part of the meaning of being an independent state—but the question put to the Prime Minister a moment ago was not answered. The question is, if the disagreement or clash over the claim to have a Europe without frontiers and our claim to have the right to defend those frontiers in the way described goes to the European Court, will it not be for the court to decide under the treaty, not the British Government? What does the Prime Minister say about that?

Photo of Mr John Major Mr John Major , Huntingdon

The right hon. Gentleman sets out the legal position. I have set out the position that I believe is the case with the declaration that was attached to the Single European Act in the mid-1980s, a declaration that expressly made the point that our frontier controls would remain. That is a point—if the question is raised by the Commission—that we shall debate and argue at that stage.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

My right hon. Friend will be aware that we had a full debate in the House on the Single European Act. The House was given the assurance that the Luxembourg compromise still existed—in other words, where our vital national interests are at stake, the Luxembourg compromise would apply. Will my right hon. Friend confirm that in the last resort we could still resort to the Luxembourg compromise?

Photo of Mr John Major Mr John Major , Huntingdon

Yes, of course that is correct. The Luxembourg compromise is a delaying mechanism—it is not wholly the end of the matter, as my hon. Friend knows. It still exists and has recently been reaffirmed by other member states, so there is no doubt that, as my hon. Friend intimates, the Luxembourg compromise is still there.

I believe that the developments in the former Soviet Union and across eastern Europe are more significant for the future of the Community than any other development since we joined 20 years ago. By 1995, I hope that Sweden, Austria and Finland will be members. During our presidency, we shall prepare the ground for those enlargement negotiations. By the end of the decade, I hope that Poland, Hungary and Czechoslovakia will have followed suit. Other countries will follow. The Community will have to develop its relationship with the Baltic states and with many of the countries of the former Soviet Union.

The politics, economics and social fabric of the Community will change radically as the Community enlarges. We shall have to show imagination, flexibility and generosity. It would be fatal to take the attitude that we have our prosperous club and that nobody else can join unlesss they are prepared to pay a heavy price. We—the Community, this country—would all pay a heavy price if, by our attitude, we damaged the chance of re-establishing for the first time in 50 years a firm democracy throughout the whole of Europe.

Some argue that enlargement points to more being done at the Community level. I believe that a Community of 20 member states will need the sort of flexibility that we have shown in the Maastricht treaty. A lot more will have to be done on the basis of intergovernmental co-operation. A lot more may be left to the national level. The changes that we have negotiated do not weaken what is valuable in the treaty of Rome. They do create the flexible framework we need as the Community reaches out to new members. The institutions of the Community must adapt to the needs of the members and not the other way round.

What should not and need not be negotiable are the core beliefs and foundations of the Community: its commitment to democracy, its framework of law, the creation of a genuine single market and the fact that the Community exists to promote the ever closer union of the peoples of Europe.

We in this generation have the opportunity and the responsibility for managing the biggest transition to democracy in our continent in its entire history. There will be many means at our disposal for achieving that, both national and international. I have no doubt that crucial among them is the European Community. If we had to point towards one endeavour that can consolidate European democracy, boost our collective European economic prosperity and enhance our collective international influence, it is the European Community.

Sometimes the national interest and the Community's interests are at variance. Where they are, we shall fight as we have done in the past for our national interest. But I have no doubt that, overall, through the European Community, our national interest can best be promoted. At Maastricht we obtained a good deal for this country. We improved the way in which the Community works. We set the basis for the growth and expansion of the Community in the years ahead. I believe that that was a good deal for this country and for Europe. I invite the House to have confidence in our future in Europe, and to approve the Bill.

Photo of Mr Neil Kinnock Mr Neil Kinnock Leader of Her Majesty's Official Opposition, Leader of the Labour Party, Member, Labour Party National Executive Committee 4:26 pm, 20th May 1992

I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof: declines to give a Second Reading to a Bill which keeps the United Kingdom outside the scope of the Protocol on Social Policy, thereby excludes the United Kingdom from the Social Chapter and prevents the people of the United Kingdom from being part of the full social dimension of the European Community to which its eleven partners have agreed in order to facilitate greater protection for employed people in their working conditions, better rights of consultation and information, equality of treatment and opportunities for men and women and the integration into the labour force of long term unemployed people, including disabled workers, deeply regrets the Government's failure to make any attempt to build into the Maastricht Treaty convergence criteria which emphasise the need for balanced development, a high level of employment and sustainable growth in the regions and countries of the Community; deplores the fact that the opt-out provisions of the Treaty on the approach to Monetary Union would mean that neither the European Monetary Institute nor the proposed European Central Bank are likely to be located in Britain; and regrets the fact that the Bill does not include provisions to strengthen co-operation between the sovereign nations of the Community, within a structure of subsidiarity, to enhance political, social, environmental, economic and technological progress throughout Europe and in the developing countries, or to ensure the maximum of democratic accountability of current and future Community institutions to national parliaments and to the European Parliament.

The Labour party has already made it clear that it broadly supports the treaty concluded at Maastricht because it is a necessary framework for the economic, social and political development of the European Community. The treaty provides for majority voting on issues of the environment and on certain other important matters such as youth training and public health. It entrenches the democratic principle of subsidiarity so that decisions are taken at the most appropriate level—local, national or Community. It establishes a cohesion fund and provides for regional policy to be an essential component of the single market.

We welcome these changes, and we welcome also the fact that the European Parliament is to get new powers that will help to close the democratic deficit caused by the fact that powers and decisions have been ceded to the Commission and other Community institutions. All those and other features of the treaty are worthy of support.

We cannot, however, extend that support to the Bill. We cannot endorse the Government's action in opting out of the agreements made by the II other European Community member countries on social policy and on the approach to economic and monetary union. Both those decisions by the Government will disadvantage the British people. The social policy opt-out would be reason enough by itself to justify refusal to support the Bill.

Eleven other Community countries—countries with conservative, socialist and coalition Governments—all endorse the social chapter that was agreed at Maastricht. They will all take decisions on social policy on the basis of qualified majority voting on specific matters. The United Kingdom, because of the Government's opt-out, will not be able to vote on those decisions or be part of the deliberations on those decisions. That is not an assertion of sovereignty; it is a resignation of sovereignty.

The Government argue, of course, as we heard again this afternoon from the Prime Minister, that to accept the social chapter and qualified majority voting would have a devastating effect on British labour relations. Both the Prime Minister and the former Secretary of State for Employment, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), have used increasingly lurid language to say that the implementation of the social chapter would mean strikes and giving trade unions abroad authority on labour law matters—we heard that again from the Prime Minister this afternoon—and would bring the country to its knees. The Prime Minister said this afternoon that it would be corporatism at its worst. Not one of those or any similar allegations made by the Prime Minister or others in government is actually true. Every one of those absurd claims is rebutted by the terms of the agreement which 11 other Community countries reached at Maastricht.

Article 2.6 of the social chapter says: The provisions of this Article shall not apply to pay, the right of association, the right to strike or the right to impose lock-outs. Article 3, which provides for agreements to be made between management and labour at a Community level, was prompted by a joint initiative from the employers' organisation UNICE and the European TUC. There is no question of such agreements superseding the Commission, the Council or Governments by altering trade union or strike laws.

The social chapter also makes that clear. It states: this arrangement implies no obligation on Member States to apply the agreements, to work out rules for their transposition, nor any obligation to amend national legislation. As the employers say: Our clear understanding is that the Article cannot be used in any way connected with laws relating to strikes or Unions and in any event we would not agree to any arrangement that did have that effect. All of that, and much more in and about the social chapter, makes absolute nonsense of the Government's claim that the social chapter would wreck or cripple the economy.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Southend East

Would the right hon. Gentleman, whom I think we all respect, say why he is worried about the social chapter exclusion when the Commission can shove through everything that is in the social chapter under the terms of the Single European Act? Indeed, it is already doing so with the 48-hour week and the parental leave directive. I ask the right hon. Gentleman, who I know studies these matters, what can the Commission do under the social chapter that it cannot already do under the Single European Act by majority voting? It is doing that today and it will be doing it again next week.

Photo of Mr Neil Kinnock Mr Neil Kinnock Leader of Her Majesty's Official Opposition, Leader of the Labour Party, Member, Labour Party National Executive Committee

It would be appropriate for the hon. Gentleman to take up his complaints about the Single European Act with the Prime Minister or with the former Prime Minister, Mrs. Thatcher, who was responsible for introducing it. Meanwhile, I shall continue to argue—as I am sure the hon. Gentleman will permit—that the claims made by the Prime Minister and his colleagues about the impact of the social chapter on Britain or, indeed, any other country are absolute fantasies. There will be none of the disadvantageous effects that the Prime Minister pretends there will be.

The Government must know that all that I say about their description of the effects of the social chapter is true, so why do they employ such fictions? Why did we hear wild allegations from the Prime Minister again this afternoon? The answer is simple—the Government need the false threat of what the Prime Minister calls disruption and militancy to cover tip their desertion of duty to the British people on matters of everyday concern to individuals at work.

The Government refuse to accept the social chapter, which makes provision for qualified majority voting so that the Community can support and complement the activities of member states in improvement…of the working environment to protect workers' health and safety; working conditions; the information and consultation of workers; equality between men and women with regard to labour market opportunities and treatment at work and the integration into the labour force of the long-term unemployed, including disabled workers.

Those commitments are, to say the least, not excessive provisions in a modern economy or a democratic society. But the Government recoil from them. This Government, unlike any other Government in the Community, reject them. The excuse that they offer for their opt-out is that accepting such provisions for individual employees rights in Britain would make our economy less competitive.

What the Prime Minister calls, as he did in his speech in the debate on the Queen's Speech, "the social charter paraphernalia," will, he says, hold Britain back. But do good conditions really prevent improvement? Do inadequate conditions really breed greater achievement? We in Britain have plenty of experience from which to learn. British men work longer hours than any others in the EC. Ours is the only country in the Community without statutory paid annual leave. In the United Kingdom, statutory sickness leave is barely half the average in the Community. Measured in terms of equivalent full weeks of maternity pay, payments to women on maternity leave in Britain are the lowest in the Community. Portugal and Ireland are the only other two countries in the EC where there is no statutory right to parental leave. In all those and in many other ways, including the treatment of part-time workers, conditions for individual workers in Britain lag well behind those of employees in most or all of the other Community countries.

Photo of Mr Richard Alexander Mr Richard Alexander , Newark

If what the right hon. Gentleman has enunciated is the case, why did he and his party vote against the Single European Act when it came before the House?

Photo of Mr Neil Kinnock Mr Neil Kinnock Leader of Her Majesty's Official Opposition, Leader of the Labour Party, Member, Labour Party National Executive Committee

For the simple reason, as I pointed out during our debate in December and as the hon. Gentleman will know if he attended it, that it included no obligation to the social charter. On the contrary, the Government of that day, like the Government of this day, were against the social charter in principle even though they are obliged to accept certain provisions now made under the charter.

When we bear in mind the conditions that I accurately described and the comparison made with those in much of the rest of the Community, we have to conclude that, if fewer rights, lower standards and worse conditions for workers were ingredients of success, Britain would surely be top of all the Community's economic leagues. Yet we are the only major EC economy in prolonged recession. We have the fastest growing rate of unemployment in the Community and a huge increase in long-term unemployment. We have the worst fall in investment.

When all that is clear, whatever else can be said about inferior working conditions, they certainly do not make for superior economic performance. They never have and they never will, and it is high time that the Government faced up to that and stopped hoping that, if they can make Britain into the labour market bargain basement of Europe, they will have some edge over our competitors. That cannot work and it will not work. That is why the Government's social chapter opt-out is not only an injustice against the British people, but also contradicts Britain's economic interests. Sadly, that is also true of the Government's other opt-out—the economic and monetary union opt-out.

Photo of Mr Robert Adley Mr Robert Adley , Christchurch

Unlike the right hon. Gentleman, I voted for the European Communities Act in 1972 and do not need lessons from him about being a good European.

Of course we are all concerned about the unemployed—that goes without saying—but can he explain why the two countries among our partners that have most fully implemented the recommendations of the social chapter to which the Opposition's amendment refers have the highest percentage of their populations unemployed?

Photo of Mr Neil Kinnock Mr Neil Kinnock Leader of Her Majesty's Official Opposition, Leader of the Labour Party, Member, Labour Party National Executive Committee

I am surprised that the hon. Gentleman should talk in those terms. He should recognise his complicity as a supporter of a Government whose policies have taken unemployment in Britain back up to 2·75 million and produced yesterday a third of a million rise in long-term unemployment and whose record—although I am sure that as an individual he sympathises with the unemployed—shows a lack of concern for unemployment and for the conditions of those who are employed. Otherwise, he would support the social chapter of the Maastricht agreement.

The opt-out over economic and monetary union was contrived by the Prime Minister to mollify the former leader of the Conservative party and her followers. That policy means that the Government cannot say—even in circumstances in which monetary convergence has been achieved, and in which other countries are going ahead with monetary union—whether they want Britain to join that union, or tell us their recommendations. However, they must do so soon—much sooner than the Prime Minister would like, judging by his comments today.

At Maastricht, the Government agreed to a timetable for the approach to economic and monetary union which makes it clear that its formation will not be left to decisions to be taken in 1997 or 1999, but will depend on preparatory decisions taken after stage 2 of the process of union starts on I January 1994—which will probably be within the lifetime of this Parliament.

The Government will have to make specific proposals to the House and to take action by then. They will not be able to opt out of that. Neither will the Government be able to avoid questions about their judgment and recommendations to the House as the process of union advances according to the Government-agreed timetable.

Photo of Ian Taylor Ian Taylor , Esher

As the Government have made clear their commitment to convergence and have not opted out of discussions about the shape of economic and monetary union, why does the right hon. Gentleman want to deny the House the right to take the final decision? That seems a strange position for a politician to take in a democracy.

Photo of Mr Neil Kinnock Mr Neil Kinnock Leader of Her Majesty's Official Opposition, Leader of the Labour Party, Member, Labour Party National Executive Committee

The hon. Gentleman has followed the debate closely and is very interested in these matters, so he will probably recall that I have said on three or four occasions that our approach is not based on an objection to the House having the vote. That is entirely appropriate. I said—and this is becoming increasingly true—that other Parliaments in the European Community will as a matter of convention want to participate in decisions as we move forward. It is not that some special deal has been struck by the Government in respect of decisions relating to the progress towards union. Our involvement in this House is necessary—and comparable involvement will be common throughout the Community.

Photo of Mr Peter Shore Mr Peter Shore , Bethnal Green and Stepney

Is it correct to infer from my right hon. Friend's remarks that he would find no objection to the existing protocol and articles on economic and monetary union, and that he is prepared to see a Labour Government and a Labour Chancellor, caught in the 3 per cent. gross domestic product public borrowing rule, being subject to penalties under the European treaties if they broke that rule? Is not that sufficient reason for any leader of any party in this country to object to EMU?

Photo of Mr Neil Kinnock Mr Neil Kinnock Leader of Her Majesty's Official Opposition, Leader of the Labour Party, Member, Labour Party National Executive Committee

My right hon. Friend also follows these matters, and will be aware that in December, and on many other occasions, I said that the policy of the party that I lead—I am certain that this will continue to be its policy—is, subject to the conditions of convergence, to favour the movement towards union, because that would serve the interests of the people of our country and the wider interests of the Community. Those who do not share that view must consider that there is no halfway house or semi-detached status for our country, and that if we stood back from convergence, there would be damaging consequences as other countries move towards economic and monetary union. If my right hon. Friend will allow me, I will address the subject of deficits later.

Photo of Mr Robert Sheldon Mr Robert Sheldon Chair, Public Accounts Committee, Chair, Public Accounts Committee

There is a considerable difference between financial, monetary and economic convergence—and it is the latter that my right hon. Friend has strongly approved. However, is there not a lesson to be learned from events in Germany, which is transferring between £50 billion and £60 billion a year from west Germany to east Germany, but is still failing to achieve the economic convergence that my right hon. Friend and I want to see?

Photo of Mr Neil Kinnock Mr Neil Kinnock Leader of Her Majesty's Official Opposition, Leader of the Labour Party, Member, Labour Party National Executive Committee

The German example is instructive, but Germany does not have to counter—as the British Government do—a deep recession caused by Government policies. Germany is taking on the unprecedented challenge of amalgamating an efficient economy with a disastrously inefficient economy. It is natural in those circumstances that Germany should use more resources and make calls on international markets. Despite that huge challenge, Germany has managed to sustain a positive growth rate in excess of 2·5 per cent.—whereas Britain suffered a negative growth rate of 2·5 per cent. over the latest period.

I hope that my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) shares my confidence that we should persist with a policy—typified by Germany—that reflects a determination to raise standards of living, generate employment and increase investment. That is the model that we should all follow. Instead of greeting economic difficulties with the kind of defeatism that is obvious on the Conservative Benches, we should go for expansionist policies, so that we do not end up with 2·75 million of our fellow citizens unemployed for the second time in 10 years.

As the Government come to make their decisions in the near future, uppermost in their minds should be the reality that the European Community has an increasingly interdependent and integrated economy. That is of special relevance and primary significance for our country. Sixty per cent. of our exports now go to other EC countries. The leading importer of British goods is Germany. France comes next, and then the United States—which used to take most of our exports. It is closely followed by the Netherlands.

That is the pattern of our trade now and that tendency will increase as we move closer to the single market and the Community is joined by other countries such as Austria, Sweden and—as we heard again this week—Switzerland, and as products and production processes become increasingly integrated in multinational companies.

Given that exports account for one third of our gross domestic product, a large proportion of our production capacity and of British jobs depend on sales in the Community. That basic consideration should guide Government policy on economic and monetary union. The growing interdependence to which I referred will make it essential for the British Government to play a full and constructive role in the process of achieving the economic and monetary union that is under way.

It is not enough for the Government to content themselves with monetary convergence and then to stand back. If only that were on offer, the future would be bleak. Low inflation, low interest rates and manageable levels of public borrowing are all important elements of stability. However, if the Community's future is left at that, the stability achieved could be the stability of stagnation— with continuing high unemployment, low growth, low standards of competitive performance and even worse imbalances between regions.

No member of the Community could benefit from a continuation of such difficulties—which is why it is essential that the Community gives real substance to the task that it defines for itself in article 2 of the Maastricht treaty, of promoting harmonious and balanced development, sustainable and non-inflationary growth, respect for the environment, convergence of economic performance, a high level of employment and social protection, economic and social cohesion and solidarity between member states.

Photo of Bill Cash Bill Cash , Stafford

That is not in the Bill.

Photo of Mr Neil Kinnock Mr Neil Kinnock Leader of Her Majesty's Official Opposition, Leader of the Labour Party, Member, Labour Party National Executive Committee

That hon. Gentleman may he among those who will deviate from the line taken by the Prime Minister. We were invited to vote for a Bill that embraces the treaty, with the exception of the opt-outs. I have just quoted from article 2. It is very much included in the Bill.

All 12 countries have subscribed to those purposes. They must now be turned into action by policies of co-ordinated and sustained expansion across the Community.

Photo of Mr Neil Kinnock Mr Neil Kinnock Leader of Her Majesty's Official Opposition, Leader of the Labour Party, Member, Labour Party National Executive Committee

No. I have given way several times, so I shall desist for the moment.

That co-ordinated expansion is the only way systematically to reduce unemployment in the Community. More than 16 million people are now unemployed, many of them aged under 25. Co-ordinated expansion is certainly the best way in which to achieve balance in the Community between the impoverished regions and the congested urban areas, and between the north and the south of the Community. Co-ordinated expansion is also the best way of obtaining convergence in investment, production, competitiveness and employment—the real convergence that is necessary for the long-term success of the Community and for the long-term success of any form of monetary union.

It is clear, moreover, that co-ordinated expansion is vital as the most effective antidote to the resentments and tensions that are rooted in economic disadvantage and insecurity. The Maastricht treaty provides a framework for such action. It gives the Council of Economic and Finance Ministers the power and the responsibility to monitor economic performance and it enables the member states and the Council to act as the focus for concerted action. It is an essential basis for the advance that must take place. What is needed now is the willingness to build on that and to see that European countries move forward together.

I urge the Government to show such willingness. I urge them to work for such expansion and not to go on accepting high unemployment, poverty and regional imbalance within our own country and within the Community.

Within a few weeks, the Prime Minister will become President of the Council of Ministers. He has said that he wants to be at the heart of Europe; that he wants to foster enlargement of the Community; that he wants to reach out to the countries of eastern and central Europe. I put it to the Prime Minister that he can show genuine commitment to those objectives only if he uses his period in the presidency for the purpose of promoting economic expansion and social justice throughout the Community. Then, as even his Conservative colleagues recognise, he will be fostering the combination that is needed to ensure the existence of vitality and confidence in the west of Europe, and to promote stability, hope and strong democracy in the east.

We shall be doing everything possible to make the Government pursue those purposes. Let me commend to the Prime Minister, as a reminder of the need to do that, the advice of Hans-Dietrich Genscher, given as he left his position as Foreign Minister in Germany a few days ago. Herr Genscher said: People who hark back to yesterday's dreams may try to escape down nationalistic paths. The only way of barring off such routes is to open the road to Europe. This demands great effort and solidarity. If we fail in that task, we will face incalculable consequences for our own stability and prosperity. I hope that the Prime Minister will heed that advice, and will get rid of his opt-out mentality. If he does not, he will not begin to fulfil the task that he has set himself; he will not serve the best interests of Europe; and, most of all, he will not do his full duty to our country and its people.

Photo of Mr John Biffen Mr John Biffen , North Shropshire 4:53 pm, 20th May 1992

Earlier, Madam Speaker, you advised us of the virtues of restraint in the light of the number of hon. Members who wish to speak. Let me make a personal affirmation. I believe that all out-of-work Privy Councillors are born-again Back Benchers, and I shall approach my remarks in that spirit. They will necessarily be limited, I hope to 10 minutes or so, and I trust that my colleagues will appreciate that. I shall consult tomorrow's Division list to find out whether gratitude is a lost art in politics.

I wish to make three brief points. The first is a philosophical observation about the nature of Community debates, while the second relates to the objectives of Community policy, which have been furthered in the debates so far. Finally, I want to consider the mechanics which serve those objectives, and which have led to the Bill and the treaty on which the House will vote.

Let me say a word about our approach to debates such as this. I believe that they have been fundamentally transformed by the cataclysmic events of recent years, which my right hon. Friend the Prime Minister described as the liberation of 400 million people in eastern Europe. Their introduction into the realistic European dimension really has altered, and should alter, all our concepts and judgments. There are no sacred cows left in our debate.

It is perfectly legitimate for those who argued at one stage on the basis of—almost—the immaculate conception of the Rome treaty and its derivatives to ask now what basic reforms are needed for that very structure, to enable the new Europe to arise out of the ashes of the old. That is the nature of our position today. There is no point in our engaging in a great and glorious discussion about how things looked in 1972, or at any time subsequently. The truth is that we are all constrained to try to look at the problems anew.

I pay tribute to my right hon. Friend the Prime Minister. On 28 April, he addressed a meeting at the Albert hall which concerned the great European issues, and the need to establish principles that would give us working parameters within which to conduct policy. He said: I make no secret of my view that we want a Europe that is a community of nation states. Of course we can argue about what powers are appropriate to a nation state, but they certainly go considerably further than the ability to enter the Eurovision song contest; as though we might say we now have a cultural identity, which is what really matters. I assert that nation states are about administration, law-making, enforcement, and engaging the loyalty of a population and its preparedness to accept discipline.

My right hon. Friend the Prime Minister went on to say: A wider Europe of nations working in partnership, reaching to"— these I think are the vital words— and embracing Russia itself—that is our goal. Embracing Russia itself is the most challenging of the commitments in which we now engage ourselves. The challenge of the east faces not only the British Government but—obviously and, indeed, primarily—the Germans. My right hon. Friend made a particularly telling and effective point when he talked of an extension "embracing Russia itself' because, clearly, that is not the German view. On 3 April, Herr Kohl made a keynote speech, which the Financial Times reported as follows: Former republics of the Soviet Union should not be allowed to join the European Community". There will be a debate on the issue. I wish my right hon. Friend the Prime Minister every success in encouraging within the German federal republic the view that a happy and well-judged Europe is one that extends from the Atlantic to the Urals, in which Russia is one of the great historic nations. Its exclusion can but lead to difficulties in due course.

That leads me to the whole question of the mechanics that should serve such a policy. That question really lies behind this afternoon's debate. I should like to put up a broad and most anodyne proposition: that we shall secure that wider partnership on the basis of encouraging national co-operation rather than greater centralisation. Much of the argument today, tomorrow and in Committee is bound to turn on the extent to which we think that Maastricht encourages centralism and Euro-size to a degree that is counter-productive in terms of what should be our national policy.

I take, I hope, a reasonably generous attitude on all these matters. I congratulate my right hon. Friend the Prime Minister on, in particular, the development of the intergovernmental concept. That is a valuable improvement. It has great prospective benefits for the future. However, when I look at the treaty, I have to admit that I have considerable reservations about it. It still contains a great deal of centralist commitment. The whole concept of the single currency will bring about a powerful force for centralism in the economic management of those countries that make up the European Community. I do not believe that we can have a single currency without a complementary movement in other economic forces generally.

Photo of Mr John Biffen Mr John Biffen , North Shropshire

I am willing to bear the cross of the support given to me by the right hon. Member for Yeovil (Mr. Ashdown).

As I look through the treaty on European union, I reflect, first, upon the role of the European central bank, which will be crucial, also upon article 99, which relates to indirect tax harmonisation, article 104c, relating to controls over Government borrowing and article 130d, relates to the cohesion fund. All these measures have a centralising concept because of the single currency.

There is a tendency to believe that, because of the welcome terms negotiated, this House should take another view on these matters before final decision, which will have retarding consequences. I do not entirely understand that view. I wish that we could have a simultaneous debate with all the other parliamentary assemblies within the Community. I should love to know whether they have the same somewhat restrained commitment to the single currency. I should like to know whether there is the same general unease about these matters.

I refer not to the debate so far this afternoon, which has been carried on at what can be described as a stratospheric level, but to the more mundane discussions that one has in the Tea Room. I get the impression that the argument there goes along these lines, "Don't get too anxious; it's not going to happen," as though the treaty were a piece of shoddy electrical work which would collapse before we had had much time to make use of it. I do not believe that we can adopt that rather casual attitude towards the Maastricht treaty.

There is a considerable requirement, therefore, for us to view the legislation with caution, if not circumspection. When the European Community was founded, there were powerful forces which drove it towards the consequence of the Messina agreement and the eventual treaty of Rome. We are now faced with the immensely difficult and challenging task, in the Prime Minister's words, of a Community embracing Russia itself. Let us make no mistake about the diplomatic, political and economic implications. There is no popular movement for that in Europe today. We have only to look at the signs. I do not take the roll call with any satisfaction, but there are the Front National in France, the republicans in Germany and the Lombard league in Italy. Those are not the heirs of the traditions of de Gaspari and Adenauer.

This Parliament can contribute constructive caution. We should seek European co-operation, based upon the IGC principle, not the enthronement or the taking forward of principles which belong to the supranationality of the treaty of Rome and the European Court. Tomorrow will be a foregone conclusion. I know that in the Ayes Lobby there will be the Goliaths—the Goliaths of numbers, of talents, of the received wisdom of the Foreign Office—and that in the Noes Lobby there will be a handful of street politicians. The instinctive prejudices and wisdom of street politicians hold the key to Europe's future, not those of the good and the great.

Photo of Mr Peter Shore Mr Peter Shore , Bethnal Green and Stepney 5:04 pm, 20th May 1992

The Prime Minister put a somewhat optimistic interpretation on what had been achieved at Maastricht. The right hon. Member for Shropshire, North (Mr. Biffen) put his finger on two important matters: that the whole architecture of Europe has changed during the last three or four years and that entirely new approaches are needed if we are to get anything like the wider Europe that many of us wish to achieve.

It is an irony, which I believe commentators and historians will note, that the thrust towards economic and monetary union and the whole enterprise that led to the Maastricht treaty was put into shape and launched just before eastern Europe was liberated and the Berlin wall came down. Most of the assumptions behind the launch towards a federal Europe, which is the underlying thrust of the treaty, were entirely consistent with the Europe that had existed up to the end of the cold war, the liberation of eastern Europe and the dissolution of the Soviet Union.

The leaders of the European Community, particularly Mr. Delors and, above all, France and Germany, have been pushing hard and deliberately for a federal development in Europe. The House should not seek to evade that very obvious fact. We all remember that, until almost the last moment, draft article A of the treaty on European union said: the High Contracting parties establish among themselves a Union. This treaty marks a new stage in a process leading gradually to a union with a federal goal. Article W said: A Conference of Representatives of Governments of the Member States shall be convened in 1996 in the perspective of strengthening the Federal character of the Union.

There is no doubt whatsoever about what was in the minds of the great majority of our continental neighbours, and certainly in the mind of the Commission when it began to draft and push forward this treaty. I am very glad that that article was dropped, and I congratulate the Government on achieving it. However, that did not change the character and nature of the treaty; it simply changed the wording of the introductory and closing articles. That is a very different matter.

The single currency, to which the right hon. Member for Shropshire, North referred, is very much at the heart of the treaty. If we want to build a federal Europe, of course we must have a single currency and a single central bank. That is the principal thrust of the treaty. The Government could say, "There is an opt-out article," or, "We have not yet opted in and we have reserved our position." I am glad that they have reserved our position. The last thing that I would want would be to have our position conceded.

However, that does not alter the fact that, through this device, the Government have, in a sense, evaded facing the central question, which is where Britain is to go, faced with neighbours in the European Community the great majority of whom wish for a different future and a different destiny from that which our own people want. We have to face the fact that, almost from the start, our neighbours have wanted a federal union on the continent of Europe, and the British people have never wanted that. I understand why Governments are reluctant to face the issue. The moment the British people are alerted to what really is at stake, their deep reluctance and hostility to it will come out. Successive Governments have not wanted to face that fact at all. As a result, we indulge in all kinds of evasion, deception and self-deception.

On evasion, we cannot sensibly discuss whether the thrust and intention are federalist, because none of us poor things can actually agree on what federalism is. We say that it is too complicated and far too difficult. That is rubbish. It is a basically simple concept, and everyone knows it. It means an extra tier of government which is superior to the present national tier of government, to which are transferred basic decision-making powers. Not a single federal state in the world today lacks those characteristics.

Such a state conducts the trade and commercial relations of the whole union. It has a single currency and a single bank. It has a common citizenship, with no control, obviously, over residence and movement in and out of the separate component states which form a united state. Finally, it has competence over foreign and defence policy. That has broadly described the United States.

We must look at Europe today and at what is proposed in the treaty, and measure that against it. We surrendered a trade and common commercial policy ages ago. The single currency and single bank are the great issues in the treaty. Yes, common citizenship is in the treaty, but nobody has discussed it. Apparently, all of us are to be jammed together in a single citizenship. Has anyone asked one person in this land whether he or she wishes to have that additional citizenship, what obligations that involves, not necessarily now but in the future, and what rights it would bestow? What is all this about a Europe without frontiers, except to demolish the whole idea of a nation state having sovereignty and control over its own frontiers?

I agree that the Foreign Secretary fought hard to keep foreign policy in a different category from the European Community's treaty structure. It is still part of the treaty of union. Those who think that there is not a serious threat that other states will take over foreign policy and defence had better look again at that commitment to a further intergovernmental conference in 1996, and think again that it was only in 1986 that we were entirely content— nobody in the House wished to change it—with political co-operation; that is, where possible and where sensible, to speak with a single voice. We have gone well beyond that.

The basic point on foreign policy is a commitment. Article J.1 states: The Union and its Member States shall define and implement a common foreign and security policy". That is it—define. We do not yet have majority voting for that, but right hon. and hon. Members and I know that, in 1996, others will be hammering on the door and saying that Britain alone is preventing the emergence of a European collective foreign and defence policy.

By not facing those issues, we do no service to ourselves and none at all to our people. As I have said, there was not just a failure to face facts but deception and self-deception. The Government are deceiving themselves about the opt-out clause. I am glad that it is there. As the Chancellor clearly said in his speech to the Confederation of British Industry, and as the Governor of the Bank of England said in the present quarterly issue of the Bank of England Journal that was published today, it is absolutely clear that we must start converging financially with the European Community so that we can be eligible and able to join in four years. We shall see, in public expenditure exercises, tax cuts and in the whole range of policy, efforts to squeeze the country into the framework of the European commitment to join an economic and monetary union. We shall see, whatever the circumstances, the public sector borrowing requirement coming down to 3 per cent. of GDP. That is it—it is in the treaty.

Once we converge on those financial indicators, the Government will hardly say, "It was not worth it. The whole effort was an absurdity. We are suffering. We have high unemployment, high interest rates and all those disadvantages. In spite of all that, and having made that the central theme of our economic policy for the past four years, we should not join the economic and monetary union third stage." The Government are deceiving themselves by using that device.

My own right hon. Friends have contributed enormously to self-deception. They seem to think that we are discussing not the treaty that is before us but a make-believe, fantasy treaty which contains precisely the clauses that they would like to see. But it does not. The parliamentary party had circulated to it only a few days ago a paper giving some guidance from the shadow Treasury team about the Maastricht treaty and what it means. My right hon. Friend echoed it today. It said that, because article 2 of the treaty contains a reference among 10 lines to the purpose of achieving a high level of employment and sustainable growth, that put those objectives on a par with the achievement of economic and monetary union.

That briefing paper went on to state: from our point of view this"— that is, that reference to a high level of unemployment— is the most important part of the entire treaty. It establishes the aims of sustainable growth and a high level of employment as economic goals of equal importance with price stability. My right hon. Friend and the briefing paper were referring to a few words in one general paragraph at the beginning of the treaty—article 2. What economic and monetary union have to say about it and what they are concerned about above all, as we all know, is price stability. There are 50 clauses and four protocols spelling out precisely how that is to be achieved. Not a single clause spells out anything about the employment objective. We deceive ourselves if we try to pretend that the objectives of a high level of employment and price stablity are on all fours. It just is not so.

Incidentally, if anyone wants to argue the toss, article 105 begins: The primary objective of the ESCB shall he to maintain price stability. Without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Community". Therefore, provided that it does not prejudice the objective of price stability, which in this context is a deflationary objective, it may pursue those other policies which are clearly more acceptable and agreeable to my right hon. Friends.

Are we in our party imagining a future in which the country, with a Labour Government, volunteers to abandon its control over its own budget policy? Do we seriously imagine that, in all good conscience and keeping faith with ourselves and our fellow countrymen, we can say to them that we are willing to place our wrists in the handcuffs of the treaty and let others determine the size of the public sector borrowing requirement from now on, and that, if we refuse to obey the 3 per cent. limit, they will have the power—it is written into the treaty—to inflict fines upon us and to call up credit from British banks to the European bank? I find it objectionable. Frankly, it is a disgrace. No person in the Labour movement could accept that control.

I draw attention to the grave consequences for Britain of economic and monetary union and convergence with it. We have enough unemployment in Britain today.

Photo of Mr Tristan Garel-Jones Mr Tristan Garel-Jones , Watford

Which would the right hon. Gentleman find more objectionable for a Labour Government to be bound by—a single currency and a European bank over which Finance Ministers would have a degree of political control or the terms and conditions that Dr. Witteveen laid down for the Labour Government in 1976?

Photo of Mr Peter Shore Mr Peter Shore , Bethnal Green and Stepney

The Minister makes a comparison which is instructive for the whole House. When the International Monetary Fund has inflicted its presence on the British Government in the past, it has visited the Government for a two-month period. The moment that the debts were cleared, out it went. The House has been asked to contemplate a European Commissioner sitting permanently at the Cabinet table dictating the policies of this country. We should be aware of that.

Our level of unemployment is high enough as it is, yet I fear that the combined effects of monetary union on not only the British economy but the rest of Europe will be deflationary, as countries try to come within the constraints of the convergence criteria set out in the treaty. That means that we will be in for a period of still higher unemployment. It will endure for years ahead.

By linking ourselves to a currency dominated by the deutschmark, we link ourselves in a foolish way to the German economy without any possibility of making corrections for its undoubted greater productivity and growth potential. If we had linked ourselves with the German economy at any time in the past 10 years, without the ability to change our exchange rate, we would have suffered terrible penalties, and we know it.

I do not know quite what my right hon. Friends on the Front Bench or the House want. We have tabled many reasoned amendments. I have tabled one, and there are others that I like the look of. I do not object terribly to the amendment tabled by my right hon. Friend the Leader of the Opposition. I think that I could bring myself to support it, but it is somewhat feeble. If any reasoned amendment is rejected, we have a duty to vote against the treaty and the Bill.

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley 5:23 pm, 20th May 1992

It is a pleasure to follow the right hon. Member for Bethnal Green and Stepney (Mr. Shore), because in the past 20 years or so, when the arguments for federalism and greater control from the centre have grown, his voice has always been that of scepticism and doubt. For many years, it was a lonely voice. It was made all the more lonely by the fact that his party changed its policy and officially became much more communautaire. He has lived through all that and has reached the stage of seeing the tide begin to turn his way, although it has not turned completely, and I would not like to see it turn as much as he would.

What I thought was interesting about the speech of my right hon. Friend the Prime Minister was that he said that, in the next few years, he wanted to see greater flexibility. He wanted to see more things left to national level. Indeed, I hope that that will be the tenor of Government policy during the lifetime of the Government and his premiership. The successful development of Europe will be based on successful intergovernmental co-operation—the point that my right hon. Friend the Member for Shropshire, North (Mr. Biffen) made—rather than increasing centralisation.

I noticed that the right hon. Member for Bethnal Green and Stepney intervened on the Leader of the Opposition about economic and monetary union. After an exchange, the Leader of the Opposition said, "It is all perfectly clear." If that is clarity, we await the advent of opacity. It is by no means clear. I suspect that the possibility of a single currency and a single bank will recede rather than grow nearer during the remaining years of the century.

I wish to speak specifically on the matters in which I have had a hand—justice and interior matters. They are germane to the type of Europe that will develop. In the negotiations that led up to Maastricht, we were faced with proposals from our partners to increase the competence of the Commission and bring matters now decided by the Home Secretary and the Home Office and, ultimately, the House of Commons under not only the Commission but the European Court. I am glad to say that my colleagues strongly resisted those proposals. They believed that the way forward was through intergovernmental co-operation.

Indeed, the success of my right hon. Friend the Prime Minister was that our partners in Europe accepted that there should be three pillars—the pillar of economic and monetary union, which has protection in the treaty that we shall be asked to approve tomorrow, the pillar of foreign affairs and defence matters, and the pillar of justice and home affairs. Those matters should be left to the agreement of Ministers of nation states working together. There must be greater co-operation.

There must also be more co-operation between police forces in Europe to deal with international crime. I should like to see even greater development. I welcome the creation of Europol, which was part of the Maastricht treaty. It is basically a clearing house of information on international drug smuggling. I opposed, and was right to oppose, giving that body operational powers so that it would be a European police force operating in different European countries. We do not want to see such an extension of competence and power.

I wish to deal specifically with the problem of frontiers—a matter on which my right hon. Friend the Prime Minister was interrupted three times this afternoon. It is an important point. The ability to control one's frontiers is an essential element of the sovereignty of either a national state or a community of states. The European Community is trying to establish an external frontier at which certain things happen when people cross but within which people can move freely.

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

I shall come on to that in a moment.

The problem with the concept of an external frontier for the European Comunity is that of geography. Countries in Europe which are part of the continental land mass find it difficult to police their frontiers. No one wishes to police the frontier between France and Germany, for example. Of course, in this century it has been policed with vigour. In previous centuries, it was policed with even greater vigour. But it is now virtually impossible to police. Similarly, the German-Polish frontier is impossible to police. The Greek islands present great problems, as does the long shoreline of Italy. So the development of an effective external frontier presents very great problems. Indeed, negotiations are continuing.

I say to my right hon. and hon. Friends in the Government that we have the great advantage—they know it only too well—that we are an island. An island can police its frontiers by policing the airports and sea ports around its shore. We must continue to do that. That is what I was particularly anxious to ensure that the Maastricht negotiations did not weaken. I am glad to say that they did not. Certain of our partners wanted to increase the competence of the Commission in such matters. We resisted that.

The competence of the Commission is increased in only two matters. The first is what is called the common visa list. That is sensible. It is a list agreed by all European countries of those countries whose citizens require a visa to come into Europe. That seems to be sensible. It means that the United Kingdom will probably require visas from citizens of at least 20 or 25 more countries.

The second area where we are prepared to concede competence is to agree a common format for visas, which is also sensible, because visas will thus be more forgery-proof.

On the other matters, we said no, and that was correct. We built a double lock into the treaty that we are being asked to approve. Immigration control and asylum, which are sensitive and difficult issues, will not move into the competence of Brussels—either the Commission or the courts—without two events happening. First, it will require the agreement of the British Government and, therefore, the Government have a veto. Secondly, the specific approval of the House will be required. That is the double lock, and it is an effective one.

Alas, the matter does not rest there, as the right hon. Member for Bethnal Green and Stepney perceived in his intervention on my right hon. Friend the Prime Minister. The right hon. Member has doubts about the Single European Act, rather than merely about the Bill we are debating. Therefore, I shall refer to that Act as it relates to justice and home affairs.

Article 8a, which establishes the principle of the free movement of people, is the important article. When that was agreed during the previous Parliament in 1986, an essential proviso was built in. Mrs. Thatcher, Sir Geoffrey Howe and my right hon. Friend the present Foreign Secretary, who was then the Home Secretary, insisted that article 8a should be qualified by a general declaration, which contained these words: Nothing in these provisions shall affect the right of Member States to take such measures as they consider necessary for the purpose of controlling immigration from third countries. That is an important undertaking.

I do not believe that Mrs. Thatcher, Sir Geoffrey Howe or the present Foreign Secretary would have asked the House to approve the Single European Act without that general declaration; nor do I believe that the House would have approved the Act without that clear declaration.

Photo of Mr Nicholas Budgen Mr Nicholas Budgen , Wolverhampton South West

Does my right hon. Friend agree that one of the difficulties with the Single European Act was that it was guillotined and that debate on all the issues that could have been properly investigated was curtailed? Does my right hon. Friend agree that it would be unwise if the House were to make the same mistake about this treaty?

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

I see that my right hon. Friend the Patronage Secretary is in his place, and he does not have cloth ears, so I dare say that he has heard what my hon. Friend has said. As I understand it, the treaty will be debated exhaustively on the Floor of the House, and it is not for me to comment on that.

The House agreed the Single European Act on that declaration, so it is important. We are told that the declaration might not be worth the paper that it is written on. That is the view of some lawyers, but advice differs and others say that the general declaration is of some significance. So there is doubt and difficulty at the centre of this issue.

If that declaration does not count, from 1 January 1993, we shall not be able to operate our present passport and immigration controls at ports and airports, for example at Heathrow, Gatwick, Dover, Liverpool and Manchester. European Community nationals will be able to come here because that is implicit in the treaty—we have all accepted that EC nationals have the freedom to travel, work and reside within the Community—but it is the rights of non-EC nationals to that freedom of movement which are at issue.

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

If my hon. Friend will forgive me, I shall not give way for a moment.

That right of movement is important, because what has been learned in Britain in the past 30 years, and in Europe in the past five years, is that rights of movement lead to settlement and rights of settlement.

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

If my hon. Friend will forgive me, I must pursue my argument.

The retention of passport and immigration controls is of great national importance to Britain. After all, we have taken more than 30 years to establish our system of immigration controls, and they are the most sophisticated in Europe. We have had to deal with migratory pressures that other European countries have not had to deal with until the past four or five years—[Interruption.] I know that my hon. Friends are anxious to support my arguments, but will they please hear them first? This is an important issue.

Faced with that dilemma, what should the Government do? They should do three things. First, they must make it absolutely clear, as my right hon. Friend the Prime Minister did at the Dispatch Box this afternoon, to our partners in Europe that it is an essential and important issue for us and that we are not prepared to surrender control over our frontier controls—[Interruption.] If my hon. Friends will wait for a moment, please. They should wait with anxiety to find out what I am going to say.

When I was Home Secretary, I constantly gave my fellow Interior Ministers that message. They had to understand the importance of the issue for Britain and for British politics, as far as all parties were concerned. It is important that we say, again and again, to our partners that we cannot make any concessions over frontier controls. We must also say that to the Commission and to Mr. Bangemann. So that is No. 1—[Interruption.] I am glad to have the agreement of my hon. and right hon. Friends, but I am only on my first point and I am coming to my second and third.

It is important to say that, because none of the alternatives to frontier controls will be effective. It is said that, if one had internal controls, one would not need—

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

I ask my hon. Friend to contain his natural impatience and to listen to my arguments.

If one abandons frontier controls in favour of internal controls, they will not be as effective. There are two types of internal control. The first is to oblige employers not to employ illegal immigrants. If one does that, one has to police it. America has tried that to stem the flow of illegal immigrants from Mexico, but it does not work. Large companies observe the law and medium-sized companies do not. What is more, there would have to be a series of dawn raids on employers to detect those breaking the law. So that does not work.

The second argument is to introduce identity cards—[HON. MEMBERS: "Hear, hear."] Some of my hon. Friends have said, "Hear, hear." I am not against introducing identity cards, but they will not be a substitute for frontier controls. Many countries in Europe already have identity cards—cartes d'identitees—but they are not an effective control for dealing with illegal immigrants.

Again and again, one is driven back to the fact that one needs effective frontier controls, and we must first persuade our partners of their importance to our country.

If we are taken to the European Court and the interpretation of the declaration is challenged, which would take two or three years or even longer, we must fight the case strongly—

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

My hon. Friend must be patient. I am coming to my third point.

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

My hon. Friend must also contain her natural impatience.

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire

I am supporting my right hon. Friend.

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire

I am grateful to my right hon. Friend.

Does he agree that it is not only in the interest of this country that we ensure that there are proper controls over migration and immigration, especially into Europe from countries outside? It is also in the interests of other European countries, which face considerable problems because they have virtually no controls. Among the results are racialism and local unrest, with which they have no capacity to deal.

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

My hon. Friend is right and that brings me to my third point.

We must fight in the courts, but if we lose, my right hon. and hon. Friends on the Front Bench must make it clear to our partners that, at the next renegotiation in 1995–96, the first item must be the revision of article 8a. I am sure that most of my hon. Friends would agree that that issue will not come up until that time. If that renegotiation occurs then, I am absolutely clear that other European countries will realise that the line we are taking is the only effective one left.

As my hon. Friend the Member for Derbyshire, South (Mrs. Currie) said, the thing that is destabilising the Governments of European country after European country is migratory flows. One has seen what has happened in Italy, where north and south have almost been divided. That has left that country with no Government and no President. In German politics, the main issue is not the Bundesbank, the deutschmark, the German economy, or even the unification of west and east, but the fact that 1,000 refugees and illegal immigrants are entering Germany ever day.

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

I know that my hon. Friends want to intervene only to support what I am saying.

Photo of David Tredinnick David Tredinnick , Bosworth

I am most grateful to my right hon. Friend. Does he agree that, if the controls were removed, it would inevitably damage race relations in Britain? If this matter went to court and we lost the case, does my right hon. Friend believe that the removal of border controls would be essential before any revision could take place?

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

No. In such a situation and time scale, we should continue to retain our border controls until the next renegotiation of the treaty came up.

Photo of Mr Kenneth Baker Mr Kenneth Baker , Mole Valley

If my hon. Friend will forgive me, I will not give way, but I am sure that he will try to speak later.

The immigration controls that we have developed in the past 40 years have been difficult to secure. We have had to face immigration pressures quite different from those faced by other European countries. It has proved a great difficulty for all parties in the House, whether in government or in opposition, to agree to those controls. We have had to sustain them and we have done so in an intelligent and civilised way. Our immigration controls are among some of the most effective and fair in Europe and we should be proud of that. Those controls have certainly helped to harmonise race relations in Britain. That is why it is important that we should continue to enforce them. I was glad to note the clear commitment that my right hon. Friend the Prime Minister gave to that effect.

In my short speech, I have tried to flesh out the consequences of that commitment. I believe that three steps are necessary to ensure that we can continue to control our frontiers, because control of them is an essential element of the sovereignty of this country.

Photo of Mr Paddy Ashdown Mr Paddy Ashdown Leader of the Liberal Democrats, Leader of the Liberal Democrats 5:42 pm, 20th May 1992

It is a pleasure to follow the right hon. Member for Mole Valley (Mr. Baker), who raised a number of interesting points, although I cannot agree with all of them. Those of us who believe that the long-term aspiration towards open borders in Europe to goods and to people is one to which we must cling will accept that the right hon. Gentleman has raised a number of issues that we must address. In particular, he drew attention to the balance that must inevitably be struck between external and internal controls. I accept that it is important to assess those controls in terms of their impact on race relations, about which many people involved in race relations are concerned.

I was rather more struck by the powerful speeches from the right hon. Member for Bethnal Green and Stepney (Mr. Shore) and for Shropshire, North (Mr. Biffen). If the case against the Bill must be put, their speeches did so effectively. The right hon. Member for Shropshire, North struck the nail on the head—he also helped to clarify my mind—when he identified the premise on which his argument and that of the right hon. Member for Bethnal Green and Stepney was built. He believes in the eternal utility of the concept of the nation state.

Frankly, I do not. I do not believe that the nation state is anything other than a relatively recent historical invention. I do not believe that it will always remain. [Interruption.] If such a notion were mentioned in any other European Assembly or Parliament, it would meet with ready understanding, and agreement. We are the most backward of European Parliaments when it comes to such understanding, and it is extraordinary that that notion is a matter for derision and laughter.

I believe that throughout this decade and next century the importance of the notion of the nation state will decline, although I do not argue that it will disappear. At the same time, advanced democracies will witness the rise in the importance of community and regional identity and supranational institutions. I do not see how we shall be able to cope with some of our emerging problems unless we are prepared to accept that our interdependence will lead to a greater dependency on international institutions. My party parts company with the right hon. Member for Shropshire, North on that basic principle, and that is why we have adopted different positions on the Bill.

Photo of Mr Tony Benn Mr Tony Benn , Chesterfield

Over the years, nation states have varied in their size and nature. The crucial question is democracy and whether the people of this country will be able to remove, through the ballot box, those who make the laws under which they are governed. The argument about the nation state is secondary, because under the present arrangements of the Maastricht treaty, that right goes.

Photo of Mr Paddy Ashdown Mr Paddy Ashdown Leader of the Liberal Democrats, Leader of the Liberal Democrats

The right hon. Gentleman has made a fair point. One of the deficiencies of the Maastricht treaty is that it does not address the democratic deficit in Europe.

Let me be blunt with right hon. and hon. Members. I do not believe in the sovereignty of this place—I believe in the sovereignty of the people. I believe that the people can vest their sovereignty in any place where it is of benefit to them to do so. Some can be vested in local government, some at Westminster and some in a form of government for Europe at Brussels. The right hon. Member for Chesterfield (Mr. Benn) is correct: wherever the people vest that sovereignty, it must be accountable. Such power must be subject to removal by the will of the people. The right hon. Gentleman is right that the Maastricht treaty fails to provide such democratic accountability for the European institutions it creates.

Despite that deficiency, we shall vote in favour of the Bill.

Photo of Mr Paddy Ashdown Mr Paddy Ashdown Leader of the Liberal Democrats, Leader of the Liberal Democrats

That can come as a surprise to no one, including the hon. Member for Newham, South (Mr. Spearing). We have held to our position consistently and unitedly for more than 40 years—something that cannot be said of the Conservative party, and most certainly cannot be said of the Labour party.

We shall not vote for the Bill because we believe that the Maastricht treaty is perfect; it is not. We shall not vote in favour because we believe that Ministers have done a wonderful job in negotiating it; they did not. We shall not vote for the Bill because we believe that the Prime Minister has, true to his word, put Britain at the heart of Europe; he has not. We shall vote in favour because we believe that the Maastricht treaty is a step forward that must be taken. It would be a disaster for Britain and Europe were it not ratified.

I do not want to make too much of the Labour party's current position—I do not wish to intrude too much on private grief—but I find the Labour party amendment curious to say the least. It is clear from the amendment that the Opposition's objection to the Bill does not, as the Leader of the Opposition claims, just rest on the opt-outs. It rests on something much more fundamental. It now appears from the amendment that the Labour party disagrees on three counts, not just with the Bill but with the treaty. It has identified a lack of appropriate "convergence criteria", a lack of any mechanism to strengthen co-operation between the sovereign nations of the Community and a lack of anything to ensure the maximum of democratic accountability". If the Labour party is to hold to that amendment, the logical consequence is that not only the Bill but the treaty is unacceptable to it. Although Labour Members will be able to get through tomorrow without betraying splits in the Labour party by abstaining, the logic of the amendment is that they must vote against Third Reading of the Bill, because the treaty is unamendable.

I merely say to my colleagues in the Labour party—[Interruption.] They are fellow members of the Opposition. In a broader sense, Tory Members are also my colleagues in this place. It is curious that a party which, only weeks ago, was telling us that it was the most pro-European party in Britain, ends up in a position where, to behave logically, it must vote against the Bill.

There seem to be two remaining positions of credibility in relation to what happens in the European Community: those who believe that the Community must now move forward, that Maastricht is not a finishing point but a transition: and those who will vote in favour of the Bill—every hon. Member on the Liberal Democrat Benches, some on the Conservative and some on the Labour Benches. And then there are those who believe that we have already gone too far and that the Community must now retrace its steps.

There was an element of that in the Prime Minister's speech today. Those Members will vote against the Bill, and will include some Conservative and some Labour Members, but the Government take the view that we should follow neither of those two cases and that the European Community should now move neither forward nor backward but should simply stay still. They regard the Maastricht treaty not as a point of transition but as a full stop. The Prime Minister used the words: thus far and no further. That is not a position but an illusion. If the Community does not develop, it will start to unravel.

Serious problems are already building up within the various member states. The impetus that the development of Europe has received is beginning to be set back as nations deal with their internal problems. Already, their will is beginning to fail. One of the key tasks for the Government during their presidency will be to ensure that Europe has a clear direction forwards. If that does not happen it will begin to unravel. That will be welcomed by some Tory Members, and no doubt by the hon. Member for Newham, South and many of his hon. Friends. However, a retreating Community is not good—it is extremely dangerous. A Community that has lost the will to go forward has lost its capacity to play its part in the Europe that is now developing.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

In his opening remarks, the right hon. Gentleman correctly referred to the need for further international co-operation, which many Labour Members who do not like the treaty of Rome or its development would heartily endorse. He has now suggested that, due to developments, unless there is further change and centralisation, those arrangements will fall apart. Does he agree, therefore, that the basis of the present treaties is at fault but that we should now emphasise the international rather than supranational aspects of it, for which the right hon. Gentleman will vote tonight?

Photo of Mr Paddy Ashdown Mr Paddy Ashdown Leader of the Liberal Democrats, Leader of the Liberal Democrats

My answer to the hon. Gentleman is no.

If Europe does not progress forward, it will start to unravel. That would be dangerous at this point in history, because at the very moment when we shall need some sense of unity and cohesion in the west to balance a descent into confusion and rising nationalism in the east, Europe will be unable to provide it. At the very moment when we shall need to begin to integrate not only our markets but our industries in Europe, to compete against the Japanese and the economic growth of power in the Pacific basin, Europe will have lost the will and capacity to produce that integration.

When we shall need to face up to the environmental threat that confronts all of us, to co-ordinate more effectively to tackle it, Europe will have lost that capacity. At the very moment when we shall have to act together in a more united fashion to establish peace in the areas around our borders, even if that attempt is sometimes in vain, we shall have lost that capacity, too. At the very moment when we shall have to move toward the integration of our defence and security because their traditional foundation in NATO will be changing, we shall have lost the will and the ability to do so.

Photo of Mr Giles Radice Mr Giles Radice Chair, Treasury & Civil Service Sub-Committee

I agree with what the right hon. Gentleman has been saying, but why is the Liberal Democratic party—among all the Liberal parties in Europe—against the social chapter? Surely that means getting together and co-ordinating.

Photo of Mr Paddy Ashdown Mr Paddy Ashdown Leader of the Liberal Democrats, Leader of the Liberal Democrats

If the hon. Gentleman will be patient, I shall come to that in a moment. I shall develop my argument in my own terms.

When I hear the voices of some Tory and Labour Members—the right hon. Member for Shropshire, North is not one of them—I am often drawn to the conclusion that they seek to persuade us that all Europe's problems spring from the Community. Nothing could be further from the truth. The problems now facing Europe—those of the rise of the right, our economic problems and the broader problems caused by disintegration—would exist whether or not the Community existed. The European Community and its growing integration have not caused those problems but are the instrument by which we can more effectively tackle them. If that is to happen, we must begin to deepen the integration of the Community and strengthen its institutions.

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

I agree with the right hon. Gentleman that the rise of the right is not a phenomenon of the European Community, but is it not a phenomenon of proportional representation?

Photo of Mr Paddy Ashdown Mr Paddy Ashdown Leader of the Liberal Democrats, Leader of the Liberal Democrats

Nowhere on earth is there a perfect electoral system. Every electoral system has its flaws and disadvantages. The hon. Gentleman may choose between an electoral system that allows one Member of Parliament to be elected from an extremist right-wing organisation when it has 6 per cent. of the vote—that is what proportional representation does—and allowing the Communist Government of Italy to have power, as it did throughout the 1960s in Italy, on 30 per cent. of the vote. That is what the electoral system of this country would have provided, had it existed in Italy. The hon. Gentleman may choose between the two systems.

I know where my choice lies. One system gives an extremist right-wing organisation, such as the National Front, one Member of Parliament at 6 per cent; the other could make that party the Government of the country at 36 per cent. Is that the kind of electoral system that the hon. Gentleman wants, because it is the system that he has here?

The Prime Minister said that he believed that we had to widen Europe. I agree with him and, if that is his aim, we shall support him. However, lying behind his comment was a different idea: that widening and deepening Europe were incompatible and that we could not do one and continue with the other. Many people, including me, believe that the Government's determination to concentrate on widening is deliberately being used to dodge the issues on deepening Europe.

If that is the Prime Minister's view—I suspect that it is—he must face up to three facts. First, he must face the fact that, if he wishes to enlarge and widen Europe, all those nations that now wish to join the Community wish to join not the looser Europe that he has described, but the Europe that is deepening and integrating its institutions. The European Free Trade Association, Poland, Hungary and Czechoslovakia do not want the Europe that the Prime Minister and so many of his right hon. and hon. Friends describe: they want the Europe that they see being built around the Maastricht treaty—a Europe moving forward to closer and deeper integration.

The second fact that the Prime Minister must confront is that, if the Europe of which he speaks is enlarged, the present institutions will be incapable of providing the sort of guidance that such a Europe would need. God knows, they are incapable enough of providing the sort of central policy direction necessary for 12 member states; they would be incapable of providing it for 15 or 16—or even 22 or 23—member states.

If the Prime Minister wants Europe to be widened, does he want the institutions to be totally ineffective? According to the reply that he gave to my hon. Friend the Member for Inverness, Nairn and Lochaber (Sir R. Johnston), it seems that the answer to that question is yes. My hon. Friend asked the Prime Minister whether there would be more co-ordination in foreign policy matters. The Prime Minister said that we could not take any decision unless it was to the advantage of us all. That is a recipe for paralysis and inaction. It would mean that, even with its present 12 member states, the Community could not take reasonable and co-ordinated steps. Therefore, with the 16 or 20 that the Prime Minister wants to create, it certainly could not.

The third factor that the Prime Minister must understand is that, if he wills the ends of a wider Europe, he must will the means of a wider Europe. There is no possibility that the sort of action that we would have to take to enable Poland and Hungary to join Europe could be taken through the Council of Ministers. The scale of such an operation is visible to us in the scale of the operation needed to unify Germany. The idea that we could achieve our goal simply on the basis of a horse trading forum like the Council of Ministers is inconceivable.

If the EFTA nations are to join the Community, how will we reform the common agricultural policy? Every one of the EFTA countries is a high subsidy agricultural nation. If they come into the CAP, they will merely join the horse trading forum, and will not help the thrust towards the reform of the CAP. Instead, they will be determined in their commitment to hold up its progress, as France now does.

If there is a drive towards the reform of the CAP, it comes not from the Council of Ministers but from the European Community. To the credit of the Government, that drive often has their support when no other Governments are willing to provide it. However, that does not always apply to this Government's Minister of Agriculture, Fisheries and Food. If we are to widen Europe, we must also deepen it; otherwise, the institutions will not cope and we shall not have the means to achieve the goals desired by the Prime Minister.

There are deficiencies in the treaty. We do not believe that the opt-out clause is necessary. Some Conservative Members are proud of it, but in order for us to believe that it is necessary for Britain, the Prime Minister will have to describe to us why. If he is to do that and to convince us, he can do so only if he can describe the circumstances in which it would be in Britain's interests to stay out of a monetary union that we had the ability to join. He has never been able to describe those circumstances. Until he can do so, the argument based on need falls and we see the opt-out for what it really is: nothing to do with Britain's interests, but more to do with splits in the Conservative party.

We all pay a high price for that piece of sticking plaster. We pay for it in that we shall not have the influence that we should have over the shape of the monetary union institutions. We pay for it in that our opportunity to have the European central bank located in Britain has been blown away. We also pay the price through uncertainty in the money markets as Britain does not know where it will be in three or four years' time. It could be inside or outside EMU. We also pay the price in that, should the pound come under pressure, we shall have higher interest rates.

The Labour amendment makes it clear that the party is unhappy with the criteria which Britain would have to meet if it were to join the European monetary union. It is unhappy with the entrance fee and wishes to renegotiate it. The positions of the two major parties are clear for all to see: the Labour party wants to join the club but will not pay the entrance fee, while the Tory party will pay the entrance fee but is not certain that it wants to join the club. I am not surprised that the machinations of the House and the two main parties sometimes cause our European neighbours to look at us with despair.

The hon. Member for Durham, North (Mr. Radice) mentioned the social chapter, about which my concerns are well known and well articulated. I believe that some elements of the social chapter will lead us towards the recreation of the old corporate structure in Europe that we in Britain have got rid of during the past 12 to 15 years. I do not believe that it would be sensible for this country or for Europe.

However, I greatly regret that, by opting out of the social chapter, the Government are opting out of the capacity to shape the social institutions. They have many friends in this context—the Portuguese, the Irish and others would also wish to ensure that the application of the social chapter should be changed to make it more amenable to the views of their Governments. I do not understand why the British Government have deliberately denied themselves that opportunity.

The great deficiency of the Maastricht treaty is the democratic deficit. The institutions that we are building will not be accountable to the European Parliament or to those who elect Members of the European Parliament. That is an issue to which the treaty, the European Commission and the House will have to return. For the moment, the Liberal Democrats are prepared to support the treaty as it is a step towards what we should like to achieve, but it is not perfect.

The Prime Minister has recently told us that he is his own man—now he can be. He has his mandate—as far as our electoral system provides one—and can ignore the minority so-called Euro-sceptics among Conservative Back Benchers. He can also ignore his predecessor who is still writhing with the phantoms that haunted her during her premiership. Let him show us that he is his own man by marking a path forward and using the presidency that starts this July to give Europe a sense of direction forward. He must not allow it to stay still, certainly not allow it to go backwards. I believe that the Prime Minister understands the importance of Europe to Britain and the significance of an increasingly integrated Europe in the world.

If the Prime Minister succeeds in obtaining those goals, he will be giving Europe the sense of direction that it needs and acting in this country's best interests. In the next two or three months, we shall see what he does and whether he is his own man. If, during the progress of the Bill and the period of Britain's presidency, the Prime Minister's claim to be his own man is tested and proved to be correct, in the interests of this country and Europe, my hon. Friends will support him, tomorrow night, during the passage of the Bill, and in the months to come.

Photo of Mrs Angela Rumbold Mrs Angela Rumbold , Mitcham and Morden 6:08 pm, 20th May 1992

I am very pleased to be able to participate in this debate with the freedom of a Back Bencher. I am even more delighted to be able to do so having heard the speeches that have been made. I should like to offer my congratulations, humble as they may be, to the Prime Minister on having so clearly set the scene for the introduction of this Bill to ratify the treaty of Maastricht.

I intend to approach the debate from the point of view of my constituents—a rather more simple approach than some of the hyperbole to which we have been treated this afternoon. In large measure I agree with my right hon. Friend the Member for Shropshire, North (Mr. Biffen), who talked about the need to make haste with caution. I suspect that most of my constituents would agree with that. The reason for their caution is that they are uncertain what the future has in store.

Many of the people who work in my constituency are business men, who welcome the single European market with open arms. They want to participate in it, because they can see that that is where their future lies and that of their businesses, small and large. Their opportunities will be even greater, they believe, if, as the Prime Minister and I hope, we extend the European market beyond the Twelve to the countries of eastern Europe and to the EFTA countries that want to join.

I disagree with the right hon. Member for Yeovil (Mr. Ashdown) about the reasons why European countries want to join the Community. It is not necessarily because they want a deeper Europe; it is because they want the benefits of the single market and of the level playing field within it. They see an advantage for themselves in trading in that market.

The Leader of the Opposition told us the reasons why he is so worried about the Government's desire to opt out of the social chapter. That reminded me, as I am sure it would have reminded my constituents, of the reasons why they were so cautious about supporting the Labour party in the recent general election. The people in my constituency are ordinary, average men and women, and they want to live and work as they choose. They want to enjoy the opportunities for employment which have been hard won over the past 13 years by getting rid of restrictive practices and rolling back the corporate state. All that has given them the chance to work and live as they would want to.

Women in particular want to keep the right to work part time and to work as they want. More women work in this country than in many other parts of Europe, and they treasure the opportunity to work. The money goes towards the family income, and we should not lightly discard this privilege in favour of the social chapter, which I fear would seriously threaten it.

My right hon. Friend the Member for Mole Valley (Mr. Baker) touched on an important point. It was clear during the course of the election that many people are worried about immigration—a sensitive area. My right hon. Friend was absolutely right to point out that, for 45 years, we have had a great deal of experience of how to absorb people from other nations, especially Commonwealth nations, and of how to integrate them.

When in government, I used to talk with considerable pride of an integrated multicultural society. We can impart a great deal of expertise to our European partners and teach them the benefits of living in a multicultural country. Our legislation and our institutions—the Commission for Racial Equality, for instance—could serve as models for other nations that will have people of other cultures coming to live among them.

This country is now composed of people of many different cultures, colours and religions, and I think that I speak for my constituents in this matter. About 20 per cent. of them come from other cultures and have become part of this country, and I am sure that they share our view that it is essential that we keep our border controls as they are. They would be most concerned were they to learn that those controls were under threat. I share the anxiety of hon. Friends who have asked what will happen if the controls are discarded—if the Government cannot retain them. If the European Court ruled against us, what would become of our border controls? How satisfactory would it be to have to introduce identity cards?

I have no particular objection to identity cards. When I go shopping, I have to produce endless pieces of identification when I want to write a cheque, so I do not have a rooted objection to such cards; but I am absolutely sure that they are not a clear way of identifying those who enter and remain as illegal immigrants.

When I say these things, I speak on behalf of a large number of people outside this place—far from this wonderful enclosed forum where we debate among ourselves and sometimes fail to reach people on the Clapham omnibus. They have fears, and everyone who lives in this country believes that we are now close to the maximum number of people we can sustain in employment and underpin with our social security system.

Photo of Michael Lord Michael Lord , Suffolk Central

Does my right hon. Friend agree that the crucial issue is not whether identity cards are good or bad but whether we as a nation want them or have them forced upon us?

Photo of Mrs Angela Rumbold Mrs Angela Rumbold , Mitcham and Morden

I quite agree. I would much prefer to have a choice. As my right hon. Friend the Member for Mole Valley said, many people are seriously worried that the European Court of Justice will force us down a road that we do not wish to travel. Somehow or other, the Government must adopt the toughest possible line on these controls on behalf of the people of this country.

Photo of Sir Nicholas Fairbairn Sir Nicholas Fairbairn , Perth and Kinross

I raised this issue during the general election myself. Does my right hon. Friend accept that economic migration is a problem faced and worried about by every country in Europe for different reasons, and that it is a matter that we must deal with as the world's population doubles in the next 30 years?

Photo of Mrs Angela Rumbold Mrs Angela Rumbold , Mitcham and Morden

I agree, as I suspect most thinking people would.

In this debate we may hear a lot of hyperbole and a great many high-flown ideals. Some Members may want to resist everything European and to say that we are self-sufficient. The truth is that we have not been self-sufficient for a very long time. For nearly 20 years, we have gradually worked more closely with our European colleagues, and we cannot resist the momentum now. We cannot sensibly resist the notion of closer intergovernmental co-operation in foreign affairs and defence. But I have great reservations about a single currency, as I suspect do some of my constituents. I should want to study it at much closer quarters before I came to a final and certain conclusion.

I am satisfied that we can go this far and that the Government will take us this far with the utmost expertise. What I worry about are the implications for the future, and I suspect that I and my colleagues will take great care to study in detail the various directives and issues as they come before the House, because we have the right and the duty to protect our constituents.

Photo of Mr Denzil Davies Mr Denzil Davies , Llanelli 6:19 pm, 20th May 1992

The heart of the Maastricht treaty—the Bill is about the ratification of that treaty—lies in the proposals for economic and monetary union, as my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) so eloquently said. However, the Prime Minister hardly mentioned economic and monetary union. He dealt with the issues in the treaty which do not need internal or domestic legislation, but he did not deal with economic and monetary union—presumably because he felt that the opt-out from stage 3, which he managed to negotiate in Maastricht, meant that he did not have to deal with it. We heard much about subsidiarity, which is the latest Government fig leaf in respect of the train that is still proceeding rapidly towards a federal union, but we heard little about economic and monetary union.

I believe that, once we have completed stage 2, the reality will be that we shall have very little option but to sign up for stage 3. That is why it is important to debate economic and monetary union in the Second Reading debate. The economic and monetary union proposals in the treaty entail a massive, substantial shift of power over money and our fiscal and economic policy from democratically elected Government and Parliament to undemocratic Community institutions.

As has been mentioned, the spirit of the age in Europe, as elsewhere, is for more and better democracy and—to use a vogue word—deeper democracy, but the House is being asked to take a gigantic step back from more, better and deeper democracy, a step that is the very antithesis of the spirit of the age in Europe.

We are being asked to cement ourselves into a treaty on economic and monetary union, not a union of the peoples of Europe but a Europe of bankers and bureaucrats, a Europe shaped by that old Hegelian ideal of a universal class of expert civil servants whose loyalty and duties lie primarily with institutions. Of course, in their case, that means with the institutions in pre-war Germany—with those of the state—and in this case with the institutions of the Community, primarily those of the new central bank, of the Commission and of the European Court of Justice. Their loyalty and duties do not lie with the elected representatives of the peoples of the different nations within that union.

The cental bank will be able to control the supply of money, untrammelled by politics. The concept of price stability will be enshrined in fundamental legislation and, ultimately, the Commission will have the authority and power to pester, to bully and perhaps even to fine elected Governments who spend more on and borrow more for public services than is allowed under the arbitrary and ridiculous percentages enshrined in the treaty. Community institutions will have a virtual veto over the policies of elected Governments, and economics will be taken out of politics. I believe that the consequences will be enormous. They will be enormous for this House, for the democratic process throughout Europe, for the mainstream political parties in Europe and, especially, for the parties of the left, including my own.

My right hon. Friend the Leader of the Opposition and other colleagues on the Front Bench have tabled a reasoned amendment, as it is described. It certainly expresses some misgivings about the treaty and, indeed, about economic and monetary union. However, my right hon. Friend the Leader of the Opposition said—I took a careful note—that we, meaning the official Labour party, broadly supported the treaty. The implication of the reasoned amendment is that, broadly, we acquiesce in most of the treaty, and certainly in the part dealing with economic and monetary union.

Indeed, it seems that we are asking for the central bank to be in London. Why we are so keen to have it in London I do not know. I walk around the city from time to time—we have plenty of banks in London. Britain needs fewer banks and more production, so I cannot understand the desire to have another bank. Perhaps some of my right hon. Friends will have more lunches at these highly geared and responsible banks. I am sorry that my right hon. Friends have decided that the Labour party should not vote officially against the Bill, and, in effect, against the proposals for economic and monetary union.

My fear is that by acquiescing, we shall have to acquiesce in many of the domestic economic consequences of the treaty and in its proposals for economic and monetary union. I shall mention a few of those consequences. First, I do not know what the Treasury is plotting, but if the Bill becomes law, I should not be surprised if we had a new Bank of England Act in the next year or two, because it will be necessary—

Photo of Mr Denzil Davies Mr Denzil Davies , Llanelli

The hon. Gentleman says, "Next year." It will be necessary to repeal the old Bank of England Act 1946, which was an attempt by a post-war Labour Government to impose direction and control on the Bank of England following the bank's activity—or lack of it—in the 1930s and the dreadful unemployment that we suffered, partly as a consequence of what the bank failed to do, or what it did.

In effect, the new Bank of England Act will transfer power and control over monetary policy to Mr. Robin Leigh-Pemberton, his heirs and successors. They will be responsible not—as they are now—to the Chancellor of the Exchequer but to the president or the governor of the European central bank. In acquiescing in the treaty, I presume that the Labour party will be acquiescing in privatisation or to the handing of monetary power from the Government to the Bank of England and, through the Bank of England, to the European central bank.

Secondly, let us consider public expenditure. We have been told that entrenched in the treaty is a condition that the borrowing requirement—the public sector borrowing requirement as we call it—should be 3 per cent. of a country's gross domestic product. At the moment, it is about 4·5 per cent. in the United Kingdom. Last night, in his speech to the Confederation of British Industry, the Chancellor said that attempts would now be made to bring the PSBR down to 3 per cent. of GDP—I am sure that the Chief Secretary to the Treasury is already sharpening his knife. Cuts will have to be made even if there is considerable growth in GDP in the next few years. There will have to be cuts in public expenditure to get the PSBR down to 3 per cent. as demanded by the treaty agreed at Maastricht.

Again, my fear is that if we—the Labour party—fail to vote against the Bill, we may very well be seen to be acquiescing in those cuts in public expenditure to bring PSBR down to 3 per cent. I do not believe that most of my colleagues would want that but, intellectually, it will be impossible to oppose those cuts from the Back Benches or the Front Benches when we have acquiesced and not objected to Second Reading.

Thirdly, "price stability" is a phrase lifted from the Bundesbank Acts which were passed when the western part of Germany was the Federal Republic. There is nothing wrong with it for that reason, but price stability means zero inflation. I see that the Financial Secretary to the Treasury nods in agreement. Indeed, it is something that the Chancellor of the Exchequer said last night.

The vague phrases that we have heard about unemployment are all subject to the main objective of the European central bank, which is price stability and, in turn, zero inflation. With low growth in Europe, I do not believe that it will be possible to achieve zero inflation without having higher and higher unemployment. That is the only way that we shall be able to achieve zero inflation in the Europe of today. The central bank, however, will press inexorably for the goal of zero inflation. As it does so, unemployment in Europe—already exacerbated by low growth and immigration—will increase.

Is the Labour party, by not opposing the Bill's Second Reading, saying that it now accepts price stability as the main goal of economic policy in Europe? The Labour party has never accepted that before. We are against inflation, but we have always felt—Conservative Members may disagree with this—that there are trade-offs. Fashions come and go in economics but we, the Labour party, have always felt that there is a trade off between zero inflation or inflation and unemployment. Are we accepting price stability by not voting against Second Reading? Right-wing monetarists have long advocated the concept of price stability, but are we accepting that it should be entrenched in the United Kingdom's economic constitution?

A further consequence for the Labour party—I apologise to Conservative Members for discussing these matters in these terms, but these are important considerations for a party of the left—will be difficulty in preparing a manifesto for the next general election. Having accepted all the canons of economic policy that are set out in the treaty, I do not know how we will be able to set out an alternative and distinctive economic policy. They are the canons that have been promulgated by the right wing of the Conservative party and even by the Keynesians on the Government Benches. I think that a few Keynesians are left.

These canons have been accepted by the Friedmanites on the Government Benches. Are we, the Labour party, to accept them? By failing to oppose the Bill, we are sending a signal that we as a party of the left in Britain, with the other parties of the left in Europe, accept the concept of strict monetarism that in the past we have always deprecated.

I have spoken in many of the debates on Europe over the past 20 years, and they are characterised by much wishful thinking. It goes like this: "It will all fall apart anyway. It is not going to happen. It will be all right on the night." A variation on that goes as follows: "These words in the treaty are awful. The language is terrible. It is easier if you are a lawyer. These French and German people are very academic. When men of good will and practical common sense get together, the words will not mean anything. We can then work it out between us."

Even Margaret Thatcher, the former Prime Minister, was taken in. I read in a newspaper the other day that somebody promised her that the Single European Act would not affect sovereignty. She did not have to read the small print, because the reality was to be seen in large print.

There was some more wishful thinking from the Prime Minister this afternoon, and subsidiarity was part of it. It is used as a cloak to prevent people questioning too deeply the movement away from parliamentary sovereignty. Apparently we are now back at the heart of Europe, Germany is now in permanent decline, things are terrible on the Continent and the general election in this country has been won by the Conservative party. We shall have the presidency of the European Council of Ministers for the next six months. We can invite all the Ministers to Holyrood house and give them dinner with the Queen, and they will admire the tiara. Everything will be fine. The Foreign Office will be happy. We are back at the heart of Europe and the other Europeans will follow us and do what we want.

That is the "big Englander" argument. It is advanced on the basis that we know better than they do and they will now recognise that. My experience tells me that it ain't going to happen like that. It has not happened like that in the past. The European Court of Justice, for example, may decide that we can no longer have our border controls. The right hon. Members for Mole Valley (Mr. Baker) and for Mitcham and Morden (Dame A. Rumbold) will not be able to do anything about that. If the House of Lords makes a judicial decision and we believe that it should be overturned, we can do so by means of a vote, but it is not possible for us to overturn a judgment of the European Court of Justice. Probably the 12 member states could do so, but it would be a herculean task to get them together, quite apart from getting them to agree. My experience tells me that in the end the central bank will enforce its status.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness, Nairn and Lochaber

The right hon. Gentleman is going on about wishful thinking, which I believe is accompanied by a certain amount of self-delusion. He attacks Conservative Members on the ground that Europe is full of Friedmanites. Those on the other side of the argument mount an attack on the ground that Europe is full of people producing social charters. There is something in the middle which is much more sensible despite what the right hon. Gentleman said about men of good sense not being able to carry the day.

Photo of Mr Denzil Davies Mr Denzil Davies , Llanelli

Perhaps I am a simple Welsh lawyer, but I read the words in the treaty. Those words are reasonably clear. The European Court will enforce its status, the central bank will try to achieve price stability, the court will enforce the treaty and the Commission will rely on its powers. That is what has happened until now and that is what will happen in future.

There is no hiding place which offers escape from the main clauses of the treaty. My party's reasoned amendment provides no escape and no hiding place.

Photo of George Howarth George Howarth Shadow Spokesperson (Environment, Food and Rural Affairs)

My right hon. Friend has made some play of the trade-off between zero inflation or price stability and unemployment. I am sure that he has read the reasoned amendment, but I shall draw his attention to it. Part of it reads: deeply regrets the Government's failure to make any attempt to build into the Maastricht Treaty convergent criteria which emphasise the need for balanced development, a high level of employment and sustainable growth in the regions and countries of the Community". Does that not meet my right hon. Friend's concern?

Photo of Mr Denzil Davies Mr Denzil Davies , Llanelli

I certainly agree with what my hon. Friend read out. That part of the reasoned amendment seems to provide a good reason to vote against the Bill's Second Reading. I intended to make that point in my conclusion.

We in the Labour party have always prided ourselves on being a party of democratic socialism. My right hon. Friend the Leader of the Opposition and I came into the House in 1970, and I know that he has always honourably maintained that tradition and spoken for it. I have read the treaty, and there is nothing democratic in the part that relates to economic and monetary union. There is nothing socialist about it, either. That is why I cannot understand why we should not vote against it.

Photo of Mr David Howell Mr David Howell , Guildford 6:38 pm, 20th May 1992

The speech of the right hon. Member for Llanelli (Mr. Davies) was interesting. He is one of the more perceptive Opposition commentators on economic affairs. His remarks showed that it is beginning to dawn on those within the Labour party that the stance of its Front Bench spokesmen, with their cavalier acceptance of the full implications of stage 3 of monetary union and their outright rejection of the far more cautious and prudent stance of my right hon. Friends, is a dangerous one.

I was especially glad this afternoon to hear the view of my right hon. Friend the Prime Minister that the Maastricht treaty, as presented to the House and embodied in the Bill, will reverse the centralisation and the centralising tendencies that are to be found in the Community. That is the most important task of all for democratic leaders and democratic assemblies, given that, like it or not, we live in a world of enormous centralising tendencies. It is surely the duty of us all not merely stubbornly and negatively to resist, but to create a balance between the great centrifugal forces at work in modern technology, modern business, modern bureaucracy and modern international institutions, and the decentralising tendencies that democrats must believe in and fight to retain.

My right hon. Friend the Prime Minister would be the first to recognise that if that is the aim and the intention as we go into this post-Maastricht phase, there is still a great deal of work to be done both here and in the other capitals of the existing member states. It appears that the mood is turning in those capitals. The fears of those who feel that we shall be caught up in the same snags and snares as we were with the Single European Act are less well founded now than they were then.

I understand those fears, but the mood is changing. The sort of debates that we have in this country are being repeated in other countries, which is welcome. We can play a part in stimulating those debates. We should not simply sit and feebly say, "The Eleven are against us, it is hopeless and nothing can be done." A great deal has been done and can be done if we show intellectual vigour. Indeed, that process began at the Maastricht meeting in December when my right hon. Friends showed that they were not inevitably caught up in the steamroller process. They came back with the opt-out from the social chapter and the protocol on monetary union.

A great deal of the attack by the Leader of the Opposition this afternoon, which was made with much feeling, was simply tilting at a gigantic windmill. The Conservative party is not against sensitive and well-tuned social and employment legislation. We have a proud record on those matters and we have been very successful over the years. However, we are against the idea that they should be laid down in a remote place and not in this nation, in the appropriate way that we choose to make our laws and design our legislation.

The Opposition amendment fails to understand even the beginnings of what my right hon. Friend the Prime Minister explained we were seeking to do in the post-Maastricht phase, which is to make a reality of the undeniably vague word "subsidiarity", about which there has been so much talk. I believe that the word comes from canon law, although some tell me that it comes from the military law of the second Roman empire. Either way, it is the beginning of a process in which we shall conduct our law making and lay down the rules and regulations for governing the order of our lives in a way that is diverse and which differs from country to country. Only in certain cases will the central Community authority be regarded as subsidiary and competent to deal with those matters.

Provided that we work with vigour on the definition of "subsidiarity"—the Oxford English Dictionary refers to a central authority having a subsidiary function—it in fact means that the centre is subordinate. The Community should not be seen as above the House of Commons or the nation state; the centre is the body to which we delegate certain functions that could be better achieved at Community level. Therefore, I welcome, vague though it is, the beginnings of a different direction towards the sort of Europe that provides a balance between the nation state and nationhood—a Europe of nations in a modern sense, not the old Gaullist sense—and the necessary central functions that we delegate to the Community and its offices. They are not the higher authority, but the authority to which we delegate certain acts, as we choose.

In the coming weeks and months, we shall discuss the details of the Bill and the Maastricht treaty, and the way in which that reforms the Rome treaty. Tonight is a time of principles, and the one that I believe should be strongly upheld is the principle embodied in the word "diversity". Of course, diversity means the very opposite of convergence—the word that we hear so often and which is in the Labour party's amendment. "Convergence" is a fashionable word, most especially in relation to monetary union aims, but also in relation to a whole range of other matters in the Single European Act and the Maastricht treaty. The more we think about convergence, the more inappropriate and worrying it becomes, so it is significant that that principle is embodied in the Opposition amendment.

Convergence means central aims to flatten the disparities and remove the discrepancies between the nation states. We must question whether that is even a practical idea, let alone a healthy ideological one. What do we make of the convergence in Germany, which is supposed to be the lead country in commitment to monetary union? The Germans are trying to achieve convergence between the former east and west Germanies, but it is an utter failure. The more they try to achieve common labour laws, common minimum wages and even a common currency on a one for one basis—against the shrewd advice of Karl Otto Pöhl—the more they plunge into hideous disparities.

The very attempt to create convergence simply results in even more disparities, so that they have now created not just a welfare state—I am not necessarily against that—but a growing dependency with bottomless expenditure, with bottomless demands on the west German taxpayers and on the borrowers of Europe, at our expense, all in the name of trying to create an unnecessarily precise convergence between east and west.

Photo of John Butterfill John Butterfill , Bournemouth West

Does my right hon. Friend agree that that all becomes even more worrying when we remember that Spain is supposed to have the same gross domestic product per capita as the former east German state? Therefore, if it costs DM 150 million a year to subsidise the former East Germany and bring it up to the standards of the former West Germany, what will it cost the Community in subsidy or increased taxation to do the same for Spain?

Photo of Kim Howells Kim Howells , Pontypridd

I was about to deal with the broader questions raised by my specific example, and my hon. Friend has touched on one of them. I was about to mention Italy and question how convergence is working out there. The poor Italians hardly even have a Government at the moment—

Photo of Mr David Howell Mr David Howell , Guildford

My hon. and learned Friend has a shrewdness that he brings to us from the northern kingdom.

Italy has a budget deficit of 127,000 billion lire. Perhaps that figure is too large to fit into Hansard. The very idea that Italy will even begin to formulate a policy to bring about the convergence necessary to overcome the disparities and prepare the way for stage 3 of monetary union is pure fantasy. The truth is that convergence is applied as a doctrine—the sort of doctrine that the Labour party apparently wants and which is embedded in the attempt to move towards the third stage of monetary union. I do not want to sound cavalier, but I do not think that that first stage will ever happen. Convergence is unattainable and undesirable.

If there is to be a thriving single market, we need more diversity. Trade and competition thrive through differences, not through the flattening of differences—between level lakes no water flows.

The constant theme of many parts of the Maastricht treaty and of the Europe-builders of the past few years has been that we must do away with diversity and achieve a commonality, a similar pattern, a uniformity of taxes and social regulation as embodied in the social chapter, employment law, schooling, culture and so on. That does not promote competition; it is anti-competitive and needs to be challenged at every point. It is the larger Europe, on which I hope that my right hon. Friends will concentrate during our presidency, that will have the necessary strength. Looseness is strength; the rigidity and flattening of the disparities is the real weakness which will lead to Europe breaking apart.

I am not talking simply about convergence, to use the jargon as applied to monetary union. The same theme occurs in the former Single European Act and is still there, I am afraid, in the present revised treaty where it appears in the new jargon as cohesion, Cohesion receives a big boost in the new treaty in article 130b. It also appears in a new commitment to educational and vocational policy and in the European social fund and the European structural fund. In all those areas there is a vast commitment to flattening and removing disparities.

When people talk about momentum in the EC, they do not mean what they used to mean when we first joined the Community, which was a momentum towards the market and towards removing barriers and obstacles; they mean momentum towards more central recycling of funds, more vast transfers of resources and more commitment by the central administration to the gigantic merry-go-round of redistribution. That is a dangerous course.

The idea that one first denies the poorer areas of Europe the opportunity to compete on costs, to move their exchange rates and to operate their fiscal policies in ways which would attract private investment, and then compensates by redistributing funds on a vast scale is socialism at its silliest. I do not believe that that is what my right hon. Friends want to see emerge after Maastricht, and they are right to seek to check it in every conceivable way.

The doctrines of convergence and cohesion have been promoted at every point. Even the sacred level playing field, an idea which has been carried to extreme forms by market-minded officials who have gone well over the top in seeking to flatten and level everything in sight, leads to a pattern which is far from promoting competition and the single market. Those doctrines are founded on the economic fallacy that, through redistribution, one can compensate for the patterns of similarity which have been imposed on everyone.

That is not the European greater single market that we want to see. Contrary to what has been said, it will not be welcomed by the new east European democracies, the Finns, Swedes or even the Austrians. They want the great prosperity of a single market, as do we all, but that will be destroyed and defeated by the huge merry-go-round of redistribution. That did not work at a national level, as was shown in Britain in the 1980s and in many other countries—there was an absurd idea that we could compensate through socialisation—and it will not work at the European level. We should use the opportunity of the Maastricht agreement secured by my right hon. Friend to ensure that the passion for sameness is blocked by the policy-makers of Europe during the next few years and that we go in a different direction.

We must take this opportunity to establish new priorities and to establish principles on which an open and enlarged Community can work. We must use this opportunity to obtain a constitutional settlement on where the competencies lie and to establish a balance between Community and national rules and get away from the feeling that everything is sliding to the centre, which is what will happen unless politicians are perceptive and fight hard.

Above all, we must equip this Parliament to achieve that balance. That means not merely scrutinising current legislation and regulations, as is done so ably by the hon. Member for Newham, South (Mr. Spearing) and his Committee, but giving this Parliament a far more effective pre-legislative role so that we can reverse the centralisation and maintain the balance of a healthy democratic Community.

Photo of Mr Derek Enright Mr Derek Enright , Hemsworth 6:54 pm, 20th May 1992

First, I congratulate you, Mr. Deputy Speaker, on your appointment. I remember a long while ago returning from exile to Pontefract and the first meeting of an education committee under your chairmanship. It is nice to be back with your fairness and firmness once again. [Interruption.] We people from Pontefract must stick together.

We seem to be living in some "Alice in Wonderland" world when we talk about sovereignty where words mean what each person says they mean rather than what they actually mean. What is this wondrous sovereignty that we are losing? I understand sovereignty to be the ability of people to control their own lives; to be able to control the large corporations, the things in the larger world but also the things at their level.

What is so unique about Westminster and Whitehall that all sovereignty resides there, which is what I have been given to understand by speeches from hon. Members on both sides of the House today? That is the clearest nonsense. The sovereignty of this House, as far as I have seen in the relatively short time that I have been here, does not mean the control of the Government; it means listening to what the Government say and then trooping through the Lobbies in the way that the Whips direct. That is scarcely sovereignty.

We have the worst examination and scrutiny—I am pleased to be able to say this in front of my hon. Friend the Member for Newham, South (Mr. Spearing) because it is not his fault—of European legislation of all 12 member countries. We should consider what happens in Denmark which truly takes control of the Council of Ministers and truly knows what its Ministers will be saying. In Denmark, the subject of prawn-flavoured crisps would have been debated before it became an issue—unlike here, where we blame the loss of our prawn-flavoured crisps on the loss of sovereignty.

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire

The hon. Gentleman seems to be completely unaware that, in addition to the Scrutiny Committee chaired by the hon. Member for Newham, South (Mr. Spearing), there are two European Standing Committees. I do not think that he is a member of either of those, but he could join us and spend many hours debating the issues long before they reach the stage that he describes.

Photo of Mr Derek Enright Mr Derek Enright , Hemsworth

I should be delighted to accept the hon. Lady's invitation. I was not allowed to join either of those Committees even though I put my name down as soon as I was elected. I am glad to have the hon. Lady as an ally in my quest to become a member of those Committees. But it is not the Committees that are at fault. I do not blame the Committees. I blame those who set up the Committees with their terms of reference and the way in which they are circumvented.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South

One of the features of the new scrutiny system on which my hon. Friend comments is that he will be able to attend all the Standing Committees when they are set up, even if he is not a voting member, and he will be able to speak at all of them, along with the hon. Member for Derbyshire, South (Mrs. Currie). Is my hon. Friend aware that our system, although it could be improved, is the best of all systems in that it reports on each item of legislation from the Council of Ministers, the Government provide an explanatory memorandum and if the Scrutiny Committee requests a debate, there is one? I know of no national Parliament within the Community that covers the matter in that way.

Photo of Mr Derek Enright Mr Derek Enright , Hemsworth

The Danish Parliament does precisely that, and in an infinitely more effective way. A whole range of legislation has passed through the House, including the Single European Act. Many of the provisions about which Conservative Members complain were implied by that legislation. They accepted and voted for it, and it is too late for them to complain.

Sovereignty is the getting of proper control. National Parliaments need to control the Council of Ministers, and we ought to give much more power to the European Parliament—which the hon. Member for Derbyshire, South (Mrs. Currie) will, I understand, soon be joining—in order that it can properly scrutinise the Commission. That is the double whammy—the way in which we ought to control the Community.

The Community has all kinds of imperfections. I would not dream of saying that it is a perfect institution. However, one must be positive about one's objectives. If all that one wants out of the Community is money, money, money and for it to serve just as an exchange and mart, the Community will crumble and fold. There is no chance of that happening, however, because—contrary to the remarks of the right hon. Member for Guildford (Mr. Howell) the Community's 11 other member states will sustain it.

It is interesting to study the attitude of the European Parliament in that respect. As soon as Conservative Members of the European Parliament joined the Christian Democrats, the liberals there said, "You're even more right-wing than we are, so why don't you move seats?" The extreme right of the Conservative party is viewed precisely as such by many Christian Democrat parties, because they do not share the hang-ups that Conservative MEPs have about trade unions.

The social chapter is important because it will make Europe a Europe of the citizen—not a Europe just of the big bankers. Europe is for every individual citizen. It should be accessible to the individual through us and through Members of the European Parliament. Economics is the handmaiden of society, not an end in itself. Economics is a tool to ensure—and this is enshrined not in the Single European Act or Maastricht treaty but in the treaty of Rome, and in the European Coal and Steel Community—the quality of life of workers and of consumers. If the social chapter is removed, we shall be finished.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

The hon. Gentleman does not need to criticise the banks. Last year's report from the Deutschebank includes a four-page section espousing the virtues of the social charter measures.

Photo of Mr Derek Enright Mr Derek Enright , Hemsworth

I am grateful to the hon. Gentleman. The House will understand why I proposed him as president of the European Movement.

One aspect of the treaty has not been mentioned. It is disgraceful that the Prime Minister's speech made no reference to the Committee of the Regions, which will be a real test for the Government. They talk about subsidiarity, and that committee is an important part of subsidiarity.

Our present structure is not very helpful in gaining for our regions the recognition that is enjoyed by, for example, German lander. If the committee of the regions is to be appointed by the Government and not be proportionally elected locally, there will be real problems. Germany has done well out of regional and social funds because its lander have direct access to both the Commission and European Parliament. They established substantial structures for that purpose and, even more importantly, to convey developments to their local industries.

Photo of Dr Norman Godman Dr Norman Godman , Greenock and Port Glasgow

The Committee of the Regions is purely an advisory body, and it has no power vis-a-vis Europe's central institutions. According to the Prime Minister this afternoon, his interpretation of subsidiarity confines the allocation of competencies to central institutions. There is no question of the present Prime Minister devolving power to Scotland, Wales, Northern Ireland or the English regions.

Photo of Mr Derek Enright Mr Derek Enright , Hemsworth

I accept entirely my hon. Friend's argument, but I do not downgrade the importance of being able to offer advice, which is also the ability of the regions to accrue knowledge—and that is a powerful tool. Regions can inform their Members of Parliament what is happening.

A practical example of that is RECHAR, which was an attempt by the European Community to ensure that those made redundant from the coal industry would be compensated. Restructuring left a legacy of dereliction, environmental blight and unemployment. I invite Conservative Members to Hemsworth, to visit the pit villages with me and to see the enormous problems that restructuring created there.

There have been big arguments between the Government and the European Commission about the way in which the RECHAR money should be used. At no time were local authorities properly consulted by the Government—although it is interesting that they were consulted by that awful body the European Commission, as well as by the European Parliament. The one body that did not talk to local authorities was the Department of Trade and Industry.

The former Secretary of State for Trade and Industry, the right hon. Member for St. Albans (Mr. Lilley) announced on 17 February that all the additionality problems had been resolved. Local government, local bodies and private industry look forward to the resolution of those problems and to the money arriving.

In Upton in my constituency, there is a huge complex of pit baths, which a local entrepreneur—not the local authority, but with its agreement—wants to restore, so that they can be used as work units for small and medium-sized enterprises. That is one of the Commission's other pet themes, but it was not mentionied by the Government. However, we still do not know how the RECHAR money and cover is to be provided.

Part of our sovereignty in Parliament is the ability to scrutinise and to put down questions. I asked the President of the Board of Trade how the capital cover arrangements for RECHAR operational programmes are to be introduced. I tabled that as a priority question, because it is a matter of priority in my constituency. The first response that I received stated that the Department would reply shortly. I received its full reply this morning: My Department expects to make an announcement shortly."—[Official Report, 19 May 1992; Vol. 208, c. 105.] Is that the kind of nonsense that we can expect when European money is being thrown about? If we had a regional committee, it would be harrying the Government every moment, and it would not be left to one or two Labour Members to do that. Regional committees would serve a useful purpose, although not if they were appointed in the same way as area health authorities.

A good deal of nonsense has been talked about monetary union. We talk as though we could advance an economic policy in isolation, here in the United Kingdom—assuming that there is a United Kingdom—that would solve all our problems, rather than being ruled by these nasty foreign bankers. Under successive Chancellors of both shades of political opinion, however, what has happened abroad is what has affected the price of the pound—and, as a result, affected our economic policies and the level of employment.

We could issue pleas. In the very old days, we could say to the United States of America, "Please do not do this to us." Before we were members of the European Community, we could say, "We are going to join the Americans, and the strength of the dollar will help us." Now we have a decision to make: do we have a currency that can stand up to the yen and the dollar or do we have an offshore currency that will end up being policed in the way in which we are told that immigration points should be policed? That would be nonsense. As a result of coming together and pooling our sovereignties, we shall gain infinitely more sovereignty over the pound and economic policy than we have at present.

Successive Chancellors in the present Administration have talked about the way in which they are shadowing the mark, and discussions have taken place in Germany with the famed independent central bank. I have not known that bank to be so very independent of the policy pursued by West Germany. Far from it: what the Government have said, the bank has followed. We certainly could not boast such an arrangement in this country. Is the Bank of England as an entity subservient or subject to the Government? I certainly have not noticed its being subservient or subject to Labour Governments, and from time to time it has taken action that has proved awkward even for Conservative Chancellors.

I cannot see that, under the present system, our Bank is anything other than independent—and, in practical terms, the Bundesbank has been less independent than the Bank of England. The Bundesbank made it patently clear what it thought about union between the East German mark and the West German mark: it was against it. It may well have been right; I am not arguing about the rights and wrongs of the matter.

Chancellor Kohl said, "We will join together," and they did join together. There was no nonsense; it was a shotgun marriage, with the gun pointed at the head of the bank. That is precisely what will ultimately happen to us when there is a central bank in the European Community. The Opposition amendment is sensible, because it says that we must openly put in ECOFIN and develop its powers so that we can be absolutely sure that we are running in parallel. We are talking not about taking separate paths, but about taking the same path to combat unemployment. The only way in which we can combat that dreadful problem is by working with our European partners and strengthening our manufacturing industry. We can do that together, but we cannot do it separately.

In no way will that do what the right hon. Member for Guildford seemed to suggest that it would do. It will not produce a sameness throughout the Community. A huge variety exists. If the right hon. Gentleman attends the European Parliament more regularly, he will see that it is the minorities that are defended by it—minorities that are often ignored in their own countries, in much the same way as we seem to be ignoring Scottish, Welsh and, even more important, Yorkshire culture because of our insistence on centralisation. That insistence is unhealthy and dictatorial. We need a Europe that is open; a Europe that is together; a Europe that can and should improve the world in many ways.

Photo of Bill Cash Bill Cash , Stafford 7:14 pm, 20th May 1992

Personally, I have always believed in the European Community. I voted for the referendum and I voted for the Single European Act. I did so on the basis that the Community is an effective means of achieving co-operation and increasing free trade, not only within Europe but in the world as a whole—the contracting global village that we inhabit.

My opposition to the Bill and to the treaty is based on the fact that, under the proposals, we are moving into wholly different territory. The Bill is about the future government and democracy of Europe and of the United Kingdom. The gravitational pull in the treaty—which is endorsed by the Bill—would take us, indeed, drag us, into a federal Europe. If anyone cares to use the expression "a unitary state", I do not really mind. The key question is not related to the theology of federalism, or the term "unitary state"; it is the question of what functions are being allocated, where the power will lie, who will be accountable to whom, who will be elected by whom and how the representative functions will be distributed. That applies not only to Government, but to the people as a whole.

I have a further problem with the proposals. Contrary to what some people believe, this is very much a centralising measure. I will go further, and say that I have proof: I put it as high as that. Strictly speaking, we are not debating the common provisions—title I of the treaty—because they are excluded from the Bill, which deals with the prerogative question. Those provisions, however, contain a clear statement that we shall now be operating within a "single institutional framework". Article C states: The Union shall be served"— there are no ifs or buts— by a single institutional framework which shall ensure the consistency and the continuity of the activities carried out in order to attain its objectives while respecting and building upon the `acquis communautaire'. I think that I can more less rest my case.

Photo of Bill Cash Bill Cash , Stafford

I am glad to hear the Minister say that.

We are being told that this is not a centralising measure, but it is clear from the common provisions—which are part of the treaty, and on which we must therefore rely—that a single institutional framework is involved.

Moreover, as far as I can judge, no reasons are being given for what is being done. I have never found any reason for us to be put in our present position, although I have heard a great deal about the fact that we will not have such a position imposed on us. I spoke about that in a debate in the previous Parliament. The question, surely, is not whether the position is being imposed on us, but whether we are prepared to agree to it.

Back in the days of the last Prime Minister, I asked repeatedly for a White Paper. During the Conservative party leadership campaign, the Foreign Secretary suggested that a White Paper might be a good idea, and he may have gone further; but we have seen no White Paper. We have had no referendum, and we are to have no free vote.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness, Nairn and Lochaber

The hon. Gentleman has said that his pre-eminent objection to the proposal is that it is a centralising proposal. If that is so important to him, why does the reasoned amendment to which he has attached his name emphasise his opposition to both the principle of subsidiarity and the creation of a Committee of the Regions?

Photo of Bill Cash Bill Cash , Stafford

I am delighted to hear from my hon. Friend. I call him that in this context, because we have discussed the issue many times. I shall come to the question of subsidiarity in a moment.

The problem is that the common provisions prescribe a union. I do not think that much attention has been paid to that yet. It is all set out. It absolutely amazes me when those of us who have been looking at these documents find that things which have been skulking around in obscure parts of the House of Commons Library for some time are only now just becoming obvious.

We are being taken into a union. I remember the debate that took place on about 25 June of last year. It was said then that the high contracting parties would establish themselves into a Union and impose duties upon the citizens of that union. Apart from obtaining certain rights, duties would be imposed upon them.

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

My hon. Friend paints an eloquent picture of the dangers that he thinks we now face in going into a certain type of Europe that he never contemplated. Presumably he is distressed by that, because he voted to go into Europe; he voted for the single European market; and he voted for the exchange rate mechanism, and the rest. Would not the logic of his own eloquence today be to say, "I was conned," or. "I now realise the error of my ways"? Ought he not now to say that he wants to found a movement for coming out of Europe? If he were to do that, he might find that many of us would want to join him. If he does not say that, he lays himself open to the accusation that he is talking about a world that that he would like to be in, not about the world he is in.

Photo of Bill Cash Bill Cash , Stafford

In all fairness, that is a very good point. The Single European Act did not do what many people claimed it did. The difficulties that have emerged from the Single European Act have arisen largely because of the mischievous way in which the European Commission has used the provisions of, for example, article 100A in order to bring things within the ambit of what the Commission would like to be included. The health and safety provisions in relation to the working time directive are a good example.

It is the misuse of the powers of that Act rather than the Act itself which has caused difficulties. The Single European Act was based upon co-operation. The reality is that the European Commission has misused those powers. We are therefore perfectly entitled to stand by what we have done. Certainly I do so with regard to my support for the Single European Act.

Photo of Sir Nicholas Fairbairn Sir Nicholas Fairbairn , Perth and Kinross

If it was possible for misuse of the previous Act to have been made against our interests, why should we not use the present Act in our interests?

Photo of Bill Cash Bill Cash , Stafford

We shall be using the provisions of this Act to assist ourselves, provided that it does not take us, as I believe it does, into this ever deeper and more centralised European union. The main point is that we are being told—my right hon. Friend the Member for Guildford (Mr. Howell) made this point—that subsequently we shall be able to move towards a system of decentralisation. The problem is that the contents of the treaty and the Bill have the effect of centralising this system. We shall find it increasingly difficult afterwards to decentralise. My answer, therefore, is that we should reject the treaty now, precisely because this is the opportunity to do so, and that we should not wait until afterwards. This is the moment.

Photo of John Butterfill John Butterfill , Bournemouth West

Before my hon. Friend leaves the question of article 100A, does he not accept that the so-called misuse of the Single European Act, or of article 100A, makes a difference only because, if we use it for health and safety, we come under qualified majority voting, whereas otherwise it has to be unanimous voting? That is the only difference. The problem with the Single European Act that my hon. Friend identifies remains the same. The difference is that, under the treaties that we are now considering, the principle of subsidiarity is introduced and the Commission has the obligation to apply it.

Photo of Bill Cash Bill Cash , Stafford

I believe that the principle of subsidiarity is a con trick. It is said that there will be a devolution downwards of functions. Yes, that will happen. However, the critical fact is that the main functions will be transferred upwards. One has only to look at the main provisions of the treaty that are taken to the upper tier—economic and monetary union and matters of that kind—to realise that that is where the real power would lie. Apart from the fact that many distinguished jurists have repeatedly rubbished the concept of subsidiarity, including Counsel to the then Speaker, the fact remains that this is a concept which, in my judgment, is centralising rather than decentralising, yet we are being told the opposite. It is extremely difficult for me to accept that.

As for economic and monetary union, I believe that, by the end of the second stage, we shall be so locked into the system that is being provided—the cranking together of the machinery of the various banks, civil services and Treasuries of the member states—that to all intents and purposes it will be unrealistic to turn round when we reach 31 December 1996 and say, "We're going to dispense with all this; we're going to turn the clock back." I just do not believe that that will happen, and I am not sure that very many other people do, either.

As for our own protocol, there are the difficulties that I have already described. The general economic protocol declares, first, that we shall not use the veto to prevent any other member state from going ahead and, secondly, that we shall be tying ourselves into an irreversible, irrevocable commitment to economic and monetary union. That seems to me an incredible state of affairs. I entirely accept the valiant efforts that were made to get ourselves an opt-out, but I am afraid that ultimately it will not work. The general economic protocol locks us in very significantly.

The setting up of a central bank raises the question of accountability and democracy. Let us assume, for the sake of argument, that there is an effective opt-out for ourselves. However, the gravitational pull of the treaty is towards a central bank and all that goes with it. I have to say unequivocally that it is crystal clear from the statutes of the central bank that the bankers will be unelected and unaccountable. They cannot guarantee price stability. If they fail to produce it, nobody can get rid of them. Opposition Members have repeatedly stated—for their own reasons, which are not necessarily the same as ours—that they are deeply worried about the impact that a central bank would have upon our parliamentary democracy. They are absolutely right.

The one lesson that I have learnt from the speeches that I have heard so far and from my previous observations on the point is that the Bundesbank does not have the degree of independence that is attributed to it. As my right hon. Friend the Member for Guildford pointed out, Karl Otto Pohl pleaded and remonstrated with Chancellor Kohl not to go down the one-for-one route, but he did it. Look at what happened, never mind all the instability that that could create for Europe.

The reality is that these independent, unelected bankers are to be given the surrogate power of government in Europe. That is absolutely and totally unacceptable. On that principle alone, we ought to reject the Bill.

Photo of Mr Tony Benn Mr Tony Benn , Chesterfield 7:29 pm, 20th May 1992

Tomorrow night 1 shall vote against the Bill. I cannot vote for the Opposition amendment which, if it makes any sense to me, argues that we should go further towards European union and the central bank. This is not a debate between those who are anti-Europe and those who are pro-Europe. I very much resent the terms "Euro-sceptic" and "Euro-enthusiast", which were invented by the media and by some of my colleagues to blank out the serious debate about two important questions on which there is a wide and legitimate difference of opinion: first, about how Britain should be governed in the next 10 years and, secondly, about how Europe should be governed. If we could just get it into our minds that there are legitimate alternative opinions, the debate will at least be rational.

Some of my hon. Friends favour a fully democratic, federal, united states of Europe. I happen to think that it would be a bit unwieldy, but it would not fall under any criticism on the ground that it was undemocratic. One thing that would happen, of course, is that the Commission would be abolished, because the Commission has been elected by nobody. Jacques Delors struts across the European stage, very often supported by the Liberal party, with no democratic credentials whatever. They talk about proportional representation in Britain, but not about electing Jacques Delors by any principles at all. Yet they endorse him.

I understand that point of view, but I do not share it. There is the Maastricht view that we should go thus far but no further. The Opposition are wildly enthusiastic—the Front Benchers, at any rate—to go further into Europe. There is a view, which I hold and which has come out very interestingly in the debate, that if we want a durable Europe we must proceed more slowly, by consent between member states, not because we are nationalists but because we are democrats. That is the argument that I want to put forward.

I now refer to the much-neglected question of how Britain is governed. If we are in this new stage, it will have a profound effect on how we are governed. My experience may be a little rusty, but perhaps I may tell the House what happened in the five years when I was on the Council of Ministers and in my six months as President of the Council of Energy Ministers in 1977. A secret Cabinet Committee—we are told that the membership of such committees is to be published and it will be interesting to know whether this one is—in which the Foreign Office played a leading part would decide— [Interruption.] The reason why the Foreign Office likes the Common Market is that it runs every Department now, because every Department has to go through the Foreign Office to get anything done.

The secret Cabinet Committee met, and the Minister—whoever it was who was going off to Brussels—was given a brief as to what law he was to agree to. When he went to Brussels, the royal prerogative was invoked and the matter was done. Civil servants used to ask, "Why bother with a Bill in the House of Commons when we could get the measure through the treaty machinery in Brussels?"

Many measures, such as the harmonising of gas appliances, were passed. That was quite harmless; I am not in favour of a variety of different gas appliances. However, in the old days we would have an Act of Parliament, but Brussels is a quick way of doing it. Of course, when we get to Brussels, there is the Committee of Permanent RepresentativesCOREPER, that mysterious animal composed of permanent officials. Sir Humphrey Applebys of every country in Europe have got together, and they say, "You cannot do that, Minister, because we have agreed with the Dutch that if they do that, the Belgians will not object to what the Italians have said to the people in Luxembourg." The Minister has no power, anyway, [Interruption.]

I am an archivist of my European experience, too. I have kept all the papers. I looked at them over the weekend. The matter is worth studying. We can hardly imagine anybody more important than the President of the Council of Ministers, which is the job that I had. In that capacity I was not allowed to put in a paper. I could say yes or not to what the Commission wanted. We were a collective monarchy who could say, "La Reyne le veult," or, "La Reyne s'avisera," as they say when Royal Assent is given, or not given, but we could not put in an alternative. That is a fundamentally undemocratic structure.

I am not a nationalist—I would not follow Mrs. Thatcher anywhere on this matter. She abolished the Greater London council and various other bodies, so I do not even accept her credentials as a democrat. The right to dismiss the people who make the laws under which we are governed is what democracy is all about. We are being told that sovereignty does not exist. Of course it does not exist. Nobody is sovereign. The Americans are not sovereign, because they can be destroyed by a missile from China, for all I know. Democracy is about whether we have the right to respond to a situation over which we have no control. When we go into the Community, we lose the right to respond because the laws are not made by people here.

I have never forgotten an incident between two brothers—alas, both dead—Sam Silkin and John Silkin. John was the Agriculture Minister and Sam the Attorney-General. It was Sam's unhappy duty to tell John that his pigmeat regime was illegal. I sat in the Cabinet Office listening to those brothers, one explaining to the other that, although we had a parliamentary majority and had passed a measure, it was illegal.

Later, two Commissioners were chasing me about a scheme introduced by the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) when he was Secretary of State for regional development or something. The Commissioners said to me, "What you are doing is illegal—it is helping the Scottish industry to produce equipment for North sea oil rigs." I said, "I am sorry: you introduce a scheme in Europe—we do not want a special one." They took me to court as Secretary of State. They chose polling day 1979, when I was busy, and after that the matter disappeared.

We have misled the British people about the meaning of the Community from the point of view of our own Parliament. The House is now governed by the royal prerogative for the first time since 1649. Over the centuries, Parliament has grabbed back prerogatives from the Crown—even that one on the security services, inadequate as it was—and put matters in statute. Now any Minister can use the prerogative to encompass and control Parliament. That is a fact. Hon. Members may argue in favour of it if they like, but they should not call it an extension of democracy or merging sovereignty—no doubt Saddam Hussein thought that he was merging his sovereignty with Kuwait when he went in, and so on. It reduces the House of Commons to a municipal body which can be rate-capped and fined.

When I joined the Labour party, I hoped that my leaders had greater aspirations than to be the municipal leaders of the Great Britain corporation, which, for all I know, could subsequently be wound up by the Commission or by the Community in its new form of union. Nothing in the world would persuade me to go along with that. If I did, I would be stealing the powers of the people who sent me here.

Even if I agreed with every bit of it, I cannot give away the powers of Chesterfield, which have been lent me for five years, the right to make laws, subject to my being removed. I do not have the right to do that—nobody has the right to do that. Any hon. Member who gives away powers from his constituents will betray their trust. That is my conviction. It applies whether one is Conservative, Labour or anything else, because, under the democratic structure, one can use the power to have monetarism, socialism, liberalism or whatever, but now the people will lose the right to make that choice.

I understand the arguments for European integration. I have heard them many times: capital is internationalised; we can have guaranteed economic growth; the ecu will stabilise our currencies; the central bank will prevent inflation; Britain cannot stand alone; integration will guarantee peace in Europe; we have an ancient culture; a federal Europe will be a world power; European influence will modernise Britain; Britain is not very democratic anyway—that is true; there is no alternative—a phrase that Mrs. Thatcher invented. Those are the arguments and I understand them. I have heard them so often.

The plain truth is that Europe has changed fundamentally since the Common Market was set up. Then it was the cold war Europe—the Europe which was trying to get capitalism on its feet again in case the Russians came in and overthrew it. It is a wholly different Europe now. It is not even the Europe of growth that was promised by the right hon. Member for Old Bexley and Sidcup when he took us in. Entry into the Common Market was to be good for Britain, good for Europe and good for everyone—I think that that was Harold Wilson's phrase.

The position has changed in the sense that the eastern economies have collapsed. Western Europe has not given us growth. We now face a slump. In these circumstances, a slump reinvents and encourages the nationalism, racism and xenophobia that I fear. I am against the rush into a federal system because I fear the very thing that it will allegedly overcome. Integration has to be achieved slowly. Unity does not guarantee currency stability. America is a powerful country with a common currency, but the dollar goes up and down according to events. There is no guarantee that the ecu will be stable. We have to accommodate a much wider range of traditions than is even the case in the United States.

I fear that when the British people discover that they cannot change laws and policies by voting, either they will not vote at all or they will riot. I made a speech at the election of the Speaker in which I said that I feared a time of social unrest. Some hon. Members expressed their disagreement. But historically, riot is a traditional method not only here but in every country that has not had democracy. When experts say that they understand the institutions of Europe, I wonder how many people study with equal care the incredibly delicate relationship that we have with the people we represent.

If there is discontent, every one of us says, "Do not riot—vote." When we can no longer say that, we shall have licensed riot. I do not say that to stimulate riot. Riot is the most unconstructive way of achieving change. The Strangeways riot probably produced more prison reform than we have seen from any progressive Home Secretary. But riot is not the way to do it. That is what this place is about. It is not about the Crown, the mace, or the Speaker's silk stockings. It is about somehow maintaining in a society of different ingredients an agreement to be governed by people who only have a narrow majority. Lose that and we have lost everything. I am genuinely afraid of it.

I am in favour of a commonwealth of Europe. I should like to see a Europe that is wider and which harmonises. It should have a Council of Ministers which discusses co-operation, rather as the Prime Minister said today would happen for areas outside the treaty. I should like to see an assembly that met and worked out conventions to which member states could adhere. I should like to see a human rights commission that would examine people such as the Turks, who are banging at the door of the Community and have a rotten, dictatorial regime. I should like to see all of that.

The ultimate consent must come stage by stage and step by step from member states within the framework of their understanding of how fast they can go. That is why the decision to deny a referendum is an outrage. I was alone in urging a referendum in 1970. I was in a minority of one in both the shadow Cabinet and the national executive of the Labour party. I had the satisfaction of seeing it come through later. We held a referendum. It was right that people should be consulted. It is absolutely wrong that a step of the magnitude of that proposed in the Bill should he taken without consulting the people who will lose their power through the Bill. It is utterly immoral.

That my party's Front Bench team should be against a referendum is not only immoral but inexplicable. After all, we argued for the referendum, carried it through, put it on the statute book and voted in it in 1975. These are big questions. I hope that in Committee a referendum can be inserted in the Bill. I hope that we shall be able to make progress with a new Europe, because this continent of ours has enormous potential.

We have had two world wars. Everyone in Britain lost people in them. I lost an uncle in the first world war and a brother and friends in the second world war. Everyone wants a peaceful Europe. But the House should not think that enforced centralisation produces peace. Look at Bosnia-Herzegovina, at Slovenia and Croatia. One cannot run capitalism from Brussels in the way that people tried to run communism from Moscow. It has to be done by agreement at almost every stage. Otherwise, the thing breaks down.

I urge the House to listen to the view that I put forward and to bear it in mind tomorrow. It is not hostile to the European enterprise. I have a deep belief that we must go forward on a different basis. The Government have said that some co-operation will be outside the treaty. That is a gain. Perhaps they should draw the real conclusion that co-operation inside the treaty should also be on an intergovernmental basis. If that were the case, we might make a lot more progress.

Photo of Mr Tim Rathbone Mr Tim Rathbone , Lewes 7:45 pm, 20th May 1992

What a fascinating speech we have heard from the right hon. Member for Chesterfield (Mr. Benn). However, I must admit that it smacked more of Jeremiah than of the idealism which he would like us to believe that it was. In the context of his speech, we should remind ourselves, as my right hon. Friend the Prime Minister reminded us at the beginning of his speech, that, uniquely in Europe, there has been a healthy debate in Britain about the way forward in and for Europe. It took place before the treaty of Maastricht and after it, and it continues to take place now.

The Government are not steamrollering the treaty through in any greater sense than any of the previous steps into Europe or the decision to stay in Europe were steamrollered through. My right hon. Friend the Prime Minister deserves our praise for that. The British form of parliamentary democracy has been enhanced by it. Unlike the right hon. Member for Chesterfield, I believe that the British stance on Maastricht has been sensible, open and extremely cautious. That is exactly the stance which he encouraged us to take.

As the Prime Minister said this afternoon, Britain is fully committed to stages 1 and 2 of economic and monetary union. But, aware that there are risks of the unknown in planning the currency union in stage 3, the Government believe that we shall be in a better position to weigh the pros and cons of a single currency, and the economic consequences of convergence by member states, when that becomes a real option in the mid-1990s, or whenever.

So Britain insisted on a special protocol to delay a decision on stage 3 and to decide later whether to participate. We shall be able to see then whether there must be political union for monetary union to work. I believe that political union is unlikely. We can also decide at that stage whether to join a single currency, which also seems rather unlikely.

Certainly, the architects of economic and monetary union saw no economic imperative for political union. The Maastricht agreement reflects that. We must not be frightened or put off by the hypothetical, imaginary, fantasy bogeymen conjured up by the right hon. Member for Bethnal Green and Stepney (Mr. Shore). Contrary to the view of the right hon. Member for Llanelli (Mr. Davies), but as my right hon. Friend the Member for Guildford (Mr. Howell) said, the prospect of implementation of stage 3 seems to be receding. That point was also made by my right hon. Friend the Member for Mole Valley (Mr. Baker).

Contrary to what my hon. Friend the Member for Stafford (Mr. Cash) and the hon. Member for Chesterfield claimed, nothing in the Maastricht treaty means that we have denied or should deny the forces of nationalism or individualism. That is what really worries my constituents in Lewes and I am sure that it is one of the things that worry the right hon. Gentleman's constituents in Chesterfield. In Sussex, we have the saying, "We shall not be druv." That underlines many of the right hon. Gentleman's arguments.

The power of a nation or the people in it to harness the human spirit and to encourage endeavour is undoubted, considerable and valuable, and that has underpinned many of the speeches this afternoon. No lasting union could ever be built on a desire to submerge individual and national characteristics or identity. That is extremely important, and nothing in the Maastricht treaty threatens it.

The provisions of the Maastricht treaty relating to intergovernmental co-operation in foreign and security policy do not form part of Community law and are not part of the Bill, as the Foreign Secretary has frequently pointed out, and the Prime Minister reminded us today.

It is worth considering that the Maastricht treaty leaves the way open for the Western European Union, in consultation with NATO, to develop European Community defence and security co-operation. Only recently, our Secretary of State for Defence and his German counterpart emphasised the complementarity of the role of NATO and the increased activity of the WEU. In that context, WEU activity should be guided by two fundamental principles—openness in consultation and complementarity in decision making.

There are questions about how the WEU will develop, especially after its enlargement through the membership of Spain and Portugal, and its involvement in the Gulf war. Of particular importance is the question of the accession to the WEU of Denmark, Greece and Ireland—the remaining members of the European Community—and the linked question of observer status and associate membership of European NATO for Iceland, Norway and Turkey, which are not in the WEU. Those questions concern the scope and the instruments of the WEU's future operational role.

What has been clearly established is that there is no contradiction between European integration in security and the strengthening of solidarity between NATO partners. Closer co-operation between the parliamentary assembly of the WEU, the European Parliament and the North Atlantic Council should ensure that.

At a time of shrinking defence budgets and continuing—some would say growing—uncertainties in the eastern countries of our continent and the countries to their east, Europe must now develop so that it can better pool its defence resources and use them more efficiently. Maastricht provides direction for Europeans to move ahead and create the military apparatus that will be responsive to risks from all quarters in Europe as well as those from beyond our continent.

The Government were correct in the Queen's Speech, and in the Prime Minister's words, to reiterate the importance of the WEU and to recommit Britain to it as the pillar of European security.

I digress from the narrow confines of this short Bill briefly to touch on the continuing importance of security in Europe, because it has not yet been mentioned. I also digress because the agreement signed at Maastricht established that the European Community can develop in more ways than one, without the European Commission having a monopoly of initiatives. Our House of Commons will continue to exercise its own scrutiny of those matters. What is not included in the Bill can be just as important as what has been included, and that is another reason why the motion and the treaty deserve ratification.

Photo of Greg Pope Greg Pope , Hyndburn 7:54 pm, 20th May 1992

As this is my first speech in the House, I am sure that you will bear with me, Mr. Deputy Speaker, if I refer to my predecessor and to my constituency before turning to the main item for debate.

On my way to the Chamber, I reflected that I would not be here if it had not been for the backing that I have received from my family. I was fortunate enough to have been brought up in a politically active family, but that has a down side. During my first week here, when I did not know any of the rules—I now know a few—I left the Chamber without bowing to Madam Speaker. I was pulled up not by a Whip or by a senior colleague, but by my mother, who saw it on television and telephoned me to tell me off. I have not yet learnt to be in awe of the Whips Office, but when a mother tells you off, you do as you are told.

It is a great shame that my father is not alive to be here, as I am sure that he would have been proud. It is a special thing to represent one's home town in this place, and I am proud to do so. My father had to leave my home town of Great Harwood in 1933. When he was 15, he lied about his age to run away from home and join the King's Troop, Royal Horse Artillery because there were no jobs in the town. In some ways it is ironic, but I am sure that he would have been proud that, nearly 60 years on, his only son is representing the town in Parliament.

Since the constituency's inception, Hyndburn has been represented by Ken Hargreaves. It is no overstatement to say that he has devoted his life to representing the people of the area, first on the old Oswaldtwistle urban district council, later on Hyndburn borough council, where he became mayor, and from 1983 to 1992 as the Member of Parliament. He won respect from both sides of the House for putting the views of his constituents before those of his party Whips. I accept that that may not be a recipe for promotion in Parliament, but it is a recipe for winning respect for integrity, and that is something that he has in abundance.

Ken Hargreaves said in his maiden speech in 1983 that he would rather have beaten any member of the Labour party than Arthur Davidson. I echo that by saying that I should have liked to beat any member of the Conservative party but Ken Hargreaves, who was a thoroughly decent man.

Hyndburn did not exist as a parliamentary constituency before 1983. Before then, it was partly made up of the Accrington seat, which was ably represented by Arthur Davidson for 17 years. I know that he is fondly remembered in Accrington. He came up during the general election to help with my campaign, and I notice that many more people wanted to shake his hand than mine. If I can represent the area half as well as he did, I shall not go far wrong.

The other part of what is now Hyndburn, Great Harwood, was represented before 1983 by Lord David Waddington. In the 1987 general election, I stood against David Waddington in Ribble Valley. Members with marginal seats will give me some sympathy when I say that I was unfortunate to lose by a narrow 22,000 votes. In mitigation, it was raining on polling day in 1987, and everyone knows how difficult it is to get the Labour vote out in the rain. I should be grateful that there was sunshine in Accrington on 9 April this year.

Hyndburn is better known for its main town of Accrington and for Accrington Stanley football team, which I am sure I shall welcome back to the Football League in the not too distant future. Hyndburn has an unfair public image, something of a "Coronation Street" image, of mills and terraced streets, which exists, although, sadly, most of the mills are now idle.

To be fair, Hyndburn borough council has done its best to change that image and to promote the town, but the council could do more if it was given the resources to do so. More than half the houses in my constituency either are unfit for human habitation or require serious renovation. I hope that the Government will bear that in mind when determining the next round of housing investment programme allocations.

The Accrington Victoria hospital was built not by the Government but by public subscription. The people of Hyndburn, and of Accrington in particular, feel very strongly that the Government have no moral right to close ward after ward, as they have done in the past 13 years. It is now rumoured that the maternity unit is threatened with closure. Any such proposal would meet with strenuous opposition, not just from me, which is neither here nor there, but from people from all sides of the community and of all political parties.

I noticed that the Prime Minister said that what was most important about the Bill was not what was in it, but what has been left out. That is absolutely true. My constituents were dismayed by the Government's decision at Maastricht to opt out of the social chapter. A survey earlier this year in my constituency showed that between 5,000 and 6,000 people in employment earned less than £3·40 an hour. Those people cannot understand why the Government appeared to betray their interests at Maastricht.

The economic options open to the Government are stark. We either undercut our competitors and become the Taiwan or the South Korea of Europe, or we compete on the basis of quality. We can be a low-paid, low-skill economy or a high-paid, high-skill economy. When will the Government learn that exploitation damages not only our economy but the fabric of our society, whereas decent pay and conditions benefit the economy and society?

My constituency is home to a famous brick company. Anyone who has been to a party conference in Blackpool will know that most of that town is constructed from Accrington brick. That company manages not just to compete with the Germans, but to beat them in their own market. It is able to export successfully because it has invested not only in technology but in its work force, who are properly paid and properly trained.

We have heard quite a bit about subsidiarity within the Community and the United Kingdom. The Government could show their commitment to subsidiarity by assuring the House that our representatives to the EC Committee of the Regions will be elected members of local authorities from those very regions rather than mere appointees of central Government.

In the time that I have been in the House, I have noted the gloating, perhaps understandably, of Conservative Members at winning a fourth election in a row. May I issue a word of caution? The electorate of the country, and certainly of my constituency, did not give the Conservatives a mandate for every dot and comma of their manifesto. The social chapter is one example of matters on which the people have not given the Conservatives a mandate. I hope that they will bear that in mind and will listen to that majority.

Photo of Mr Stephen Milligan Mr Stephen Milligan , Eastleigh 8:03 pm, 20th May 1992

I am not sure what the normal form is when one maiden succeeds another, but I should like, metaphorically, to blow kisses across the Chamber and congratulate the hon. Member for Hyndburn (Mr. Pope) on his excellent maiden speech. He set a high standard and I was particularly impressed at the generous tribute that he paid to his predecessor and the fluent and moving way in which he delivered his speech.

I should like to begin in the same vein by paying tribute to my predecessor, Sir David Price. He served in this House for 37 years and he was one of the few Members of the previous Parliament who had also fought in the second world war. He brought to this job the soldier's quality of bravery when he spoke out independently on certain issues. He also brought to that job the soldier's quality of loyalty to one's colleagues when he put his own interests second to those of others.

Sir David took a particular interest in the health service and the disabled. In the constituency he was not only respected, but loved—a number of people in the House who knew him have also expressed similar sentiments. The best pledge and boast that I can make to my constituents is that I shall be pleased if I do this job half as well as Sir David.

My second duty is to tell the House that I am fortunate enough to represent one of the most excellent seats in the country. Eastleigh has a famous history. It was at our airport that the Spitfire was developed, which helped to defend the country in the second world war. More recently, the Vosper Thornycroft yard at Woolston built the glass fibre minehunters that played a crucial role in saving British and allied lives during the Gulf conflict.

Eastleigh developed as a railway town at the turn of the century. In the past 15 years, it has become a boom town—thousands of new jobs have been created, tens of thousands of new houses have been built, new schools have been opened and new churches consecrated. We even have a new railway station at Hedge End. If hon. Members want to see the booming Britain of tomorrow, to which we can all look forward, they should come and visit us in Eastleigh.

Eastleigh is not only an economically thriving area; it is a strong community with a strong sense of responsibility for those who are less well off. We can be particularly proud of our network of voluntary services—we have the best dial-a-ride scheme for the elderly in Hampshire. Eastleigh is a strong, caring community.

Eastleigh is a world leader in another respect—speed of milk bottle delivery. Hon. Members may be aware that Eastleigh was the home of the late Benny Hill and that that is where he began his milk round before he became a comedian. Hon. Members may remember his song about Ernie, the fastest milkman in the west. I am glad to tell the House that Ernie is still alive and still working, but, after 40 years as a milkman, he has, unfortunately, moved on to another job. But it is clear that high productivity levels are still much in strong evidence in Eastleigh.

While we are on the subject of dairy products, I should like to apologise to my right hon. Friend the Prime Minister for the fact that he was hit by an egg when he was kind enough to visit the constituency.

Photo of Mr Michael Carttiss Mr Michael Carttiss , Great Yarmouth

That was not the first time.

Mr. Milligan: No, indeed. However, I was able to reassure my right hon. Friend that that egg was not thrown by one of my constituents, although there are 93,000 of them. The person who threw it was from far afield. The true feelings of my constituents towards my right hon. Friend were shown on 9 April when they gave a massive vote for the Conservatives.

I am proud to be pro-European; I make no apology for that. But now I should like to turn to the treaty we are discussing tonight. I believe that the European Community has been one of the great success stories of recent times. I have spent much of my journalistic life in eastern and western Europe writing about European events. I am still an enthusiast for Europe and I have found some of the comment in this debate depressing because it was essentially negative and it misunderstood Britain's role in the present world.

I had the good fortune to work for the BBC and to report the revolutions in eastern Europe. If hon. Members had seen the faces of the young people of Prague, Budapest, Warsaw and Berlin as those revolutions took place and if they had had the opportunity to talk to them, they would have discovered that they have not only a great passion for freedom and democracy, but a great desire to join western Europe and the Community, our Community. Those events served as a reminder that, even today, the Community has the power to move hearts as well as road haulage quotas.

Eastleigh is enthusiastic for the Community, for practical reasons. We are developing an airport that will create 5,000 jobs and develop links across Europe. We have hundreds of businesses that export to Europe, especially through the port of Southampton, which is now doing a booming trade with Europe. We are twinned with two railway towns in France and Germany and have close relationships with them. Our sixth form college at Barton Peveril is, for the first time, welcoming East German students.

However, enthusiasm for Europe does not mean support for every idiocy suggested by Jacques Delors. May I give two precise examples from my constituency? My constituents cannot understand why the European Commission has taken it upon itself to try to block the completion of the M3 motorway at Twyford down. For 30 years my constituents have suffered intolerable delays because of the failure to complete that motorway and many people have been killed and injured on the Winchester bypass because of that delay. Not only can my constituents not understand why there is a delay, but they cannot understand why an Italian Commissioner should tell the British Government where to build a British motorway.

The second example in my constituency is that we are fortunate enough to be home to Mr. Kipling's bakery, which bakes "exceedingly good cakes". Many of the bakery staff work long hours and a double night shift. They do so not because they like the smell of mince pies but because they want to earn good money for themselves and their families. Yet, under the Commission's proposals, the social chapter and the social charter, the idea would be to deprive those workers of the right to work those hours. They cannot understand why Europe should want to restrict their right to earn good money.

Hon. Members will therefore understand that my enthusiasm for Europe is tempered by scepticism about some of the nonsense that is now coming out of Brussels. That is why I heartily welcome the treaty. It seems to combine positive developments in Europe, the extension of the efficacy of the Court of Justice, a more effective foreign policy and important steps toward economic and monetary union, which are in the interests of my constituents, together with a change of direction in the institutional structure of Europe.

The treaty develops a new model for Europe, which is different from that which Jean Monnet drew up 40 years ago. There will be more supranationalism in one or two areas, but the main move is towards a new intergovernmental structure, particularly on the sensitive issues of immigration and foreign policy. The decision to opt out of the social chapter is not only right but sets a useful precedent for negotiations with the new countries that will come in from eastern Europe. They will be unable to stick to all the same rules as the countries in the existing Community. If we are to enlarge Europe, it is important to make it a multi-track Europe. Obviously, all countries will have to stick to certain common principles, but individual countries will want to opt out in many cases if the rules prove too difficult for them to accept.

The treaty was possible only because of the remarkable relationship that my right hon. Friend the Prime Minister has developed with Chancellor Kohl and the German Government. He has done that through his qualities of courtesy and plain speaking, which have made him so popular in this country, and in Germany. Because of that relationship, the Germans were willing to moderate many of their demands, which the House would have found unacceptable. The fact that we now have the best relationship between Bonn and London for many years augurs well for this country and the future of the Community. That is why I have every enthusiasm in supporting the treaty, which is good for Eastleigh, good for Britain and good for Europe.

Photo of John Taylor John Taylor , Strangford 8:13 pm, 20th May 1992

I commence by congratulating the hon. Members for Eastleigh (Mr. Milligan) and for Hyndburn (Mr. Pope) on the delivery of their maiden speeches. The speech of the hon. Member for Hyndburn was marked by the tribute that he paid to his predecessor. It is good when an hon. Member speaks highly of a predecessor from another party. The hon. Member for Eastleigh spoke without a note, which was a magnificent performance for a maiden speech. It made a big impact on me.

The hon. Gentleman said that he was in Prague, Budapest and eastern Europe, where I have been over the years. But the fact that the inhabitants of those countries wanted to be part of Europe did not necessarily mean that they looked forward to being in the European Community. There is a difference. They wanted freedom and democracy, not necessarily the European Community.

We are now taking part in a debate on the unmentionable subject of the general election campaign. The Conservative and Labour parties entered into a conspiracy not to raise the issue of Europe during the election campaign. That is why it came as a surprise to me this evening to hear the Prime Minister say that he had gained a mandate for Maastricht by winning the general election on 9 April. A Government do not have a mandate for a subject when they fail to mention it during an election campaign.

The right hon. Member for Chesterfield (Mr. Benn) said that he resented the fact that he has a reputation for being anti-European simply because he questioned some of the issues raised by the Maastricht agreement and the European Community. I share that resentment. I have been actively involved in European politics since my university times more than 30 years ago. I joined the European youth campaign and have been involved in European organisations across Europe in the past 30 years, including 10 in the European Parliament. I take a great joy in the development of democracy and freedom right across western Europe, spreading into eastern Europe. I therefore resent any suggestion that, because one questions the Maastricht agreement, one is anti-Europe.

The Ulster Unionist party can look the other parties straight in the eyes and say that we have been consistent in our policy on Europe. I listened with amazement to Conservative Back Benchers complaining today about the problems now arising on border controls, immigration issues and the 48-hour working week. Those problems arise not from the Maastricht agreement but from the Single European Act, for which the very same Conservative Members voted. I am glad to say that the Ulster Unionist party voted against it and, on behalf of the party, I was one of the few Members of the European Parliament who voted against it in Strasbourg. There is only one Labour Front-Bench Member present now. We approach the subject with a clear conscience, but Labour Members' consciences cannot be clear because in the past few years they have jumped around so much on their policy on Europe.

We must congratulate the Prime Minister, however, on the way in which he negotiated the Maastricht agreement. There is no doubt that the Government proved themselves good and skilful negotiators. They have managed to negotiate a treaty that will result in a victory tomorrow night for the Government. It is a true opt-out, although some of us would say that it was a cop-out because the Government are avoiding the real issue and postponing it for another day.

Last week I had the privilege to return to the European Parliament. It was an important week—asparagus week. [HON. MEMBERS: "Hear, hear."] I am surrounded by some other Members of the European Parliament. One of them spoke earlier this afternoon and six former Members of the European Parliament fled Europe to come here. They may have heard that the hon. Member for Derbyshire, South (Mrs. Currie) was trying to get there. Not only was it asparagus week, but there were two other important events, one of which was especially important for me—our first Northern Ireland exhibition in the European Parliament, which went successfully and was opened by the Secretary of State for Northern Ireland. In addition, we had the visit of Her Majesty the Queen, which has not yet been mentioned in this debate.

The Queen's visit to the European Parliament was magnificent. The way in which she performed, from the moment of her arrival to her departure, made one proud to be British. On the morning of her arrival, I looked at the English newspapers and was horrified by the squabbling and scaremongering that appeared to be taking place. I looked forward to the Queen's speech with trepidation, but having listened carefully to every word of it, I found myself in full agreement with the text. I know from my friends in the Christian Democrat party and other groups that all nations felt great respect for the United Kingdom following Her Majesty's speech to the European Parliament.

When we talk about the United Kingdom in Europe and, to use the Prime Minister's phrase, "the heart of Europe", we must ask ourselves what sort of Europe we are discussing. Is it the Europe of the present common market of the European Community? Is it the Europe of the Maastricht agreement? Above all, is it the Europe of nation states or a Europe of regions? That issue has not been clearly defined by the Government, who are hedging their bets.

This afternoon the Prime Minister said that he interpreted the Maastricht treaty as a transfer of matters back to the nations. Not one of the other 11 Prime Ministers in the European Community would interpret that agreement in that way. Having been involved on the continent of Europe for 15 years, I can assure the House that the projection is towards federalism and a united states of Europe. To pretend otherwise is to mislead the people of the United Kingdom.

We need a wider Europe and we certainly need greater co-operation in Europe. We also need more nations in the European Community. An Ulster Unionist has many Roman Catholic friends in the European Parliament and works happily with them. Many of them say that they look forward to the introduction of a greater Protestant work ethic in Europe as a result of the entry of Sweden, Finland, Switzerland and perhaps even Norway. We want those countries to join the European Community, but, above all, we want less centralisation in Europe, with less bureaucratic control from Brussels.

When we talk about the Maastricht agreement, we are debating a treaty for European union. There seems to be, particularly among Conservative Members, a pretence that we are not talking about European union. There is an avoidance of the fact that we are talking about federalism. Some people pretend the word does not exist or, if it does, that it can be interpreted in different ways, but in Europe federalism is being interpreted in only one way.

The treaty for union makes reference to votes for all citizens of the European Community in whatever nation they live. So far, the vote is restricted to local and European elections, but next it will be extended to apply to our national elections—everything in the European Community goes step by step, not all at once. That development is creating problems for some countries. In the next European elections in Luxembourg at least one of their six Members of the European Parliament will be Portuguese, not Luxembourgers as already about 20 per cent. of the population of Luxembourg and thus, under the new legislation, 20 per cent. of the voters, will be Portuguese. Such problems are being created for small countries and regions in the European Community.

We in the Ulster Unionist party certainly welcome the reference to the committee of the regions. I would be the first to agree that Northern Ireland, More than any other part of the United Kingdom, has benefited from the European regional development fund. We give thanks for the work of both Labour and Conservative Governments when in office for the way in which they assisted us in Northern Ireland to take advantage of the ERDF.

However, it is tremendously important that the people of the regions which benefit from the fund know how it operates and participate in the decision-making institutions. Therefore, we welcome the idea of a committee of regions and trust that Northern Ireland will be fairly represented on it by the people of Northern Ireland and not politicians sent over to rule Northern Ireland.

The treaty refers to the cohesion fund, which was to apply in those states which had less than 90 per cent. of the average gross domestic product in the European Community. Unfortunately, Northern Ireland was excluded from the benefits of that cohesion fund for some reason. I hope that if our exclusion was an oversight—I suspect that it was, as we were one of the districts to benefit from the European regional aid and so should have been included in the fund—we will gain compensation by being granted further assistance from the ERDF.

The main issue in the treaty is that of monetary and economic union, and the suggestion of a single currency. What does a single currency require? It requires a central bank to control it, which means the surrender of national freedom to vary either interest rates or exchange rates. It even means that we would give up the right to decide the major economic policies to benefit United Kingdom citizens.

The Labour party, Liberal Democrat party, Conservative party, Ulster Unionist party and all other political parties will cease to have a right to introduce different economic policies, as we shall be governed by factors outside the United Kingdom and outside our democratic control. That is the key issue facing this Parliament and the citizens of the United Kingdom. That is why we want a referendum on the Maastricht agreement in the United Kingdom before a decision is taken. I know that some Conservative Members, some Liberal Democrats and some Labour Members support that idea, which, regrettably, has been rejected by the Prime Minister.

If we fail to secure a referendum this time, I hope that there will be one before a final decision is made in two or three years' time on whether to join the European central bank with a common currency and all that goes with that. If we enter a central European economic system, it will ultimately be controlled by a central European institution outside our control.

The Government's policy has been too clever by half. The policy has been determined in order to hold the support of most Conservative Back Benchers and also, I fear, to deceive our Community allies in the other 11 countries who now significantly misunderstand the United Kingdom's attitude to the European Community.

By enacting the Bill, Parliament will be running away from the issues, as happened in the recent general election. The day of reckoning will simply have been postponed—but that merely means that the day will be more painful when it finally arrives in three years' time.

Photo of Mr Peter Hordern Mr Peter Hordern , Horsham 8:29 pm, 20th May 1992

I hope to follow the remarks of the right hon. Member for Strangford (Mr. Taylor), but first I should like to congratulate most warmly the hon. Member for Hyndburn (Mr. Pope) on his maiden speech. He spoke most graciously of his predecessor, of whom we were all fond, and he was listened to with great interest and enormous respect. I cannot promise him that he will always be treated with such respect; that will depend on how much he riles Conservative Members.

As for my hon. Friend the Member for Eastleigh (Mr. Milligan): what a tour de force. He spoke without notes and the excellence of his speech was greatly to his credit. We especially appreciated his kind remarks about his predecessor, David Price—a great favourite of ours who will be long remembered in this place. I am sure that my hon. Friend will represent his constituents as ably and with as much integrity as David Price did, and we look forward to hearing from my hon. Friend and from the hon. Member for Hyndburn again.

We have had continuous debates about the European Community during my time in the House and we are now approaching a watershed. The Maastricht treaty is important for several reasons. First, as the right hon. Member for Chesterfield (Mr. Benn) rightly said, conditions now are very different from when the Community started. We are no longer in the cold war. There has been an enormous change in eastern Europe, and the treaty must be examined in the context of the challenges that Europe will face in future.

Today's state of affairs is very different from that which obtained 20 years ago when we signed up as members of the Community. The great change has been in the relations between the Community and eastern Europe—as the Prime Minister rightly said, that is the most significant change of all. It would be absurd to try to arrange a treaty that took no account of the changes in eastern Europe.

I know that a number of Members would like to concentrate on creating a deeper Europe before we create a broader one, but that option is not open to us. The enthusiasm to join among the east European states is such that, as my hon. Friend the Member for Eastleigh rightly said, it would be intolerable if we ever turned our backs on it. That is why the idea of subsidiarity is of the greatest importance in this treaty. Everything should be judged against it—against how rigorously we can apply the principle of subsidiarity to every issue in the treaty.

As time has gone on, countries in the Community have seen to it, after their initial enthusiasm, that they took good care of their own. The French have never hesitated to do that. They coined the word "communautaire", but that word means whatever is good for the French. There has never been any doubt about that since the time of Colbert, and the French view of French policy is very different from ours. They want a European state favourable to the French. The more centralised the state that they can obtain to that end, the better they will be pleased.

This is not our idea, however. The love of the French for Cartesian logic has bred a race of functionaries certain that they are always right; of such is Mr. Delors. In France, this takes the form of protectionism; in Brussels it takes the form of deepening the European Community before broadening it. That means that Brussels will take every opportunity to centralise power, convinced that that is in the best interests of the Community.

What should our attitude to Brussels be? Given the new circumstances in eastern Europe, we must take a critical look at the institutions of the European Community and at what is proposed in the treaty. We should approach our European negotiations with the same caution as we would show to a particularly demanding mother-in-law with a tribe of foreign cousins on the make. That is what the European countries do, and we should do the same.

Of course we are wedded to Europe, but that does not mean that we should fail to look with a critical eye both at present Community institutions and at the proposals for the social chapter and the budget. The common agricultural policy is a long-standing European institution. I dare say there was much to be said for it when it was founded, at a time when Europe was short of food. It is now a disgrace. It provides poor support for farmers, it damages third-world agriculture and it is likely to ruin the GATT negotiations unless it is drastically reformed.

The CAP is also corrupt in a technical sense, in that the Court of Auditors has found far too many cases of fraud in claims for agricultural support. As Chairman of the Public Accounts Commission, I have had talks with the Comptroller and Auditor General before and since the Maastricht treaty to see what might be done to tighten up the procedures to counter this fraud. The House will know that, under article 206, both the European Council and the Parliament will examine the observations of the Court of Auditors, and the Commission will report on measures taken to combat fraud. It seems to me that this is a real role for the European Parliament to play. It is one which our own PAC has played conspicuously well, with never a minority report in well over a century.

I hope that the European Parliament will call the Commission to account in just the same way as the PAC calls permanent secretaries to account, and I hope that it will be rigorous in its examination, because there is nothing worse than disrespect for the European Community because of the fraud of which there is far too much evidence. The European Parliament should play this extended role with our full backing.

I hope, too, that the European Parliament will make the fullest use of these powers and will devote rather more attention to detail of this kind and a little less to invoking the spirit of Charlemagne at good lunches—that would be good for European parliamentarians. They have a real job to do and it represents a welcome addition to their powers.

Subsidiarity, as I have said, is important. It has been followed more by other nations than by ourselves. The Italians regard the Community as a form of grand opera: overflowing sentiment, broken pledges and commitments unfulfilled. The French regard the Community as a form of outdoor relief for their farmers, as do Spain and Greece. The Germans think of the Community as a form of insurance against themselves. They are going through a rough time, but I do not doubt that they will recover and become the strong economic force forecast by Mrs. Thatcher.

I do not believe, however, that the best response is to station United States marines on the Rhine. Rather, we must regard a strong Germany as an opportunity for our exports; a weak and over-burdened economy, either of Germany or of France, cannot be good for Britain or for anyone else.

Economic success does not depend on a common currency. It would certainly be more convenient to have one, but, if we are to achieve economic success, there is no substitute for free trade and competition and doing away with waste such as that caused by the CAP. It is an illusion to suppose that we would lose our sovereignty if we adopted a common currency.

When we were strong, in Victorian times, sterling was fully convertible to gold, and no one complained that we would lose our sovereignty because of gold production by Californian or Australian gold miners. Nor did anyone complain after the war when, under the Bretton Woods agreement, sterling was made exactly equivalent to the dollar for many years. It might be argued that that resulted in our being wholly dependent on the Federal Reserve for the value of sterling, yet I do not recall anyone saying that we had surrendered our sovereignty then; no more will we in this case.

It is necessary to decide whether it is in our interests to adopt the very strict regimes that the Maastricht treaty provides—in other words, to reduce the deficit to about 3 per cent. of GDP. I do not know whether the House is aware of the fact that the Italian deficit is about 12 per cent. of GDP and there is no reasonable prospect of countries such as Greece reducing their GDP to such a degree. However, the 3 per cent. target is well worth aiming for.

The important question is whether the targets set for a common currency are desirable. If I believed that, in examining the coming expenditure round, my right hon. Friends could reduce the deficit swiftly to 3 per cent. of GDP, I should be very pleased, but I think that may be accomplished only with difficulty.

I shall be right behind my right hon. Friends in their efforts, but the idea that other countries would be able to do so swiftly and within the next four or five years is fanciful. When the other eastern European countries join the European Community—as we all hope they will—it will put those very desirable objectives in some doubt, so I believe that a single currency is many years hence.

I shall say a word or two about cohesion, which is another important part of the treaty. There is a notion that a large physical transfer of resources is the only way to provide the circumstances required for a single currency, but I do not believe that that is the case. Surely the economies that are growing most rapidly are those in the far east. There are transfers of resources in the far east, but they take the form of substantial investment by, for example, Japan, Singapore and Thailand and other developing countries.

There is no question of the Japanese transferring resources by taxing their citizens and giving away that money. There is substantial investment by the richer countries in the poorer countries, and I see no reason why we should not adopt the same attitude in the European Community. In fact, I would go further: we shall not be successful unless we have a free trade regime in which such investment can take place easily.

National Parliaments are closer to their peoples than the European Parliament can ever hope to be, and we can never afford to weaken the hold of democracy. We now have the strongest parliamentary democracy—indeed, the strongest Government—in Europe. More than at any other time we are now in a position to shape the future of Europe and make it a free trade, outward-looking community of nations, and I have every confidence that we shall seize that chance.

We are far from being a united Europe. There is much in the treaty that may cause us concern, but progress towards a united Europe can be better achieved not by grandiose sentiment or impractical arrangements but by the creation of conditions in which enterprise may flourish and in which new European businesses may be set up. I think that the Government have a better opportunity now than at any time since we became members of the Community to impress our leadership on the Community, and I hope that we shall seize that opportunity.

Photo of Mr Nigel Spearing Mr Nigel Spearing , Newham South 8:42 pm, 20th May 1992

I think that I might be the last member of the Labour party to be described as an enthusiastic European, but I put it on record that, since 1948, when I visited Hamburg and helped the Hamburg international youth club to rebuild the Gestapo headquarters into a new theatre, I have been anxious to see the rebuilding of an international Europe on democratic lines.

For the benefit of my colleagues who may not know this, I want to make clear my views on the various treaties that we have had to discuss in the past 20 years. I believe that they did not provide the fruit that I wanted and, above all, that they will be a danger not only to the democracy of our country but, conceivably, to that of our colleagues across the channel.

In that spirit, I am glad to follow the hon. Member for Horsham (Sir P. Hordern) because he mentioned two major issues on which I shall concentrate—the importance of the definition of subsidiarity and the importance of economic control and its link with democracy. The House cannot be unaware that control of finance, credit, taxation and expenditure and the criteria on which the decisions are made are fundamental to democratic representative institutions. I shall end my speech on that note.

Conservative Members have spent a lot of time discussing the unexpected and perhaps unwelcome results of the Single European Act, especially the definition of a single market as an area without frontiers. I believe—I think that this is becoming clearer—that the results of that Act, or that treaty, have not been easily predictable. I fear that the same will be true of the treaty that we are discussing now in its connection with the existing treaties and the results of the third treaty which we have yet to see. Indeed, I believe that it would be wrong for us in Committee to move to that stage of debate without a consolidated treaty which would be the result of the merger of the two documents that we are considering. Without that, I do not think that we can scrutinise its outcome.

Partly because of the way in which various ideas have been promulgated, it is possible that, while the Government have been skilful in their negotiation of the treaty, deep within the recesses of the Foreign Office certain ideas or descriptions may not have been what they should have been. That is a very serious charge—especially as I shall suggest that it applies to the Prime Minister himself, whom I shall quote in a few moments—but that is perhaps not altogether a surprise for those of us who served on the Select Committee on Foreign Affairs.

A few years ago, when that Committee was dealing with the constitution of our Commonwealth in Canada and the relationships between this Parliament and that country, the Foreign Office's legal department told us how it had advised successive Prime Ministers of this country. Through careful work, we discovered that it had advised successive Prime Ministers incorrectly. The documents of the Kershaw committee, as it was called, assisted us in resolving what might have been a very difficult situation between the two countries. I now return to what I said about the Foreign Office and the Prime Minister.

At Prime Minister's Question Time on 12 May, the Prime Minister gave his celebrated reply about sovereignty not being "up for grabs". I shall deal with that at the end of my remarks. He went on to say: perhaps one of the most essential parts of the Maastricht agreement was the agreement on subsidiarity—that things must be done on a national level when they can best be done on a national level".—[Official Report, 12 May 1992; Vol. 207, c. 493.] That might be a good definition, but it is not one that is in the treaty. As many colleagues may know, there is no definition of subsidiarity in the treaty. All that the treaty does—and it does so pretty importantly—is to state in article 3a how the principle shall be used.

Earlier today, the Prime Minister again quoted something about subsidiarity. I do not know whether he was quoting the treaty, but I shall, because one should do so on Second Reading. Article 3b states: In areas which do not fall within its exclusive competence, the Community shall take action, in accordance with the principle of subsidiarity, only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Community. I shall not spend long on the exegesis of that complex statement, but one can see that there are three variables even when the undefined principle is applied and, of course, the judgment on that matter—surprise, surprise—lies with the European Court of Justice.

Perhaps the most important part of it is the first sentence, which refers to areas which do not fall within the Community's exclusive competence. In other words, in areas which fall within the exclusive competence of the Community, subsidiarity, whatever its principle and whatever its definition, does not apply. That is the clear meaning of the article which is to be added to the treaty.

I have tried to find a definition of the exclusive competence of the Community. I tabled two questions to the Attorney-General. By great good fortune, an answer to my most recent question appeared in Hansard yesterday. The Attorney-General refers to my previous question, in which I used the word "jurisdiction", which has been changed in the treaty from December 1991. In effect, the right hon. and learned Gentleman states that the answer is the same. He states: The answer to the hon. Member's question about exclusive competence is the same as to his question about exclusive jurisdiction, mutatis mutandis: the European Community has exclusive competence where that is conferred upon it by treaty provision or measures taken under the treaty. Current examples include the common agricultural policy, the common commercial policy and the external tariff "—[Official Report, 19 May 1992; Vol. 208, c.67.]

It being a legal opinion, I should have thought that it might have been a good thing for the Attorney-General to continue with what would have been an inclusive list. Instead, he merely gives examples, which I do not think is good enough. I hope that we shall hear more about this matter in Committee. Without a definition—perhaps it will have to come from the European Court of Justice and not from the Attorney-General—we would not know where subsidiarity, even as defined in or operated under the article, would operate.

Accordingly, I challenge the basis of many of the statements that have been made about the wondrous word "subsidiarity". Indeed, I am left wondering whether there has been some publicity which has gone slightly beyond the accurate. My Front-Bench colleagues circulated a document earlier this week which referred to the treaty enshrining the concept of subsidiarity. It contained a quotation which, while taken from the treaty, I think was not entirely accurate.

Perhaps the prize goes to Mr. Baker—not the right hon. Member for Mole Valley (Mr. Baker), but the Secretary of State of the United States of America. He was quoted, presumably accurately, by my hon. Friend the Member for Hamilton (Mr. Robertson) on 20 November as saying: the architects of a united Europe have adopted the principle of 'subsidiarity', something like American `federalism'—that is, the devolution of responsibility to the lowest level of government capable of performing it effectively. My hon. Friend then said: Clearly the American Secretary of State has not been paid to listen to the right hon. Member for Finchley"—[Official Report, 20 November 1991; Vol. 199, c. 380.]

I do not think that the American Secretary of State has it right, and I cannot speculate why there has been some slippage between the article and the American Secretary of State. I am merely saying that for some reason—I shall not speculate—there has been a massive misinterpretation of an extremely important article, albeit by the Prime Minister as well as others.

The hon. Member for Horsham talked about the single currency, the single bank and economic and monetary union. I must refer now to the views of my right hon. and hon. Friends on the Opposition Front Bench. They were set out clearly by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) on 21 November. When criticising the Government, he said: We have heard nothing from the Government about their participation in the discussions in the economic intergovernmental conference about the accountability of the proposed European central bank and the allocation of responsibilities for economic and monetary policy between the Economic and Finance Ministers and the proposed central bank.The Labour party has argued consistently for the bank to operate in a stronger framework of political accountability than the present draft treaty proposes. Like the French Government, we believe that ECOFIN—the Council of Economic and Finance Ministers—should play a crucial role in determining overall economic and monetary policy. We believe that it is important, for example, that the setting of the external exchange rate for a single currency should be a matter for ECOFIN."—[Oficial Report, 21 November 1991; Vol. 199, c. 508.] Similar sentiments were set out in the Labour party's election manifesto.

At the risk of being tedious, I shall read article 107 of the treaty. I think that it is right that I should do so. It states: When exercising the powers and carrying out the tasks and duties conferred upon them by this Treaty and the Statute of the ESCB, neither the ECB, nor a national central bank, not any member of their decision-making bodies shall seek or take instructions from Community institutions or bodies, from any government of a Member State or from any other body. The Community institutions and bodies and the governments of the Member States undertake to respect this principle and not to seek to influence the members of the decision-making bodies of the ECB or of the national central banks in the performance of their tasks. What greater separation can there be between the elected representatives of the people here and in the other countries of the Community and the central, economic, fiscal and taxation authorities, bodies that play such an important part in the economic life of the Community and of the United Kingdom?

That is why I believe that my right hon. and hon. Friends were right when, before Christmas, they set a target that would satisfy them in terms of the relationship and democratic accountability that we seek. I do not think that the target has been reached and that is an important reason—perhaps the crucial one—why I cannot support the treaty. Indeed, it has been said by hon. Members on both sides of the House that, the Opposition having made that point in the reasoned amendment and having lost the amendment, we cannot then proceed to vote against the Bill itself. Surely one must follow the other.

Without that which we seek, how can we see that the essential quality of democracy that the Community claims as one of its major features will be retained inside its institutions and inside the very nations that form the Community? As my right hon. Friend the Member for Chesterfield (Mr. Benn) said, unless people have the power to change policies, including economic policies, and to change the people who determine those policies—it is a major democratic right—how can there be a link with democracy?

I return to the Prime Minister, who I believe got it wrong on subsidiarity on 12 May. I am sorry to say that I think he has it wrong on this issue. He said: The sovereignty of the House is not a matter that is up for grabs—that is perfectly clear."—[Official Report, 12 May 1991; Vol. 207, c.493.] I do not think that it is clear at all. If the position is that which the Prime Minister states, why do we have clause 2? Clause 2 provides the opt-out that would allow that "grab" to happen.

Perhaps one of the most interesting comments that could make about the Prime Minister and his very skilful Foreign Secretary is that they managed to obtain that temporary reprieve in very difficult circumstances. However, those circumstances showed that that power, sovereignty and linkage—not a popular word with some of my colleagues—were up for grabs. That is why we are having this debate.

How is it that a Prime Minister of this country can say that even his responsibilities as First Lord of the Treasury—there lies the power—are not up for grabs, when clearly the function of our Treasury is to be taken away, perhaps under pressure and certainly under the treaty, if the opt-out is not used? I am talking of those very functions on which the treaty says there should be no political linkage.

If Europe is not to be dominated by bankers for bankers, there must be some form of democratic accountability. I cannot see that in the treaty or in the aspirations of those who support it. That is why I shall vote against the Bill tomorrow.

9 pm

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

I am grateful to be called at this stage of what has become an increasingly interesting debate, in which there have been a number of enthusiastic speeches about the future of the European Community and our involvement in it.

In this Parliament, with its traditions, one has to be careful about praising Members of another party, but the hon. Member for Hemsworth (Mr. Enright) was kind enough to refer to my role as chairman of the European Movement. That movement embraces politicians of all the political parties, people who are not members of any party, members of other groups and, indeed, individuals. Praising a Member of another party is more of a habit in some of the continental Parliaments, where it is not viewed as sinful to agree with someone on the opposite side. Here, it is still regarded as a slightly sinful act.

My hon. Friend the Member for Eastleigh (Mr. Milligan) made an enthusiastic, striking and excellent maiden speech—and without any notes, as other hon. Members have already said. It was a striking reaffirmation of enthusiasm for the European Community. The good thing about that and other speeches is that they provide a balance that reflects the growing consensus in this House in favour of the Maastricht treaty [Interruption.]

My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) is heckling, but I cannot quite catch what he is saying. I repeat with unequivocal emphasis, so that he can absorb it more easily, that there is a growing consensual enthusiam for Maastricht, for the skilful negotiations conducted by my right hon. Friend the Prime Minister and his senior ministerial team and for all the implications that flow from this Bill and from the Maastricht treaty, which adds to the treaty of Rome and other related treaties.

That growing enthusiasm is very good for the country. It was, at least to some extent, a background factor in the general election, although I agree that it is difficult to measure precisely. Although mainly domestic political, social and economic factors were at the heart of the general election campaign, an important background factor was the Government's great success in negotiating at Maastricht a treaty for this country that will stand us in good stead with the other member states. Therefore, the scope for negative speeches tonight and tomorrow is limited, because increasingly the public want the House of Commons to be enthusiastic and positive about these matters.

Other hon. Members wish to speak, so I shall refer only briefly to the important provisions in the treaty. I remind both sides of the House that article 3c refers to an internal market characterised by the abolition, as between Member States, of obstacles to the free movement of goods, persons, services and capital. That is a solemn and important aspiration, both of the treaty and of other member states. It is not to be taken lightly; it is a serious commitment.

In the Single European Act, the British Government regarded the creation of a single market as the most important component. They, above all others, insisted on the operational applicability and practicability of majority voting in order to get that primary component of the Act through the House and accepted by the other member states. That therefore equally binds this country and this Government to an equally solemn commitment.

As was evident in the ratification debate in the National Assembly in Paris, the main preoccupation was not economic and monetary union or other matters of enormous importance to the future of the Community and to the accretion of greater sovereignty by sharing it with others. That is the definition of a strong and powerful geopolitical treaty—a part of our history—and this treaty is another important example of it.

In view of the anxiety shown in Paris and the anxiety that exists in Britain and Germany, and now in Italy, which has rather weak immigration provisions, it is right for the Government to express reservations about what compromise will eventuate in the area of immigration controls. However, we cannot go too far down that road without distorting the single market that we want to create.

The idea that there can be completely free discretionary movement of goods and freight and severe restrictions on people moving through the Community channels, because it is not possible physically to segregate them in any practical way in principal ports and airports, would, I think, be completely unacceptable to British citizens in growing numbers, not simply to active politicians in this place and in the upper House who take a deep interest in the matter. The Government would face certain difficulties—I do not say this with any pleasure—if they were to go too far down the path of a solution that would produce a practical restriction.

The Government have said repeatedly both previously and, subject to reading Hansard tomorrow, in this debate as well, that that will not be a problem and that in the intra-Community between the member states—the citizens of each member state are now to be citizens of the European union as well—people have the exclusive 100 per cent. total right, subject only to the restrictions of criminality and prosecution the traditional authorities of the member states, to move between the member states.

The Government must have regard to what would happen if that right were to be too limited. I sympathise with the Government on the problems. It will be essential to have that practical segregation of the channels in ports and airports, but I believe that it can be done in a satisfactory way.

The other point that must be made concerns the huge area of economic and monetary union. I referred earlier to a German bank's report which referred to the social chapter, but that does not necessarily mean that I do not understand and, to some extent, sympathise greatly with the Government's reservations on the social chapter provisions. We have seen the campaign launched by the CBI saying that we did not want to be hamstrung or handicapped by some social charter provisions that would strike adversely at Britain's growing economic and commercial recovery which has resulted in the past few years from successful economic management by a Conservative Government who are now in their fourth term. The CBI did not want to see that achievement reversed, reduced or harmed in any way.

It is interesting to observe and reflect on how much more relaxed people in other continental countries are, including those who represent the general capitalist class, about some of the social charter provisions. I imagine that, as they come off the production line as individual items, we shall be able to accept at least part of them and so return to the greater cohesion that the other 11 member states increasingly feel about the measures.

It is a mistake for us and some of our anti-European colleagues here and elsewhere to say that other countries are indulging in fundamental second thoughts on the Maastricht provisions. That is simply not true. There is no evidence of it. I remind the House once again that in the National Assembly debate, when 77 members voted against ratification but a huge majority was in favour, the preoccupation was with immigration and other such matters, not the central provisions of the Maastricht treaty.

But there will always be suggestions on economic and monetary union—it has been said at least once tonight—that stage 3 will never be reached because the criteria are unrealisable and because other economic and financial circumstances will deter various other member states from even wishing to accept stage 3. I do not believe that. It would, for all sorts of reasons, be untenable and wrong to suggest that there may be renegotiations on some of the provisions, but obviously that alternative may arise in order to get stage 3 going properly.

As to containing the situation in respect of Italy's large deficit, I remind the House that European Finance Ministers urged the Italians again yesterday to begin their programme of public expenditure cuts. Italy is the worst example, but even that does not gainsay that EMU stage 3 is an objective for the entire Community.

There is far too much obsession in the House and elsewhere with the apparent but rather phantasmagorical argument that the Commission is accruing to itself excessive powers on an exponential basis, becoming tyrannical and dictatorial, and telling everyone what to do without proper consultation or accountability. That totally misrepresents the true position.

Sometimes, the much-maligned Jacques Delors deserves to be criticised. I am not defending him tonight, but perhaps a member of the Opposition Front Bench will say something. Nevertheless, when he makes major policy declarations, they are more and more in response to requests from—guess who? surprise, surprise—member states. They are for ever asking the Commission to do more by way of new programmes and policy formulation. That was the background to the whole EMU exercise, which involved an intergovernmental committee, not the Commission machinery itself.

Also, Jacques Delors speaks with the combined authority of all the other Commissioners, who—surprise, surprise—include the two British Commissioners. Although there is frequently a majority vote, most of the time policy declarations are unanimous. Jacques Delors the sole dictator, unelected and with no democratic accountability—acts on behalf of them all, and produces programmes that arise from the Community's own legislation, treaties, and duties that are given to the Commission by delegated legislation and powers.

That is not at all terrifying, despite the remarks of the hon. Member for Newham, South (Mr. Spearing). If the Commission did not produce those programmes, we would roundly criticise it for dereliction of duty, not bothering with its task, and failing to undertake its work.

Not one speaker tonight arrived at a logical conclusion as to how—though this is beginning to occur in the Maastricht provisions—we can more easily take care of the fact that the Commission is not directly accountable in the way that we should like, and the way that we perceive national Governments to be. In a sense, perhaps accountability is at its strongest here, by comparison with other national Parliaments—but we have many weaknesses as well. Other national Parliaments, such as that of Denmark, provide examples of strong accountability.

Also absent from the speeches made so far has been any mention of the increased powers of the European Parliament. That is the way to achieve greater practical control of the Commission—so that well-informed, well-researched, and well-paid members of the European Parliament can pursue the Commission and ask it questions.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

I think not.—[HON. MEMBERS: "Go on."] As I finish my remarks, I shall think about giving way to my hon. Friend.

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

My hon. Friend should be a parliamentarian—a British parliamentarian.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

I may tell my hon. Friend that I am.

Photo of Miss Janet Fookes Miss Janet Fookes , Plymouth Drake

Order. Right hon. and hon. Members know full well that if a speaker chooses not to give way, he is entitled to continue.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

Despite your kind advice, Madam Deputy Speaker, I am still thinking about giving way to my hon. Friend in a moment.

We can also at long last begin the crucial exercise of building on the liaison between national Parliaments with the European Parliament. Several of my right hon. and hon. Friends are nervous about all the foreign adventures in which we are engaged, but about which the public are increasingly enthusiastic—and is that not annoying to my hon. Friend the Member for Wolverhampton, South-West and others? What they do not want is the greater democracy that would be implanted by those two exercises: increased powers, activity and authority for the European Parliament, and more working together by national Parliaments—particularly our own Parliament, with all its experience of trying to keep the Executive in order.

I say that partly with tongue in cheek. As we know from our own experience, heavy whipping being the fate of all Members of Parliament, that would be the most crucial way in which it could then be said that the Community had reined in, on behalf of its citizens—citizens of the union as well as those of the member states—the necessary democratic and parliamentary control. So often the "antis" do not want to accept that—which is why I now give way to my hon. Friend the Member for Wolverhampton, South-West.

Photo of Mr Nicholas Budgen Mr Nicholas Budgen , Wolverhampton South West

I am sure that the whole House is excited and elated to hear of the new role of the European Parliament that is envisaged by my hon. Friend. No doubt we can look forward confidently to such proposals as and when we move further into the heart of Europe.

May I ask whether my hon. Friend is in favour of tax-raising powers for the European Parliament?

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

Not at this stage, and perhaps not for very many years. The only real answer that can be given to my hon. Friend's interesting question is this. If a central tax-raising capacity is eventually created in the Community, it is possible that such powers will eventually follow. It will depend on how the structure of European union works out—and we are talking of a union of sovereign states; it is not federal in the sense that anyone is suggesting the creation of a single sinister super-state Government based in Brussels.

I very much doubt whether that will happen, however. It is much more likely that the European Parliament will have a limited residual role. That might reduce the accountability that I have been asserting, and, because I have been suggesting otherwise, my hon. Friend could claim that I am being illogical. I am talking, however, of a separating of powers—a tussle between various layers of politics and various different institutions. That is the only answer that I can give at this stage.

Perhaps I am now being phantasmagorical, as the "antis" often are, but I believe that there is a chance that we could agree on a common voting system for the European Parliament next time. Such a system could be based on the regional list construction—

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

Not to my hon. and learned Friend. I must finish my speech.

The other possible alternative is the multi-member constituency structure. As all this is only a couple of years away, however, that may not be a possibility. I know that the prospect is terrifying for some of my hon. Friends, but the nettle must be grasped in due course. In the meantime, I hope that the whole House will give an enthusiastic welcome to this excellent Bill tomorrow night.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow 9:17 pm, 20th May 1992

Even the good-humoured hon. Member for Harrow, East (Mr. Dykes) will recollect that his patience was a little stretched in the indirectly elected European Parliament when some of our French colleagues went into "explications de vote". I am afraid that I must deliver one of those tonight, however: I must explain to my colleagues and the House that tomorrow night I shall vote for Maastricht in the Division on the main question—voting, coincidentally, in the same Lobby as the Government.

The reason for my action goes back a long way. I am one of a dwindling band of Labour hon. Members in whose time the party was led by Hugh Gaitskell. It is now a matter of record that he talked about "a thousand years of history". As a very new Member for Parliament, I was hauled into his office—he was formidable, if charming—to explain the European beliefs that a number of us held at the time, and ever since then I have believed that those of us in the Labour party who are pro-Europe really have to say so—and to say so means voting accordingly, however uncomfortable that may have made us in the past.

Furthermore, I do not very much love the fact that the House of Commons as a whole is taken less and less seriously. When the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), bustling and perspiring, returned from Brussels to give his reports, in 1962, there were debates week after week that were attended not only by Mr. Macmillan, who was then Prime Minister, but by many of the heavyweights in his Cabinet. I am not making a party political point. My hon. Friends the members for Carrick, Cumnock and Doon Valley (Mr. Foulkes) and for Hamilton (Mr. Robertson) have already been good enough to do that, but I have not spied a single member of the shadow Cabinet on the Opposition Front Bench since the main speeches were made. Equally, only the Foreign Secretary was here earlier.

I recollect that, apart from Harold Macmillan, Iain Macleod, as Leader of the House, certainly attended the debates on these vital constitutional matters, took notes and remembered everything. So did the Chancellor of the Exchequer, Reginald Maudling, the Minister of Agriculture, Fisheries and Food, Christopher Soames, and many other Ministers of State. The House of Commons was taken seriously.

We have to ask ourselves tonight whether the House of Commons is being taken very seriously. When the Chairman of the Select Committee, the right hon. Member for Guildford (Mr. Howell), and the former Home Office Minister of State, the right hon. Member for Mitcham and Morden (Dame A. Rumbold), were speaking, both of whom made important speeches, there was just a junior Treasury Minister taking notes. I do not complain about the Foreign Office Minister, who is assiduous. However, the Government as a whole are not taking the House of Commons seriously on this constitutional issue. That is a change. If one wants to make a point, one has to do it these days by vote.

There are only four of us—my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley), my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) and I—who, rightly or wrongly, were among the 69 Labour Members of Parliament who went into the pro-European Lobby on 28 October 1971. For those of us who do not regret it, it teaches the lesson that the only way to do this kind of thing is by vote. For that reason, I shall be voting for the Bill. I do not know how many of my hon. Friends will reach the same conclusion, because these are personal matters, but one has to ask why one feels so passionately about this question.

Let us talk about the future rather than about the past. A number of us believe strongly that many of the world's future problems can be addressed only on a European basis. I do not complain about the right hon. Member for Shropshire, North (Mr. Biffen) not giving way, but he attacked centralism. As a concept, "centralism" is a bit of a dirty word, but how other than through a centralist approach does one approach the problem of the ozone layer, on which I had an Adjournment Debate on 4 March? How else other than on a central European basis can we do anything about the rain forests? And how else can we do anything about marine pollution? The air that we breathe is common. If we want to do something about chlorofluorocarbons in the third world and about skin cancer, we must do it on a European basis, or on an even wider basis than that.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

Yes, wider.

That brings us to some other questions for the Foreign Office, as my hon. Friend the Member for Newham, South (Mr. Spearing) has prompted them. I should like someone to answer the question, "How wide?" I listened to the Prime Minister with absolutely rapt attention. I may have got him wrong—it is difficult without seeing his speech in print—but some of my hon. Friends and I understood him to say that he hoped to bring Russia into the Community.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

The Foreign Office Minister assents, so I do not think that I am wrong.

I speak as a friend of the Community. How wide is it to be? If we bring in Russia, the Community will stretch from Ireland to the Aleutian Islands. Where, incidentally, do we draw the boundaries? If we include Czechoslovakia and Hungary, then Romania, and if we take in Russia, do we then exclude the Ukraine? I do not think so. Then we must consider the difficult area of Kazakhstan and the Asian republics. I am asking for a Foreign Office comment on where the line should be drawn. It will become logistically unmanageable.

I listened to the hon. Member for Horsham (Sir P. Hordern) speaking of fraud. It so happens that I was a member of the sub-committee of the Budget Committee of the indirectly elected European Parliament, which looked precisely at the issue of fraud. When we investigated, for instance, how funds were spent in relation to a dreadful earthquakes, at Udine and Germona, in Friuli, I was extremely impressed that there was absolutely no sign that funds had been misappropriated. Because no Italian would go, there was the Earl of Bessborough, myself and one of our German colleagues, and we all came to that conclusion.

Any genuine accusation against the Community for squandering funds may be misplaced. I think that they are basically honest and competent people in Brussels. If the Minister has an idea of fraudulent incidents, of course they must be investigated. As a former member of the Public Accounts Committee, I know that we have our problems and so do they, but I should like a defence of the much maligned Brussels bureaucracy in relation to fraud.

If I vote in the way that I have mentioned, it is partly for another reason. I had an extremely expensive education, as did a number of my colleagues—

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

I had an expensive education—it is not where my hon. Friends think—in the European Parliament, from 1976 to 1979. It was an eye-opener. The conclusion that I draw from my experience in Europe is that, unless one is enthusiastically at the heart, one will not carry much weight. As happens so often in politics, the halfway house can he the worst of all possible worlds.

My hon. Friend the Member for Newham, South, my right hon. Friends the Members for Bethnal Green and Stepney (Mr. Shore) and for Llanelli (Mr. Davies), and doubtless my hon. Friend the Member for Great Grimsby (Mr. Mitchell), have a right—perhaps it is a duty—to go into another Lobby to vote. If they do not do so, in the light of what they have said or doubtless will say, they will debase the House of Commons. I am a believer in the House of Commons, but equally, my right hon. and hon. Friends will allow me to go into a different Lobby to vote.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

I am glad to have the support of my right hon. Friend the Member for Chesterfield (Mr. Benn) on this matter. Although we take different views, perhaps we are united in thinking that we should vote. In view of the time, I shall limit myself to one more question to the Minister.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

It is not a parochial question; it is an important question.

I should like the Minister to say a little about how the Foreign Office sees the relations post-Maastricht between the Community and major local authorities and regions. I will be excused for thinking particularly of Lothian region. Partly as a result of the efforts of its excellent Member of the European Parliament, David Martin, good relations have been established. A great many of my constituents think, rightly or wrongly, that they have better relations with Brussels than with Westminster.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

My hon. Friend says that that is true. The truth is that, among the Scots, the Community is pretty popular. I happen to think that the prospect of independence for Scotland within the Community is extremely unreal. The Germans will ask, "What about the Bavarians?" and the Spaniards will ask, "What about the Catalans and the Basques?", as the Minister knows better than anyone. Nevertheless, the Community is well regarded by the electors in Scotland who sent me to the House of Commons.

How can we establish better links post-Maastricht between Brussels and Strathclyde, Lothian region, Grampian and so on? Madam Speaker, you asked us at the beginning to be disciplined as to time. All of us could go on and on, but on that question I conclude.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North 9:31 pm, 20th May 1992

I follow the hon. Member for Linlithgow (Mr. Dalyell) in one particular, but I prefer to use the English language. This speech is by way of being an explanation of my voting intentions.

Maastricht was the most effective defensive battle fought on the European mainland by a British leader since the Duke of Wellington at the lines of Torres Vedras. My right hon. Friend the Prime Minister is to be congratulated on his success. It was truly magnificent. I also add my congratulations to the Minister of State, my right hon. Friend the Member for Watford (Mr. Garel-Jones). His victory has had its effect. There has even been progress since Maastricht.

I understand that the French to some extent, the Germans to a greater extent and the Danes, who knows, are having second thoughts. Even better, the United Kingdom is seen since the election as having the potential for an economic and political stability that is the envy of our partners in Europe. We are about to secure the powers of the presidency of the Community in July. We have a new credibility born of a positive, if not yet federal, vision of Europe.

It is we, we are told, who will have the power to mould the Community. Brussels will be putty in our hands. "Do not rock the boat, things are going our way"—that is the message to my hon. Friends. It is mood music. It is sweet, it is seductive, but it is mood music. Sadly, such a scenario is one of hopes and aspirations—a grand strategy of apple pie and motherhood, but not yet reality. It is that reality which is before us today. It is much more mundane. It is the hard reality of legislation, the allocation of powers and the who and the how of its control.

Many hon. Members will remember that much the same overture was played at the time of the Single European Act. The chorus then was equally harmonious to most ears, even though then, as now, no one really understood the score. For example, we were told, as we have been told tonight, that the rights of workers, not least the length of the working week, was a matter for unanimity, eventually a matter that could be decided in this House. We were told that our methods of immigration control were a matter for unanimity and effectively, in the last resort, a matter for the competence of this House. Nor did we then imagine for one brief moment that a domestic matter such as tobacco advertising would be other than under our control.

We have been cheated, swindled and mugged by the self-same institutions that this very day are grovelling on their knees for us to give them more of our powers. Having lost our innocence and our wallets, does it not seem a little perverse to venture again so soon on to the dark back streets of Brussels?

The Single European Act was a mere 23 pages of intractable and ambiguous prose. It was clear, curt and comprehensible in comparison with the 134-page monster from Maastricht that I have here. Surely, before we consider surrendering yet more power over such areas as the environment, health, education, training, citizenship and culture—you name it, they will have it—should we not first clarify the present arrangements?

When we know that there will be no 48-hour week, when we have an undertaking that our system of border controls can remain, when we have clear evidence from the European Court of Justice that its understanding of subsidiarity is the same as that of my right hon. Friend the Prime Minister, then—and only then—may the House feel that it is safe to consider the treaty. Once bitten, twice shy; once cheated, mad to buy.

Whatever our differences, one thing binds us together in the House—we are all Members of Parliament. Today, we have an awesome responsibility to the House and to our predecessors and successors. We are the guardians of the powers and privileges of the House and, through it, of the rights, liberties and well-being of our people. The passage of the Bill would shrink this Parliament and demote the democratic safeguards of our people.

Maastricht was a brilliant tactical victory, but the forces of federalism—artificially camouflaged during ratification—have yet to be banished. The heart of Bonaparte still beats in many breasts—[Laughter]—for example, over on the Opposition side. The House should dedicate itself to the fight against Bonapartism. This should be the trumpet, the clarion call, the beginning of a march to a second Waterloo.

Photo of Mr Calum MacDonald Mr Calum MacDonald , Na h-Eileanan an Iar 9:38 pm, 20th May 1992

I begin with the complaint made by my right hon. Friend the Member for Chesterfield (Mr. Benn)—hoping to take advantage of his presence—about the attempt to polarise this debate between the pro-and anti- Europeans. I am sympathetic to his complaint, as that is too simple a way to view the debate. He tried to turn it into a debate between democrats and anti-democrats—that was much of the thrust of his speech.

If one is concerned about the lack of democracy in Community arrangements, the answer is to stay within the Community and attempt to change or improve it, to make it more democratic, rather than to talk about withdrawing from it. There are many ways in which we could do that. We could improve the powers of the European Parliament and we could, and I believe that, eventually, we will, make the Commission and its President directly accountable to the citizens of the Community.

The real division that underlines this debate is not between democrats and anti-democrats or pro-Europeans and anti-Europeans, but between unionists and nationalists. That is the key philosophy that divides people within the parties as well as across the Chamber. I am justified in identifying my right hon. Friend the Member for Chesterfield and others who have spoken against the treaty as nationalists from the tone of their remarks and from looking at the amendment tabled by my right hon. Friend and other hon. Friends. That amendment contains my right hon. Friend's specific aspiration for a wider association of fully self-governing nations, harmonizing their policies by consent … rights or self-government of all the Member States".

I am not seeking to denigrate the nationalist case I want to be exact about it. I acknowledge that the nationalist point of view, whether we are talking about Scottish nationalists or Welsh nationalists—

Photo of Mr Calum MacDonald Mr Calum MacDonald , Na h-Eileanan an Iar

Yes, indeed. I accept that that nationalist case is a respectable and sustainable one. I have the highest regard for people who feel in their heart of hearts that they must defend the rights of their nation to full self-government and the exercise of sovereignty.

It is a little odd to talk about nationalism or to put the case for national self-government in this Chamber. This Parliament is unique among west European Parliaments, because it is not a national Parliament, but a multinational one. The arguments that have been advanced by my right hon. Friends the Members for Chesterfield and for Bethnal Green and Stepney (Mr. Shore) and others echo those advanced in the Scottish Parliament in 1707.

In 1707, similar crucial decisions had to be made about giving up the right to self-determination, including specific financial and fiscal rights. In 1707, people decided that it was worth giving up those national rights for the greater political adhesion of the United Kingdom. I believe that we face crossing a similar threshold in this decade as we consider the fate of western Europe.

I agree with my right hon. Friend the Member for Chesterfield that, as we come to make decisions about the treaty in the months and years to come, we must have our eyes open about what we are committed to. It is clear that the treaty is not a treaty in terms of co-operation, alliance or partnership between Governments; nor does it speak, as others have tried to suggest, about intergovernmental consultation and collaboration. It is a treaty of political, social and economic union.

As has been rightly pointed out—it needs to be emphasised again and again—article A of the treaty says: the High Contracting Parties establish among themselves a European Union. That has been disguised by some of the comments that have been made tonight and, to some extent, by what the Government have tried to suggest the Bill is all about. Indeed, the Bill's fundamental nature could not be discerned by looking at its title: "The European Communities (Amendment) Bill". It sounds like a secondary piece of legislation that merely adds or tidies up details, consequent upon the original accession to the treaty of Rome. In reality, the Bill does something fundamentally different. It represents a wholly new departure from the political life of our country and the other countries that are about to participate in the union.

The treaty sets up a common citizenship, common fiscal and monetary policies, a common social policy and a common foreign and security policy. The Bill should therefore be called the European Union Bill and we would then know what we were really talking about. It represents all the apparatus and language of the multinational political union, that we are now engaged in establishing.

Some hon. Members have asked what kind of Europe we are embarking on. Reference has been made to the Prime Minister's comment on a Europe embracing Russia. It is not the first time that he has used that phrase—I have heard him use such language before. Surely a Europe that embraces Russia cannot be the kind of Europe that the treaty talks about constructing. As my hon. Friend the Member for Linlithgow (Mr. Dalyell) said, it would be logistically impossible to extend the competencies allowed for in the treaty all the way from the Hebrides to Vladivostok.

It is fantastical to think that the European union that we are discussing can be extended so far, because the essence of the success of the project on which we are embarking—a political community—depends on whether the citizens of that community consider themselves to be part of a distinctive, unique, separate political community. Do they genuinely feel that they are fellow citizens? Do they share the subjective attitudes and emotions necessary to engage in the construction of a political community? Do they share enough historically, culturally and in their way of looking at the world, especially politically?

The key difference that divides hon. Members tonight is between those who feel strongly that a sense of political union is now developing across western Europe and those who simply cannot find it in themselves to share that sense. I am one of those who feel strongly that we are developing a sense of political community across western Europe, and that the appropriate expression for that sense is the sort of European union that we are now engaged in constructing.

There are four key aspects or fundamental principles in the treaty. I wish that I could say that one of the principles was to make institutions more democratic, but I do not think it is—work still needs to be done on that.

The treaty contains the principle of subsidiarity, which is extremely important. It has been discussed sufficiently this evening, so I shall say no more about it except to note the importance of the setting up of the Committee of the Regions. I acknowledge the reservations of my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) that the Committee of the Regions will not have real powers. It is an advisory committee, but that in itself is important, as the committee will begin to have an influence and to shape the future development of European union.

The pity is that the principle of subsidiarity is not being applied in the United Kingdom. The German lander are now acquiring increased powers in the context of the development of European union, and even over the foreign policies of the federal German Government. We in Scotland clearly expressed our desire for such subsidiarity in Scotland, but are being denied it.

The second fundamental principle in the treaty is a push towards economic convergence and cohesion. On this issue I disagree radically with the right hon. Member for Guildford (Mr. Howell). It seems obvious that economic and monetary union must lead to the greater use of regional policy, and an elaborate and developed system of fiscal transfer within the Community—a means of distributing money within the Community from those districts that are better off to those that are not so well off. That must happen as a consequence of economic and monetary union, in exactly the same way as it would within an individual nation state.

The right hon. Member for Guildford said that modern Conservative Britain was moving away from the notion of regional policy and transferring money. Regional policy may have ended, but by far the greatest part of the transfer of money occurs in other ways such as spending on education, health, social security and the building of roads and railways. That is how money is transferred and distributed throughout a political community such as the United Kingdom, and that is what must eventually happen within the Community. That process must happen as, if we have monetary union, we will lose our present defensive mechanism of the manipulation of currencies and the exchange rate. If we lose that defence, we must replace it with a system of fiscal transfer.

The third fundamental principle is related to the second one and involves the introduction, for the first time, of the notion of a social Europe. Europe is not just about the free movement of goods and capital, but about having common standards of welfare and working conditions in the Community—the subject of the famous escape clause won by the Prime Minister. But that clause is worth very little. It is inevitable that what is agreed by the other member states will gradually, instrument by instrument and Act by Act, be taken on board by the Government.

From a purely partisan point of view, it might almost be a good thing that the Government won an escape clause, because that stops them gumming up the works beforehand, and it means that the instruments and agreements that will be reached will be arrived at on the basis of a social philosophy shared by Social Democrats and Christian Democrats in the rest of the Community—a philosophy fundamentally different from that of the Government. Perhaps the Government would not have played a constructive role on social policy and are better off out of it. They will have to accept what is agreed in their absence, however.

My final theme is not mentioned in the Bill but is fundamental to the treaty—the establishment of a common foreign and security policy. Article B of the treaty states that the new European union shall assert its identity on the international scene, in particular through the implementation of a common foreign and security policy including the eventual framing of a common defence policy". The treaty goes on to mention the need to safeguard the common values, fundamental interests and independence of the European union.

The treaty explicitly refers to the need to adopt common positions in international forums, citing the United Nations as an example. Secondly, contrary to what many have said, the European Commission and hence the Community will have a role in a common foreign and security policy. Finally and crucially, the Western European Union has declared itself to be the defence component of the European union. So the pieces are all in place: the notions of economic union, of citizenship, of social union and political union, and now of a common foreign and security policy. The treaty will create a new multinational union, which is why I look forward with optimism to the future of that European union.

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe 9:57 pm, 20th May 1992

The hon. Member for Western Isles (Mr. Macdonald) suggested that differences of opinion in this debate can be characterised along the lines of those who are nationalist and those who are unionist. That may be true in Scotland, but it does not do justice to differences present in the rest of the kingdom and in this Chamber. Those differences are a good deal more subtle and profound than that.

I pay tribute to the two maiden speeches that we have heard this evening. The hon. Member for Hyndburn (Mr. Pope), in a remarkable contribution, showed a great deal of humour and—much appreciated by Conservative Members—generosity to our former colleague, Ken Hargreaves. My hon. Friend the Member for Eastleigh (Mr. Milligan), in a remarkable opening innings, showed us that some good can come out of the BBC.

With the exception of these two maiden speeches, however, we have had a rerun of many previous debates—most of us are old hands at them now. We have made our points many times before, which is not to deny that we are considering a fundamental and crucial step forward in European affairs. Crucial and fundamental though the issue is, I find it depressing that we still get bogged down in detail and that none of us can get away from our basic attitudes, which cut right across party lines.

I do not think that most hon. Members reflect the weight of opinion in our respective parties, and I worry increasingly that the tenor of the debate is out of tune with the mood of the country, which is much less querulous and questioning and more disposed to accept the reality of Britain's relationship with the European Community and Britain's right and duty—this has now become a cliché—to be at the heart of that Community. We do our constituents a disservice if we do not listen to that development outside.

Some of us, consistently, honestly and with honour—from the beginning, from Messina, and certainly from 1972—have always been against Britain's participation in the European Community. While the camouflage or cosmetics may change a little, the fundamental position never changes. It must be respected for its consistency, but, I think, for little else. I believe that it was always wrong. As the world develops, it becomes increasingly wrong and outmoded.

Whether we like it or not, the world is developing—or has developed—into three significant blocks. It is in our constituents' interests that Britain should be in one of those blocks. We may be nervous about that development—we may even deplore it—but it is happening, so it is especially important that Britain should be at the heart of one block. Through our history and our inclination we, as a nation, still have a strong instinct for internationalism and we have a distinct contribution to make to ensure that our block—the European Community—does not become fortress Europe but is outward-looking and that the world progresses in as cohesive a manner as possible.

The three poles are growing ever more real. Last year, the United States' GNP amounted to no less than $5·4 trillion. The European Community was not far behind with $4·6 trillion, and Asia was just behind with a little more than $4 trillion but growing at a tremendous rate, as we know. The growth rate in the major Asian countries last year was 5·75 per cent., and it is estimated that in the rest of the decade it will be 5·5 per cent. Last year, the volume of exports of the Asian countries increased by 13 per cent. on 1990, growing at four times the rate of the rest of the world.

I offer those figures rather late at night, which makes them even more indigestible than they would usually be, but they underline the challenge facing Britain's legislators to ensure that our country stays in the race. Many hon. Members, and many of my hon. Friends, would accept that thesis, but they would then say, "That's fine. All that we want is a free trade area, a trading relationship." That is not an option—it never was and it certainly will not be in the future. The experience of every country that seeks to separate economics from politics has proved that it is not possible. What happened in Gorbachev's Soviet Union and what is now happening in China proves that.

I remind the House that the need to relate economic and trading relationships with political and social relationships was identified about eight years ago by a far-sighted Head of Government of the European Community, who said that what was needed was a series of new policies to promote the economic, social and political growth on which the future well-being of the Community depended. The passage continues: This means giving greater depth to the Community in both its internal and its external activities. The Head of Government then emphasised that the European Community should develop into something much more than a trading bloc and that it must be our objective to aim beyond the commercial policy through political co-operation towards a common approach to external affairs. You pointed out that the Community has 'weight and must show more political will to act together.' It was envisaged that it might even require military action.

The Head of Government then said: Our objective must be to strengthen the European pillar of the Alliance and improve European defence cooperation. Finally, I quote the part of the speech where it is stated that there is a need to heighten the consciousness among our citizens of what unites us". That is essentially the text that we should follow. The speech was made by my right hon. Friend—I think that she would have claimed to be that and I would claim her friendship—Mrs. Margaret Thatcher to the Heads of Government in June 1984. She set out the principles that we must adhere to and develop. That gives the answer to those who say that the European Community is merely a trading area.

There arc two threats. There are those who say, "Let's jump off Europe. We are nothing to do with it, so let's forget it." There are others who say, "Let us have just a trading area." A third threat was highlighted significantly by the important contribution of the hon. Member for Linlithgow (Mr. Dalyell)—that of stretching ever further eastwards and creating an entity that would be unwieldy. The hon. Gentleman raised an important question that we should consider carefully: just how far is far enough? If we want to make the entity work, there must be a limit. We cannot go on and on to Vladivostok or wherever. It is not merely a trading area that we are seeking to develop.

Photo of Sir Nicholas Fairbairn Sir Nicholas Fairbairn , Perth and Kinross

My hon. Friend has said that we are split into three blocks. I have listened to him with care, but I do not understand what the blocks are or should be.

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe

I am sorry that my hon. and learned Friend has not understood. As it is so late, I hope that he will forgive me if I do not retrace my steps. I wish to make some progress.

There is the danger of the federalist bogey. That there are arch-federalists—one or two collegues in the house may merit that label—in Brussels and other parts of Europe is something that cannot be denied. That they will always he there is something that will always be a reality. It is a reality also that the real dangers of the sort of federalism about which fears have understandably and justifiably been expressed this evening are increasingly recognised in the capitals of Europe. The pressures that a pell-mell rush towards a single currency would put on weak economies are increasingly understood. We should be ever alert to the dangers of federalism, but we should not, in adopting that approach, turn away from an extraordinary enterprise. The Maastricht achievement was an extraordinary one.

Our friends who have doubts and who wish to jump off and stop the train must ask themselves what it is that is attracting the Swedes, the Austrians, the Swiss, the Poles and others. Are they too stupid to understand the threat to their national identity? Are they all socialists who wish to turn some great dirigiste structure and to be bossed around from Brussels? Are they failing to understand the impact of the huge economic differences between Germany, for example, and Czechoslovakia? Of course they are not that stupid. Of course they understand those threats, of course they understand those dangers—but what they also understand is the great challenge of the European enterprise. That is something which sometimes many of our colleagues forget as they become bogged down in minutiae.

While always fighting our corner about immigration controls, the 48-hour week and so on, we must not keep our eyes on the minutiae and forget the broad European enterprise, which the British people support and endorse.

Photo of Mr Llew Smith Mr Llew Smith , Blaenau Gwent 10:10 pm, 20th May 1992

I promise to respond to the request that you made many hours ago, Madam Speaker, for hon. Members to be brief.

I have spent the past eight years in the European Parliament, but I have decided not to seek re-election in two years. One reason for that is that I do not share Delors's vision of the future of Europe—a vision which I believe is reflected in the Maastricht treaty. I do not share Delors's vision that decisions affecting the community in which I live in Blaenau Gwent increasingly should be made by bankers who are neither elected by nor accountable to our people. However, that is what an independent central bank is all about. The powers of those bankers would make it almost impossible for a future Labour Government to begin to respond to the problems in our communities—the bad housing, mass unemployment, and education and health services increasingly under attack.

I was brought up in south Wales to believe that it is the task of the Labour movement to try to take powers away from bankers and other unelected people. Therefore, I do not intend to allow history to turn on its head, and I will not vote to give bankers and others additional powers. If we allow that to happen, it will take economic decision making outside the political arena. Nor will I vote for another group of unelected, unaccountable individuals—the European Commissioners—to work alongside the unelected and unaccountable bankers and take decisions that will affect my community. If the Commissioners insist on those powers, as a Parliament we have the right to question their record and discover whether it stands up to serious analysis. In my opinion, it will not.

This very day, the EC is still spending more than 50 per cent. of its budget supporting the common agricultural policy. Not that long ago, a parliamentary answer showed that the average family in Britain was paying about £17·50 a week to support the CAP.

In a debate a few days ago, an hon. Member said that there was obvious anger among the people of our communities because in the past the EC had paid farmers not to grow food. I remember that some years ago the EC introduced a set-aside scheme to encourage farmers not to farm the land. What happened? I know of a Scottish farmer who had reached the grand old age of 31 and who received more than £200,000 from the EC not to farm his land. It was also agreed that within five years he could return to the soil and continue as normal.

Imagine what would happen if redundant coal miners and steel workers were offered similar payments. There would be a national uproar. But nothing was said when that money was given to big farmers.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness, Nairn and Lochaber

I appreciate the criticisms that the hon. Gentleman is making, but none is the fault of the Commission; they are the fault of the Council of Ministers on which the Government are represented.

Photo of Mr Llew Smith Mr Llew Smith , Blaenau Gwent

It was the Commission which put forward the proposal and it is the Commission which wants the powers outlined in the Maastricht agreement. Therefore, it is right that we should look at the Commission's record.

What was happening to my community while all that money was being wasted? Very little money was being invested in regional aid or spent on trying to overcome problems of unemployment. But the Commission is not satisfied with wasting the money that it already has. Under the Delors plan, it wants billions of pounds more from member states. I would not give it an extra penny. Why should we give it extra powers when it has already misused those that it has?

Whether we are talking about bankers or Commissioners, those elected to take decisions will soon no longer have the power to do so, while those who were never elected will be taking the decisions on their behalf. If we allow that to happen, parliamentary democracy will become a sham. Future generations will never forgive us, and they would be right not to.

We have been told that this is probably the most important vote in which we will participate in the lifetime of this Parliament, and I agree, so I cannot abstain on the issue. In the months and years ahead, we shall be concerned not simply with the issues of Maastricht, but with issues such as proportional representation. If we are once again advised to abstain on that issue and proportional representation becomes a reality in Britain, decisions will increasingly be taken, as in Germany, not by the largest party but by those such as the Free Democrats who virtually never obtain more than 10 per cent. of the vote but who always wield the balance of power. Such Governments are formed not by the vote but by deals done behind closed doors by party leaders who are no longer accountable to anyone.

Would it not be ironic if the House were to accept proportional representation at a time when other countries in Europe are increasingly rejecting it and when other Governments in Europe are in chaos and fascism is once again raising its ugly head? I shall have nothing to do with proportional representation.

If we make points about the undemocratic nature of the EC, we are sometimes told that we are ignoring other positive developments such as subsidiarity. In theory, that may be right, but the reality is somewhat different. One example of that is the EC public procurement policy which has taken considerable powers from local authorities. I have been interested during past years to listen to the debate on the need for devolved Governments in Scotland and Wales, and while those debates were taking place, the EC, the Commission in Brussels, were taking from us the very powers for which we have fought in our own little communities.

History will judge us not on words but on actions. Therefore, we should judge the EC and the Maastricht treaty not on grand theories but on what is happening in the real world—a move away from democracy, devolution of power and accountable government to decisions being made by those who have never had the courage to stand for election in order to put their ideas to the test. That is the direction in which the Maastricht treaty is taking us and that is why we must have the courage to reject it.

Photo of Iain Duncan Smith Iain Duncan Smith , Chingford 10:19 pm, 20th May 1992

I take this opportunity to congratulate you, Madam Speaker, on your election. As this is my maiden speech, I ask the House to bear with me if I make a series of mistakes.

Earlier, the right hon. Member for Chesterfield (Mr. Benn) reminded the House of the great honour that our electorate bestow upon us in permitting us to represent their views and interests in a sovereign Parliament. I may point out that Chingford is officially part of Greater London, not Essex. Having heard the recent results in Basildon, I am sad that it is not part of Essex.

The majority of the people who live in Chingford have striven for a long time to buy their own properties, take care of their own lives, and make the most that they can—to hand on to future generations—from hard work and the sweat of their own brows. Many of my right hon. and hon. Friends will immediately recognise those as key principles that have supported conservatism, and which my party promoted during the whole of the 1980s. Chingford represents those interests, and we represent Chingford's interests.

My hon. Friend the Member for Eastleigh (Mr. Milligan) mentioned that there is a factory producing Mr. Kipling cakes in his constituency. I cannot boast of such a place, but we do have the London Rubber Company in the middle of my constituency. That company is heavily linked to today's debate. The House may recall the little problem that existed with the Italian regulations, on the size or width of certain items that London Rubber produces—so it has a keen interest in what goes on here.

Few constituencies are so associated with a particular individual as Chingford. I refer of course to my predecessor, Norman Tebbit. Some may remember only the "Spitting Image" vision of a leather jacket, studs, and chains—but I am sure that all right hon. and hon. Members will keep in mind the image of a man of incisive wit, telling rebukes, and most of all, reforming zeal.

If it were only for his political achievements, Norman would be remembered as one of the most important figures in British political history—but he is remembered for much more than that. The House owes him a great debt. On that terrible night in Brighton, the lives of Norman, Margaret, and their family were devastatingly and treacherously changed for the worst—yet at no time has Norman or Margaret complained, and they consistently serve as a great inspiration to me and many others.

It is not overstating the case to say that Norman brought great honour to the House. I know that all right hon. and hon. Members will join me in wishing him great happiness in the future, in all that he does.

So often in the past when Europe has been debated, there has been a knee-jerk level to the debates. It is said that there are those who are pro-Europe—the Europhiles—and those who are anti-Europe—the Euro-sceptics. If the issue is always polarised in that way, it will be impossible to have a rational debate. The question is rather, whether we want to interrogate certain aspects and regulations or not, the public have a right to know the detail, and it is important that we examine the detail of the treaty and put it before them. I will attempt to do that this evening.

Let me begin by congratulating my right hon. Friends the Prime Minister, the Foreign Secretary and the Chancellor on their great negotiating skills, which have produced the treaty that is now before us. Their achievements in securing our exclusion from the social chapter protocol, and in reserving Parliament's right to decide whether to enter currency union, are greatly appreciated by hon. Members on both sides of the House.

As I read the treaty, however, I must confess to a growing disquiet. My chief worry is that, despite the Government's considerable successes, we remain locked into what I see as a continuing progression towards a European super-state. I consider that neither necessary nor desirable.

Maastricht—following, as it does, from the Single European Act and the treaty of Rome—embodies that movement; perhaps it is proceeding at a slower rate in this context, but it is a movement none the less. Let me explain—echoing what was said earlier by the right hon. Member for Llanelli (Mr. Davies)—that my reasons for believing that are based fundamentally on the ethos that exists in the institutions that the Community now contains. I refer chiefly to the European Commission and the European Court.

In my view, successive Governments have failed fully to understand the way in which the Commission seeks constantly to advance its competence. In so doing, it will be supported by the European Court. The Commission is not just a bureaucratic body, as so many people seem to think; it has substantial law-making powers—very excutive powers. Beyond those powers, it exists as much to propose legislation to the Council of Ministers. Through its performance of both those roles, constant pressure will continue to extend the process of European integration.

All too often, press and politicians talk about Delors as though he were an expletive. His role is quite clear to him; I believe that it is our understanding of that role that is unclear. Obviously, the European institutions hold the key to the concern that I feel over Maastricht—the Single European Act and, originally, the treaty of Rome.

The European Court of Justice has the role of interpreting and applying Community law. Through the interpretation that it gives the treaties within the Community, it can and does fundamentally affect the balance between nation states and the Community. The Court, through its judgments, cannot be considered neutral by any means: it is part of those key institutions that consider it their duty constantly to push forward the concept of the Community, ultimately at the expense of the nation state.

An example of that is provided by a judgment in a case brought by the Netherlands against the high authority. The power of the Court was defined by the Court as the ultima ratio enabling the Community interest enshrined in the Treaty to prevail over inertia and resistance of member states. Many other judgments also illustrate the point.

The history of the European Court clearly shows, time and again, that it will be far from impartial, invariably finding in favour of what it perceives as the interest of the Community. Furthermore, the difference between the tradition of common law that exists in this country and the tradition of Continental law—based, as it is, so fundamentally on the code Napoleon—means, essentially, that the European Court will regularly fall back on the preambles to treaties, and will use them to interpret points, as it sees them, within the spirit of the agreement—the members. Every treaty that we have ever signed has given the Court greater scope to interpret.

The preamble to the treaty of Rome raises general provisions urging member states to attain ever closer union with general objectives. To most common law lawyers, that might appear fairly general on the surface. However, it is a major signpost in continental law. The preamble to the Single European Act is full of references to the states implementing a union. Article I clearly refers to progress towards European unity—a major signpost for the European Court.

Here we seem constantly to have disregarded the general wording of the preambles to the treaties. Under common law, they are not part of any agreement, but in the code Napoleon and continental law, they form a major part of any agreement. The treaty on European union sets out no less clearly in its preamble that defence, foreign policy, economic and social policies and the free movement of people are all set to converge in ways which on the surface may appear rather general but which will be critical to the functioning of the treaty. Therefore, across a full range of matters the Maastricht treaty extends further the areas to which Community law applies.

Given the natural desire to the Community institutions constantly to push forward with closer ties and greater compliance, it is natural that they will seek to find areas that are open to extensive secondary legislation affecting our national life that have not yet been affected.

That can be clearly seen in the proposals for a 48-hour working week. We never perceived under the Single European Act that that would necessarily be the case, but the Community—in the shape of the Commission, ultimately supported by the European court—pushes for that extra bit to be brought to the Commission, under majority voting. I know that my right hon. Friend the Secretary of State for Employment is doing all she can to sort this out, and I wish her the very best of luck. However, I remain a touch pessimistic about the outcome.

Both sides of the House have made much of subsidiarity, probably because most people do not have a clue what the heck it means. I suspect that some hon. Members on both sides of the House also fall into that category. It is the devolving of power to a lower level, as perceived by the treaty—that of nation states. As a means of trying to retain control over our national identity, it should be given some approval, but if we look back we see that it is a two-edged sword. It very much cuts both ways.

Originally it was a papal concept. That concept was about power that could flow downwards to the constituent parts of the papal dominion. The key factor was that that power had to be given, as judged by the central authority. In line with that, if we come forward to Maastricht again, we see that it could imply that anything that cannot be justified at national level should, therefore, be taken to the European level. That is the other edge of the cutting sword: that the Community could easily turn round and say, "Justify the fact that you have the right to retain control over that area; otherwise, we shall take it under our powers and competence." It therefore follows that the European Court would ultimately find in favour of the Community. That is part of its ethos.

Therefore, I propose some measure of reform which I believe we must undertake if we are to make sure that the sort of Europe that we want to see is the one that goes through and that we can control. First, I propose that we should repeal sections 1 and 2 of the European Community Act 1972 and replace them with clear statements about this Parliament's supremacy over all European Community activities that affect the relationship between this House and the courts—and, in fact, all other constitutional matters.

Secondly, we should set about reforming the Commission, starting with the European Court. We should position a constitutional court over the Community, I stress, to take an impartial position on questions which affect the competence of nation states.

Thirdly, the Commission should be slimmed down, losing many of its existing portfolios. We should get rid of the position of the President and make the Commission more of a non-executive body. Those moderate suggestions are offered, Mr. Deputy Speaker, with some deference to your position.

Most of all, we must therefore seek to refocus the Community as one of a group of nation states determined to seek co-operation on a defined but limited number of areas. That would greatly assist the inclusion of other states, which is proposed and with which I thoroughly agree, while keeping the flow of trade as free as possible through co-operation not coercion.

From successive treaties, we have seen a growing erosion of the powers of the House to legislate, not to be overruled by the European Court. Much has been made about the exclusion of the word "federalism". Having read the treaty time and again, I have to say that, even if we exclude it, the obvious signs are there for all to see—that is, that that is the inevitable march. After all, a bite from a rottweiler hurts just as much even if we insist on calling it a pekinese.

We are asked to support the Government. There is no doubt in my mind of the Government's intentions, and those I support. However, the problem is that far too much trust is expected of us in this House to be vested in the institutions in the Community. I do not believe that, if we notice how the general tendency is to move towards greater integration, that trust will be well placed.

It has been ably pointed out several times that we have seen the Government and previous Governments fight rearguard actions to prevent the growing power of the Commission from encroaching. Those rearguard actions have been fought in the knowledge that we have signed up to something which has given the Commission powers to get in and take control of certain aspects of our lives.

The treaty is therefore somewhat out of date. It reflects, sadly, concerns from the past which are no longer relevant. I hope that, if we consider the problems and changes that are going on in the Community, hon. Members will agree with me. The treaty keeps the door open to a federalist, centralist and uncompetitive Europe which is clearly moving us in the wrong direction from the rest of the world.

I am not by any means anti-European. After all, Europe is a geographical expression. Therefore, being in the centre of Europe or supporting Europe is neither here nor there. The key is a European Community of nations trading and co-operating through sovereign Parliaments. There is no other time but now. I have talked to many hon. Members who have said, "Don't worry, this matter will ultimately collapse; things will change and we will not have the problems."

If now is not the time to put the line in the sand and say, "Thus far and no further," when are we to say that? This matter has caused me great concern and problems early in the Parliament, but I hope in the next 24 hours to show where my true attitudes lie.

Photo of Austin Mitchell Austin Mitchell , Great Grimsby 10:38 pm, 20th May 1992

It is a pleasure to follow the new hon. Member for Chingford (Mr. Duncan-Smith) and to congratulate him on an elegant, thoughtful and perceptive speech. Some might argue that he broke a convention because it is the convention not to be controversial in a maiden speech. Of course, he was not controversial because I agreed with everything that he said. The convention that a maiden speech should not be interrupted was maintained apart from my cries of "Hear, hear" and similar cries from the Conservative Benches.

The maiden speech of the new hon. Member for Chingford was very different from the kind of speeches that his predecessor used to make. He had a shrewder instinct for pressing an unwelcome knee to an unwelcoming groin. The performance of the new hon. Member for Chingford was more elegant and urbane and I am sure that the House looks forward to future performances from the hon. Gentleman of the same nature, particularly if he continues to take the same line of very cool Euro-scepticism. I congratulate him on that.

I am disappointed that the hon. Member for Chingford should be introduced to this place in tonight's debate on European matters. It is difficult to think of a political entity that has been created in a more shambolic and, in a sense, more deceitful way than the European institutions. Those institutions did not follow revolutions and they were not built by popular acclamation. They did not emerge from chaos and war. Instead, the European institutions are an amorphous entity, growing like a great swelling amoeba without popular consent. They are carried through by bamboozlement and imposed on the people. The people are not consulted.

The Bill will receive a Second Reading by what amounts to a species of deceit, because we are not considering the real issues. The Bill will not make progress because the people want it to or because the argument has been won. It will receive its Second Reading because the Opposition will abstain.

That process of bamboozlement is implicit in the nature of an institution in which the nations that form it cannot agree on what they want or what they want to build. Those nations cannot and do not consult the people about what they want because the issues are never presented in a clear-cut fashion. Those nations cannot build on the existing foundations because they are deadlocked by vested interests such as the common agricultural policy. One cannot make a palace out of a cowshed.

Instead, there is a process of building from the top down. With regard to the Maastricht treaty, we will unleash economic forces that will subject Europe to a common economic misery under a dominant German economy. We are going down that road because, in practice, all the other avenues for the advancement of European unity have been blocked. So they have the temerity to withhold consent.

In 1978, it seemed that the only road open was the path of monetary union that began with the exchange rate mechanism which, in the 1980s, turned the Common Market countries into the high-unemployment, low-growth blackspot of the advanced industrial world. The record then was worse than the record of this country in the 1980s with its disastrous monetary and economic policy. The European record was worse in terms of unemployment and growth.

We followed and became part of that mistake when the present Prime Minister bullied his shy, hesitant predecessor into entering the exchange rate mechanism in 1989. We entered at a crippling over-valued rate. We are now locked into an inescapable deflation because we cannot bring down interest rates as we are locked into the German economic cycle. Germany wants high interest rates, so we have to have them, too. Our interest rates should be half the current level if we are to have a recovery.

There cannot be recovery so long as we are locked into the exchange rate mechanism and are compelled to maintain high interest rates. By joining the exchange rate mechanism, we have achieved much the same as Churchill achived in 1925 when he took the pound back to the gold standard at an overvalued level. That was described very well in "The Economic Consequences of Mr. Churchill" by Keynes. The economic consequences of Mr. Major will be exactly the same.

We are going through the same process: industry has to cut costs, fire labour and throw overboard more research, design and development—everything that makes for competitiveness—just to survive and keep going. That is a finite future. That is the position that we are in now because at this stage in building European unity we need a futile gesture. We have made it. We have joined the exchange rate mechanism.

Now, in the treaty that we are debating, we are asked to take that gesture further by making it the first stage of economic and monetary union. In other words, we are making the process immutable and locking ourselves on the rails to a deflationary target. The treaty will lock a deflationary regime on the economies of Europe by requiring Governments to cut deficits, cut growth and get inflation down to abnormally low levels, destroying their manufacturing bases in the process.

The treaty is a deflationary charter because a national currency plays a vital role in national economic life. It is rather like the atmosphere round the planet. It sustains independent economic life. It protects the economy from shocks and abrasions from outside. If we tie, as we have tied, our currency to Germany, we shall import its economic trends. It will be the dominant economy. If we harden that into monetary union we shall throw away all the weapons of economic management that we need to rebuild British industry and solve the balance of payments problems.

It is odd that a Government who believe in free markets in every other respect do not believe in them in the one crucial area of the exchange rate when the consequences of not allowing the market to operate are serious. In a free market system, the pound would come down so that we could divert resources into our balance of payments and to rebuild our manufacturing base. The market cannot now operate, because we have agreed to shackle ourselves to Germany.

By ratifying the treaty, we are embarking on hardening the monetarist obsession which is now dominant in the British economy. The treaty refers to the achievement of a high degree of price stability". That is central to the whole treaty. There has never been an economic regime that was dedicated simply, solely and overwhelmingly to price stability. Under the gold standard, prices were not stable