Intergovernmental Conference

– in the House of Commons at 4:15 pm on 21st March 1996.

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Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]

[Relevant documents: Minutes of Evidence taken before the Select Committee on European Legislation on 13th February (House of Commons Paper No. 226), the Commission Opinion on the holding of an Inter-Governmental Conference entitled "Reinforcing Political Union and Preparing for Enlargement", European Parliament resolution A4–0068/96 entitled "Report on (i) Parliament's opinion on the convening of the Inter-Governmental Conference (ii) Evaluation of the work of the Reflection group and definition of the political priorities of the European Parliament with a view to the Inter-Governmental Conference" and the Minutes of Evidence taken before the Foreign Affairs Committee on 18th March (House of Commons Paper No. 306-i).]

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

More than 50 Back Benchers have expressed a wish to speak in this debate, so I have limited all Back-Bench speeches to 10 minutes.

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary 4:27 pm, 21st March 1996

I am delighted that the House is to have this opportunity today to discuss the forthcoming intergovernmental conference, taking into account various papers, including the Government's White Paper entitled "A Partnership of Nations". The next few years will be as important as any in the European Union's 40-year history. The Union confronts a number of serious challenges.

First, we must tackle with vigour the urgent task of improving Europe's global competitiveness. Europe must be as successful as north America and the far east if we are to ensure high employment and growing prosperity. Secondly, we must promote the enlargement of the EU as a means to assist stability and to consolidate freedom and democracy in the countries of central Europe.

Thirdly, enlarging the European Union necessarily entails reforming its agricultural and structural policies if we are not to bankrupt the Community budget. Fourthly, we shall need to work out the arrangements for financing the EU after 1999.

Fifthly, the European Union will face hard choices on a single currency. Britain's position is, of course, protected by the opt-out negotiated by my right hon. Friend the Prime Minister.

The IGC, which begins on 29 March in Turin, is only one of a series of parallel negotiations within the European Union over the next few years; nor is it necessarily the most important. It is not likely to be the defining event for the European Union in the 1990s.

Generals and Ministries of Defence are sometimes accused of always preparing to fight the last war. Perhaps some commentators, in according such attention to the IGC, have been preparing for a re-run of Maastricht. If so, that is unwise. Maastricht had its origins in the project to create a single currency. Before that, the 1985 IGC, which negotiated the Single European Act, was inspired by the goal of a single market.

The next IGC—the one about to begin—unlike 1985 or Maastricht, has not been convened to negotiate a big idea. The conference that begins in Turin will essentially be an exercise in improving the effectiveness of the European Union's machinery before we tackle the bigger challenges that I have already mentioned. My intention in saying this is not to belittle the importance of the IGC, but I believe that the conference should be seen in its proper context.

Our White Paper, "A Partnership of Nations", sets out the overall British strategy for the conference. The Government are committed to making a success of Britain's membership of the European Union. We shall be positive in our approach and shall work for agreement with our European partners. We believe in partnership, because we remain convinced of the central importance of the nation state in our vision of Europe's future.

Our approach found an encouraging resonance last week, when the French Prime Minister, Alain Juppé, said: The nation state remain more than ever the essential, central place where the democratic contract, the social and political link between citizens and their elected representatives, is fulfilled". The nation state remains as relevant as ever to today's Europe.

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

The Foreign Secretary is on to an absolutely central point about the integrity of the nation state and a European partnership of nations. Does he not think that the most convincing evidence that the House and the Government could give of their commitment to a Europe of nation states rather than to a federal Europe would be to say now, and clearly, that we have no intention of allowing the transfer of economic powers to European institutions that would be involved in economic and monetary union and a single currency? If he could clarify that and give us that firm assurance, his others words would carry greater conviction.

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

I recognise the importance of the issue that the right hon. Gentleman has raised, and it is for precisely that reason that the United Kingdom and Denmark were the two countries that refused to accept even the principle of a single currency during the Maastricht negotiation. That is not the view of the other members of the European Union, but the United Kingdom took that position—a rather lonely position but one that demonstrated our determination to protect the United Kingdom's interests and to ensure that no step would be taken that was contrary to our national interests.

Photo of Mr Llew Smith Mr Llew Smith , Blaenau Gwent

In the White Paper, the Government argue that they are against the erosion of national Parliaments. If we should become part of monetary union, will the Minister indicate what economic powers would be left in this Parliament and what economic powers would be with the European central bank?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

These will indeed be issues that will need to be addressed fully, but they will not be relevant to the IGC, so I hope that the hon. Gentleman will forgive me if I do not get tempted along that alleyway on this occasion.

The nation state remains as relevant as ever to today's Europe and to its peoples. In each country, citizens can best express their concerns through their national democratic institutions. The European Union supranational institutions cannot deliver the same level of democratic accountability.

President Mitterrand said, in his moving final speech to the European Parliament in Strasbourg last year: "Nationalism is war." Chancellor Kohl echoed that fear, saying that Europe has no desire to return to the nation state of old, and that nationalism has brought great suffering to our continent. Extreme nationalism and xenophobia are indeed poisons, but they will not be overcome by an internationalism that seeks to deny national consciousness, local differences and historical experience.

The German Chancellor is right to say that we do not want to return to the nationalism of the 1930s; but the nation states of western Europe have learnt the lessons of history. One of the great achievements of the European Union has been the replacement of the habit of conflict which dominated western Europe for centuries and which spawned two world wars in this century, with a habit of co-operation.

Every month, every week, every day, Europe's Ministers and officials are meeting, resolving differences, working together and building for the future. Any reversion to the habits of the past is literally inconceivable. That achievement has been entrenched by a reconciling of the unity of Europe with the diversity of its nations. To have striven for the former by ignoring the latter would have been fatal.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

I realise that the Foreign Secretary is trying to establish the delicate balance between those factors. The Maastricht treaty, however, specifically upholds national identities, so there is no built-in problem there.

Paragraph 6 of the White Paper states that the Government are committed to the success of the European Union, and to playing a positive role in achieving that success. Must that not include our paying attention to the requirements and aspirations of the other member states in the negotiations—without weakening our position—and accepting that they want to create a genuine European Union?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

It certainly means that we must listen courteously to the views of others. It means that we must recognise that they are not enemies but partners, and that we must make a genuine and constructive effort to reach agreement.

My hon. Friend will acknowledge, however, that for each nation—not just the United Kingdom—there will be sticking points. There will be positions that are arrived at not simply out of a desire to be obstructive or out of bloody-mindedness, but because they reflect an honest perception of what the national interest of each country requires. When Britain—or, for that matter, any other country—identifies such a position, it is right and proper for it to be as firm as possible in ensuring that that position is respected.

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

I hope that the hon. Gentlemen will forgive me if I do not. I want to make some progress.

Over the years to come, the European Union may develop in three possible ways. We want it to be a partnership of nation states, co-operating freely in pursuit of their overall collective interests and using the institutions of the Union only when that is clearly necessary.

A second way would lead towards a federal Europe. The pressure for a United States of Europe still exists. Although it is not the declared policy of any of the member states' Governments, it is clearly the aim of the European Parliament and the Commission, judging by the maximalist opinions that they have submitted to the intergovernmental conference.

A possible third way in which the European Union might evolve is a multi-track Europe, as referred to in my right hon. Friend the Prime Minister's speech in Leiden two years ago. That could lead to a flexible Europe with different degrees of integration for different countries, which would be a different kind of partnership.

Photo of Bernard Jenkin Bernard Jenkin , Colchester North

If we, as a nation state, do not wish to be included in what my right hon. and learned Friend describes as a federal Europe, must we not as a House ensure that we no longer go along with the process of legal integration, which is gradually denuding Parliament of competence and transferring it to the institutions of the European Community? Is it not true that the Maastricht treaty has done nothing to halt that process?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

I accept that certain changes may be required. I think that my hon. Friend is referring to the role of the European Court of Justice; I intend to deal with that later.

I was talking about the third possible way in which the European Union might evolve into neither a loose partnership of nations nor a federal Europe, but a Union that is more flexible and has multi-track characteristics. Those intent on a federal Union in Europe maintain that, if the European Union does not integrate more and more closely as it grows larger, it will inevitably dilute and will eventually collapse.

I understand that argument, which is sincerely advanced; but I reject it. It is true that, if the European Union is to fulfil its potential, there must be core disciplines and obligations. If nation states were free to erect barriers against each other, we could quickly slide back from the achievements of the single market. Europe, however, must allow and even encourage variety, especially as it enlarges. How is that paradox to be resolved?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

As is often the case, the hon. Gentleman is correct.

The Prime Minister's speech at Leiden began by arguing for tolerance of diversity and for suspicion of conformity for its own sake. The European Union must develop with the instincts of free peoples. That implies acceptance that some may wish to integrate more closely or more quickly in certain matters. Their national interest may require it, even if that of others does not.

The Prime Minister suggested three conditions that needed to be fulfilled for that purpose. First, such flexibility must not undermine the core of disciplines and obligations on which the single market depends. Secondly, no member state should be excluded from an area of policy in which it is qualified and it wishes to participate—policies must be open to all.

Thirdly, there should be no inner and outer circles—no two-tier Europe. As the Prime Minister put it at Leiden: There is not, and there never should be, an exclusive hard core either of countries or of policies in which some member states lay claim to a privileged status. For 40 years, the European Union has worked to reduce divisions in Europe. No one wants such divisions to be reintroduced.

Photo of Bill Cash Bill Cash , Stafford

Will my right hon. and learned Friend note that paragraph 12 of the Government's White Paper says: If we were to press ideas which stand no chance of general acceptance, some others would seek to impose an integrationist agenda which would be equally unacceptable from our point of view"? Does he not accept that that is a form of appeasement, that we will not press ideas if they are inconvenient or may not be generally accepted by other member states? Is that not a defeatist position for us to adopt?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

We are about to enter into a negotiation, not a debate, so the Government and I must take account of the fact that, in that negotiation, we must set certain objectives. We are not excluding objectives in that negotiation simply because we might start as the only country expressing certain views. I have not the slightest doubt that we will start by being the only country advocating certain proposals and changes, some of which are referred to in the White Paper, but we cannot sensibly enter a negotiation if we judge that, not only at the beginning but at the end of it, there is unlikely to be any willingness to support our position.

The IGC will deal with one aspect of the work of the European Union. We will argue strongly for matters that are within the relevant competence of the IGC. If we make proposals that we believe are vital to the United Kingdom, we will argue them with all the vehemence at our disposal. We will not stop arguing them simply because there is not a measure of agreement.

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

My right hon. and learned Friend's position will be overwhelmingly, although not unanimously, accepted by Conservative Members, but he seems to be saying that there is no sticking point in the negotiation. Are there any sicking points where, if he cannot get his way, he will say to our partners, "We will bring the temple down because this matters to us more than anything else"?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

The IGC will not be a success unless its conclusions are accepted by all member states. I notice that, only yesterday, one of my French colleagues said that the IGC would fail if certain French interests were not properly taken into account. The same applies to the UK and to other member states.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

Will my right hon. and learned Friend give way?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

May I make a bit of progress? I will then happily give way to my hon. Friend.

A further principle with regard to flexibility that I outlined a fortnight ago in my Paris speech is that policies using Community institutions and the Community budget should be undertaken by less than the full membership only when that is agreed by all. Policies agreed by some against the objections of others should not carry the imprimatur of the European Union, or use EU institutions or resources.

Two years ago, the Prime Minister's Leiden speech was considered heresy by some of our European partners. That is not so today. They increasingly accept that the development of the European Union may need to include a degree of flexibility, or, as it is sometimes called, "variable geometry". We welcome that, provided that the concept of flexibility is not misused, for example, to introduce obstacles into the single market or to enable some countries to pursue closer integration among themselves and still expect all member states to foot the bill. We are, however, alive to the risks. As the European Union enlarges, it will have to incorporate more flexibility, which may require some new mechanism in the treaty.

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

If the Government are in favour of variable geometry, why should that variable geometry not extend to allowing France, Germany and perhaps some countries surrounding Germany to enter a hard-core arrangement? If they think that that is to their advantage and we do not find anything wrong with it, why should they not get on with it?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

If countries wish, on an intergovernmental basis outside the European Union, to enter into agreements between themselves, we cannot stop them—they do not need our agreement or our permission. That is what happened with the Schengen agreement. That is intergovernmental, was reached outside the European Union and does not require our consent. If, however, countries wish to integrate under the European Union, use its resources and be subject to the work of the European Court and of the European Commission, that requires the consent of all member states. That is a crucial requirement for us.

Several hon. Members:

rose

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

I must make some progress. You said, Madam Speaker, that many hon. Members wish to take part in the debate. I will give way later.

Of course, some variable geometry exists. Not all countries participate in the Schengen agreement on frontiers. The UK has opted out of the social chapter. Britain and Denmark have not committed themselves to joining a single currency. As the Union enlarges, such variable geometry will be increasingly visible. The likelihood that a majority of existing members will not be able to participate in any single currency that might be created in 1999 is widely acknowledged.

One must add to those factors the new market economies of central and eastern Europe, nine of which have applied to join the European Union. It is unavoidable that most of those central and eastern European countries will be unable to join a single European currency possibly for a generation. The EU must get used to the idea that, if the single currency goes ahead, most of its member states will not be a part of it for the foreseeable future.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

If that position exists, is it not clear that there is a two-speed Europe?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

No, because a two-speed Europe implies that we are all going to the same destination, but that some may arrive at it later than others. That may be true with regard to some policies and some countries, but it is equally clear that some member states will not wish to move towards some forms of integration, even in the long term. That is why I referred to a multi-track rather than a multi-speed concept of European Union.

Several hon. Members:

rose

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

I must make some progress.

The inclusion of the principle of subsidiarity in the European Union treaty was a British success at Maastricht. Since then, the principle has been developed further. The European Commission accepts that action at the level of the nation state should be the rule and Community action the exception. Some progress has been made. Since Maastricht, the number of legislative proposals from the Commission has fallen dramatically, but there is scope to do more. We shall seek to entrench subsidiarity further.

In 1992, the Edinburgh European Council adopted guidelines on how subsidiarity should work. We propose that those should be incorporated in a protocol to the treaty. Such a protocol would require that the Commission shall propose the simplest form of action possible". The Commission would need to explain why Community action was chosen in preference to co-operation between member states. A new measure would have to satisfy the test that it minimises financial or administrative burdens, and leaves the maximum scope for national decision-making.

We shall vigorously defend the pillared structure of the treaty that was introduced at Maastricht. That acknowledges that Community procedures and institutions are inappropriate when it comes to foreign policy, defence policy and questions of home affairs such as policing. Those are issues that need to be handled intergovernmentally, because they go to the heart of national sovereignty.

Once again, France agrees with the United Kingdom. In his speech last week, the French Prime Minister said: The IGC should clearly limit the Commission's field of action to Community matters; the second and third pillars should fall to the exclusive competence of the Member States". Much can be done in the IGC to improve the operation of the second and third pillars. Britain has already made proposals and we shall have more to make, but there can be no question of abandoning the intergovernmental nature of co-operation—for example, by introducing voting procedures more appropriate to the European Community.

I must confess to some dismay at the prospect of months and months of negotiation about decision-making procedures in common foreign and security policy. There are times when the European Union becomes a triumph of process over product.

My right hon. Friend the Member for Witney (Mr. Hurd) asked in his Churchill memorial lecture in Luxembourg last week whether the European Union was going to spend the next year discussing majority voting or the real issues confronting us, such as our policy towards Russia. He said: On present form there is a real danger that Ministers and politicians will spend precious time going to and fro over the arguments about machinery. I hope that we can prove him wrong, for, as he went on to say, it is unreal to imagine that the European Union's contribution to foreign policy would be transformed by different decision-making procedures in CFSP. The more important priorities are for thorough joint analysis, sensible policy proposals and the machinery to implement our ideas quickly and well.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

I am grateful to my right hon. and learned Friend for giving way. This House is deeply exercised by the judgment by the Advocate General on the 48-hour week. This House was told, without any doubt, that it retained competence over social policy. If the Advocate General's judgment is sustained by the court as a whole, and if, as is likely, we do not get unanimity in the IGC to reverse that judgment, will my right hon. and learned Friend give the House an undertaking that he will not rule out the possible necessity of passing legislation to overcome that judgment?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

I cannot anticipate now what we might or might not be determined to do a year from now if all other methods fail. I am not prepared to comment in that way. However, I can tell my hon. Friend that we intend not only to fight vigorously to get the court to make a judgment different from that of the Advocate General, but to raise the issue at the IGC—and we will view it as an important priority for this country to obtain the necessary changes.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

How does my right hon. and learned Friend's answer to my hon. Friend the Member for Northampton, North (Mr. Marlow) square with paragraph 36 of the White Paper, in which the Government emphatically say: The Government is committed to a strong, independent Court without which it would be impossible to ensure even application of Community law, and to prevent abuse of power by the Community institutions. Further on in that paragraph, the Government say: The ECJ safeguards all Member States by ensuring that partners meet their Community obligations. Is that not more important than giving my hon. Friend the Member for Northampton, North the impression that we might be flexible on those very fundamental matters?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

The crucial problem with the 48-hour week was that the Commission, in the first instance, made what we believe to be an abuse of the legislation, and tried, on the spurious grounds of health and safety, to get around the United Kingdom's social chapter opt-out. The European Court's job is to interpret directives, and we believe that the interpretation it should make is one consistent with the clear intentions of Ministers when they originally considered the matter.

Photo of Denis MacShane Denis MacShane , Rotherham

Is the right hon. and learned Gentleman aware that companies in my constituency want to gain access to European markets and want a strong European Court of Justice to make the single market work? Britain's contempt for the law of Europe, of which the right hon. and learned Gentleman should be utterly ashamed, is causing great damage to our reputation as a law-abiding nation state.

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

With respect, the hon. Gentleman is talking through his hat. He well knows that we strongly support the role of the Court in ensuring the proper workings of the single market. If the hon. Gentleman discusses these matters with companies in his constituency, he will find that they are angry and frustrated by the attempt to impose a 48-hour week regardless of the circumstances of their companies and their discussions with their employees.

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

I must make progress, but I will give way again later.

In the defence area, too, there is a danger that discussion at the IGC may be hijacked by institutional architects more interested in decision-making algebra than real defence issues and the purposes of closer European defence co-operation. Britain, as a country with real defence interests and obligations, is less interested in blueprints and more concerned about how, collectively and consistent with our NATO responsibilities, we and our European partners can actually promote security and stability on this continent, on its periphery and beyond.

Britain is determined to play a leading role in the defence debate at the intergovernmental conference, but we are equally determined to ensure that the debate stays rooted in the real world. NATO is the bedrock of our security. Without the United States, the countries of western Europe would have to double their defence budgets to achieve comparable defence capability. Decisions to send service men and women to risk their lives must remain for national Governments, accountable to national Parliaments.

Defence is not the only area in which institution builders are in danger of losing sight of what people actually want. The truth is that some of the proposals to be put at the conference—the ideas, for example, which emerge from the Commission and the opinions of the European Parliament, which have been tagged to this debate today—are driven not so much by a desire to make practical progress or to respond to public demands as by an ideological mission to maintain the momentum of integration and centralisation in Europe.

A clear example of that relates to majority voting. I often hear the argument that retaining unanimity would bring an enlarged Community of 20 or more to a standstill. The Labour party consistently uses that argument; indeed, the hon. Member for Livingston (Mr. Cook) used it in reply to my statement last week. Superficially, that may sound persuasive, but it is bogus. It does not stand up to analysis.

First, almost all member states say that they recognise that majority voting is inappropriate for the most fundamental issues, however big the Union may become. There was broad agreement in the Reflection Group that unanimity should remain the rule for decisions on primary law", such as treaty change, new accessions and the Community's overall revenue ceilings.

Equally, there is strong opposition to majority voting on issues such as taxation or big institutional questions such as the appointment of Commissioners. Reaching decisions by unanimity in such areas may not always be easy, but there is, in our view, no serious alternative. Member states will not allow themselves to be overruled on issues of such importance.

Secondly, the House should recall that majority voting already applies in those areas where regular decisions are needed to enable the Community to conduct its day-to-day business, such as the single market, agriculture and external trade. Some hon. Members have difficulty grasping that point. I lose count of the number of times I have heard the assertion that the Government are blocking serious agricultural reform by setting their face against further extension of QMV. I repeat that agriculture is already subject to QMV.

So what is left? The answer is some regional and environmental decisions; decisions on the locations of certain institutions of the Union; decisions on the shape and size of the research programme; and areas such as industrial policy and culture. Those are important issues. The Labour party will damage British interests by surrendering our national veto. But is anyone seriously saying that retention of unanimity in those few areas would render the Union unmanageable after enlargement? Of course not.

So why is there pressure for an extension of QMV? Partly, it is the desire to be seen to be doing something which can be presented, however erroneously, as a great leap forward. However, the real motive—this is my central point—of many who argue for more majority voting is ideological, not practical. They would like QMV for all decisions, but they know that that is non-negotiable at the present time—so they are seeking half a loaf now, hoping to secure the other half, the flour and the whole bakery, when they can.

That is the objective of the European Parliament, of the Commission and of a significant number of continental politicians. They want to extend QMV, as part of a long-term ambition of building a federal Europe. That is not a dishonourable goal, but it is disingenuous to pretend that, without more QMV, enlargement cannot succeed. The Government have not been against majority voting in the Community where there were good, practical arguments for it. That is why we supported the extension of QMV to the single market. No case has been made, however, for extending QMV further, and the Government will therefore oppose it.

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire

My right hon. and learned Friend should be aware that some Conservative Members are not nearly as frightened of QMV as the Government appear to be. If the vetoes are retained in their present form and the enlargement process brings in a number of small countries that would also have a veto, does he recognise that one of the fears of many of us on the Conservative Benches is that we would be told what to do by small countries, which are new to Europe?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

My hon. Friend is putting forward a very democratic principle. If she shares the central philosophical belief of the Government that the European Union should be a partnership of nations, then small countries, as well as large countries, have a right to be heard. It may be my hon. Friend's view that, as long as the large states can have their way, it does not matter what the smaller countries face, but I do not think that such a view would carry great resonance in a large number of EU countries. We believe that the principle of a partnership of nations applies to all nations—large and small.

Where I would, however, have some sympathy with my hon. Friend the Member for South Derbyshire (Mrs. Currie) and with many others, and where we agree with Germany, France and Italy, is that there are strong arguments for increasing the relative influence of the larger member states in the voting system. For example, the total population of Luxembourg, Ireland, Denmark, Finland, Sweden and Austria is 31 million—slightly more than half of Britain's. Yet those countries wield 19 votes between them in the Council, which is practically double the 10 votes of either Britain or France.

The current bias against the larger member states will become more pronounced with the accession of more, mainly small, states. The automatic extension of the current system on enlargement could allow a significant percentage of the EU's population, or the major net contributors as a group, to be outvoted. That would bring the Union's democratic credentials into disrepute.

Photo of John Butterfill John Butterfill , Bournemouth West

Does my right hon. and learned Friend accept that QMV is excluded in some aspects of the single market? For example, article 223 excludes defence procurement. That is especially important to British defence industries, which are prevented by it from gaining access to some of our partners' defence procurement. Does he not think that we could extend QMV in that area, where it would benefit British industry?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

No. The debate about that article is not about unanimity or QMV, but about whether defence procurement itself should be a matter for Commission competence and should come within the operation of the EU. We have looked at that very seriously from the point of view of British interest, but we did not conclude that it would be acceptable for article 223 to extend to defence procurement. Nor do we believe that it would be in the UK's interest.

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

As an example of variable geometry, I shall give way to the hon. Gentleman.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

How does the Secretary of State think that greater advantage could be given to nations that are larger, either in terms of population or contributory powers? Could we, for example, follow a process of block voting, in which he could hold up a card, like a great panjandrum national secretary, and cast a block vote on behalf of the country? Does he fancy something like that?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

That policy has always seemed to go down well at Labour party conferences, but the rest of the world has not considered it appropriate. We clearly need to consider a system of weighted voting that reflects the respective populations of the EU countries—I do not necessarily mean in exact proportion. There is weighted voting at the moment, but it is not in any way reflective of the contributions of larger countries to the overall work of the EU. That needs to be corrected.

The desire for further centralisation is also clear in other areas. The need to create more jobs is one of Europe's highest priorities. The Labour party is arguing that we therefore need a treaty chapter on employment. Why? What would it achieve except employment for new armies of bureaucrats and trade unionists? Fine words in treaties do not create jobs; businesses create jobs, and they would be able to create more of them if they were left to get on with it without bright new initiatives either from Brussels or from the Labour party.

There are many areas in which it makes sense for the nations of Europe to combine forces through the European Union, and in which successive British Governments have accepted common European decision-making, because the benefits for British security, prosperity or the quality of life are so significant that they have justified some loss of unfettered national control.

We are not going to be driven into further centralisation for ideological reasons by those who maintain that the days of the nation state are over. We must look very carefully at the balance of the EU's legal order, to ensure that it permits a stable equilibrium and that we are not ratcheted by our obligations beyond what is sensible or publicly acceptable.

That is one reason why the IGC will need to look at the role of the European Court of Justice. The French, too, have concerns. I again refer to the speech made by the French Prime Minister last week, when he said that the European Court of Justice was becoming, little by little, a sort of European Supreme Court. This competence, if it were extended, could lead ineluctably to the acceptance of a federal type of European constitution. To avoid such an outcome, the Intergovernmental Conference should examine the issue, otherwise all the debates about the balance of power in the Union could become pointless". I very much welcome the fact that the French Prime Minister, on behalf of his Government, has agreed with our judgment that the ECJ is a legitimate issue to be raised at the IGC, and that trends in the way in which the European Court is operating could point towards a federal structure in the EU, which France would also find an unattractive and unacceptable policy. We therefore look forward to hearing in greater detail French ideas on that important matter.

Photo of Iain Duncan Smith Iain Duncan Smith , Chingford

May I press my right hon. and learned Friend a little further on that point? He previously referred to the concept of subsidiarity, and he has just mentioned what we might do with regard to the European Court. He will be fully aware that one of the crucial doctrines of the European Court is that of the occupied field—when it moves competence into an area, it may never move out. Does he accept that subsidiarity and that doctrine are mutually opposed, and that, if he wants to proceed on the matter, he has to resolve that doctrine by the end of the IGC? Does he intend to make that an absolute?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

I certainly agree with my hon. Friend that it is not acceptable to suggest that certain areas of competence, once agreed, are irreversible. We have a democratic European community of nations. If it is the view of the people and Parliaments of the EU member states that some area that has previously been seen to be relevant to the competence of the Commission is unnecessary, and that it could much better be handled at the level of national Parliaments, I would see nothing wrong with such a proposition.

Indeed, I see it as unacceptable to suggest that such matters cannot be considered afresh in the light of circumstance and experience. It would be a denial of the democratic nature of our European family of nations to try to prevent such a discussion from taking place.

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

The House understands that the Government's first objective will be to try to amend the treaty on the powers of the court, but we all know that that is very difficult. Is the Government's present position one of leaving open the possibility that they might in future refuse to obey one of the European Court's judgments?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

This Government and this country have always been staunch upholders of the rule of law. I trust that my hon. Friend—[Interruption.] It is the law that this Parliament has indicated it believes to be the law to which we are subject. I do not believe that it would be the will of the British people to disobey the law. It is a quite different matter as to whether—

Several hon. Members:

rose

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

May I be allowed to finish what I was saying before I give way?

The proper course of action when one believes that a law is unreasonable or unjust is to change that law, not to ignore its legal force.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Southend East

I fully accept the important point that the Foreign Secretary makes, but does he not accept that many of us believe that the wording of the Advocate General's judgment, or recommendation, is so wide that the whole social chapter will be applied to this country by majority voting through the Single European Act? If by any chance those who take that view happened to be correct, what would the Government do? What advice would they give?

I fully accept what my right hon. and learned Friend says about the sanctity of law, but if our exclusion is virtually written off and torn up because of the abuse of the European Court, surely we must do something.

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

Of course it follows that, if the vital interests of member states were ignored in the European Union, there would come a time when the Union would become unworkable, and would not be able to continue as a effective force for the peoples of Europe. Our view is that the proper course of action on aspects that we believe to be unattractive and undesirable is to seek a change.

As we have seen in the past, that can be achieved. The British budget rebate was a good example. Not surprisingly, Britain began without a single ally—but by tough and firm negotiations we achieved our objective in a most creditable way.

Several hon. Members:

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Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

May I make a few more remarks on that subject before I give way again?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

I am still dealing with the same point.

Our proposals on the Court of Justice for the IGC will be contained in a detailed memorandum that we shall issue shortly. They focus on two areas, the first of which concerns improvements in the functioning of the Court.

The EU needs a strong independent Court to ensure the even application of Community laws and to prevent abuse of power by Community institutions. Britain's proposals will not be designed to reduce the Court's legitimate authority. Rather, we want to help to ensure that it avoids disproportionate judgments that threaten to bring its reputation into disrepute; and we are concerned that the Court's interpretations have sometimes gone beyond what Governments intended when laws were framed.

Secondly, there can be changes in the law itself. In many cases, it is not the Court that is at fault when things go wrong, but the law itself, which can be an ass. It is absurd, for example, that there should be fishing quotas designed to guarantee a reasonable return for local fishing communities, yet at the same time treaty provisions on non-discrimination that render such quotas unenforceable. It is wrong that the health and safety articles are so loosely drafted that they can be used to make social policy by the back door, evading the unanimity requirement.

Those are issues that we intend to address at the conference. We do not accept that directives, once approved, are irreversible. Treaty provisions are not to be seen as tablets of stone. If amendments are needed, they should be agreed.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

Will my right hon. and learned Friend give way?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

No. May I continue?

It is important to understand that the IGC will not cover the whole waterfront. I do not expect, for example, that there will be substantive discussion of the common agricultural policy. The treaty provisions on the CAP do not present a legal barrier to the liberal, market-driven policy that we want. We shall pursue the necessary reforms vigorously outside the conference. They cannot be evaded, given the prospect of enlargement and the next round of World Trade Organisation agricultural negotiations, which will continue to require EU reform.

Photo of Michael Lord Michael Lord , Suffolk Central

The last time that we had such a conference, and discussions such as this, a package was brought back to the House that many of us found totally unacceptable, and into which we had had no input whatever. Will my right hon. and learned Friend assure the House today that, during the prolonged negotiations, he will report back to the House of Commons on a regular basis and tell us how things are going, so that the House can take a view of the whole business?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

My hon. Friend has raised an important principle. At the moment, we are in some disagreement with the European Parliament, because the United Kingdom and France are refusing to allow it to become a party to the negotiations. We intend to insist on that, and I am delighted that France is again a strong supporter of the United Kingdom's position.

I entirely accept that national Parliaments and the European Parliament have a right to be kept informed on the progress of the negotiations. I can certainly assure the House that any opportunities given to the European Parliament must also be given to the national Parliaments, so as to ensure proper consideration.

Photo of Peter Tapsell Peter Tapsell , Linsey East

Does my right hon. and learned Friend realise that that reply is totally unacceptable, and that we will expect him to come regularly to the House and report on his negotiations? They are bound to drag on beyond the next general election; the serious negotiation will not start until then, because some may hope that after the election they will have a Labour Government to deal with.

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

I have no difficulty with what my hon. Friend says. In fact, that is exactly what I thought I was saying, and I am happy to reassure him and the House as a whole that we have every intention of reporting to the House on the progress of the negotiations on a regular basis. That is what I thought I was saying, but if it needs further clarification, I am happy to provide some.

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

The coming intergovernmental—

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

My right hon. and learned Friend said that he would give way to me.

Hon. Members:

That is the third time.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

No, the second.

My right hon. and learned Friend sets great store by the rule of law; we all do. But in this House we also set great store by democracy. If through democracy we cannot get what the British people want, how then can we achieve things?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

I think that Parliament will always come to its own good judgment in time if it believes that the vital interests of the United Kingdom are not being properly respected. The final decision will be taken by this Parliament, as has happened in the past and as I am sure will continue to happen in the future.

Several hon. Members:

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Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

The coming intergovernmental conference needs to be kept in proportion. It will address some important issues. My main concern is that it should be used to strengthen the EU as a partnership of nations. As the Prime Minister put it at Leiden, the intergovernmental conference should be the anvil on which we forge a stronger Union.

Such a Union must develop a surer sense of the areas in which it can help to maximise Europe's potential, where the member states have shared purposes and common interests. It should also identify the areas in which it should choose to stand back, recognising the limits of its vocation. The intergovernmental conference will succeed if it helps to establish such a framework. The United Kingdom is determined to contribute to that success.

Photo of Robin Cook Robin Cook , Livingston 5:16 pm, 21st March 1996

It would be churlish to begin without congratulating the Foreign Secretary on the straight bat with which he has fielded so many helpful interventions from the Government Back Benches. However, the confidence that he has expressed in the Government's position would have been more convincing if the Government had acceded to the request that I believe was made by both Opposition parties, to table a motion supporting their White Paper, to which we could have tabled an amendment.

As I sat through the right hon. and learned Gentleman's speech over the past 40 minutes, I rather suspected that the reason why the Government did not table a motion was patently before us: it would have taxed even the skills of the Foreign Secretary to produce a motion that all Conservative Members could have voted for tonight.

Photo of Robin Cook Robin Cook , Livingston

We offered to table an amendment if the Government would table a motion. Had we been able to table an amendment, I assure the hon. Gentleman that we would have divided the House on it.

One does not need to be a conspiracy theorist to suspect that the debate has been arranged for today, after such a major statement on Northern Ireland, precisely so that fewer Members will be able to take part, and fewer people outside will know what has been said to the Foreign Secretary in the House.

However, in the comparative privacy that the Government have given us for the debate, we can talk frankly to each other. Let me begin not with the Foreign Secretary's White Paper but with ours, which the Labour party presented to its conference six months ago and which, I am pleased to say, was passed unanimously. [Laughter.] I do not see why Conservative Members find that the least bit hilarious. I presented the White Paper to my conference and my conference passed it unanimously. I shall be extremely interested to see whether the Foreign Secretary dares to submit his White Paper to his conference—and, if he does, whether it gets a unanimous vote there.

Our starting point—

Photo of Robin Cook Robin Cook , Livingston

I shall give way to the right hon. Gentleman, of course.

Photo of John Redwood John Redwood , Wokingham

If the hon. Gentleman is so confident of the unity of the Labour party, why has he not tabled a motion in Labour party time so that we can see this fabled unity for ourselves?

Photo of Robin Cook Robin Cook , Livingston

We tabled a motion in our time last year and I would not rule out tabling another motion in our time this year. We look forward to the right hon. Gentleman giving his considered support should we choose to take his advice and table such a motion.

The starting point for our White Paper is that we are in the European Union and we are in to stay. We have no intention of seeing it develop into a supranational state. I would not go so far the Foreign Secretary when he addressed the House as a Back Bencher and said: directly elected membership of a European Assembly brings us one step nearer a United States of Europe. That may be a good thing, as I believe".—[Official Report, 7 July 1977; Vol. 934, c. 1503.] I do not believe that with him.

We rule out, and always have ruled out, a United States of Europe. We believe that the peoples of Europe would rule that out. We want a Europe of nation states coming together of their own free will. We do not want to centralise more powers in Brussels. Indeed, it is the thrust of our policy to devolve power to the regions and nations of Britain, not to centralise powers up from Whitehall.

However, we must co-operate with our partners in Europe. Europe is our largest market. It is the largest reason for inward investment in Britain. When my right hon. Friend the Leader of the Opposition visited Japan and addressed the Japanese equivalent of the CBI, he did not receive a single question about the minimum wage or the social chapter—those King Charles's heads that Conservative Members like to kick around the Chamber. The questions that he received were all about the security of Britain's commitment to Europe, because it is on that that future Japanese investment in this country depends.

Such investment is a two-way flow, because, despite all the concerns of Conservative Members about how the social chapter on the continent diminishes competitiveness, since the social chapter was signed by the nations of the continent, investment by British companies in those countries with the social chapter has been at a record all-time high.

Photo of Edward Leigh Edward Leigh , Gainsborough and Horncastle

Is it possible that the Leader of the Opposition received so many questions on the security of our membership of the European Community because the position of the Labour party on that issue changed at least five times?

Photo of Robin Cook Robin Cook , Livingston

The last change in the Labour party's policy was in 1983–84, when I was our last European affairs spokesman and indeed shadowed the Foreign Secretary. Since 1983–84, our position has been consistently in support of membership of the European Union, recognising, unlike Conservative Members, that if we are to remain a member of the European Union, the worst possible position is the one taken by the hon. Gentleman and his friends—to be in it and know that we cannot get out, but constantly to sound as if we wished that we were not in it.

Photo of Bernard Jenkin Bernard Jenkin , Colchester North

Given that we are but one of 15 members of the European Union, why does the most reluctant nation in Europe attract such a huge proportion of inward investment?

Photo of Robin Cook Robin Cook , Livingston

The hon. Member puts his finger on precisely what he would put at risk. He knows perfectly well, and I know from visiting many companies that have invested from abroad, that they are in Britain precisely because we are one of 15 nations. Make us one nation in isolation and we will not have that investment. If he is hinting at the social chapter, I can tell him, having met many times the Japanese investors in my constituency, that not one of them would have the slightest difficulty in meeting any of the terms of the social chapter.

There is no prospect of the British economy succeeding if the economy on the continent is failing. Either we go down together or we succeed together. There is no magical escape from the ties that bind us to Europe by pretending, as some Conservative Members have sometimes done, that we do not really have that much in common with Europe and that, at heart, we are an Asian nation that has somehow come adrift from our true homeland on the Pacific rim.

It is vital that we get access to the new markets in the far east, but I note that when the Prime Minister went to Bangkok to deal with the Asian nations, he went as part of a European Union team—a team that gave him additional bargaining clout because it spoke for the largest market in the world. In a world that is increasingly coalescing into trading blocs, it is more, not less, important to secure our base in the largest trading bloc. We are much less likely to come to terms with the global economy if we start out by being as difficult as possible to our immediate neighbours.

That is the background against which we come to measure the Foreign Secretary's White Paper, which sets out the Government's benchmark for the IGC. It is difficult to measure that benchmark without a rubber ruler, because its enthusiasm for the European Union expands and contracts with each changing paragraph. If I were still a student of English literature, I would be tempted to say that the text was the work of two hands.

For example, I presumed that it was the Foreign Secretary, the repressed supporter of the European Union, who drafted paragraph 36 on the European Court of Justice which, quite properly, tells that we need a strong independent Court without which it would be impossible to ensure even application of Community law". The Foreign Secretary is absolutely right. Since the annual reports on the European Court of Justice commenced in 1984, Britain has lost fewer cases in the European Court of Justice than any other major member. France and Germany have lost more cases than Britain. Belgium, never mind its alleged enthusiasm for Europe, has lost three times as many cases as Britain. Italy has lost six times as many cases.

Photo of Robin Cook Robin Cook , Livingston

I just want to put a question to the Foreign Secretary. He said that the Government were getting increasing support among the countries of the European continent for proposals to limit the powers of the European Court of Justice. If Italy says that it would like to support proposals to limit the powers of the European Court of Justice, would the Government be relieved to have that support or worried about why they were getting it?

Photo of Gwyneth Dunwoody Gwyneth Dunwoody , Crewe and Nantwich

I am interested in my hon. Friend's argument. Can he tell us how many times, when Italy has lost, it has implemented the decision of the European Court of Justice?

Photo of Robin Cook Robin Cook , Livingston

My hon. Friend argues that the European Court of Justice should have the powers to ensure that its rulings are carried out. That has to be the case for any court. If one respects the rule of law, there must be powers to impose it. I cannot understand the complaint of my hon. Friend and the Conservative Euro-sceptics that other countries do not play by the rules when they want to weaken the very court that enforces the rules.

Photo of Iain Duncan Smith Iain Duncan Smith , Chingford

May I press the hon. Gentleman on that point? He holds up the European Court of Justice as a shining paragon of judicial intervention. Does he support its ability to translate the treaties, which is called teleological interpretation, or would he seek to limit it to specific interpretation of the treaties as they stand and not reading them as it would wish?

Photo of Robin Cook Robin Cook , Livingston

There is no difficulty in replying to the hon. Gentleman, because the court's abilities come from the British system of law. The court should interpret the treaty and the law and not what it thinks about it. On that point, I agree with him.

We turn to paragraph 37—

Photo of Robin Cook Robin Cook , Livingston

If I may, I shall proceed with my point, but I shall ensure that the hon. Gentleman has an opportunity to make his.

Paragraph 37 is plainly by a quite different hand. Suddenly, the respect for the need for a strong, independent Court of Justice disappears. Until I heard the Foreign Secretary's speech, I had assumed that it had been hacked into the text after he had gone off to bed by the Minister of State, who emerges as a closet Euro-sceptic when the moon comes out. Paragraph 37 totally ignores paragraph 36 and proposes six different ways of limiting and weakening the powers of this independent court that is needed to enforce the even application of the rules.

As a result, the Foreign Secretary has ended up with negotiating objectives for the European Court of Justice flatly in contradiction with his own analysis. The truth is that, like so much else in the White Paper, the negotiating objectives are drawn up not on any calculation of the interests of the 56 million people of Britain but on a very fine calculation of what is necessary to fit the prejudice of a few dozen Tory Members—which is a perfect point on which to give way to one of them.

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

To take up the hon. Gentleman's point about the rule of law, does he agree that one of the ideas behind the rule of law is that one has a legitimate way of changing the law if one disagrees with it? Does the hon. Gentleman agree that, in European law, the citizens of this country have no legitimate hope that anything they say to change the treaty will succeed? Any suggestions for amendment of any substance will be met by a veto from one of the nation states.

Photo of Robin Cook Robin Cook , Livingston

The hon. Gentleman seems to make a strong case against the Foreign Secretary's defence of the unanimity rule. Surely the hon. Gentleman is now in favour of qualified majority voting.

The Foreign Secretary is a better judge of the prejudices of his colleagues than myself. I cannot help the right hon. and learned Gentleman in that calculation, but the omens are not good that he has got those prejudices right.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

Why not answer the question from my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen)?

Photo of Robin Cook Robin Cook , Livingston

I can offer a judgement on the right hon. and learned Gentleman's White Paper against what we regard as Britain's interests in the IGC.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

The hon. Gentleman has not got an answer.

Photo of Robin Cook Robin Cook , Livingston

The hon. Member for Wolverhampton, South-West (Mr. Budgen) answered his own question by conceding that the veto was damaging to Britain's interests. I thought that that was a most interesting intervention, one to which we shall return on a number of occasions.

How will we measure the White Paper against the public interest? We can judge it against three criteria, and the hon. Member for Wolverhampton, South-West has anticipated one of them. First, are the objectives in the White Paper capable of negotiation? I can be brief about that, because I suspect that the Foreign Secretary is about to hear a succession of speeches telling him that those objectives are not capable of negotiation. That claim is, of course, correct. The general thrust of the White Paper will leave the Foreign Secretary out on a limb, on the sidelines of negotiation. That is not a good place from which to exert bargaining leverage.

I notice that the Government are the only major Government attending the IGC opposed to the reform of the European Parliament, presumably because they are, after all, the Government who have the greatest difficulty in getting their party elected to the European Parliament. I must tell the Foreign Secretary that I can see no British interest served by the Government's position on the European Parliament. Of course, Ministers who go to the Council of Ministers should be accountable to the House. In fact, the House should pay more attention to how it holds Ministers accountable for what they do in the Council of Ministers.

I see no national interest for Britain or any other member state blocking measures that would make bureaucrats in Brussels, who are effectively accountable to no one, more accountable to the European Parliament. I very much doubt whether the Foreign Secretary will be able to think of such an argument, which is one of the reasons he may have difficulty in negotiating on such an objective.

The Foreign Secretary will have noticed that some of his honourable colleagues and some members of the right-wing press are now pressing him to give an undertaking that he will veto the whole package if he does not deliver on his White Paper. Two days ago, a Mr. Boris Johnson, who I understand has aspirations to join the Conservative Benches—no doubt in order that he might better sustain the Foreign Secretary in his conduct of European relations—said that he was alarmed that the Foreign Secretary has not promised in advance to veto the outcome of the IGC.

The Foreign Secretary has my full sympathy for the delphic way in which he is refusing to give that commitment, because we both know that he has not a hope of delivering the full package of the White Paper. It is written for consumption in Southend and Stafford, not in Brussels and Strasbourg. It is very wise of him therefore not to tell in advance what he is going to do when the White Paper fails our first criteria of being capable of negotiation.

Our second criteria is whether—

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire

It is not criteria, but criterion.

Photo of Robin Cook Robin Cook , Livingston

I said criteria rather than criterion.

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire

No, it should be criterion.

Photo of Robin Cook Robin Cook , Livingston

In the spirit of unity, I will compromise: the second of our criteria is whether the White Paper equips the European Union to face the challenges of the 21st century. According to that measure, the White Paper is a glorious missed opportunity. It gives us a comprehensive tour of the footnotes of diplomacy, and even finds a place for a paragraph on the future development of comitology.

Photo of Bill Cash Bill Cash , Stafford

Does the hon. Gentleman agree with the hon. Member for Dunfermline, East (Mr. Brown), the Opposition spokesman on the economy, who says that the Labour party is committed to managed exchange rates and monetary union? Does the hon. Gentleman agree that, by saying that, his hon. Friend guarantees that the Labour party, if ever if were to achieve government, would be incapable of delivering its promises on all those matters relating to public expenditure that fall within the convergence criteria, including health, education and the attainment of jobs?

Photo of Robin Cook Robin Cook , Livingston

Of course I agree with my economic colleague. We share a place in the shadow Cabinet, and it is a condition of being there that we agree. Of course we agree fully and absolutely on every point relating to Europe. [Interruption.] If I may say so to the hon. Member for Stafford (Mr. Cash), the parent text of our policy on monetary union was debated at our party conference three years ago. It has remained consistent since then and has stood the test of time much better than anything put forward by the Government. Both my Treasury colleagues and I are united in our commitment that a single currency must first require convergence of Britain's real economic performance with that of the continent.

Photo of Robin Cook Robin Cook , Livingston

I will give way to the hon. Gentleman if he will strike a bargain kindly not to interrupt me from a sedentary position once I have allowed him to intervene.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

I will keep that side of the bargain. The hon. Gentleman has referred to the single currency. My right hon. and learned Friend the Chancellor of the Exchequer has said that he thinks that the probability that the single currency will go ahead is 60:40. What is the hon. Gentleman's prediction? Is it more likely to happen if the Labour party forms the next Government or the Conservative party forms the next Government? Perhaps he can give a straight answer to a straight question.

Photo of Robin Cook Robin Cook , Livingston

The answer to the hon. Gentleman's first point is that—let me take the second point first. [Interruption.] It seems sensible to work backwards. On the hon. Gentleman's second point, I am absolutely confident that the advent of a Labour Government will make it vastly more likely that Britain will achieve convergence according to real economic performance with the continent. In that happy event, we will increase the prospects for Britain joining a single currency. I must say to the hon. Gentleman—

Hon. Members:

Oh!

Photo of Robin Cook Robin Cook , Livingston

I will give way in a moment to my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore). Although I hope that the hon. Member for Northampton, North (Mr. Marlow) will remain sedentary and silent during the rest of my speech, I think that the House must address the serious issues about the single currency which have been dodged by the White Paper.

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

I was rather alarmed by what my hon. Friend said a moment ago. I certainly expect and hope that a Labour Government will have success in the real economy, but is he implying that if, for whatever period, we did converge with other and, on the whole, more successful economies than our own, we would still find ourselves bound by the existing convergence criteria? That would involve restrictions on the borrowing requirement of a Labour Government and the transfer of the Bank of England into a subsidiary or a branch of the European central bank, and would require us to rejoin the exchange rate mechanism. Surely my hon. Friend is not even contemplating such nonsense.

Hon. Members:

Hear, hear.

Photo of Robin Cook Robin Cook , Livingston

I must tell my right hon. Friend that we have repeatedly criticised the very convergence criteria that he listed. One of the reasons we have pressed the Government to support the Swedish proposal to put a commitment to employment into the Maastricht treaty is all the other convergence criteria that have already been accepted. The Foreign Secretary said in his speech—

Photo of Iain Duncan Smith Iain Duncan Smith , Chingford

Will the hon. Gentleman give way?

Photo of Robin Cook Robin Cook , Livingston

No. I have already given way to the hon. Gentleman.

The Foreign Secretary said that putting a commitment to employment into a treaty did not guarantee that one would achieve the increase in employment. I have a lot of sympathy with the Foreign Secretary's obvious logic on that point, but the Government agreed at Maastricht to put into the treaty targets on inflation, interest rates and Government deficits. The case for the Swedish commitment to employment as a target for the European Union is precisely that, if it is missing from that treaty, one has an unbalanced set of objectives for economic management within the European Union.

Photo of Robin Cook Robin Cook , Livingston

It is good of the hon. Gentleman to seek to help me, but I intend to return to my speech.

As I said earlier, the White Paper fails to tackle the real challenges facing the European Union in the 21st century. The Foreign Secretary said in his speech that enlargement was a central issue facing the European Union. In his White Paper, however, enlargement is relegated to a single paragraph in the introduction. I believe that enlargement is a much more urgent and central mission facing the European Union than suggested by the attention that it receives in the White Paper.

It is important that the European Union opens its doors to the new democracies of central and eastern Europe to provide stability in that region and to share with those countries our experience that bringing down barriers to trade provides a much better guarantee of security than putting up borders between us. I agree with the Government's objectives in their introduction, but I would have been more impressed with their commitment to enlargement if any consideration of it had surfaced anywhere else in the substance of the document that follows.

Photo of Mr Christopher Gill Mr Christopher Gill , Ludlow

Obviously, we are interested in the Labour party's views on enlargement. However, the hon. Gentleman did not quite answer the last question from his right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore). Is the hon. Gentleman committing his party to renegotiating the treaty? If he is, this would be an appropriate time to spell it out so that hon. Members are in no doubt.

Photo of Robin Cook Robin Cook , Livingston

The hon. Gentleman need be in no doubt. The Labour party has repeatedly stressed its position for three years: we will not enter a single currency unless and until we have achieved convergence of real economic performance. There can be no doubt in the mind of the hon. Member—or in the mind of any other listener—as to the Labour party's position, because it has been repeatedly stated from the Dispatch Box by every member of the shadow Cabinet who has spoken on the subject.

I return to the issue of enlargement.

Photo of Robin Cook Robin Cook , Livingston

Of course I shall give way to my right hon. Friend. However, I was about to say that the intervention of the hon. Member for Ludlow (Mr. Gill) showed the true lack of commitment to enlargement on the Conservative Benches. No Government Members wished to intervene in relation to enlargement; they intervened in relation to a single currency.

Photo of Mr Tony Benn Mr Tony Benn , Chesterfield

Given what my hon. Friend said about better convergence criteria—including employment and a more successful economy under a Labour Government—when it is achieved, what role will the British people have in the decision? My colleagues on the Front Bench are in favour of a referendum on Scottish devolution, in favour of a referendum north and south in Ireland and in favour of a referendum on proportional representation. This decision is fundamental. Will my hon. Friend give us a clear assurance that such a decision could be taken only after the consent of the British people at a referendum?

Photo of Robin Cook Robin Cook , Livingston

Yes, I give my right hon. Friend that commitment—it has been repeatedly stated by our leader. We believe that Britain could enter a single currency only with the consent of the British people. [HON. MEMBERS: "Ah!"] That is what my right hon. Friend asked, with the greatest of respect. If there is a general election in which there is a fair choice—choice would have to be available to the British public—that might be one way of establishing the consent of the British public for a single currency.

In the event that there is no such fair choice at a general election, a referendum would be one way to establish the consent of the British people. My right hon. Friend will know that Labour has an impressive track record on this point: after all, it was a Labour Government who gave the people of Britain a referendum on whether they should join the Common Market after a Conservative Government took them in, thus denying them that commitment.

Photo of Robin Cook Robin Cook , Livingston

I am addressing the issue of enlargement, and I am anxious that hon. Members should not lose sight of what is an important challenge to Europe.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

In respect of enlargement and of the other matter that we have just been discussing, will the hon. Gentleman try to answer the questions more accurately, as they are so important? Do not his evasive answers to interventions from his Labour colleagues show that the divisions in the Labour party on Europe are much greater than the divisions in the Conservative party?

Photo of Robin Cook Robin Cook , Livingston

There is no evasion in my replies. We are quite clear that Britain can join a single currency only with the consent of the British people; that that consent may be judged by a general election if it is fought on that issue and it is a fair choice for the British people —the hon. Gentleman would not dissent from that—and, if not, it could be established by a referendum. That is not an evasion: it is a perfectly clear statement of the position—and it is a much clearer statement of the position than he will get from his Front Bench on the issue.

Photo of Robin Cook Robin Cook , Livingston

I shall give way to the hon. Member for Ross, Cromarty and Skye.

Photo of Charles Kennedy Charles Kennedy Shadow Spokesperson (Foreign and Commonwealth Affairs)

I think the hon. Gentleman is characteristically trying to make a fair point, but will he clarify it a little more? If the next general election—at a time and in circumstances that none of us can predict—does not meet this pristine criteria of clarity of choice, will Labour, if it is in a position to so do, definitely offer a referendum? Would not that clarify it once and for all?

Photo of Robin Cook Robin Cook , Livingston

If the next general election does not provide a fair choice to the public, and if a subsequent Government join the single currency, a referendum would be a way of establishing that consent. Plainly, the decision on a referendum would follow a decision on whether we were joining the single currency.

I remind hon. Members that I am seeking to address an issue of immense importance to the countries of central and eastern Europe, the people of whom, were they listening to this debate, would be depressed by the little interest that is being shown in their application to join the European Union. I remind the Foreign Secretary that his enthusiasm for enlargement appeared to play no part in the position he has adopted on qualified majority voting—he has adopted a position of no surrender.

The Foreign Secretary was unfair to himself in saying that the Labour party had invented the idea that enlargement provides the case for expansion of qualified majority voting. It was not the Labour party, but the right hon. and learned Gentleman. In 1985—the last time the European Union was enlarged—he said to the House: With 10 member states it is not surprising that the Community takes a considerable time … to reach agreement … Clearly a Community of 12 member states will find it even more difficult to reach agreement on a wide range of issues.The Government believe that it is desirable to encourage more majority voting within the Community."—[Official Report, 20 June 1985; Vol. 81, c. 470.]

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

If the hon. Gentleman were honest enough to read the rest of my speech, he would see that I was not suggesting that we should extend the area where qualified majority voting applies—I am positively against that. I said, as is quite clear from the speech, that where there is already QMV we will need to use it more often the larger the Community becomes.

Photo of Robin Cook Robin Cook , Livingston

The right hon. and learned Gentleman then sat in a Government who, at that very time, expanded qualified majority voting.

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

The hon. Gentleman might now have the decency to withdraw the original charge that he made, now that he recognises that—either deliberately or inadvertently—he was misleading the House.

Photo of Robin Cook Robin Cook , Livingston

I say to the right hon. and learned Gentleman that I have nothing to withdraw, except his words. I quoted his words to the House of Commons in 1985, at the time Spain and Portugal joined the European Union. It may be embarrassing for him to be reminded of those comments now, but they were his words. The Government expanded qualified majority voting at that time.

The right hon. and learned Gentleman also said during the course of his White Paper that we will have to amend the structural funds as part of the process of enlargement. He will know that voting on structural funds is a matter of unanimity. I put it to him that there is no prospect of getting serious reform of the structural funds if Spain and other countries retain a veto on the structural changes that will be necessary. It is also unlikely that the other countries of the European Union will admit countries such as Malta—which has a population that is one tenth of 1 per cent. of the European Union—on the basis on which Malta gets the full present range of the veto.

The reality is that, as the negotiations proceed, the Foreign Secretary will have to choose—either he will have to shift his position on qualified majority voting or he will have to drop his support for enlargement. There is no prospect of enlargement happening without expansion of qualified majority voting.

I now turn to the third of the criteria by which we judge the White Paper. Will it restore public legitimacy for the European Union by reconnecting the solutions offered by the Union to the problems faced by the peoples of Europe? It would be wrong to accuse the White Paper of failing in its answer to the question—it does not attempt to answer it. The major problems facing the peoples of Europe at this time are high unemployment and low job security. The White Paper recognises those problems. It says that the need to create more jobs is one of the highest priorities of Europe. However, the sole practical measure it offers to create more jobs is to keep Britain out of the social chapter.

Photo of Mr Llew Smith Mr Llew Smith , Blaenau Gwent

What likely job losses and cuts in public expenditure would have to come about for us to meet the convergence criteria?

Photo of Robin Cook Robin Cook , Livingston

My hon. Friend anticipates a point to which I shall come. If he is patient, I shall give way to him again when I reach that point, and I assure him that he will not be disappointed.

As I am sure that my hon. Friend would not like me to let the Government off the hook by allowing them to say that they will keep Britain out of the social chapter, may I tell the Government that, for purely party reasons, I have a sneaking welcome for the fact that the Government do not intend to sign up to the social chapter?

The Conservative party is lining up to fight the next general election, telling workers in Britain that they will have less right to know the future strategy of their company, and parents in Britain that they will have less right to unpaid leave to be with their newborn children, than workers on the Continent. That suits us fine. We will offer to help with the leaflets to communicate the fact at every workplace. In case the Conservatives fail to produce the leaflets, we will do it ourselves.

I will go further: I will keep a place in my diary so that the Foreign Secretary and I can tour the workplaces of GKN, Coats Viyella, United Biscuits and Marks and Spencer—all companies that have ignored the Government's opt-out and set up works councils under the social chapter—so that he may explain to those work forces why the Government wanted to deny them a legal right to measures which they have found helpful, which allow them to participate in the future of their company.

Photo of Robin Cook Robin Cook , Livingston

I think my hon. Friend has already intervened, so, if I may, I shall continue.

At this late stage in the Parliament, I say to the Foreign Secretary, I would request the Conservative party to keep opposing the social chapter and keep opposing better rights for working people, until working people have the chance to let the Conservatives know what they think of that position through the ballot box—but do spare us the humbug that deregulation is the only thing that creates jobs.

Several hon. Members:

rose

Photo of Robin Cook Robin Cook , Livingston

I give way to the hon. Member for Dover.

Photo of Mr David Shaw Mr David Shaw , Dover

Does the hon. Gentleman accept that, in Italy, non-wage labour costs are about £40 for every £100, that in Germany they are about £32 for every £100, but in Britain they are considerably less than that? Does he accept that every country in Europe that has higher non-wage labour costs than Britain has, as a result, higher unemployment?

Photo of Henry Bellingham Henry Bellingham , North West Norfolk

That is right. How does one answer that?

Photo of Robin Cook Robin Cook , Livingston

I will answer that by referring to the Government's record. Since the Conservative party came to power, employment creation in Britain has been 1 per cent.; in Italy, 6 per cent.; in Germany, 7 per cent.; and in the Netherlands, 36 per cent. After a decade of deregulation from the Conservatives, we have a bigger trade deficit with the rest of Europe than any country except Greece, we are bottom of the investment table and we are third from the bottom in the skills table. How can Conservative Members possibly claim that that validates their case that deregulation makes us more competitive?

Several hon. Members:

rose

Photo of Robin Cook Robin Cook , Livingston

I shall proceed, if I may.

Photo of Robin Cook Robin Cook , Livingston

No.

If the authors of the White Paper had been able to lift their eyes above the Government's obsession with deregulation, they could have offered a positive response to initiatives in Europe to stimulate employment. They could have told us what the Government would do about dropping their opposition to the sale of Union bonds to finance major transport projects throughout Europe. They could have told us that they will not oppose President Santer's proposal to transfer surplus funds from the agricultural budget to spending on industry and on support for small and medium-sized enterprises—a proposal that will definitely be on the table in Turin. Or they could have told us how they reconcile the convergence criteria with the urgent need to create more employment in Europe.

I pick up the point made in an intervention by my hon. Friend the Member for Blaenau Gwent (Mr. Smith). The gaping hole in the White Paper is the absence of any discussion of the single currency. Paragraph 17 does say that the single currency is a "notable omission" from the IGC. It is certainly a notable omission from the White Paper. I can conceive of no other Government in Europe who would present to their Parliament a White Paper on Europe without a discussion on where they stood on the single currency.

The Foreign Secretary may be unaware of it, but a debate is raging on the continent about the link between the convergence criteria and employment levels. An election is being fought in Baden-Wurttemberg on that issue. The result may well prompt new thinking, even in the German Government, on the convergence criteria.

I find it negligent of the Government, at this crucial moment in the debate, to miss the opportunity of saying what they believe to be the way out of the problems created by the convergence criteria. Of course, I realise the problem for them in doing so. Whatever reservations they may have about the single currency, they signed up in full to the convergence criteria at Maastricht.

In the light of all that has happened since to the economies of Europe, was it right to adopt convergence criteria that have obliged many of the economies of Europe to deflate at the same time as one another? Is not the lesson of the past three years that any progress to a common currency in Europe can be stable and secure only if it is based on convergence to common economic performance of output, jobs, investment and unit costs—precisely the tests of convergence for which we have argued for three years? Judged by that standard, the White Paper's massive failure is its failure to propose a single European measure to stimulate investment, boost skills, develop technology or create jobs.

I know that the Foreign Secretary could not do anything so positive, because to do so he would need to appear enthusiastic about Europe. The Foreign Secretary's dilemma, which will not have been lost on him, is that he is seeking to produce a negotiating strategy for an international conference that would be acceptable to a nationalist party.

While the rest of the world builds regional alliances and is coming to terms with a global economy in which we are more interdependent than we are independent, the Conservative party is living on a planet of its own, demanding repatriation of even those powers that we have shared with our own regional alliance.

Photo of Robin Cook Robin Cook , Livingston

Not all of them. Some Conservative Members are still on the same planet as the rest of us—I concede that. Nevertheless, the hon. Lady must face the fact that her party is gearing up to fight the next election on the slogan "Bring back King Canute!" and is adopting, in constituencies throughout Britain, candidates about whom all we can learn is that they are little King Canutes, whose views are modelled on the inspiration not of the hon. Lady but of the hon. Member for Stafford.

Photo of Bill Cash Bill Cash , Stafford

Will the hon. Gentleman give way?

Photo of Robin Cook Robin Cook , Livingston

As I mentioned the hon. Gentleman, I will give way.

Photo of Bill Cash Bill Cash , Stafford

The hon. Gentleman refers to regional alliances and makes a comparison with the European Community. He knows that he is talking rubbish, because regional alliances being constructed elsewhere in the world have nothing to do with the legal framework that has been set up in the European Community.

Photo of Robin Cook Robin Cook , Livingston

The advantage of that legal framework is that it gives Europe a single market which is the largest market in the world. If the hon. Gentleman does not understand the strength that that offers Britain in the new global economy, he does not understand where the prosperity of his constituents will come from in the 21st century.

That is why a party with views increasingly modelled by the influence of the hon. Member for Stafford cannot successfully represent Britain's interests abroad—because it will not command respect abroad. Shortly before the White Paper, the chairman of the Europe committee of the Confederation of British Industry warned: There is no credibility attached to the current British position in Europe. Since he said it, the grudging, querulous tone of the White Paper and the grudging, querulous welcome to it from Conservative Back Benchers have confirmed that the Government cannot command credibility in Europe. The failure of the White Paper and the hon. Gentleman's Government to rise to any of the major strategic issues facing Europe is one of the many reasons why they cannot, and will not, regain credibility in Britain.

Photo of Miss Janet Fookes Miss Janet Fookes , Plymouth Drake

Before I call the next hon. Member to speak, I remind the House that there will now be a limit of 10 minutes on speeches.

Photo of Mr Edward Heath Mr Edward Heath , Bexley Sidcup 5:58 pm, 21st March 1996

When Parliament debated this country's entry into the Community, it debated for 10 full days, and more than 360 of its Members took part in those debates. We are now about to begin what may be the most important conference since Messina—certainly the most important since Paris in 1972—which we are told may take a year and a half, two years or longer, and what do we have in a debate? Well, Back Benchers, if lucky, have three hours, at 10 minutes each.

Is that any way to handle something that everyone agrees is the most important point? How can the Leader of the House and the Foreign Secretary justify their actions? If their objective is to try to hide divisions in the party, it is—and will continue to be—a failure. Those who are prepared to support the Government must speak out and make their positions clear. We should not hold our peace in order to avoid the impression that there are differences inside the party.

I am interested in the whole White Paper, but an early sentence caught my eye. It says: it is crucial that national parliaments remain the central focus of democratic legitimacy". Is "democratic legitimacy" what we have this evening: three hours in which to discuss a White Paper containing 10 vital subjects? It is not, and it is a disgrace to the House of Commons.

I must deal with a number of those important issues very quickly. The White Paper begins in a very positive way and my right hon. and learned Friend the Foreign Secretary also began his speech in a positive manner. However, the White Paper is riddled with schizophrenia—just as my right hon. and learned Friend has "schizophrenia" written all over him. He says something good in one paragraph and then cancels it out in the next paragraph.

There are those who say that it is a mistake to produce a White Paper of that kind, and I rather agree with them. It contradicts the Foreign Secretary's argument that he must have flexibility in negotiation. Each time he returns from a meeting and makes a statement to the House—if he is so foolish as to do that—people will say, "But that does not agree with what you said in paragraph X, Y, Z and in sentence so-and-so." I have lived through all of that: I lived through two years of it in 1961 and 1963 and through another 18 months of it in 1970–71.

If my right hon. and learned Friend tries to tie himself down to the specifics as to what he will or will not do, he may find that when negotiating he must have the flexibility to agree with others in the Union. The other member states are described in the White Paper as"our colleagues from the continent". It seems to have escaped the Foreign Office's notice that Britain is a part of Europe geographically: we are part of the European continent. However, the other countries of Europe are treated as being on the other side—which does not encourage them to be helpful to us.

We then turn to the question of qualified majority voting. I must give my right hon. and learned Friend another warning. The Government tried to change that system once: the Prime Minister took it in hand himself, and he was humiliated, because there was no support for his actions. I beg the Foreign Secretary not to advance down that path again unless he is sure of securing support to carry him through. If he does not have that support, he will face the most appalling humiliation.

We have heard a great deal about the remarks by the French Prime Minister. I am sure that he is an admirable fellow. However, President Chirac will stand with Germany through everything: France and Germany will stand together the whole time. If it meant President Chirac's sacrificing his Prime Minister, he would not mind. Therefore, I ask the Foreign Secretary to examine with the utmost care the many stories about those who want to support us.

We then turn to the problem of the smaller countries. The Community was successful in its early years because it gave a proper vote to the smaller countries—to Luxembourg in particular, but also to Belgium and Holland. The figures are cited in the White Paper. Other countries have followed the same route and they will not give up easily—they make that absolutely clear when one talks to their representatives. They made it plain at the earlier meetings when the proposal was first advanced that they feared that their position in the Union, their economic safety and their political future rests in their having a proper say. Therefore, my right hon. and learned Friend will change that arrangement only with the utmost difficulty.

That brings me to the other point of discussion: enlargement. The British have always placed an emphasis upon enlargement. It comes from that deep, hidden well of Wider still and wider shall thy bounds be set". We have carried that attitude into the European Union. However, the plain fact is that the other members interpret it as being the British way of blocking any further development within the Union. That is why they oppose us so often.

The White Paper makes the point that people of Europe—using the general term—are dissatisfied with what the Community has done and that they want to see it do less. That is quite wrong: they are dissatisfied about what has not been done to keep them in jobs and to deliver better living conditions and all of the things that they had to begin with and are expecting to have again.

When it comes to extension in Europe, I believe that we are quite wrong—and we are misleading the people in the countries concerned—to talk about membership. Association rights have always existed under section 4 of the treaty of Rome. Countries can be associated with the European Union and, through that association, can gain great advantages. Is the Foreign Secretary suggesting that countries in eastern Europe that were part of the Soviet system, that have a standard of living of only 20 per cent. of our own and that do not yet carry out their political activities democratically should be brought into the Union quickly? That is just not possible.

Photo of Andrew MacKinlay Andrew MacKinlay , Thurrock

What about central Europe? The Visegrad countries should come in soon.

Photo of Mr Edward Heath Mr Edward Heath , Bexley Sidcup

The countries of central Europe have not reached the same level as the present members of the Community. That is crucial in relationships between member states. We should not run the risk of allowing countries like that to join the European Union—not because they are evil, but because their current stage of development does not allow it. We can help them to develop as associate members of the Union. That is the line that we should take in order to assist the countries of central Europe and what is left of the Soviet Union.

I beg my right hon. and learned Friend to recognise those facts of life and to deal with them realistically. We shall not get anywhere by trying to overlook them or by listening to gossip in the Lobbies and so on. The problems are very real and very great.

We should have a separate debate about the common currency—it should not be discussed as part of the intergovernmental conference. There is an urgent need for such a debate. The people of this country are disillusioned because they are given no information about the issue. There has been no debate in this place about the single currency. The public do not understand the issue.

Opposition Members have called for a referendum on the single currency, but I cannot think of anything more remote. Perhaps the hon. Member for Livingston (Mr. Cook) should remind his party that those Labour Members who demanded the last referendum never accepted the result—they still do not accept it. If there is a referendum on a common currency, people will vote according to their views about everything but a common currency because so few of them will understand the implications. They will base their votes on social and economic ills rather than on a common currency. I make those simple suggestions to my right hon. and learned Friend.

Photo of Mr Peter Shore Mr Peter Shore , Bethnal Green and Stepney 6:08 pm, 21st March 1996

Given the awful time constraints, I must support the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) in his complaint about the lack of serious attention that the House is able to give to the issue. This debate should not be conducted under such restricted circumstances. We do ourselves no good. It is not wholly the responsibility of the Government: my hon. Friends on the Front Bench must take the European issue much more seriously. They must ensure that time is found for a proper debate, with a motion and with an amendment. They may then press on with what they have tried to do previously.

I welcome this White Paper for one overwhelmingly good reason: it sets out what I believe are the real alternatives facing our people and the European Community. It also sets out clearly the option between advancing towards a centralised, supranational European state and a much more loosely agreed alliance with minimal treaty powers, which I think is favoured by the great majority of people in our country and by many hon. Members on both sides of the House.

We have to face clearly some very big problems. We have to accept and recognise that there is a most powerful drive towards the creation of a federal or quasi-federal state in Europe. It has rightly been pointed out that federal institutions such as the European Court of Justice, the European Parliament and, of course, the European Commission have been created under previous treaties. The weight of their influence is directed towards developing a centralised and federal Europe.

Let us not, however, forget the strong declared purpose and will of many of the leaders of the nation states of Europe. No one who has followed the statements made by Chancellor Kohl in recent weeks and months can have the slightest doubt that he is committed wholly and passionately to a political union, in which he sees economic and monetary union and a single currency as merely a stepping stone. He has almost conceded that a single currency does not make much sense economically, but it makes every sense politically, because it takes a giant step towards the federal political union that he wants.

Let us not ignore the fact that the leaders of the Benelux countries are also clearly pointing towards a federal Europe, as are those of Italy—or what is left of them after the collapse of its classe politique—because they believe that they are better governed in Brussels than they are in Rome.

Those are very powerful forces, and we have to face the fact that we will be isolated, virtually on our own, although we shall look for what allies we can find in the intergovernmental conference. I must tell my hon. Friends on the Labour Front Bench that, when they form the next Government, they will find themselves in virtually the same situation, because the real differences between Labour Front Benchers and Ministers are by no means as great as has been suggested. They have said that they will keep the veto on the crucial spheres of treaty change, taxation and budget contribution, and that is very important. They have also said that we will not abandon unanimity in pillars 2 or 3 of the treaty. They cannot, therefore, easily be pushed along in the direction that most European Governments wish to go.

If Labour Front Benchers mean what they say about economic and monetary union—that real convergence would be necessary, in the terms spelled out by my hon. Friend the Member for Livingston (Mr. Cook)—then, quite frankly, we can rest in our beds at night because we know very well that there will never be that convergence. Some of us will rejoice at that, because it means that we shall not become members of an economic and monetary union or a single currency.

A very interesting and most unusual test of opinion in Britain was conducted only a year ago. It was a very respectable survey, commissioned by the BBC and carried out by NOP. The people of our country, in weighted samples, were asked: How 'European' do you feel? That is basically a question on how much one feels part of a community and what is one's sense of national identity. The answers to the question are fascinating. People felt "European" as follows: "a great deal", 8 per cent.; "a fair amount", 15 per cent.; "a little", 25 per cent.; and "not at all", 49 per cent.

The reality is that the people of this country do not feel that the European Community is a community in the same sense that we are a community within the United Kingdom. Until that perception has changed, it is no good trying to force the British people into an arranged relationship with Europe that is fundamentally against their instincts and judgment.

One other question was asked that is worth reporting. People were asked: With which of these countries do you feel you have most in common? The responses to the European countries were as follows: France, 9 per cent.; Germany, 7 per cent.; and Spain, 5 per cent. When asked about three non-European countries, the responses were: the United States, 23 per cent.; Canada, 14 per cent.; and Australia, 15 per cent.

The majority of the British people feel that they are closer to the countries of the English-speaking world than they feel politically close to our geographical neighbours across the channel. That is another of the great realities of British life, and it should be part of the realities of British politics. I hope very much that we will sharpen up our views and our objections to the course of conduct that has been pursued in Europe towards the convergence of their currencies. That conduct is doing dreadful damage to Europe: virtually 20 million people are unemployed, and cuts in public expenditure and reductions in public borrowing are occurring all over Europe.

It is no good Labour Front Benchers hoping that, because the Swedes will make an attempt to insert something into the Maastricht treaty, first, that they will succeed or, secondly, that it will be in quantitative terms, because it will not. I have spoken to the Swedes, and I know that it will be purely declaratory. So long as the existing convergence criteria remain—they are flatly deflationary—there is no chance at all of European countries and the European Union pursuing a different policy.

No mention is made in the existing Maastricht treaty of employment and unemployment, yet the treaty was signed when the majority of European Union Governments had a socialist complexion. It was signed by Mitterrand, Gonzalez and Craxi, and it had the imprimatur of that wonderful ex-socialist, Mr. Delors. That is no longer the situation. We have no major allies of the Labour, social democratic persuasion left in Europe with any real weight, apart from the Swedes.

There is no point in wishful thinking. The Council of Ministers will not change at the IGC when a Labour Government arrive, and it will not add to or change the treaty. The time has come when we must face up to the truth about these matters and not continue to exist in a cloud-cuckoo-land.

I shall quote one last remark. My hon. Friend the Member for Gateshead, East (Ms Quin)—for whom I have great affection—has put out a little document. In it, she says: We want to see a successful EMU which helps to promote general European prosperity and does not have a deflationary or negative effect on economic performance. I should tell my hon. Friend that one would have to rip up the Maastricht treaty completely to achieve that end, and there is not a hope of doing so.

Photo of Hon. Douglas Hurd Hon. Douglas Hurd , Witney 6:17 pm, 21st March 1996

This is an admirable White Paper and the Foreign Secretary has spoken admirably. I should love to follow the right hon. Member for Bethnal Green and Stepney (Mr. Shore), but I can make only three brisk three-minute points: referendum, court and foreign policy.

It is obviously much easier to be clear about the referendum from the Back Benches. I am not in favour of referendums as a general rule, but, for about 18 months now, I have made it clear that the question of a single currency, if it came about it, would be such a massive change—more massive than anything that Britain was committed to at the treaty of Maastricht—that it would require a referendum. That would be the case only if a British Government of the day decided that it was in British interests to join a single currency.

My view is that that would happen only if the single currency had gone ahead with other countries, including France and Germany, and we had begun to find that our economy was suffering, inward investment was falling away and jobs were being destroyed. Then, a British Government might come to that conclusion. They would need to have a referendum, but they would certainly need to hold to the doctrine of collective responsibility.

What happened in 1975, which the hon. Member for Livingston (Mr. Cook) held up as an impressive track record, was a disastrous example of weakness. I hope that we never see Conservative Ministers meandering up and down the country, from platform to platform, contradicting each other night after night. A Government have to decide, seek to persuade and then act if they are successful in persuading.

Secondly, as regards the European Court of Justice, I think that the White Paper has the balance right. I see no contradiction between the analysis in paragraph 36 and the proposals in paragraph 37. It is right about quota hopping. We have national quotas for fish—we do not have quotas for anything else that we produce or grow—and that is a special case. It is nonsense to apply to a policy of national quotas the general directive of a single market.

Britain uses the court and we often win in it. Lately, there have been three significant cases in which the court has followed the British Government's analysis of the treaty, although, of course, we never read about them.

Photo of Mr Giles Radice Mr Giles Radice , North Durham

They are not reported.

Photo of Hon. Douglas Hurd Hon. Douglas Hurd , Witney

Indeed; they are not reported.

At the moment, four major British companies are involved in actions before the Court, trying to resist protectionism and encourage competition—British Petroleum, British Steel, British Airways and Ladbroke. I have to tell my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), who has left the Chamber, that if those companies win, they expect the judgments to stick. They do not expect their opponents to follow the lawless advice that my hon. Friend gave a few minutes ago.

Finally, in negotiations before Maastricht and in public, I have always strongly opposed the idea of majority voting on substantial matters of foreign and common policy. From my experience, it is clear to me that it would not work. We do not need majority voting or endless arguments about procedure; what is needed is agreement among Europeans, when and where it can be found.

My right hon. and learned Friend the Foreign Secretary pushed forward excellent ideas in Paris—some are in the White Paper—on how the chances of agreement can be improved. Agreement on eastern Europe and Russia is needed now, not later, once the IGC has been ratified. It would be vain for Germany, for example, to suppose that it can pursue a German foreign policy towards Russia that we opposed or that we could pursue a British foreign policy towards Russia that the Germans opposed. That is nugatory.

My worry—my right hon. and learned Friend mentioned this—is that he will be compelled to scratch around on secondary matters, month after month, while the scene in eastern Europe and Russian darkens this year. My right hon. and learned Friend has always been strong and wise on this particular subject, as well as on others. I hope that he will ensure that the work in hand in Europe on these matters is completed and that we soon have a clear, agreed policy so that we can be valid partners with the United States on the most important foreign policy issue of the day.

Photo of Charles Kennedy Charles Kennedy Shadow Spokesperson (Foreign and Commonwealth Affairs) 6:22 pm, 21st March 1996

If there is one issue on which there has been broad agreement—there has not been agreement on much else—it is the point raised by the former Prime Minister: that to shoehorn this debate into one Thursday evening, following a very important statement on Northern Ireland, is a ludicrous way to go about our business.

It was interesting that, under pressure from some of his Back Benchers, and in a way that had perhaps not been considered by the Leader of the House or the Foreign Office, the Foreign Secretary buckled and promised that he would give us a full account of the negotiations as they proceeded. That might be disastrous for him from a political point of view and as a negotiating tactic, but, now that he has made that concession, I hope that we shall hear from the Minister of State when he winds up what shape and form that reporting back will take—whether there will be an oral statement every so often in the House or whether there will be a Government-initiated debate such as this to take note of progress in the negotiations. From a personal point of view, he may live to regret the commitment he gave, but, since he has given it, the House will be eager to take advantage of it, no matter from which side of the argument we approach the issue.

The Harold Wilson phrase about a week being a long time in politics is certainly true for the Government's IGC White Paper. It was Janus-faced when it was produced, and it has been exposed as Janus-faced in this debate. As we know from the Chancellor, who is about as far away from the Government as he can physically get at the moment, discussions inside the Cabinet are no happier than the debate within the broader parliamentary Conservative party itself.

To sum up the Foreign Secretary's strategy as outlined this afternoon, it seems to be a case of, "Goodbye Helmut, hello Jacques". The former Prime Minister is correct—the Foreign Secretary will find that, when the chips are down, the President of France will stand shoulder to shoulder with Germany on key constitutional aspects relating to the development of Europe, and that we will be isolated. I have to say that I would be slightly worried if I were a Tory Back Bencher watching the Foreign Secretary this afternoon. He buckled under a bit of constructive pressure when asked to what extent he was willing to be accountable to the House in the next 18 months. If he buckles to the same extent in the IGC negotiations, the White Paper will not be worth the paper on which it is printed in terms of the assurances that it seeks to offer.

The Foreign Secretary used the word "disingenuous". If ever a word could be applied to the Government's performance, that is it. It is surely disingenuous to erect these Aunt Sallies and proceed to knock them down when they are not seriously on the negotiating table. For example, there is in fact agreement among the three political parties about the type of issues to which a national veto should pertain and on which it should be maintained—troop deployment, immigration policy, own resources and tax.

Photo of Mr Giles Radice Mr Giles Radice , North Durham

As the reflection group said.

Photo of Charles Kennedy Charles Kennedy Shadow Spokesperson (Foreign and Commonwealth Affairs)

As the hon. Gentleman says from a sedentary position, the reflection group made that clear.

There is a broad consensus on these issues across the political divide in this country and among member states. It is frankly disingenuous of the Foreign Secretary to say that he will be battling against such things when they are not on the agenda and not up for discussion. He will find that echoed in the Labour party's policy document and in the policy document that we produced last week.

It would improve the tenor of the debate if, instead of creating myths to tilt against for the purpose of assuaging those from his own side who, I fear, from his point of view, are not to be bought off, the Secretary of State was honest and constructive and dealt with the agenda that is before the IGC rather than with a mythical one, which is doing no good in the eyes of his own Back Benchers and doing no good for this country's credibility in the rest of Europe.

The Foreign Secretary's strategic objectives, of which there appear to be two in the White Paper, are ones with which no one would disagree. He wants a better deal for animal rights and he wants enlargement. He does not want social or human rights for workers in this country, but he wants a better deal on animal rights, something with which no one would seriously disagree. Nor would anyone seriously disagree with enlargement, but I doubt that his aim to deliver enlargement is going to be achieved by his apparently setting his face against any extension of qualified majority voting.

The hon. Member for Livingston (Mr. Cook) is surely right. Can the Foreign Secretary provide some clarification? He appeared to avoid it in the "Newsnight" interview that he gave last week after he had made a statement to the House. Is he saying that there is to be no extension whatsoever of QMV? Is he willing to sacrifice the cause of enlargement for a compromise on QMV over, for example, research and development? Is that the position? Is he saying that, if enlargement goes to the wall, so be it—if QMV did not apply in any other sphere?

Photo of Malcolm Rifkind Malcolm Rifkind Foreign Secretary

If the hon. Gentleman reads the report of what I said in my opening speech today, he will find that I explained fully why I believe that enlargement does not depend on an extension of QMV, and that the arguments that suggest it does are bogus. I went into some detail as to why I believe that to be the case.

Photo of Charles Kennedy Charles Kennedy Shadow Spokesperson (Foreign and Commonwealth Affairs)

The right hon. and learned Gentleman did indeed do so, but that does not answer the question. He may well believe that, but he has to negotiate with a number of other member states. If his interpretation does not hold sway, he will have to make a decision at some point down the track about what the trade-off between QMV and enlargement is going to be. That is the issue that he will not face and to which he did not respond in that intervention.

Secondly, the confusion of the White Paper is best summed up by one quotation, which is supposed to be a ringing statement of the British Government's position with regard to the approaching set of crucial discussions. The Foreign Secretary says, in the White Paper: As the European Union matures it needs a clearer sense of what it is, and of what it should never aspire to be. That is hardly the visionary stuff of politics, if ever we heard it.

The Government are trapped in the headlights of the views of their Back Benchers on this subject. They cannot give leadership or enunciate a vision, because whatever they do will deepen the chasm behind them. That will be bad news for this country, not just for our contribution to the IGC but for what comes out of the IGC and what should be a more democratic and decentralised European Union. Ultimately, I fear, we will have to have a referendum on these matters, and it would be better if the Government endorsed that position now and got on with an honest and open negotiation.

Photo of Julian Brazier Julian Brazier , Canterbury

What question would you ask?

Photo of Charles Kennedy Charles Kennedy Shadow Spokesperson (Foreign and Commonwealth Affairs)

I would ask, first and foremost, for a public endorsement of the outcome of the IGC, if it has constitutional implications, in the same way as I voted for a referendum on the outcome of Maastricht. We could have had a referendum on that, too. There will have to be a referendum and it would be better if the Government were to embrace one positively now rather than being forced into that position later. We could then get on with a more vigorous debate outside this place, because it is clear that the Government will not give us an opportunity for one inside.

Photo of Mr Norman Lamont Mr Norman Lamont , Kingston upon Thames 6:30 pm, 21st March 1996

I congratulate my right hon. and learned Friend the Foreign Secretary on the skill with which he handled so many questions, but the number of questions indicated how strongly my right hon. and hon. Friends feel about the issues. I am sure that those questions reflect public opinion in this country. I wish my right hon. and learned Friend well. I, of all people, know how difficult his task will be.

The test of the White Paper is not what it says. Its tone is, dare I say it, Euro-sceptical. It certainly strikes the right notes, but that is not the real test. The real test is whether it provides an effective bulwark against the federalist ambitions of other European countries.

The Prime Minister stated the Government's position on page 1: The bedrock of the European Union is the independent, democratic nation state. However, as the right hon. Member for Bethnal Green and Stepney (Mr. Shore) pointed out, that is simply not compatible with the view of the German Chancellor, who told us last month at Louvain: However much some European politicians may regret it, the day of the nation state is over. The threat of creeping federalism is not something that exists only in the fevered imagination of a few Euro-sceptics. A few years ago, my right hon. Friend the Deputy Prime Minister wrote: We have federalism by stealth, whether because national electorates cannot be told the truth, or not trusted to understand it, or because their elected leaders have failed to comprehend … There is no escaping the fact that a fledgling federalism is emerging". I agree with every word of that. So can we believe that other countries in Europe will settle for a partnership of nation states?

The whole idea of a directly elected European Parliament might be thought to be inconsistent with the idea of a Europe of nation states. We have already sold the pass there. If we had wanted a Europe in touch with public opinion and politics in individual countries, we would have continued with an indirectly elected assembly, not a Parliament.

The White Paper takes a minimalist approach. In a section to which my hon. Friend the Member for Stafford (Mr. Cash) referred, it suggests that, if we do not press hard for Britain's agenda, others might not try to impose an integrationist agenda on us. That is wishful thinking. Whatever we say or do, others will push for the next great leap forward.

In the whole long year of the Maastricht negotiations, it became clearer and clearer to me that our partners have and always will have a completely different view of the future of Europe from ours. They mean what they say when they express their wish for European unification. This is not windy Euro-rhetoric. Too often, British politicians are whistling in the wind when they say that we are winning the argument in Europe.

One can quibble about definitions, but Europe is amassing powers that will soon give it the characteristics of a state. At that point, Britain will cease to be an independent, self-governing country. The people in this country have not been consulted about that. The Europe of today has little resemblance to the Europe for which people voted in the referendum of 1975. They do not want to live in a European state, but that is the way we are going. It must be right to hold a referendum if the Government want to move to monetary union, but there is also a case for a wider referendum, not just on the single currency but on the whole future of Europe and the question of political integration in Europe.

We are creating a monster machine that is remote, insensitive and pushing out a mass of unwanted, often ludicrous, paper. Mr. Andrew Roberts, the distinguished historian, recently wrote a novel, set in the next century, called "The Aachen Memorandum", in which he described a situation in which civil unrest started in this country when the people found that they were unable to change the laws of this country in their own interests. That is fiction and perhaps fanciful, but I believe it is a warning.

Democracy should not be a one-way street. As my hon. Friend the Member for Colchester, North (Mr. Jenkin) and others have pointed out, the whole principle of the acquis communautaire is that once something becomes a European responsibility it should remain a European responsibility permanently. In this country, in our elections, citizens can choose whether they want bigger government or smaller government, but once power is transferred to the centre in Europe it is transferred, if not permanently, at least until the rather improbable event of 15 Governments unanimously deciding to repatriate it.

The answer to the problem should be subsidiarity. I was one of its strongest supporters, but what I had in mind in 1990 was very different from how it has turned out. Subsidiarity should be about the repatriation of the common fisheries policy, not about zoos. We all know that subsidiarity has been a complete failure.

The White Paper takes comfort from Chancellor Kohl's assurances that his country does not seek a centralised state. It is a limited comfort, because the Germans do not consider their state a centralised one. It is, after all, a federal republic. In Chancellor Kohl's mind, Britain's place in Europe should be similar to that of Bavaria in Germany.

No one in Europe is seriously interested in whether money achieves the objectives for which it has been voted or whether it gives value for money. Any money the Community can get its hands on is used to expand the influence of Europe and to buy loyalty to the European idea. Money is spent wastefully and as conspicuously as possible in the regions to weaken ties with national Governments and to increase loyalty to the European idea. It would be an outrage, but all too typical, if the European Union were to use taxpayers' money to launch a campaign to explain the alleged benefits of a single currency.

My right hon. and learned Friend the Foreign Secretary wants more powers for the European Parliament to supervise the spending of money. Unfortunately, the European Parliament is itself a propaganda vehicle for the European idea. It would be much better if the equivalent of the Public Accounts Select Committee in every national Parliament examined how European money was spent in each and every country. Then we would have a real check on the effectiveness of money.

Public opinion is moving and the debate is moving. A recent poll in the Sunday Times showed that a majority of people in this country think that European Union membership has been bad for Britain. Some 37 per cent. thought it had been good for other countries. Perhaps the 37 per cent. is the surprise.

Europe's obsession with a single currency has made the continent the high unemployment zone of the world. What a strange obsession it is. Far from increasing trade, the drive to a single currency will slow down growth and thus reduce trade between European countries. It is nonsense to say that EMU is necessary for the single market. No one suggests that Canada, Mexico and the United States have to merge their currencies to complete the North American Free Trade Agreement.

In the 1960s and 1970s, the European Union played a role in liberalising world trade, but today its importance has been overtaken by the general agreement on tariffs and trade. One does not need to be a member of the EU to gain access to European industrial markets or to attract inward investment to sell into Europe. It is neither in Europe's power nor in its interests to shut us off from its markets. Switzerland, Japan and the United States have all increased trade quickly with the EU. The economic benefits of our membership are finely balanced, but the political price is high and rising.

Do we need this political integration? We do not need it. It is for advocates of our continued membership to demonstrate that membership is compatible with being an independent, self-governing nation state, able to make our own laws and administer our own justice.

My right hon. and learned Friend has a very difficult task. It seems to me that Britain is heading for a clash with Europe. We have fundamentally different views, and if they cannot be reconciled the time will eventually come when Britain has to consider much more radical alternatives.

Photo of Mr Giles Radice Mr Giles Radice , North Durham 6:39 pm, 21st March 1996

By no stretch of the imagination can the White Paper on Britain's approach to the IGC be called a great state paper. At best, it is a holding statement designed mainly for internal party reasons. I accept that it says nice things about Britain's membership of the European Union, although that is not music to the ears of some Conservative Members. Unfortunately, however, a positive introduction is contradicted and undermined by the detailed proposals set out later in the document.

In particular, paragraph 27 says that the Government will oppose any further extension of qualified majority voting. I believe that to be a great mistake, because, as the White Paper admits, the creation of a single market needed qualified majority voting to work. Indeed, the second banking directive was passed against German opposition by QMV.

So those who go on about the need to retain the United Kingdom's veto in all remaining aspects of policy forget that what is sauce for the goose is also sauce for the gander. The vetoes of other countries can block the progress of EU policies that are in Britain's interests—a point that those who oppose the extension of QMV seem to ignore. Action against fraud, progress on the environment, structural funds, research and development and the extension of membership are all cases in point.

Similarly, the White Paper says that Britain will block any new powers for the European Parliament, apparently on the basis that that Parliament has used the Maastricht co-decision powers irresponsibly. That is plain wrong. The fact is that the European Parliament has agreed with the Council of Ministers 48 times out of 50 under its co-decision powers. Perhaps the White Paper should have pointed that out.

There is now a grave danger that Britain will be isolated and excluded from some of the major decisions taken in Europe. By opposing the extension of majority voting and any increase in powers for the European Parliament, Britain is putting a lock on our European partners which they will not in the end accept. They are already opening the way for France and Germany to go it alone—hence the talk in France and Germany about a so-called flexibility clause allowing countries that want to go ahead on certain issues to do so. The White Paper is too inflexible; it creates the danger that a hard core of countries will want to go ahead if they believe that we are blocking their progress.

If my party wins the next election, it will face a grave responsibility. Certain of my hon. Friends might care to reflect on the fact that our party conference unanimously passed an excellent document called "The Future of the European Union". It proposed extensions of qualified majority voting where that is in the British interest—on industrial and regional matters, and on the environment and social policy too. At the same time, it argued for an extension of the powers of the European Parliament where decisions on legislation are taken by QMV. That seems only logical.

I believe that this general approach is supported not just by the vast majority of Labour Members but also by members of the other Opposition parties—and by Conservative Members.

Photo of Mr Giles Radice Mr Giles Radice , North Durham

It all adds up to a majority in this House that is perhaps not reflected in the attendance at this debate.

Photo of Mr Giles Radice Mr Giles Radice , North Durham

We shall have to see.

If Britain is not to be isolated or excluded from these decisions, and is to play a leading and constructive role in Europe, we shall need to mobilise that majority in this House, across party lines if need be. That is one reason why I happen to believe that the European Movement is important. I am fortunate enough to be its chair, and the hon. Member for South Derbyshire (Mrs. Currie) is a vice-chair, as is the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy). Our views represent a majority in this Parliament, and, I believe, in the country at large.

We are arguing for sensible, moderate proposals for future integration where that is in Britain's and Europe's interests. That approach ought to commend itself to the House.

Photo of Mr Timothy Renton Mr Timothy Renton , Mid Sussex 6:45 pm, 21st March 1996

I like the general thrust of the White Paper—the partnership of nations is a good phrase, and I have heard it echoed in France, Germany and Italy on my recent travels.

But I would ask the House to think a generation ahead, and to consider the likely vitality and strength of the Chinese and Indian economies at that time. We should also consider the ambitions for international investment of Argentina and Brazil and the high technology pouring out of the south-east Asian tigers of which my right hon. Friend the Member for Guildford (Mr. Howell) often speaks.

We should think of the many options available to Japanese and American capital as to where, internationally, they build their large new factories. Will we look back with pride at these years when we decided not to be a part of the further integration of European markets and institutions? I very much doubt that we will.

Will we look back with pride if we are determined to build a Europe that suits only our national prejudices and neuroses, a la William Rees-Mogg? Or will we be reminded of Sam Brittan's words in the Financial Times of 29 January 1996: The whole record of Britain's dealing with the European Union is first to stay out at each stage, and then to complain about the rules when it tries to join later". We must not repeat the procrastinations and mistakes of the past.

We know very well—the Foreign Secretary said it this afternoon—that a host of decisions face the European Union between now and the year 2000. The IGC is just one of them—not even one of the most important. Those decisions will lay out the future course of the EU. I am sure that Britain has to play a leading role in them, and this Conservative Government are well placed to do just that.

But we must be a team player; we must not go on keeping the ball in the scrum when everyone else wants to pass it out to the three-quarters. In doing so, our responsibility in this House is to convince the British people of the wisdom of what we are doing. That requires wise leadership, not just listening to every silly tale about European directives—of the "Snails have to be moisturised in transit" sort and so on. Usually those tales turn out later to be incorrect.

If we do not take this line, and if Europe does not integrate further to provide greater economies of scale, more efficient decision making and more jobs at reasonable wages, we and other Europeans will pay a harsh economic and social price.

Every European country wishes to preserve its national identity; I can find no country in Europe that does not want to do that. But we seem to be the only country that thinks that, by accepting more integration to make Europe work more efficiently—perhaps more powers for the European Parliament and more QMV—we would be "giving away our country", in the extraordinary hyperbolic phrase that is used by hon. Members on both sides of the House.

This year, Austria celebrates its 1,000th year as a country. France is an older country than ours. Spain, which goes back to the kingdoms of Aragon and Castile, is just about as old as us. None of those countries wishes to give up its national identity.

Photo of Mr Timothy Renton Mr Timothy Renton , Mid Sussex

No, I have only a few minutes.

Not long ago, my right hon. Friend the Member for Epsom and Ewell (Sir A. Hamilton), my hon. Friend the Member for Wycombe (Mr. Whitney) and I—between the three of us, our views on Europe could be quite different—went to Paris at the invitation of some members of Mr. Chirac's party, the RPR, or Rassemblement pour la République. We had a day of discussion.

During that day, we were told by all but one of those members—Gaullists—that they wanted to see the monnaie unique, the single currency, come about. They wanted closer integration of defence forces, and talked about moves towards a common foreign policy. At the end of the day, as we left, we were all given a medal, which I have with me, on which is the profile of de Gaulle. Written on the reverse are the words, of which I shall give a loose translation: To all men and women this coin is dedicated whose foremost wish is to see to it that France remains true to herself. Many of us would see an extraordinary paradox in that Gaullist combination of coin and philosophy, but other European nations do not. We should look at our neighbours and ask ourselves why it is such a problem for us when it is not such a problem for other proud, independent nations that intend to stay independent within the European Union. Perhaps geography helps them to feel more European than we do. They accept that retaining their nationhood while giving up some sovereignty for a shared European sovereignty is worth while, particularly for long-term economic benefit. That is a lesson that we must learn.

The right hon. Member for Bethnal Green and Stepney (Mr. Shore) took the view that we should accept the fact that most Britons do not feel European, and that we should, as it were, then run away from the problem. I say that the challenge is entirely the opposite, because it is in the European Union that so much of our trade, our future, lies, and therefore there is surely a responsibility on us to put over to our constituents the virtues not only of what is happening in the European Union but the fact that, ineluctably, it is where our economic and trade future lies.

One point of difference between myself and my right hon. and learned Friend the Foreign Secretary is that I think that, without an extension of qualified majority voting, we will not get the enlargement or the institutional change about which the White Paper speaks, both of which I very much favour. Surely the Luxembourg compromise showed that a system based on unanimity cannot make progress. The single financial services market, which would have been of great benefit to this country, was vetoed by Germany. There would have been no single market in trade without qualified majority voting.

My right hon. and learned Friend said that there is already QMV in agriculture, but, of course, it is rarely if ever used, because a blocking minority is not available. But surely that makes the point that we do not have to be that frightened of an extension of QMV. I agree with my hon. Friend the Member for South Derbyshire (Mrs. Currie), who asked whether we would really be happy if plans, for example, for the control of environmental pollution were blocked by a veto of Cyprus or Slovenia because of some other deal that they wanted to make.

Sir Francis Drake once said—I remember quoting these words at a Conservative conference on the European Common Market more than 20 years ago— It is not in the beginning of a great adventure but in the continuation thereof that the true glory lies. He said those words when he was about to go out and defeat the Spanish armada, but we still have to remember them in this immensely difficult task of promoting a partnership of nations in Europe.

Photo of Mr Tony Benn Mr Tony Benn , Chesterfield 6:54 pm, 21st March 1996

We are, of course, having the oldest discussion in our history. Julius Caesar came and established a single currency, which we still use. The iron lady, then known as Boadicea, led the men of Essex, who were called the Iceni, to try to stop it.

This story will go on long after the Prime Minister has taken his seat in the House of Lords as Lord Huntingdon, and my right hon. Friend the Leader of the Opposition, after a long period as Prime Minister, has taken his seat as Lord Sedgefield. I shall be 100 then, and shall try to absent myself from the current political argument. But please, I say to my hon. Friend the Member for Livingston (Mr. Cook), do not tell the public that there is unanimity in the Labour party on this matter, because that is not true.

It is not an argument between those who love Europe and those who hate it. We are all Europeans. I lost an uncle in the first world war and a brother and many friends in the second. I understand the speeches of the former Prime Minister, the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) in battling for peace in Europe, but there are other ways of looking at it. There are other views about the future of Europe that we should keep in mind.

The truth is that hardly any reference whatever has been made to the relationship between the House and the people who sent us here. It has all been experts on currency and trade. That is the weakness, because we are the stewards of the people's rights. That is the other question that has to be addressed. There is the idea that we would feel a bit different if we were part of a single currency. Every individual has his or her own identity. It is not about identity; it is about democracy, and it is to that question that I want to turn.

I do not believe that any Member of Parliament has any moral or legal authority to hand to others powers that have been lent to him or her by his or her constituents on polling day. It is no good me going back to Chesterfield and saying, "You voted for me, but I'm awfully sorry: I've handed over your powers to somebody else in Frankfurt, who will decide whether you can have schools, jobs or a home."

If we do not confront that argument, we would not be talking about the real future of Europe, because if I were a German or Italian I would feel the same. If I were a Spaniard, I would not want to be governed from Frankfurt; I would want to be governed from Madrid. It is absurd to suggest that this means being pro or anti-Europe.

Photo of Mrs Edwina Currie Mrs Edwina Currie , South Derbyshire

Will the right hon. Gentleman give way?

Photo of Mr Tony Benn Mr Tony Benn , Chesterfield

No.

We have to remember that the history of this country is not only about the history of our relations with Europe—Julius Caesar, William the Conqueror, William of Orange and so on. It is about the struggle of people in this country to have any control over the Government of their country. It is vital that we maintain a democratic link between a grievance and a remedy. That is what democracy is about.

If people have a grievance, they can do something about it at the polling station and the ballot box. They can go to the polling station and remove a Chancellor, get another one and hope to get a better deal. If we broke the link between the ballot box and the statute book, we would betray our trust and would destroy this House.

I am amazed at the House. We pride ourselves on being the mother of Parliaments, but many hon. Members seem to be content with signing an early-day motion, raising a point of order or going over to No. 4 Millbank for a soundbite, by courtesy of Jim Naughtie, and not recognise that we were elected to safeguard the interests of the people who sent us to this place. It would subvert democracy.

Once the link between the ballot box and the statute book has been destroyed, why bother to vote? Indeed, why not take more direct action? Our history books never like to remind us of it, but throughout our history, when people have been disfranchised, those with a grievance have drawn attention to it by rioting, and rioting is not the best way of handling problems. It leads to a lot of trouble.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

Will the right hon. Gentleman give way?

Photo of Mr Tony Benn Mr Tony Benn , Chesterfield

No. I have only 10 minutes in which to speak. It is disgraceful that the debate should be curtailed in this way; 25 years ago, we had a 10-day debate on Europe, in which I spoke from the Front Bench.

Once people are allowed to see a quicker and better way of putting things right than voting, democracy will have been destroyed in Britain—and democracy cannot be built in Europe on the basis of the destruction of democracy in this country.

Perhaps the most important point of all relates to globalisation. My hon. Friend the Member for Livingston speaks as if it were a requirement for us to fit in with globalisation, but globalisation means that the world is run by that very powerful Welshman. Everyone knows who I mean: Mr. Dow Jones. When we are in bed, Mr. Dow Jones's industrial averages are giving marching orders to every Government in the world. When the Chancellor of the Exchequer meets the Governor of the Bank of England, the Governor says that he thinks that unemployment is not quite high enough, and that he wants interest rates to be high; the Chancellor wants them to be lowered again; and Mr. Dow Jones arbitrates.

Are we really going to accept a world in which we are required to do what the global gamblers want us to do? The ballot box is a rival to wealth as a way of controlling power. I think that globalism will stimulate the very nationalism that it was supposed to end.

I believe that the moment will come when this European Union will mean that, instead of blaming the Maastricht treaty and the treaty of Rome, we may blame the Germans. Indeed, there is already a good deal of anti-German feeling around. I am not anti-German: I think that the German people suffered under Hitler more than we did, and, with 4 million unemployed, they are suffering under the present arrangements. That is not what The Sun will say, however. After all, it was The Sun that said "Up yours, Delors", demonstrating the intellectual strength that we expect of it.

If we hand over power to determine our own laws, before we know where we are people will look to the Spanish fishermen, or to the French farmers who will not have our beef, rather than recognising that we have given up the right to govern ourselves. Let me put it more simply still: communism run by commissars from Moscow did not work, and nor will capitalism run by Commissioners in Brussels. Both deny people their right to develop in their own way.

We should have a new vision of Europe. The other day, I introduced a Bill, the Commonwealth of Europe Bill, in which I listed all the 47 countries. We should co-operate and harmonise, but at our own pace and with the consent of our individual Parliaments. That should include the countries of eastern Europe which were dismissed by the right hon. Member for Old Bexley and Sidcup. If the former Yugoslavia had been part of a commonwealth of Europe, the Bosnian war might never have developed: there would have been a framework in which that country could have lived.

I believe that, given the importance of this issue, there must be a referendum on it. People say that we are a representative democracy, but we shall not be if we go into a single currency under a central bank. The case for a referendum is that it would preserve representative democracy. We have so many rules. One is that no Parliament can bind its successor, but that would be abandoned if we joined a single currency. Tom Paine said that the dead could not bind the living, and he was right.

All that I can do now—for I do not expect to have any impact on the thinking of those who take a contrary view—is repeat what I said a few days ago at a meeting in my constituency which dealt with this subject. I said: I want tonight to give a clear personal and solemn pledge to my constituents here in Chesterfield that while I remain a Member of Parliament for this town I will never vote in Parliament to take Britain into a federal European Union and will oppose it in every way I can by speaking and voting against. Even if I were in favour of such a Union, I would have no right to vote for it. As I said some years ago, it would be a theft of public rights. We have no right to do that. We shall see how to resolve the problem when we discuss it.

I suspect that the White Paper was drafted to cater for those who are described as Euro-sceptics—those with doubts. If there were a Conservative Government after the next election, however, I think that the pressure of international business would take that Government into a federal Union, and I think that the same would apply to a Labour Government. I have seen it happen before. We would be told, "You cannot be left out." We would be told that the pound would fall, and that all sorts of other things would happen.

In a sense, both Front-Bench speeches were pre-election cautionary exercises in a bid not to lose support. We would do better to take a principled stand, and to talk about a Europe that we could really believe in—a Europe that would work, develop and co-operate.

Photo of Mr Geoffrey Lofthouse Mr Geoffrey Lofthouse , Pontefract and Castleford

Order. The right hon. Gentleman's time is up.

Photo of Michael Spicer Michael Spicer , Worcestershire South 7:04 pm, 21st March 1996

Like others who have spoken, I do not accept for a moment that the federal process is cracking up. On the contrary—with the exception of public opinion—all the forces are moving in the other direction, as has been said several times.

There are two obvious forces. Following the Maastricht treaty—as those who opposed it tried to point out at the time—there is now a set date for monetary union, 1 January 1999, towards which all concerned are working. We are not gathered here to discuss monetary union, but it is clearly a massive force, which has the backing of the treaty of Rome, which is moving us in a federalist direction.

The second major force, which has been mentioned tonight and which is very much on our agenda, is the role of the European Court of Justice. It has four specific federalist features. Since the Defreme case of 1976, the Court has been able to make law; since the Factortame case of 1991, that law has had the makings of being superior to the law passed by the House of Commons. Because of the principle of direct applicability, the European Court's law may bypass the national institutions of each country and directly affect its citizens. Because of the fourth principle of acquis communautaire, that superior law compounds itself and occupies territory from which it cannot be dislodged: there is a compounding one-way process towards federalism.

The problem is that a Government who no longer control their law and who no longer control their money are no longer in control of the nation. That is why whether we join the single currency is not just a matter of expediency to be determined, as the phrase goes, "in the light of events"; it is a matter of the profoundest possible principle. That is one of the reasons why I do not agree with my right hon. and learned Friend the Chancellor of the Exchequer about the issue.

What is to be done to turn the rhetoric in the White Paper—which, on balance, is in the right direction—into practical reality? We must, of course, reject the idea of joining a single currency as a matter of principle, but if that is not on offer, a commitment to holding a referendum on the issue is a second, albeit poor, alternative. It is certainly inconceivable that any British Government would give up control over our money, and hence control of our taxation policy, without directly consulting the people.

I was interested to hear what Labour's position would be. If Labour Members are saying that the issue would be determined by a general election, logic suggests that they must also be saying that anyone who opposes the single currency—including the right hon. Member for Chesterfield (Mr. Benn)—should vote Conservative to put the matter properly to the test, and that everyone who is in favour of the currency should vote Labour.

The Government's recent pronouncements of intent in regard to the European Court—especially those of the Foreign Secretary today and those of the Prime Minister earlier this week—are, in themselves, admirable. In particular, the Government have accepted that henceforth the Court shall be stopped from making law. There is only one way in which to do that: re-establishing in the treaty the supremacy of national Parliaments.

The tactics and the means of achieving that are now important. Some Conservative Members have said that they think negotiation on such matters is impossible. I do not agree. What is involved is the bartering between what we want and what other countries apparently require. We want a retrieval of powers. Apparently, other countries want more federalism—usually, nowadays, against the interests and wishes of their people. Let them have it. Under article N, they need unanimous support to change the treaty. Give it to them, but, in return, they must give back to this Parliament sovereignty over all key matters of national policy.

The Government must make up their mind on that important point. Do they really believe in what has come to be called variable geometry, as they say they do in the White Paper? If so, why does my right hon. and learned Friend the Foreign Secretary fear a hard core of other countries going ahead with federalism, as was stated earlier? The Government cannot have it both ways. They must develop a clear position and a firm, positive and coherent negotiating stance. Just to say no to what others propose, for instance, about the removal of the pillars on defence and foreign affairs, however important that intrinsically is, is not publicly attractive.

A positive position must be adopted at an early stage in the negotiation. Its aim, above all, must be to reclaim powers for this Parliament that have been progressively eroded since the debacle of the Merchant Shipping Act 1988. The powers must be enshrined not only in the treaty, but in statute in this Parliament.

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

Does my hon. Friend agree that that is why it is so important that the Government admit that there are certain irreducible demands on which they will insist, if necessary via legislation in this Parliament? The alternative is to tell our partners in advance that, ultimately, if they overrule us, we will accept it.

Photo of Michael Spicer Michael Spicer , Worcestershire South

I could not agree more with my hon. Friend. There must be a clear statement of those demands. The only matter on which I take issue with the Government is that the demands are couched in terms of saying no to matters that they think will arise at the intergovernmental conference. The Government should make a positive statement that we want to retrieve powers, in return for which we are prepared to consider what others may do within the context of variable geometry. That would be a positive negotiating position.

In their White Paper, the Government make a good start—dare I say a "fresh start"? As my hon. Friend the Member for Teignbridge (Mr. Nicholls) says, we now need detailed policies, confidently presented to back up the White Paper.

Photo of Mr Denzil Davies Mr Denzil Davies , Llanelli 7:12 pm, 21st March 1996

In the 10 minutes available to me, I intend to deal with the European Court of Justice, on which we are apparently to receive another memorandum, so the time has come to consider fundamental reform of its structures and procedures.

The court is 36 years old. It was set up as part of the authoritarian European Coal and Steel Community and it drew most of its procedures from the authoritarian and state-dominated French legal system. We have a European Community of 15 countries, and in a few years' time it will probably be more. Many of them—not just Britain—have legal systems that are different from the French system. The European Court is a state court which serves an increasingly centralised European state. It is a supreme court. From time to time, it has declared Acts of Parliament—not just of this Parliament, but of Parliaments throughout the 15 nation states—unconstitutional, and it will do so again.

We should not be surprised about that. We have signed a treaty which declares the ever closer union of European nation states and the submergence, in effect, of their sovereignty. Presumably that is why we have such a court, but the problem for this debate is that the European Court is not fair. Its structures and procedures mean that it cannot be even-handed in litigation between a nation state and a Community institution or when a party seeks to invoke treaties against the nation state. It cannot be even-handed, because its legal bureaucracy and structure is aimed towards ever closer union.

The European Court is not like courts in Britain. It is located in a large, impressive building in Luxembourg. It has 800 staff, many of whom are highly qualified lawyers, although they are described as legal secretaries. Each of the 15 judges has a highly qualified cabinet that would turn a United States supreme court justice green with envy.

One of the problems is that the European Court is bureaucratic. When a party hands in pleadings at Luxembourg, the first person he meets on the court house steps is the judge rapporteur—it is always a rapporteur. He is a proper judge. With other judges, he will decide the case. He takes the case over. After that, the case belongs not to the parties, but to the court of legal bureaucracy.

The judge rapporteur considers the pleadings. He decides what facts must be proved and, in secret, how those facts are to be proved. That is an enormous power. He decides on the procedures—within, of course, the general procedure of the court—and takes over the whole case.

After a few years of written pleadings going back and forth, before the oral hearing, which is perfunctory and lasts for only half an hour or an hour—most of the work is done in writing—the judge rapporteur writes a report about the case for all his fellow judges. It probably forms the basis of the first draft of the court's opinion. Apparently—so I am told—the judge rapporteur often writes the judgment as well. We therefore have a complete legal bureaucracy.

The judge rapporteur may be an important fellow, but the top cat is our friend the Advocate General. He is an extraordinary fellow. He is both a judge and an advocate. If any young lawyer wants to have it both ways, he should become an Advocate General. With his friend the judge rapporteur, the Advocate General also considers the case from the beginning. There is nothing in the British legal system—or, I suspect, in the legal systems of most other countries—to compare with the Advocate General. Again, the concept comes from the French legal system. There is a mirror image in the Conseil d'Etat—the French state court. If I may translate the French, he is known as the commissar of Government. The Advocate General is the commissar of the European Court, and he has enormous influence.

The Advocate General's moment comes at the end. He sits with the judges listening to the oral argument of the poor advocates, who get only half an hour each. Once they have finished, down from the judges' bench comes the Advocate General and he becomes an advocate. He addresses the court and reads out what he calls his opinion—we have heard about his notorious opinion on health and safety and the 48-hour week. It is his speech to the court. He is impressive and intellectually brilliant in many ways, reviewing the whole case because he is the Cerberus of the acquis communautaire—the guardian of the treaty.

That is the end of the matter. The Advocate General has the last word. Every advocate knows that the last word is precious. Some time ago, a silk to the chancery Bar apparently tried to ensure that he lost in the Court of Appeal 2–1 so that he could open in the House of Lords and have the last word. I do not know whether that is true, but the advocates in the European Court of Justice cannot reopen the case after the Advocate General. As we all know, the Advocate General's opinion, although it is not always followed, is influential with the court.

There are 15 judges in the court, but they deliver only one judgment. I do not know whether hon. Members have read such judgments, but they are a disgrace. Except to the aficionados who practise law, they are usually almost completely incomprehensible, even to most lawyers. Yet this is a court whose judgment can make an Act of Parliament unconstitutional. The judgment is merely a series of propositions with a conclusion: there is no attempt at reasoning—no attempt to make it flow so that people can read and understand it.

There is no dissenting judgment, of course, because no one can dissent in the European Union. People cannot dissent in the Commission—anyone who is against a single currency gets the sack. It should be remembered that in the United States supreme court, dissenting judgments have often been the most important judgments. So why in the Europe Union cannot there be one proper judgment from the judges and one—we are not asking for more—dissenting judgment? The current procedures do not allow that.

I want to offer the Minister a few suggestions to take with him when he goes back into that terrible room and finds that he is one against 14. First, there needs to be a fundamental review of the procedures of the court, the way it operates, the way evidence is called and the way facts are decided. Secondly, the judges should be told to write a proper opinion, which people can read and understand. One dissenting judgment should be allowed, if one is wanted. Finally, we should get rid of the Advocate General, because we do not need him.

The Minister, in his paper, should suggest abolishing the Advocate General. People may think that that is a radical suggestion, but it is already happening in the court of first instance, which deals with most anti-trust cases, competition and monopoly. I am told—although I have not seen it in writing—that the court of first instance is dispensing with the services of its extraordinary commissar, the Advocate General. The Minister now has a precedent—lawyers can always find a precedent if they are asked to do so. Proper judgments, dissenting judgments, reform of the procedure and abolition of the Advocate General might provide a better, more modern and less authoritarian European Court to suit the needs of 15 nation states.

Photo of Mr Cranley Onslow Mr Cranley Onslow , Woking 7:22 pm, 21st March 1996

Since the Government published their White Paper, I have had one letter from my constituents on the subject. I do not know why I have not had more. I am sure that people are interested in Europe. Perhaps they hesitate to enter into a debate where such appalling terms as "subsidiarity", "variable geometry" and "acquis communautaire" are common change.

I want to leave all the technical stuff and quote from that one letter, which is of some interest. My constituent writes: I don't think that there should be a referendum on whether we join the EU single currency if one does come about. It is far too technical a subject for the man in the street to cope with. My wife says that if there is a referendum on the single currency the electorate need to be told far more about the pros and cons. What we both feel very strongly about is the dreadful way the EU interferes in the general running of our country. They are succeeding in doing something that the Kaiser, Mussolini and Hitler failed to do in this century, as did all others in the seven previous centuries, namely conquer us, overrule our Parliament and the judiciary, laws, fishing rights. etc. etc. Give us a referendum on this and we will gladly let you know where we stand. I note that some of my hon. Friends are nodding in agreement with that letter. I received it with some regret because it shows the extent to which the problems are not understood and the extent to which we need to move forward. It would not be a misleading summary to say that many people in this country feel about the EC like someone who has bought a fine new car, found that it has four good forward gears that work well, that the brakes are a bit dodgy, that neutral is all right, but that there is no reverse gear—so when he finds himself in a position where he does not want to be, there is no way to get out of it. That is something that we cannot ignore.

I agree with the right hon. Member for Chesterfield (Mr. Benn), who has left the Chamber, that the one issue that the intergovernmental conference should address is the grievance that many people feel. Without any evidence that something is being done about that, confidence in the EC as an institution and in the treaties that we have signed will continue to wither on the vine. There is a job to be done, which is to deal with areas that we find so unsatisfactory—such as the common fisheries policy. We do not have to be Euro-sceptics to be furious about the way that the Spaniards get away with things; we do not have to be Euro-sceptics to boil over when we learn how other countries cheat on the enforcement of their quotas; we do not have to be Euro-sceptics to be infuriated by the European Court of Justice and the extraordinary conclusions it reaches. My right hon. Friend the Prime Minister has made his feeling clear on that.

I and my constituents feel that Britain did not join the European Union to be saddled with Eurojudge-made law. Something must be done about that and the IGC provides an opportunity to do it. The Government's approach in the White Paper is commendable and we hope that real results come from that. Most of our constituents will welcome the Government's pledge on qualified majority voting, the number of Commissioners and the powers and procedures of the European Parliament—a body which, though elected, still has a serious credibility problem which it might do something to solve if it actually began to use the powers that the Maastricht treaty gave it. I find it difficult to understand why that has not happened already. It may have something to do with the in-built socialist majority in that so-called democratic body.

The Government's line on foreign and defence policies is also right. NATO must be the bulwark of our defence. Our vital national interests cannot be overridden. It is absolutely unthinkable that British forces could be committed to operations in or out of Europe against the will of this House. It is equally unacceptable that, while recruitment to our armed forces is voluntary, another European Court should be able to degrade the efficiency of our fighting services by compelling them to retain homosexuals in uniform. People want to be assured that, at the IGC, Britain will try to redress grievances rather than plough on blindly.

I wholly agree with what the Government say in the White Paper about the social chapter, especially in paragraph 60. We hear a great deal about conditions in Germany. Anyone with a close relative working in a German firm will know at first hand how extraordinary the loss of work ethic has been in German society, how the German work force has saddled itself through self-indulgence with social benefits to an extent that has made it so uncompetitive that even in high-tech industries such as the automobile industry jobs are leaching from Germany to Britain—and a good thing, too, for us. I do not mind BMW, Mercedes or Bosch coming here; but let us not hear those on the Opposition Front Bench saying that it has nothing to do with the fact that we have not saddled ourselves and our workers with the burdens of the social chapter in the way that the Germans have done.

I want finally to refer to the question of a referendum on a single currency, which my constituent opposed in his letter. I believe that there must be a referendum, as there is no other way of obtaining the consent of the British electorate. It should be based on a question set by the Government of the day, which will not be this Government, on a question decided by the Parliament of the day, which will not be this Parliament, with everyone given an opportunity to show how far they have confidence in the system, how much they believe that the EU works to our advantage, and how much they believe that it is genuinely a democratic body.

I was somewhat depressed by the equivocating responses of the hon. Member for Livingston (Mr. Cook) when he was pressed on that point. It was clear that, in effect, he was saying that, if the Labour party should gain a sufficient majority to form a Government, there would not be any nonsense like a referendum. That will not stand Labour in good stead when the general election comes and I hope that we will make more of that.

If there is to be a referendum, it follows that it must be mandatory—the Government of the day must be bound by the result or go to the country with a general election on the single issue of what should happen. We cannot lump in that issue with all the other issues at a general election. However, there has been no reassurance on that matter and I hope that the House will take note of that.

I hope that at the intergovernmental conference the Government will carry through the determination that they have shown in their White Paper. I wish my right hon. Friend the Prime Minister and his colleagues the best of luck.

Photo of Mr Terry Davis Mr Terry Davis , Birmingham, Hodge Hill 7:29 pm, 21st March 1996

The right hon. Member for Woking (Sir C. Onslow) began his speech by expressing surprise that his constituents had so little interest in the intergovernmental conference and our proceedings on the matter. He answered his own point. People are not interested in the IGC, or indeed the European Union, because they do not feel that the EU has any relevance to their personal and pressing problems. The EU is not seen as being relevant to problems of unemployment, standards of living, or the quality of life of people in any of our constituencies. The European Union's answer to that has been to spend money on propaganda to try to convince people in some mysterious way that it is relevant rather than tackling the bread and butter issues.

The right hon. Member for Woking went on to give a quite misleading description of the position taken by my hon. Friend the Member for Livingston (Mr. Cook). My hon. Friend did not say that a Labour Government with a large majority would not hold a referendum. He said—I have some reservations about the position taken by my hon. Friends on the Front Bench—that the question would be put in either a general election or a referendum.

I want a referendum. Unlike the right hon. Member for Woking, I have always voted for a referendum. I am not sure that I have ever seen him in the Lobby voting for a referendum. Some Conservative Members—I see them here tonight—joined us in the Lobby when we voted on an amendment calling for a referendum on the Single European Act and the Maastricht treaty, but I did not see the right hon. Gentleman on either of those occasions. Perhaps I have done him an injustice, and if I have, perhaps he will correct me.

Other misleading points have been made, particularly by Conservative Members. The right hon. Member for Mid-Sussex (Mr. Renton) made a misleading point at some length when he described his discussion with the French Gaullists. He said that other nations in Europe were different from the British and that they were wholehearted—he did not use that word, but that was the impression that he gave—in their acceptance that there was no inconsistency between, on the one hand, a sense of identity, and on the other, integration in the EU. He is clearly wrong.

Several other countries held referendums on the Maastricht treaty. It was very clear, especially in France, that substantial numbers of people did not agree with integration in the EU. I say especially in France because a majority there were narrowly in favour of the Maastricht treaty, and because leading figures in the campaign against the Maastricht treaty were leading figures in the French Gaullist party. The right hon. Member for Mid-Sussex misled the House—I am sure unintentionally—on that point.

That was not the only misleading point made by Conservative Members. There has been a tendency in the debate to suggest that the options are either integration or isolation, but there is a third option, which the Government are not expressing clearly, and certainly not with any enthusiasm. That is because the debate—it was very clear from the Foreign Secretary's speech—is seen by the Government as a debate within their own party. That was apparent from the Foreign Secretary's unwillingness to give way to my hon. Friends when they wanted to intervene, and the fact that he gave way to every one of his hon. Friends.

The whole business of isolation or integration is very misleading. There is an alternative vision for Europe: co-operation, partnership and working together. Of course we must work with neighbouring countries and people in other political parties in other countries. There is nothing weak or wet about that approach. It takes self-confidence to work in partnership with other people. Such a vision does not come through in the White Paper, which is a mistake and an omission—but not the only omission.

My hon. Friend the Member for Livingston pointed out the virtual total omission of any reference to the single currency. I would have liked the White Paper to begin with recognition of the fact that for the first time in the history of Europe, there is not a single dictatorship. In the past 60 years, we have seen off the fascist dictatorships of Germany, Austria and Italy; we have seen come and go the colonels in Greece; we have seen the fascists of Spain and Portugal disappear in the 1970s; and, more recently, in the 1980s and 1990s, we have seen the countries of eastern and central Europe become democracies. Some recognition of the fact that democracy has swept like a tide through Europe would have been very welcome in the White Paper as a background to the idea of partnership, co-operation and working together.

Another glaring omission in the White Paper is that there is no reference to other European institutions. If only by implication, the IGC will affect the working arrangements of the Council of Europe. The White Paper refers to the European convention on human rights, but makes no reference to the Council of Europe. The White Paper refers to the European Court of Human Rights, but makes no reference to the Council of Europe. That glaring omission is significant since the whole basis of the Council of Europe is co-operation and the idea of working together, which is what many of my hon. Friends, and I think many Conservative Members too, would advocate. We are not anti-European; we are part of Europe. We are not averse to other countries. We are not hostile to Germans or French and people in other countries; we want to work with them. That means working together—co-operation not integration.

When the Foreign Secretary said that no other Government in Europe favoured integration, he too was—undoubtedly unintentionally—misleading the House of Commons. The Belgian Government believe in integration, the Netherlands Government believe in integration, and so do the Luxembourg Government. Luxembourg might be only a small country, but its Government have a vote almost equivalent to that of the United Kingdom's. The German Government clearly believe in integration. One has only to read the comments of Chancellor Kohl to realise that. The Italian Government believe in integration—and such a belief does not stop there. Not only do Members of the European Parliament believe in integration; from my experience, many Members of Parliaments in other countries believe in it too. The question that we should face is what to do about it.

I do not understand the Foreign Secretary's distinction between multi-track and multi-speed. He said that he was opposed to multi-speed because it implied that everyone would arrive at the same terminus but at different times, and then said that he was in favour of multi-track. I do not know whether he envisages multi-tracks going in different directions. I thought that the whole point of multi-tracks was that they went to the same destination. I could not understand his ruling out multi-track any more than I could understand him ruling out outer and inner circles. I find such language slightly offensive.

If Parliaments of other countries want to integrate, we should not say no to that desire. We should accept that they are entitled to their point of view. We should not try to veto or stop them; we should make it clear that, although we do not want to be part of such integration, we are willing to co-operate with them in partnership and peace to achieve common objectives and ends. We should not try to sabotage their wishes. Such lack of vision and clarity damages us in Europe.

Photo of Bill Cash Bill Cash , Stafford 7:37 pm, 21st March 1996

The Maastricht treaty did not work and is not working. It is a complete failure and the problem that we have tonight is assessing what the White Paper does to redress the problems with which the Maastricht treaty presented us.

For me, the White Paper is more like a whited sepulchre than a White Paper. It is attractive on the outside in tone, but dead on the inside. The issues themselves have been buried by the procedural device of a one-line Whip, agreed between the two Front-Bench teams, in order to ensure that the issues will not receive the appropriate attention, and Members will not be given the opportunity to exploit them.

In my pamphlet, "Blue Paper", which I published yesterday, I replied to the White Paper. It was published by the European Foundation. I very much hope that a number of Members on both sides of the argument will be good enough to consider its contents, because it would certainly take me a lot longer to describe all my complaints. They are all set out, line by line, for anybody to read if they wish to do so.

I was intrigued by the speech by my right hon. Friend the Member for Witney (Mr. Hurd), because he was of course the Foreign Secretary when the Maastricht treaty went through the House. He was good enough to ask me in those heady days when I was chairman of the Back-Bench committee on European affairs if I would write the paper on the future of Europe for the Conservative manifesto committee. I offered my observations, since published in a book called "Visions of Europe", and clearly said that, if we did not veto monetary union then, we would end up in a German-dominated Europe in which we would be marginalised because we would be on the outer rim of a two-tier arrangement.

The present Foreign Secretary addressed that point in his speech, and emphatically ruled out a two-tier Europe, but the problem is that the concentric circles plan and the hard core arrangement—the very developments that I had advised the previous Foreign Secretary to ensure did not happen—did come about, through the Maastricht treaty.

We are indeed trapped in a two-tier Europe, unless we have and use the political will to remove that problem from the British people. How do we do it? We must reduce the powers that have been conferred on the European institutions and return them to the United Kingdom. That means that at the summit we must take on in forceful debate, person to person, if necessary, the Germans and the French, and explain to them exactly why we will not accept the bullying and hectoring tone of so many of their recent speeches. I am thinking in particular of Chancellor Kohl's speech in Louvain on 2 February.

To deal with the question we shall also have to produce some legislation to enforce our parliamentary supremacy. I raised the matter with Madam Speaker on 7 March, when I asked her for a ruling on the Court of Justice's judgment on the fishing issue. Right at the heart of that judgment lay another question—not on fishing alone, but having to do with the system of the treaty. If member states were to contravene the system of the treaty, they would be acting illegally.

As soon as I read the judgment, it immediately raised in my mind the question of the European Communities Act 1972. Could we amend it? In a nutshell, the answer is that we must. Madam Speaker declined to rule from the Chair on my question, but she has written to me saying that she realises and appreciates the seriousness of the point that I made, although she says that it is primarily a political question.

That political question will have to be resolved by legislation. The House will have to assert that Parliament retains the right and the authority to enact provisions that have full effect, notwithstanding anything in the 1972 Act or the treaties mentioned in it.

In the White Paper, how do the Government address those thorny questions, that cul-de-sac and trap to which they have referred? They do not tackle them at all. Indeed, they do not even want to tackle them. They say: If we were to press ideas which stand no chance of general acceptance, some others would seek to impose an integrationist agenda which would be equally unacceptable from our point of view". As I said in an intervention, that is nothing short of appeasement. That is defeatism. We are not even to consider whether to give the House the opportunity to retrieve the powers that have been given away and prevent the slide further down the glacier. We shall not even allow the other member states to consider and discuss the question of monetary union in the intergovernmental conference. If we are not even to discuss those issues, by any standards that must be utter irresponsibility.

The Conservative party can win the next general election if we take a sufficiently robust, realistic, down-to-earth view on the matters that we are discussing today. If we unbundle the European Union policies, and use the fact that those on the Labour Front Bench have committed themselves to managed exchange rates and monetary union, we can turn it against them, because we know that they will not be able to deliver their promises on health, education, public expenditure or jobs.

When the Labour party is confronted with that, we shall be able to explain to the British people why our credibility, which we lost over the exchange rate mechanism, has been restored and reinvigorated as a result of our more Euro-realistic position.

Photo of Bill Cash Bill Cash , Stafford

No, I have only a few minutes left.

In order to achieve that position we must renegotiate the treaty, and say that we shall not accept monetary union. Not merely on the opt-out, but during the intergovernmental conference and before the general election—in other words, in our manifesto—we must state that we shall not go down the route of monetary union. That is the logic of the position. And in doing that we shall be able to wrong-foot the Labour party in the general election.

We have been trampled on by the European institutions, and we shall not tolerate it. Our sense of pride and our nationhood have been infringed over and over again, and we shall put up with it no longer. It is time for the House and for the Conservative party, which, as Disraeli said, is a national party or it is nothing", to put an end to the dishonour heaped upon us by the federalism that is permeating throughout the European Union.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West 7:46 pm, 21st March 1996

Anyone walking into the Chamber and seeing the hon. Member for Stafford (Mr. Cash) on his feet would know precisely what issue is being discussed. I suspect that, regrettably, anyone who came in here and saw the usual suspects lining up on either side would know what subject we were debating.

If the hon. Gentleman really thinks that the issues surrounding the European Union will win the election for the Conservative party, he deceives himself. I do not want to sound complacent, but frankly, I doubt whether even if the Archangel Gabriel declared for the Conservative cause at the moment it would assist the Tories much in saving the general election—but be that as it may.

The debate has been fascinating, for several reasons, one of which is the fact that we seem to be driving everyone out. If we cannot even raise enough interest in the House in discussing the issue, how on earth are we to arouse people's interest outside in the country? Both sides have locked horns over the issue and the area has become sterile, as has the whole debate. Indeed, one could hardly describe it as a debate in the true sense.

I find the debate fascinating, partly because of the attendance levels. There are more Members on the Government Benches than on the Opposition Benches, and it is clear—the way in which the Foreign Secretary dealt with interventions showed that he recognises it too—that the European Union is revealing the deepest divisions that I have ever seen in the Conservative party.

The interesting thing is that the divisions are ideological—not simply matters of opinion, but ideological. The right wing opposes the Government's policy on the EU, and the left wing of the Conservative party is attempting to support the Government, although, if I may say so, not very vocally or successfully. That is the Conservative party's fundamental problem. Most Conservatives who oppose the Government's policies on the European Union are also politically opposed to the Prime Minister. That adds to the problems. The Tory party is deeply divided. If the European Union is going to influence the general election, it will not be through discussion, or its absence, of the issue but through the divisions in the Conservative party, which people will recognise.

Of course, Labour has its differences of opinion. The right hon. Member for Wokingham (Mr. Redwood) laughs, but our differences are more like differences of opinion. They are not ideological divisions.

Photo of John Redwood John Redwood , Wokingham

indicated dissent.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

The right hon. Gentleman must allow that I know far more about the ideology and divisions of my party than him. If he honestly thinks that there is an ideological linkage between Bolsover, Chesterfield, Stepney and Newham, South he is an idiot and does not at all understand ideology. Our divisions are more generational than ideological. Our discussions do not pose any problems for the Labour party, either in opposition or in government.

I listened to the Secretary of State with great care when he said that the days of the nation state are not over. I agree—but they are numbered. Nationalism and religion have together been responsible for nearly every war in Europe and the rest of the world, and that remains so.

Photo of Bill Cash Bill Cash , Stafford

What absolute nonsense.

Photo of Mr Tony Banks Mr Tony Banks , Newham North West

I defer to the hon. Gentleman because he is an expert on nonsense. Perhaps he could consider my speech, write to me and identify all the wars through history that have not had nationalism or religion as their root cause. That will remain so in future. The break-up of Yugoslavia was the result of a combination of nationalism and religion. The purpose of supranational bodies such as the European Union is to move us away from the narrow nationalism that has been the cause of so much suffering in Europe over the generations.

The Secretary of State also gave us his vision of three ways in which Europe could develop. First, he said that it could be a free association of nation states—the market concept. That is what the Conservative right wants—a loose market association of free nation states coming together to carve up the markets between them, with no further economic or monetary union or integration.

The rest of Europe is not prepared to accept that model. The Government can carry on whistling in the dark. They can wish, but it will not happen. Wishing is no way to achieve things. We are being left out of developments in Europe and they are laughing at us. We are becoming immaterial and insignificant in respect of events in Europe. It is the fault of the Conservative Government that we are not punching our weight in the European Union.

The Foreign Secretary talked about the federal Europe, which is the big bogey of the Conservative party. The definition of federalism in the Tory party lexicon is totally different from that in German politics. After all, federal Germany has a strong central state Government and strong local government though its lander. Britain is the most centralised state in Europe. I go further: we are the last fully functioning mediaeval state in Europe. We do not need lectures from the Conservative party, which has centralised our Government, criticising Germany or France and saying that they want a federal Europe that means more centralisation. We have centralisation: it is called the British state and it needs to be broken up. We need the sort of freedoms that they have in Germany through regional government and devolution. We do not have that and we desperately need it.

The last possibility mentioned by the Foreign Secretary was that of a multi-track Europe. Again that is nonsense, like our opt-outs, which are being proved to be nonsense. They were the fig leaves that the Prime Minister brought back to try to cover his embarrassment and the divisions in the Conservative party, and everyone knows that they are not working. They are not worth a bucket of cold spit or the paper on which they happen to be written. Most sensible people understand that.

A multi-track Europe cannot avoid being a two-tier, first and second class Europe. That is exactly what will happen. The right hon. Member for Old Bexley and Sidcup (Sir E. Heath) summed it up. When France, Germany and the Benelux countries start to decide, we can either go with them or stand outside wringing our hands. Those are our only options. We have lost our sovereignty, but we are not prepared to acknowledge it and try to do something about the institutions of the European Union, where we can claim back sovereignty through the international bodies.

Conservative Members talk about the European Union as if it were imposed on us from Mars. Throughout their speeches, they denigrate the directly elected, accountable European Parliament. We try weakly, stupidly and ineffectively to defend our fast-disappearing parliamentary sovereignty. At the same time, we refuse to allow the European Parliament the power to exercise democratic control and influence over European Union institutions. It is the French and the Germans that want to give more power to the democratically elected European Parliament. While we in this Parliament complain that we are losing our powers, we are not prepared to give any additional powers to the European Union to try to claim back democratic accountability over European Union institutions. It is self-defeating nonsense.

I have a specific request that I had hoped to make to the Minister. He is not here and I will have to address my remarks to the Whip, the hon. Member for City of Chester (Mr. Brandreth). I am sure that he will communicate them to the Minister. Can we use the IGC to secure a change in the treaty of Rome to give a new status to animals? At present, animals are classified as goods or agricultural products. If they were recognised as sentient beings, they could be accepted as living creatures capable of feeling pain and suffering. That change would enable us to extend animal welfare provisions throughout the European Union. Animal lovers and animal welfare movements want that. Will it be possible to get such changes at the IGC?

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing 7:47 pm, 21st March 1996

I welcome the White Paper, which, in its way, is an interesting and helpful document, but I join those who have complained, not least my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath), about the lack of time for debate. Several hon. Members have abandoned hope of being called. On the point made by the hon. Member for Newham, North-West (Mr. Banks), with television being relayed to Members' rooms, attendance has steadily declined. Members come up to one after a speech and say that they agreed or disagreed with it when the Chamber appeared to be empty.

I would have liked to have sufficient time to address in detail the points made by the right hon. Member for Chesterfield (Mr. Benn) who, in a way, epitomised the arguments on a referendum. I can only refer hon. Members to column 702 of Hansard on 13 February 1995, when I sought to rebut his arguments.

As I have other matters to cover, I shall make only three brief points on a referendum. First, the position that the Government have taken hitherto—that the question of a single currency will not arise for a long time and that, while there may or may not be a case for a referendum, the issue can be appropriately addressed at that time—is entirely sensible. Although I am fundamentally opposed to referendums, I was prepared to go along with it. I hope that, following the consideration that Cabinet is giving to the issue, they none the less will maintain that commonsense point of view.

I disagree with the views of the right hon. Member for Chesterfield. Fundamentally, we are in a representative democracy. A crucial element of that democracy is the right of our constituents to express to us their views on the single currency or anything else. They have every opportunity to do so, be it on an interview night, or whatever. It is then up to us, having heard all the arguments put to us and read those in the press, to weigh them up and vote accordingly on the extremely complex issue of the single currency. The referendum is the antithesis of that system of representative democracy.

Some European countries do not even have constituencies, let alone constituents. One can then see that there might be a case for holding a referendum. That is not the case here and it would be unfortunate if we were to opt for a referendum.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

No. I have only 10 minutes.

I should like to pick up on one of the arguments used last week by my right hon. Friend the Member for Wokingham (Mr. Redwood), who is in favour of holding a referendum. It is inevitable that such a referendum would be preceded by a major campaign on the issue. The result cannot be binding on the House, because, at the end of the day, it will decide what happens, whatever the result of that referendum. The crucial point is that the result will be binding on the Government, who will have analysed carefully all the arguments, discussed them in great depth and put forward their case.

What happens if the result of the referendum goes against their views? If I understood my right hon. Friend the Member for Wokingham correctly, he suggested that the Government would simply have to accept the result of the referendum. That seems completely absurd. The Government could not campaign on one argument, lose the referendum and then say, "We have suddenly decided that all the arguments we put forward were wrong. We will change our mind." In the circumstances, the Government could do only one possible thing—resign. That is what would happen. Before opting for a referendum we need to consider carefully the implications. I could deploy other arguments against the use of the referendum, but I do not have time.

I should like to dwell on the single currency, about which I am extremely sceptical. I do not think a single currency will be introduced even across the existing European Union by the next general election, the one after that or even the one after that. What may happen is that a core currency will be created, effectively a deutschmark bloc. If a referendum were held, the relevant question would not be, "Do you want to join a single currency?" but, "Do you want to join a deutschmark bloc?" I am very doubtful whether it would be in the interests of this country to join such a bloc. It would create a situation in which the Union would cease to be a Union because in an essential respect there would be a difference between the inner core and the others. In that sense, the Union would be fragmented.

It is not just the single currency and the possible fragmentation of the Union that are dangerous, but the speed and passion with which other EU countries and this country are pushing forward on the convergence criteria. The fundamental aim is to reduce Government deficits, and that policy is deflationary. What we are witnessing across Europe is a conspiracy to deflate. That policy has not been dictated by any normal reason of economic management given the state of the economic cycle in this country or another.

It appears that countries are determined to rush forward, according to a tight timetable, to meet a requirement to reduce their deficits. The welfare and unemployment implications would be extremely serious. That needs to be taken into account.

I noticed a short time ago that Mr. Lamfalussy, the president of the European Monetary Institute, was reported as rejecting the idea that Europe is heading for a recession that would jeopardise the European monetary union. I believe that the drive for European monetary union is in danger of causing a Europe-wide recession. That is an extremely dangerous situation, which one should consider carefully.

The urge is to meet the criteria at a specific moment in time. The idea is that we will say, "Goodness, we have managed to meet the convergence criteria. 'Snap!' We will join." Total disregard will be paid to whether the country is in any sense in economic equilibrium. If a country joined the single currency, it would give up for all time the major means of adjusting for differential movements in prices and costs. That would have the consequence of endemic unemployment, and the need for subsidies across national boundaries within the Community. It may be that a country would be totally unconverged; all that it would have managed to achieve would be a false convergence at a particular moment in time.

If that happens and two or three countries or more were to join a single currency, the danger to the future economic prosperity of Europe would be great. Whatever the jargon—two-tier, two-speed—a drive towards a single currency would certainly not create a European Union. One would have the "ins" and the "outs". I believe it may be better to be out rather than in the inner core.

About four months ago, the National Institute of Economic and Social Research published a good report on that very problem in its journal. It is a complicated issue, and the idea that the public understands it is just not so. That is why any such decision on a single currency should be taken in the House of Commons. We need to analyse all the factors involved and, in particular, the Select Committees need to analyse them before we move forward on the single currency.

Many proposals in the White Paper deserve comment, but in the time available, I shall refer to one. On page 11, it proposes the automatic withdrawal of Commission proposals if not adopted within a certain deadline. I am glad that Ministers have taken on board the importance of that point. The problem for British industry has not been that proposals become time-expired but that we implement them before anyone else does. That has a damaging effect on British industry. Not only do we often implement such proposals well before anyone else, but often in a more extreme form than that set down in the requirements. We should establish a system under which no directive becomes operational until all the countries are ready to sign up to it.

Photo of Roger Berry Roger Berry , Kingswood 8:07 pm, 21st March 1996

I am one of those who supports many European proposals. I support action to protect the environment, to tackle discrimination at work and to improve employment practices. I am, however, opposed to the deflationary economics of Maastricht. For some people that appears to be an odd position to take. There are those who think that, if one is pro-Europe, one must support the Maastricht road to the single currency. That is bit like saying that, if one appreciates stand-up comedy, one must like Bernard Manning. The opposite is the case. Such confusion often arises on European issues, not least because they represent a wide range of issues. I should like to deal specifically with the economic element of the debate.

Last week the Secretary of State said in his statement that the IGC will not consider economic matters. The White Paper has confirmed, however, that nothing is off the agenda. Recently, the President of the Commission, Jacques Santer, said that he would put forward a specific proposal at the meeting in Turin next week on how to use the savings from the common agricultural policy to support investment in Europe.

With respect to those right hon. and hon. Members who have already spoken, the one issue above all about which most people are concerned is that which affects them most directly—the crucial economic issue of unemployment and job insecurity. That is the issue on which people want Europe to deliver. That is the issue on which people will judge whether the European Union is doing useful things or doing unhelpful things.

In Europe, 18 million people are officially unemployed and many more are seeking paid employment but cannot secure it; more than half of those people are long-term unemployed—that is, they have been unemployed for more than 12 months; and 5 million people under the age of 25 are unemployed. All hon. Members would agree that unemployment is the most serious issue for the European Union and for its member states to address. Talk about some of the niceties of constitutional arrangements pales into insignificance when compared with the issue of what we in Europe are going to do about unemployment.

We cannot talk about political arrangements at the IGC without some kind of economic context. Unless we know clearly how economic policy in Europe will develop, we cannot sensibly determine the appropriate political institutions to deal with it. For example, the question whether there will be a single currency influences the kinds of political arrangements that we might wish to put in place. It is my view that the Maastricht road to a single currency is so deflationary and will increase unemployment so significantly in Europe that it will put the very existence of the European Union at risk, as other hon. Members have said.

There is a political cost involved with economic policy, as well as potential benefits. Therefore, for the IGC to say that it is simply going to talk about so-called political matters—and to leave the difficult economics of the single currency and of deflation or reflation off the agenda—is not very sensible. Unemployment is the European problem. I reject the view of those who suggest that there is little that national Governments can do to tackle unemployment—because there is a lot that national governments can do—but it is clear that there are European initiatives to create jobs that have significant advantages.

The case for co-ordinated reflation in Europe, given the high degree of economic integration, is overwhelming. That would be the most effective way of reducing unemployment. However, the tragedy is that, at the moment, the economic agenda on Europe is not co-ordinated reflation but is co-ordinated deflation. That is explicit in the Maastricht approach to a single currency. My complaint in this context is not that the fiscal constraints are arbitrary and they have no economic basis whatsoever—although both those statements are true—but that that package is, beyond a shadow of doubt, severely deflationary.

I am genuinely delighted that Conservative Members of Parliament—who on other occasions have not been too enthusiastic about demand management and who have not felt that macro-economic policy had a significant effect on jobs—are now, because they are opposed to Maastricht or opposed to Europe, saying that Maastricht is terrible because it is deflationary and that deflation creates unemployment. I think that they are right when they say that deflation creates unemployment, but I wish that they would apply that argument to Government economic policy in this country as well.

If we were to introduce a single currency in Europe, the Maastricht approach is a good example of how not to do it. If we were to go down the deflationary road to a single currency, if we were to reject—as my hon. Friend the Member for Livingston (Mr. Cook) indicated this afternoon—the notion of real convergence, and to simply concentrate on the Maastricht criteria, I have no doubt that the evidence that we are already seeing in Europe of increased social division, and of growing nationalism and racism, would be exacerbated. Unemployment is a breeding ground for social division and racism.

Photo of Mr Jacques Arnold Mr Jacques Arnold , Gravesham

So would be accession to the single currency.

Photo of Roger Berry Roger Berry , Kingswood

Indeed.

There is much evidence that those parts of the European Union where unemployment is high are precisely the parts of the Union where extreme right political organisations are gaining electoral support. All hon. Members, not least given the history of Europe, should be mindful of the effect of inflicting deflationary economics on the European Community and of the impact that has in unemployment and social division. It is not an exaggeration to suggest that the Maastricht road to single currency could put the existence of the European Union in jeopardy.

We desperately need a new economic agenda for Europe, and we have to be clear that it cannot be the economic agenda as laid down in the Maastricht treaty. We must have an economic agenda that gives priority to jobs.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

I agree entirely with the hon. Member. Was it not a pity that the Delors plan for jobs, growth and employment was all too small and modest in terms of the investment money injected into the system because they were all worried about the existing deficit?

Photo of Roger Berry Roger Berry , Kingswood

Yes, indeed. There is a delightful irony here that the Delors White Paper was put forward not least because it was appreciated that the Maastricht strategy was deflationary. I hope that there are other Government Members who, like us in the Labour party, would support Delors-type programmes for economic expansion. That is the only effective way to tackle the problem of unemployment in Europe.

We desperately need the kinds of measures that were in the Delors White Paper. We need a European recovery fund that will invest in economic recovery. We need to develop trans-European networks, which Jacques Santer spoke about again yesterday. It is this kind of investment across Europe that will tackle the unemployment nightmare—it is a nightmare and it is a social disaster.

I very much regret that it appears that a lot of the talk at the IGC will not be about unemployment. Frankly, most of the talk will be about constitutional minutiae that most people in this country and in the rest of Europe will regard as not addressing their key problem: job insecurity.

Photo of John Redwood John Redwood , Wokingham 8:16 pm, 21st March 1996

I welcome the aims of the Government's White Paper. Like the Government, I wish to see a partnership of nations, I believe that we have strong interests in Europe and I believe that we must influence it for the better. I wish us to be in Europe, to trade there, to have friends there, to co-operate where we can and where it is in our interests to do so. We are European—that is an accident of geography and a fact of history, and one with which we must live. We must influence Europe for the better.

Where I find the analysis of the White Paper less convincing is where the Foreign and Commonwealth Office would have us believe that the German Chancellor is now an advocate of just such a Europe of nations. That is a serious misreading of the German intentions. It is also a misreading of the intentions of the all-too-powerful Franco-German alliance, which is driving the federal scheme that is insisting that we go ever deeper into a federal union.

The German Chancellor wants a Europe with one passport, one anthem, one supreme court, one currency, one interest rate, one common foreign policy, one common defence policy, and one common home and justice policy. What is that if it is not one state called Europe with one government? I urge my right hon. and hon. Friends in the Government to take the Franco-German scheme very seriously.

I urge them to offer Europe a choice: to put Britain at the forefront of the debate, to say that Britain is going to offer Europe a better way—a way that works, a way that brings us more jobs, a way that brings us friendship and peace, and a way that does not intrude on our ways of life as individual nations—with our own languages, histories, cultures, flags and passports, of which we are rightly proud.

I understand why some people do not take France and Germany seriously. When we look for the arguments of substance that might support this historic task on which they are embarked, we find little there. Instead of big arguments and well thought through blueprints, we see a series of tired metaphors.

The latest tired metaphor telling us why we must go ever deeper into European Union is that of the bicycle. We are told that the 15 member states are all pedalling on the same bike. I do not understand why we cannot each afford our own bike and go cycling together when we wish. We are told that, if we do not carry on pedalling, we shall fall off and that would be a disaster.

I confess I do not cycle very much these days, but I do remember a little about bicycling, and when I wanted to pause or stop pedalling, all I did was put my foot down. I urge the Government now to put their foot down in Europe and say that we do not have to pedal restlessly in the way that our partners are saying. It is time we offered Europe the chance to go to the pub, have a drink, rest and enjoy the club.

I do not want to belong to a club where all we do is discuss the club rules. I want us to be in a club where we trade together, we are friends together and we do things together when we feel like it, but we do not have to closet ourselves in darkened rooms and argue the toss about how many more rules we shall change and be told that we are bad boys in the club if we do not consent to all those rule changes.

The big issue, which has rightly been highlighted in this debate, concerns the powers of the European Court of Justice—a little-loved institution in a faraway place, whose powers have become excessive and whose powers now need to be cut back if this high court of Parliament is to do its job and is to speak for the British people. I do not urge my right hon. and hon. Friends in the Government to do anything that the German state has not already done, but I do urge them to take immediate action to roll back the excessive powers of the ECJ.

The German Federal Constitutional Court has said that there are occasions when things that the ECJ does are against the German constitution. It rules accordingly, and German law will prevail.

We have the advantage of an unwritten constitution; a constitution fashioned over many centuries through struggles and debates; a constitution that does uphold the liberties of the British people, because they elect Members to this place and we speak for them unless and until they decide that we no longer speak well enough, in which case they choose other representatives. That is what we must do in this case; we must assert the right of Parliament above the European Court where that court conflicts with our constitution.

Two clear constitutional principles of the United Kingdom are these. First, we believe that an Act of Parliament is sovereign; the only thing that can change an Act of Parliament is another Act of Parliament or an amendment or repeal of that Act of Parliament. So by what right does the European Court overturn an Act of Parliament, and when will this great Parliament assert its right that those Acts will be supreme? By all means let the ECJ advise us if it believes that one of our Acts is ill-judged; by all means let us debate that or vote again on it, but we should not let the ECJ have the right to overturn an Act of Parliament.

The second constitutional principle that we hold dear is that the House does not usually invent a new law applying five or 10 years ago and then condemn people for not obeying it. That, however, is exactly what the European Court of Justice is now doing—changing the law that prevailed some years ago and then imposing compensation on us.

If we look in our constitutional history, we shall see that there have been occasions when this High Court of Parliament has had to assert our rights. There has been a direct parallel with the question of a foreign court. In 1533, this Parliament passed an Act that meant that the Roman courts no longer had jurisdiction in England and Wales. That was a bold move. It did, I confess, result in a papal bull. I am delighted that our predecessors were not scared of that papal bull. I am delighted that they took that papal bull by the horns and as a result created our sovereign jurisprudence through our court system in this country.

There is another parallel for what is going on in the case of compensation for Spanish fishermen. It is almost unbelievable—it is a sketch that Jeffrey Archer would never have dared to write—that a European court can now say not merely that Spanish fishing boats can come and plunder our waters, but that those boats that did not come and plunder our waters should then have money from British taxpayers.

In the 1630s, this Parliament had to assert its right against the Crown when the Crown tried to levy ship money when it was not approved by Parliament. The European Court is now trying to levy its own type of ship money on the British people, and this Parliament must say no. The Government must take action; the Government must assert our constitutional rights.

The issue of the single currency has been much debated, although, as the Government point out, it is not yet formally part of the agenda of the conference. I am quite sure that, either at the conference or in parallel, it will be a very important item discussed with our partners. It will be important because the Madrid conclusions left the single currency in an uncertain position. We are told that the ecu is to be abolished and the euro is to be invented, but many loose ends have been left, which business men and the markets need tied up or answered quickly.

I am certain that the European Community will have to introduce new legislation—indeed, it should undertake treaty amendment—to make the euro legal. It is by no means clear that it is possible, simply by agreement among the member states without formal treaty amendment, to move from the ecu, a currency which exists in the form of bank accounts and bond instruments and which has a quoted value, to the euro, a currency which does not exist at all and whose composition or characteristics will be determined at a later date by people as yet unknown, and certainly unelected. I therefore trust that our Government will say no to the automatic transfer from ecu to euro and will insist on the strict interpretation of the Maastricht treaty for the progress to monetary union.

It will come as no surprise to Members of the House to know that I am not entirely enamoured of the idea of the single currency anyway, but I believe that Britain's contribution to the debate, for our partners' sake, should be to say that those treaty conditions were well meant at the time but that they are the bare minimum that should be insisted on to give any participating economy or currency a chance of getting it right or making progress. We should strengthen the position by saying to our partners and friends in Europe that, if we were they, we should have more restrictions than the treaty suggests.

Photo of Mr Stuart Randall Mr Stuart Randall , Kingston upon Hull West 8:26 pm, 21st March 1996

I have a feeling that tonight's debate and this period in our parliamentary history will be remembered as a dark age of nationalism. We have heard many speeches tonight, and it is frightening that there is still such strong nationalistic feeling in the country.

The people of this country are not as Euro-sceptic as the press—certainly this Parliament—suggests. Last week, when I spoke at a townswomen's guilds conference in Sheffield, we conducted a poll, whose results accurately mirrored those of national polls. It showed that people are not Euro-sceptic. They feel ignorant about Europe and its future development but, most important, they want to learn about Europe.

This debate, the White Paper and the IGC are all about change. We have been going through the change from empire to Commonwealth and from Commonwealth to Europe. That is the path we are on. In addition, we have been experiencing an immense change in our industrial, commercial and economic structures.

The word "globalisation" was used several times earlier. Before I came to the House, I was in business and industry for 25 years. I have witnessed some of those developments, and they are extraordinary. Businesses are restructuring in Europe at a high rate. They do not even recognise national boundaries any more. We must follow the example of the banking industry, trade associations and trade unions, which, like other institutions, are becoming global. The governance of Europe must become global—I cannot conceive of its being out of touch with current economic structures and developments.

In addition to those changes—which I believe we must address as politicians—there is the matter of peace, because peace and prosperity go hand in hand. There is a great prize to be gained from European union and co-operation. In the next 10 years, I believe that we shall see the European Union develop into the most powerful bloc in the world. It will be probably twice the size of America, and I believe that the World bank will be forced to relocate from that country to Europe.

We have no alternative but to respond to the irresistible globalising forces. The Government have prepared a White Paper for the Turin intergovernmental conference which I would call a standstill paper: it does nothing other than bind the Conservative party together. I do not believe for a moment—I am not pleased to say it—that the paper will be taken seriously by our fellow European Union members.

The Foreign Secretary referred today to the strong link between Her Majesty's Government and the French Government, but I do not believe that it exists. Hours after the White Paper was published, the French Prime Minister, Alain Juppé, attended a conference in Paris and told the 40 right-wing parties in attendance that he expected to see a two-speed Europe that was dominated by a restricted circle of member states who supported the French-German position on future directions and developments in Europe. He raised the same point in the French National Assembly, where France's policy enjoys a broad consensus.

The paradox is that the French and German position presents the Government with two options: either they must move away from their static position as stated in the White Paper or they must become more progressive. If they do not do that, the Government will be left behind in a two-speed Europe. I cannot conceive how that would be in the national interest, and I ask the Minister to confirm that the Government do not want that to occur.

I want Britain to take the lead in the IGC. We have heard about the relationship between France and Germany; I believe that we should get in between and play a stronger role in the interests of Europe and of this nation. Germany's prime concern is to set in concrete the timetable for a single currency. Germany is facing rising unemployment—the figure is approaching 5 million—and Helmut Kohl views the single currency, which will bring great benefits, as a way of reducing unemployment considerably: there is talk of a 2 million decrease by the end of the decade. The deutschmark is a haven for speculators, which increases its value and makes it difficult for Germany to export easily.

I want to raise a few points about the single currency in the short time left. I believe that the single market—the relevant legislation was introduced by the Conservative Government in 1986—has proved very successful. The growth rates are quite staggering. In 1992 the growth rate was 6 per cent.—I have only rough figures—the year after it was 9 or 10 per cent., and now it is 16 per cent. I refer hon. Members to the survey conducted by Andersen Consulting, which found immense support for the single currency in the business community. They are the people who will generate the growth in this country to finance our social policy. The funding of social policies is a key issue for all western Governments—it was the cause of the unrest in France in December.

As to making the EU work better, we must address the problem of ignorance and ensure that people are far more informed about and involved in the process. That did not occur with Maastricht. I believe that the European institutions should work better and that the Commission should become more accountable. I am happy for more powers to go to the European Parliament. We need to work on the Council of Ministers, but I believe that there is a joint role for the European and national Parliaments.

The IGC must address the jobs issue and I ask the Minister to respond on that point. In the next three years, the common agricultural policy will produce a surplus of £3.6 billion as a result of the general agreement on tariffs and trade, steps taken by the EU and world prices. Will the Minister suggest to the IGC that that money should be spent creating jobs rather than funding tax cuts?

Photo of Mr Michael Carttiss Mr Michael Carttiss , Great Yarmouth 8:36 pm, 21st March 1996

I agree with my right hon. Friend the Member for Wokingham (Mr. Redwood). The White Paper devotes only 11 lines to the common fisheries policy. As the only Conservative Member who voted in December against accepting the European Commission's quota document—the Government lost that vote—I believe that it will be no surprise to hon. Members to learn that, although I wish to talk about a number of issues in the White Paper, I shall focus upon those lines in the document about quota hopping.

The White Paper states: 'Quota-hopping' has been a particular problem, not least because it prevents fishing communities from enjoying a secure benefit from national quotas, thereby undermining the whole intention of the quotas". Hon. Members referred to that statement earlier in the debate, and I agree with it 100 per cent. It concludes: If Treaty changes are needed, we shall seek them". What does it mean by that? Of course the treaty should be changed in order to reform the common fisheries policy. The Prime Minister of the United Kingdom was reduced—perhaps that is not a very nice word to use—to the level of the average saloon bar commentator—perhaps such commentators would not like me to use the word "reduced" either—when he described the decision of the European Court of Justice on the Spanish quota hoppers as "ludicrous". What will the Prime Minister do about it? What can he do, unless there are changes to the treaty?

The White Paper is deficient in several respects, but particularly when it says: If Treaty changes are needed, we shall seek them". Those changes must occur. It is not simply a matter for the European Court of Justice. Many hon. Members have referred to that body, and the Government have stated their intention to seek some changes to it. If they succeed, I am sure that those changes would be very welcome.

I do not agree with some of my Eurosceptic colleagues who suggest that the decisions of the European Court of Justice should be ignored in this country.

No one can stand up in this Parliament and suggest that we should ignore laws that have been implemented as a result of international obligations into which we have entered. This Parliament, however, should decide that the treaties and our laws must be changed to enable us to avoid implementing decisions that we find have not been reached in accordance with what has been determined by the Council of Ministers. That is the point at issue, as the Minister of State knows only too well.

An hon. Member said that he did not take this White Paper seriously.

Photo of Mr Nirj Deva Mr Nirj Deva , Brentford and Isleworth

Is it not correct that the people of this country should be governed by laws passed in this House, the other place and the Queen in Council? If the European Court's laws infringe on those laws, the sovereignty of Parliament should take precedence.

Photo of Mr Michael Carttiss Mr Michael Carttiss , Great Yarmouth

As I said, that is a matter that we must deal with in making changes in the treaties that have imposed those responsibilities on us. People talk as if the European Court of Justice existed of its own accord, but hon. Members have agreed in this Parliament to its jurisdiction. We are now discovering that the court is interpreting its jurisdiction in a manner that we never thought it would. That issue needs to be debated at length, but, at the end of it, I do not think that my hon. Friend and I would find ourselves far apart on the issues.

It is not for this Parliament to connive and acquiesce in a decision to let the European Court of Justice continue but to ignore its decisions. We must take action, as my hon. Friend the Member for Chingford (Mr. Duncan Smith) said, by passing a one-line Bill to change it.

Let us not forget the European Commission's adjudication on how the other European countries have failed to implement the fisheries policy. The European Commission report on fisheries policy says that Spain does not yet appear capable of meeting the challenges it should and will face in terms of enforcement. The monitoring of trawlers and catch sizes presents considerable long-running difficulties and direct checks on catches have not always been Spain's strong point. The report says of France: Strict enforcement of community rules is not perceived to be a priority of all the agencies involved. Reporting on Greece and Italy's application of the fishing policy, the European Commission said that they do not appear to have fully integrated into the control system". This country is held up as the one that obeys the rules according to the standards of the European Commission.

What will the Government do in Turin to address those problems? I have no confidence in statements in the report that seek to identify a problem and then say: If Treaty changes are needed, we shall seek them. Treaty changes are needed, and they must be sought.

There has been a lot of depression on this side of the House, and also among Opposition Members who do not share the view that we want an integrated Europe. The depression is related to the power of Germany and France.

The hon. Member for Newham, North-West (Mr. Banks) said that the French Government do not want to limit the powers of the European Parliament, but my understanding is that they are quite unequivocal in joining the British Government in limiting the powers of the European Parliament, letting it deal with the Commission, and preventing it from interfering with matters that should be dealt with in national Parliaments. I agree with the Government on that matter, and I have been convinced by my friends in the Gaullist party—who campaigned to vote no to Maastricht, incidentally—that France takes the same line on that issue as we do.

I am not too depressed, because, although we must not express an opinion on an election in a friendly country—but the European Union is becoming more integrated, and the partnership of our countries is becoming stronger—I feel able to express a view on the outcome of elections in member states, and to campaign in those countries for the election of candidates who hold views about their country's position in Europe that are similar to my views about the United Kingdom's position.

I look forward very much to the success of Mr. Lafontaine's Social Democrat party this weekend, when a quarter of the German population vote in regional elections. It appears that Mr. Lafontaine's party has captured a strain of opinion by which people are increasingly sceptical of the single currency, and Chancellor Kohl's determination to integrate us all in his vision of Europe. He is entitled to his opinion. He is entitled to express the view that Germany's future will be better—in terms of controlling the elements that in past times have been a focus for nationalism—if they are integrated into Europe.

That has not been our problem. We have not had the problem of a nationalism that has dictated that we go to war with our neighbours, but we are being told what to do by Brussels. We now have to show speed limits in kilometres, for example, on the Norfolk broads. That should not matter to Brussels. There are a hundred and one matters on which we ought not to be told what to do by Europe, but this Government slavishly follow those directions.

I think it was the right hon. Member for Bethnal Green and Stepney (Mr. Shore) who said that there is not much difference between Ministers and Labour Front Benchers. To me, there is not enough difference between hon. Members sitting on the two Front Benches.

Photo of Mr Michael Carttiss Mr Michael Carttiss , Great Yarmouth

He did not? My time is up, so I cannot pursue that point. I wish the Government well in their endeavours, but I look for more action and less rhetoric when they get to Turin.

Photo of Sir Ray Whitney Sir Ray Whitney , Wycombe 8:46 pm, 21st March 1996

I shall not pursue the thoughts of my hon. Friend the Member for Great Yarmouth (Mr. Carttiss), except to say that I hope that he will spare a thought, in his enthusiasm for taking part in elections in other European countries, for the prospects of a certain Anglo-French billionaire who is taking an active interest in our politics.

I welcome the thrust of the White Paper, particularly the Prime Minister's forward, in which he reminds us that the United Kingdom has to be at the heart of the debate". In paragraph 11, we are told: The United Kingdom's role as a leading member of the European Union is vital to our national interests. We are then told—it is very important for some hon. Members on both sides of the House: If we were to press ideas which stand no chance of general acceptance, some others would seek to impose an integrationist agenda which would be equally unacceptable from our point of view. We would do better, therefore, to concentrate on achieving sensible amendments in the areas which have been identified for review. I think that that is extremely important, and I hope that my hon. Friends, in particular, will bear that admirable objective in mind.

Finally, just to mention the remaining bones of the White Paper that I think deserve approval, we are reminded that the IGC is expected to last many months. It would plainly be wrong in such an exercise for any Government to tie its hands rigidly at the outset. Rather, we shall form a considered view, as the negotiations progress, of what outcome would best serve the overall interests of the United Kingdom. That "considered view" causes concern to those of us who are conscious that Britain must play a constructive part in Europe, because considered views—the cold, honest intellectual approach to this issue—have, sadly, for two or three years been singularly absent from our debates.

Those of us who are old stagers feel that this matter is like a classical Japanese Noh play, in which we all play our symbolic roles. Several of my hon. Friends and I play a symbolic role as the voice of reason and moderation, while the voice we hear from below the gangway is, sadly, not a clear one.

In politics, it is important to use words frankly and honestly. To me and to most people, the word "sceptic" implies doubt, uncertainty and questioning. From what we have heard today and from similar previous jousts, there seems to be no doubt at all, only a determination that Europe is not for us. Of course, I reject that point of view. The vast majority of hon. Members reject it, and I believe that the vast majority of the population will reject it, as and when and if it is put to them fairly. I ask my colleagues to face up to the implications of what they are saying.

I am sure that it was inadvertent, but my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) misled the House on at least one point, if not many more. He referred to the speech made by Chancellor Kohl of West Germany at the university of Louvain on 2 February. My right hon. Friend quoted the Chancellor as saying: the day of the nation state is over. I searched through the English text—I do not have the German text, and my German is not that good—but there is nothing in the statement that coincides in any way with the quotation attributed to the Chancellor by my right hon. Friend.

In fact, the German Chancellor, according to the English translation—said: No one wants a centralised superstate. It does not and never will exist. We might not believe what Chancellor Kohl says, but he says it in virtually every speech he makes. He is deeply conscious of the dangers of nationalism—who should not and would not be?

Chancellor Kohl has a point when he says that we should not take it for granted that the peace that has obtained in Europe for 50 years will last for ever. The example of Yugoslavia ought to remind us of the potential dangers. We too glibly accept the wonderful blessing that we have enjoyed since 1945 and, increasingly, since the European Community was created.

There are many points at which German and British interests coincide. Likewise, there are points at which French and British interests coincide. My right hon. and learned Friend the foreign Secretary and others referred to what Alain Juppe said. They said that it represented only one French position and that it could change, but the point is that, essentially, the French approach in many important spheres coincides with the instinctive British approach.

For example, in his speech last week, Mr. Jupp6 emphasised that the nation state was the basis on which the European Union should proceed. That coincides entirely with the title of the White Paper, "A Partnership of Nations". I therefore appeal to the anti-Europeans—not the Euro-sceptics—to have much more courage. There are many more points of view on the continent of Europe which echo and respond to our natural instincts than they seem to believe. That is certainly the case in the newer member countries such as Sweden. My message to the anti-Europeans is, "Trust yourselves, and trust us."

Buried just under the surface of what the right hon. Members for Bethnal Green and Stepney (Mr. Shore) and for Chesterfield (Mr. Benn), and what my right hon. Friend the Member for Wokingham (Mr. Redwood), said is a fear of Germany and a belief that we can never live with Germany, never look it in the eye and never compete with it, and that only by devaluation can we live in the same ball park. I reject that, and our economic success over the past 10 or 15 years shows that we can have faith in ourselves.

There is work to be done, and there are huge gains to be made. For centuries, the essence of Europe has been, and it will continue to be, the balance between the three nations of Germany, France and Britain. Who could deny that there is a collaboration between Germany and France, but, if we have enough faith and belief in ourselves, the British can get in the ring. There will be times when Bonn or Berlin and London are together, and there will be times when London and Paris are together, but we can and should be involved. We owe it to our people to be there. The Prime Minister was right to say: The United Kingdom has to be at the heart of the debate". My right hon. Friend the Member for Wokingham made a powerful but deeply misguided speech as far as the question of a single currency is concerned. Everyone knows that the decision on a single currency is not to be taken yet. We can argue about whether it will be taken in two years or five years, although I think that it will be sooner rather than later. We do not have to take the decision yet, but we have to stay in the ring so that British interests are protected.

My right hon. Friend the Member for Wokingham told the Daily Mail that there will be a .£10 billion tax bill for a single currency". That claim is wholly unjustified by any studies that have been undertaken, because the savings to the European nations as a whole will be in the order of $20 billion or $30 billion, and we shall benefit from lower interest rates. Above all, our own currency will not be vulnerable to raids from Mr. George Soros and other international financiers. Such stability will be of enormous benefit to our nation.

I know that many other hon. Members wish to speak, and I am grateful for having had the opportunity to do so. Let us have done with the painful two years of sloganising—

Photo of Denis MacShane Denis MacShane , Rotherham 8:56 pm, 21st March 1996

This debate has been marked by perhaps the worst outburst of nationalism—from both sides of the House, let it be said—that I have heard in my two years as a Member of Parliament. It is a reflection of the tone set, alas, by the Government. If one reads the White Paper carefully, the verb that continually springs from the page is "oppose". If we are to play any part in any international body, a responsible British Government must have a positive, constructive agenda to offer. But, in a sense, a country that faces the problems that Britain faces—unemployment, social exclusion and great insecurity in so many sectors of its society and economy—will always produce that tinge of xenophobic or nationalist reaction. It has existed for hundreds of years. Daniel Defoe acknowledged it at the beginning of the 18th century when he said: These are the Heroes who despise the Dutch, And rail at new-come Foreigners so much. Exactly that language, from 300 years ago, is to be heard from Conservative Members today.

The problem that Britain faces is that it is not ready to acknowledge fully the modernisation that its institutions, economy and society require. The only positive suggestion that I could find in the entire White Paper was that of a clause that would enhance protection for animals. My hon. Friend the Member for Newham, North-West (Mr. Banks) is not in his place, but I support his suggestion that we should have more protection for animals in any future European treaty. I would also like—and I am clear about this—more protection for workers. The 20 million unemployed, who have had hardly a look-in in this debate, need some consideration. If Britain in the past 15 years had been a model country for employment, social justice and economic growth, the anti-Europeans would have a better case, but they and their ex-Ministers have presided over so much wanton destruction and have caused discord and disharmony in our society.

I was pleased that we heard the beginning of some honesty today. The right hon. Member for South Thanet (Mr. Aitken), when he greeted the Foreign Secretary's White Paper last week, used the "W" word—withdrawal. I also detected at the end of the speech of the right hon. Member for Kingston upon Thames (Mr. Lamont) the suggestion that he thought that other arrangements might have to be made. I would respect those who are anti-European if they came out of the closet and said, "Let's get out of Europe." They would find some elderly support—rhetorical and powerfully vocal support—from two or three Labour Members. That case can be made and I can make it intellectually, but I would like the British people to judge it. I invite the Europhobes and xenophobes on the Conservative Benches to make that case much more clearly.

The only four-letter word in the White Paper is "veto". A foreign policy based on a veto is not a foreign policy worthy of Britain or likely to have any real impact in international affairs. Last September, the Foreign Secretary made a speech at Chatham house to the Royal Institute of International Affairs. He said: occasionally, it may be appropriate to accept a loss of influence if that is the only way we can protect our interests". That is a new doctrine emerging from the Foreign Office. In the past, the task of a Foreign Secretary was to protect British influence and safeguard British interests. Indeed, the one followed consequentially from the other. A loss of influence meant a threat to British interests. If that doctrine, which I believe still holds true, is now overturned by the Administration, we need a new Foreign Secretary able to restore British influence and to protect British interests in Europe and in the heart of the world.

Germany has been the Banquo of the debate tonight. I am concerned because I know Germany. I like the country and its people, and I know something of its history. If that new super-nation state—with a gross domestic product twice that of Britain's and a population 20 per cent. bigger, with its satellite states and its maquiladoras in the cheap-labour countries to the east—is not fully integrated with Britain, France and the other member states of the European Union, it will go it alone. Germany is a democracy and the men who write about the fourth Reich in The Daily Telegraph and the Daily Mail should be ashamed of themselves. But Germany is also a nation state with its own economic, trade and foreign policy and, in due course, may have its own defence policy. I put it to the House that a state of that size and power, alone and disconnected in Europe, would be a danger.

British interest for 300 or 400 years has been based on having a stake in Europe. We have called it a balance of power. After 1815, we had a concert of nations and we have had other alliances. But we have never isolated ourselves from Europe—except, of course, in the 1920s and 1930s, and the descendants of those Tory politics of isolationism are, alas, growing in strength in the Conservative party today. That is why I feel passionately about this issue. The new isolationism is just another form of political protectionism, and there is one ineluctable consequence of political protectionism: economic protectionism.

There are voices in Europe saying that Britain is simply an offshore assembly plant for Japanese and Asian goods made by companies which come here thanks to our devalued pound, our very low wages and our nine laws which have taken away trade union rights. Why, those voices ask, should their jobs and economic interests be threatened? In the past two weeks, Korean and Taiwanese plants have opened in my constituency—I am glad of that connection between Rotherham and Asia—and those plants are there to sell to Europe.

Britain is continually obstructive and negative and has nothing constructive to offer Europe. I enjoyed the speeches of the hon. Member for Wycombe (Mr. Whitney) and the right hon. Member for Mid-Sussex (Mr. Renton), but the dominant voice in the Conservative party continues to be that of nationalism and anti-Europeanism.

It is not so much a question of Britain's role in Europe as of Europe's impact and influence on Britain. Let those who want to cut this country off from Europe come out and say so. Let them have the intellectual honesty to advance their arguments. I believe that they are wrong. The British people will think they are wrong, too, while remaining profoundly British and proud of this Parliament. They know, however, that it is only by pooling, co-operating and sharing sovereignty, economies and the rule of law that we shall secure justice and jobs and safeguard democracy for people here and on the rest of the continent.

Photo of Michael Lord Michael Lord , Suffolk Central 9:06 pm, 21st March 1996

It was interesting to hear the hon. Member for Rotherham (Mr. MacShane) talking about Conservative extremists since he is clearly a man of great extremes himself. He seems to think that one can only be either a federalist or in favour of leaving Europe all together. Federalism was implicit in everything he said; he agreed with the two Conservative speakers who agree with him.

There is another course between the two extremes. There is no doubt that what I would call the European experiment is failing and beginning to disintegrate. Its total disintegration may not be far away. That does not surprise me, as one who campaigned and voted against Europe in 1975. I did not understand in those days how there could be one set of rules for so many different nations, temperaments, cultures and climates. So I shall not be surprised if the experiment does not ultimately succeed.

The question really is how Europe will change. If it is going to break up, will it break up chaotically or in an orderly fashion? The great difficulty is in persuading the people who are determined to press on towards a federal Europe that the game is finally up. Until now, this country and this Government have not quite known how to cope with Europe. We have tried a war of attrition to get our way; at other times we have been like Mr. Micawber, hoping that something would turn up.

The problem is hugely exacerbated by the fact that while we talk about reining in some of the European institutions and about subsidiarity, the truth is that the whole mad machine of federalism is grinding on as fast as ever. We really must distinguish between fact and fantasy, between reality and wishful thinking, between what we would like Europe to look like and what is actually happening to our constituents.

The common fisheries policy is a running sore. The common agricultural policy makes less sense every day. Only last week we learned that 2.5 million tonnes of fresh vegetables had been destroyed to keep prices artificially high. In our constituencies our work is continually frustrated by the interventions of Brussels. Nitrate-vulnerable zones are being forced on my farmers by a Brussels directive, although I do not have time to go into that this evening. Heavy goods vehicle drivers who wear glasses are told that they must lose their licences. I was amazed to get a letter from my hon. Friend the Minister for Transport in London—if anyone would call a spade a shovel, he would—telling me that the effect of this measure has been somewhat overestimated and that it will cost only 3,000 jobs.

The House might be interested to hear that I tabled a question the other day to my hon. Friend the Minister who is on the Front Bench tonight. I said to him, "You would think, would you not, that the countries which normally have embassies or missions in different countries would be nation states." I asked him how many embassies and missions the European Union had established to date. The House will be intrigued to know that the European Union has established 118 embassies or missions throughout the world. I have the list here, which I shall read into Hansard. From Bangladesh to Barbados, from Brazil to Cape Verde, on and on it goes, and it costs about £151 million a year—about £60 million in salaries and about £90 million in non-staff-related costs.

If that is not evidence of an organisation that believes that it is already a state, I do not know what is. I do not know who sanctioned all those embassies and all that spending. I trust that it was not my hon. Friend the Under-Secretary of State, whose views I suspect are not far removed from my own, and who I am sure will find it difficult to respond to today's debate in the way that I would wish.

More seriously, Chancellor Kohl warns of war if he does not get his own way. Yet most people now know that his federal dream is as dead as the dodo. Most people in this country are fed up to the back teeth with European interference. The challenge is to decide where we go now. The question, "If you don't want a federal Europe, what kind of Europe do you want?" is fair, and we should address it.

I welcome the White Paper, although I do not think that it goes far enough. I believe that it is an opportunity missed. I believe that the United Kingdom should now take the lead and spell out the Europe that we want for the future. There is no time for me to deal with all of that tonight, even if I knew all the answers—which I do not. Many suggestions have been made. My hon. Friend the Member for South Worcestershire (Sir M. Spicer) talked about the European research group and its ideas. Opposition Members talked about the Council of Europe with variations. I believe that there is a way to share trade and to have a common market without binding ourselves politically in the way in which we are starting to do.

Hon. Members will agree that calls in their constituencies for total withdrawal are growing. If those calls are not to become irresistible, we have to do something about it. We talk about being at the heart of Europe, but this country has never been at the heart of Europe in the way in which some people mean. We have always been on the fringe, not just geographically but in other ways. Caring for Europe? Yes. I am very anxious for its future. In a sense, we are looking after it. We have had to help it from time to time. I do not believe that we are part of Europe in the way in which some people pretend, but this is a golden opportunity, from our relatively separate position, to take a lead and to say that this is the way in which we should go—not federal, not out, but a new way with which we can all be comfortable.

I listened with interest to the right hon. Member for Chesterfield (Mr. Benn). I agreed with every word that he said about our responsibilities to our constituents and how important—I believe that it is almost sacred—that relationship is and how it cannot be given away without a referendum to ask the people whether that is the right thing to do.

Hon. Members say that we cannot do this or we cannot do that because the issues are hugely complex. I have come to the conclusion that almost all the great issues that the House faces are probably very simple at the end of the day, but we make them complicated, I suspect, simply because we do not want—or do not have the courage—to face them. This issue is all about the sovereignty of the House of Commons, about who governs this country and about the role that Back Benchers play on behalf of the constituents whom we look after.

As other hon. Members have said, I believe that it is high time, in whatever form, that the House of Commons reasserted its authority and right to look after the people of this country. If that means that we have to tackle the European institutions head on in a tough but fair way, I hope that we shall have the courage to do so.

Photo of Iain Duncan Smith Iain Duncan Smith , Chingford 9:14 pm, 21st March 1996

I did not expect to speak in the debate, and I assure both Front-Bench spokesmen that I will stick to the agreed time. I have only a few points to make.

The debate is supposed to be about the White Paper, but much of it has involved not the White Paper but the bandying of prejudices across the Chamber. One example is the speech of the hon. Member for Rotherham (Mr. MacShane), whose speeches I normally enjoy—but I shall not be tempted to follow him.

I welcome the principle of producing a White Paper. I think that those who say, like my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) that the White Paper was a mistake are wrong. After all, what is democracy if it is not discussing what Governments plan, and then discussing what they do after attempting to implement their plans? I congratulate the Government on seeing this through.

Although I enjoyed the main rhetorical thrust of the White Paper, however, I feel that what is not in it may be more important than what is. The section dealing with home affairs includes a lengthy restatement of the intergovernmentalism that was supposedly established by the Maastricht treaty. The Government set great store by that, but nothing in the White Paper leads me to believe that the border controls declaration of exemption from the Single European Act will be sorted out and bound into the treaty at the intergovernmental conference to give it some force of law.

I think that my hon. Friend the Minister will accept that that is vital, given some of the propositions advanced by the European Parliament and even the Commission in connection with getting rid of the declaration. Perhaps, as the White Paper suggests, we fear that our proposal would stand no chance of … acceptance". I ask my right hon. and hon. Friends to stand a bit straighter, and to approach the IGC with determination.

As for foreign affairs, we have again stressed the intergovernmentalism of the whole approach; yet quietly, almost subliminally, we are told that there is to be a spokesman on European common foreign policy. I understand why the Germans might ask for that: their position has been clear and explicit. I only ask why we have agreed to it. It strikes me as yet another ratchet towards the institutions gaining control over much of the decision-making. Why have we gone first in one direction and then in another?

The fishing issue is interesting. We have had a big row about that, and much concern was caused by the judgment of the European Court. Incidentally, I do not know why hon. Members were surprised; we have known that the judgment was on its way for the past few years. We say that we will adopt a robust stance—that we will take on our partners—but we do not say what we will do if they tell us that they do not agree with us. It seems that we are not going to send a message saying that we mean business, although I suspect that France and Germany might do just that.

Why do we not enact a two-clause Bill restating the position, and stating our belief that the judgment will lead to a waste of taxpayers' money? Why do we not say that we are politically determined to sort the matter out at the IGC but that, until then, the European Court should not implement its judgment under direct applicability, because the matter is political and we will deal with it politically? Such a message would be understood by the Germans and the French, and respected, because they understand the force of argument backed up by their own institutions.

The White Paper does not deal properly with two important issues. The first is the whole issue of European law and the European Court of Justice, which runs through the body of the European Union like a backbone. The second, which hangs there like a shadow, is the issue of European currency union and the eventual single currency. It is strange that a White Paper presenting a Government position for which we hoped does not specify the Government's real approach, or set out what they hope for in regard to the rest of Europe, which will be advanced at the IGC. We are often accused of standing back or of being negative, but we have an opportunity to be positive and to say that there is an alternative to what is clearly not working. If we do not take that opportunity, we shall have wasted it.

The right hon. Member for Llanelli (Mr. Davies), as always, set out the position fluently and clearly with regard to the European Court of Justice and I commend him for that. I made a similar speech on 24 March 1993 and on 20 January 1993, in which I pointed out that the social chapter opt-out was non-existent because the treaty contains all the social chapter provisions to implement everything that the European Court would wish. Right hon. and hon. Members have been surprised at the recent decision on the working time directive, but I am not surprised, because that is an inevitable progression. The court will always find in that direction.

We ask ourselves what we can do about it and we seem to agree, somehow, that we can resolve this matter at the IGC. Yet as my hon. Friend the Member for Great Yarmouth (Mr. Carttiss) said, we gave the European Court the powers. We agreed the competences under successive treaty amendments, so we have acquiesced in that. We should not be surprised about it, but we should understand it. The court legislates on the move—we accepted that fact when we joined in 1972—and it is political because it takes a view on the political intentions of treaties and their amendments. It will always let one phrase ride when there is doubt: ever closer union between the peoples of Europe. It will always read things in that direction.

We cannot deal with that by saying simply that we will take the court on or ignore its judgments. We should not ignore them: if we believe in the rule of law, that would be wrong. We are saying that Parliament should reassert its position with regard to this country's courts and to the way in which divisional courts strike down Acts of Parliament without even a referral to the court. We need an Act of Parliament.

Most of all, clearly, if we pass to the European Union competences on which the European Court of Justice will rule, what are we to expect? It will rule on them and widen the breadth of its rulings. The only answer, therefore, is to withdraw those competences so that the court will not be able make such rulings, It is quite simple, but it will take a heck of an amount of political will from Ministers at the IGC. I wish them luck. Without the will, there will be no scope to curtail the court's powers.

The single currency issue hangs over us. Unemployment is rising across Europe because of the timetabled drive towards currency union. Chancellor Kohl is a man in a hurry and with a view of his destiny. His own bank and people do not agree with him, but he does not care, because he has a dream and a vision and we must all march to that vision. In the wake of that vision, however, will come the one thing that he seeks to avoid: the destruction and chaos caused by the kind of government that he experienced in his country.

He is about to create that here. He will set nations against nations. Germany will be unnecessarily criticised roundly in all the various conferences and discussions. We have heard many such criticisms tonight. I do not fear Germany and I wish that it would not fear itself, but I recognise that it is powerful. We must deal with it, but we will not do so according to Chancellor Kohl's agenda, because that will lead only to fear and unhappiness.

I welcome the White Paper's rhetoric, but we must take to the Counsels of Europe a clear British agenda for a looser, more free market approach to Europe. Europe must recognise that the global network of trade is already breaking external European barriers. We insist on having agreements and regulations in certain areas, but we do not wish them to be extended. If we wish Europe to succeed—

Photo of Ms Joyce Quin Ms Joyce Quin , Gateshead East 9:24 pm, 21st March 1996

For many hon. Members on both sides of the House, this has been a frustrating debate—in particular because of the lack of time available to discuss the many issues that are raised in the Government's White Paper and that are likely to be raised at the intergovernmental conference. Sadly, an already short day was curtailed even further by the admittedly important Government statement on Northern Ireland. I strongly regret the Government's retreat behind the device of an Adjournment debate to avoid dealing with a substantive motion. However, we will seek and, I hope, win other opportunities to bring these matters before the House so that a vote can be taken on the issues.

I want to puncture one myth that Ministers frequently peddle, including the hon. Member for Boothferry (Mr. Davis), who will reply to the debate. He has claimed that Labour is criticising the Government's White Paper because it does not have any ideas of its own. However, as he should be prepared to admit—and as was pointed out by my hon. Friend the Member for Livingston (Mr. Cook)—Labour published a White Paper on the issues many months ago and it has been unanimously adopted. It contains many details that I commend to Conservative Members. It is even in a white cover, unlike the Government's White Paper which, intriguingly, alone among European countries has Britain coloured red on the front cover—[Interruption.] My hon. Friends think that it is a sign of things to come.

This is our second debate on the Government's White Paper because the hon. Member for Ludlow (Mr. Gill) introduced an Adjournment debate on it last Wednesday. The Minister made a rather odd statement when he replied to that debate, which he might be able to explain tonight. First, he said: Labour policy is partly a lame shadowing of our policy when the Labour party is too afraid to have a view of its own. I punctured that claim by pointing to Labour's White Paper. However, the hon. Gentleman then said: It is a pathetic wriggling on hooks that the Labour leader has impaled the hon. Lady on in moments of Europhoria."—[Official Report, 13 March 1996; Vol. 273, c. 914–15.] I am not sure what on earth that means, but I am sure that we cannot be following Government policy on the one hand and being impaled on various hooks of Europhoria on the other. Perhaps the Minister will explain his mysterious remarks.

What is clear from this debate and from the White Paper is that the document is wholly inconsistent. Indeed, the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) put it well when he said that it was riddled with schizophrenia. The Government are trying to have it both ways. During the Adjournment debate last week, the Government appeared to have been partly successful in getting a welcome for the White Paper from both Euro-sceptics and Europhiles in the Conservative party.

However, a different picture has emerged tonight. It is now clear that the Euro-sceptics very much reject the White Paper. They feel that it does not go anywhere near as far as they had hoped. Indeed, they have been fiercely critical of it during this debate. The Foreign Secretary had to deal with a large number of interventions from Conservative Members. At one point, it was suggested that the sitting be suspended so that a meeting of the 1992 Committee could be convened to sort out some of the huge divisions appearing before us.

The White Paper is inconsistent on many issues. That is especially true in the section that deals with the European Court of Justice. The Government say that they want to strengthen the court and they acknowledge the importance of its strong and independent role, yet at the same time they suggest various ways to weaken its powers, including some rather strange proposals such as damages being paid only in cases of serious or manifest breaches of obligations. That is a very curious principle and we would all be extremely surprised if the Government tried to apply it in our own national courts. Indeed, the way in which the Government say that the damages should be limited suggests that they are saying that there should be one rule for Governments and quite another rule to the disadvantage of individuals who have previously been protected by the court's rules.

In saying that the court should be liable only for damages in cases of a serious or manifest breach of obligations, the Government are presumably opening the way for the court to decide whether that breach has been serious or manifest. Paradoxically, therefore, what the Government are proposing could lead to greater interference by the European Court of Justice rather than less.

I should like to pay tribute to some of the judgments of the European Court of Justice, especially those that have protected the interests of many British women at work who had been treated unjustly by the Government and their employers. We should recognise that.

On working hours, it seems to be totally illogical for the Government to adopt a position that effectively means that even if one worked 24 hours a day, seven days a week, there would be absolutely no health and safety implications. That is totally untenable. My hon. Friend the Member for Livingston was quite right to point out that we stand to benefit from the European Court of Justice applying rules uniformly across the European Union. Indeed, the figures that he quoted showed very clearly that Britain is a beneficiary of that system. It does not lose.

The section of the White Paper relating to the European Parliament is also full of inconsistencies. The Government criticise the European Parliament for lacking popular respect and affection. That seems a particularly ironic claim to be made by the Government at this time. They also criticise the use of powers of co-decision by the European Parliament, and say that it abuses its powers. In fact, the figures clearly show that the powers have been used very sparingly and that, in most cases where co-decision could have been used, the European Parliament and other EU institutions have managed to reach agreement well in advance.

It is also sad that Government are not prepared to consider any of the modest reforms that the Labour party proposes in its own White Paper for increasing the influence of the European Parliament. Labour Members believe, especially if the scrutiny in national Parliaments is made more efficient, that, far from taking powers away from national Parliaments, our proposals can enhance the democratic structures and democratic accountability of the whole EU. It is again ironic that the Government are refusing to consider any of our proposals, when it is clear that they are treating our own Parliament with contempt in the way in which they deal with many aspects of European legislation.

Many hon. Members on both sides of the House have talked about their frustration at not being able to debate monetary union as they would have liked. Yet, at the same time, a proposal by the European Select Committee to debate a document on monetary union on the Floor of the House has so far been blocked by the Government. Conservative Members ought to direct some pressure on members of the Government so that such matters are brought into the full gaze of public scrutiny on the Floor of the House.

The White Paper also talks about bringing powers back to—presumably—this House, but it is very short on details of how that could be achieved. Perhaps the Minister will tell us whether he has any more specific proposals on the matter. The White Paper talks about the concept of subsidiarity, too. Once again today, the Foreign Secretary claimed that subsidiarity was some kind of uniquely British idea and an uniquely British success. That simply is not the case. Subsidiarity was mentioned before Maastricht, in article 130S of the Single European Act. It was also mentioned in the European Parliament, in a much earlier report by the Italian MEP, Altiero Spinelli. For the Government to claim that it was a British idea is false.

In the White Paper the Government also say that they are now considering proposals to improve the system of comitology. However, less then a year ago, in a written answer to one of my parliamentary questions, the Government said that they had no proposals to change the system of comitology. Perhaps the Minister of State will deal with that inconsistency, too.

The Government's aims in the White Paper are unrealistic. They talk again about trying to introduce a sunset clause into the revision of the treaty. The idea of a sunset Government trying to put forward a sunset clause made me smile. But what they are asking for is already there in the European institutions. It is already possible for the Commission to withdraw proposals, and it frequently does so. Moreover, if a sunset clause came into effect, the Commission could make new proposals to replace the sunset proposals when it wanted to. So that is another idea that is simply window-dressing, with no substance whatever.

Many of my hon. Friends talked about monetary union. I welcome the fact that in doing so they spoke eloquently about addressing the issue of employment at the IGC. It is wrong for the Government to claim that the only people interested in putting an employment chapter before the IGC and into the revision of the treaty are the Swedish Government. In fact, the Swedish proposals are gaining impressive support across the European Union.

I recently read a statement by the Austrian Government, part of their submission on the social compatibility of economic and monetary union. They say firmly that the goal of full employment should be anchored explicitly in the treaty. The Austrians also support the idea of an employment chapter and policies to tackle unemployment, especially the problems of social exclusion.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

Does the hon. Lady agree that the move towards the convergence criteria is having a deflationary effect, with an adverse effect on unemployment?

Photo of Ms Joyce Quin Ms Joyce Quin , Gateshead East

Yes, there are difficulties with the convergence criteria, which were ably discussed by my hon. Friend the Member for Livingston.

However, we should look at the other parts of the treaty too. It is a bit of an ideological mix, and certain elements of it can be quoted against other elements. I commend to the right hon. Member for Worthing (Sir T. Higgins) article 2, which talks about a high degree of convergence of economic performance, a high level of employment". Interestingly, but probably not to the liking of the right hon. Gentleman and his hon. Friends, it also refers to a high level of … social protection". We must use all aspects of the treaty that can be to our benefit when we want the important issue of employment to be tackled within the IGC. I mentioned the proposals by the Austrian Government, and I have also seen some interesting proposals by the Irish Foreign Ministry in its submission on economic and monetary union, entitled "Social Cohesion and Employment". Those are very much on the same lines, but in some ways they go further, talking about not only an employment chapter but a stabilisation fund, a stability pact, and proposals to improve the employment intensity of economic growth.

Finally, another interesting submission has been made by Belgium, the Netherlands and Luxembourg for consideration by the IGC. It talks about the importance of measures to tackle the European Union's high unemployment. Again, it stresses the importance of giving some hope to people on the margins of the labour market who have little chance of getting decent employment.

In the debate, certain matters that have been hidden up to now have come out into the open. My hon. Friend the Member for Rotherham (Mr. MacShane) was right to note the number of Conservative Members who raised the agenda of withdrawal from the European Union. That agenda has come out into the open more than in any other debate on this subject. 6 There were also some views on the social chapter that have not previously been so openly expressed as they were today. Rather than being the triumph that the Prime Minister claimed, many Conservative Members clearly think that the opt-out is not worth the paper that it is written on. Indeed, that form of words was used by a Conservative Member during Prime Minister's questions today and shows once and for all that, rather than being game, set and match, Maastricht was an ignominious defeat for the Government.

The Government's policy risks ending up with the worst of all worlds. They often take up postures in the EU that they are later forced to retract. The Home Secretary said that he was against any declaration on racism in the European Union. He has now at least partly caved in on that. Baroness Thatcher spoke out strongly against qualified majority voting but agreed to its massive extension in the Single European Act. The Prime Minister blocked Jean-Luc Dehaene's candidature for the presidency of the European Commission and leapt from the frying pan into the fire with the inauguration of Jacques Santer as President of the European Commission.

The Government's strategy seems designed to lose the maximum number of friends in Europe and win the minimum influence possible. Neither Britain nor the British people will have a good deal in the European Union with that approach. This debate has again shown that European co-operation, and a successful role for Britain in the European Union, can be promoted and achieved only under a Labour Government.

Photo of David Davis David Davis Minister of State (Foreign and Commonwealth Office) 9:41 pm, 21st March 1996

This has been a stimulating debate. Too many of my right hon. and hon. Friends have made excellent contributions for me to list them all. They have ranged from that of my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath), who I am sorry to see is not here, through my right hon. Friend the Member for Witney (Mr. Hurd), via Kingston and on to Wokingham. It has been an interesting range.

Photo of Denis MacShane Denis MacShane , Rotherham

What about Stafford?

Photo of David Davis David Davis Minister of State (Foreign and Commonwealth Office)

As Labour Members want to join in, I have especially enjoyed the contributions of the right hon. Members for Bethnal Green and Stepney (Mr. Shore), for Chesterfield (Mr. Benn) and for Llanelli (Mr. Davies), if only as a corrective to the view of Europe of their Front-Bench spokesmen.

We also learned a little about the views of the hon. Member for Livingston (Mr. Cook). He clearly thinks that I should be allowed to negotiate for the country only when the moon is not full. I do not know whether he is trying to characterise me as the beast of Boothferry, but it would not be the first time that demonisation has been tried. We also learned that his grip of English history is not that good. He compared us to King Canute, forgetting that when Canute showed that he could not stop the tide, he was giving his courtiers a lesson in humility. That is a point to which I may return if I have time to discuss Labour's policy.

Photo of David Davis David Davis Minister of State (Foreign and Commonwealth Office)

He also ruled much of England, including the part that I live in.

I welcome the fact that the House had the opportunity to debate the Government's vision of Europe, which is clearly and comprehensively set out in the White Paper. It is a vision of practical co-operation, not doctrinal Euro-theology. It seeks to harness diversity, not to impose conformity. It is a vision close to the citizen that does not ignore either national interest or public opinion in pursuit of political dreams. Success at the IGC, although by no means the only important negotiation in the next few years, is an important step in the process of delivering that vision.

My right hon. and learned Friend the Foreign Secretary laid out the challenges and options for Europe at the beginning of the debate. Those challenges are clear. I should like to draw the attention of the hon. Member for Livingston to the first item with which I start—the need to enlarge Europe to ensure peace and stability. We need to cut the burdens of Europe to deliver competitiveness, prosperity and jobs. We need to reform Europe's policies and their financing to make enlargement and competitive success possible.

We need to shape Europe's institution to create a decentralised structure that recognises and works with the sovereignty of nation states and does not undermine or erode the powers of those states.

Photo of Bill Cash Bill Cash , Stafford

Can my hon. Friend tell me exactly how he proposes to achieve that objective specifically?

Photo of David Davis David Davis Minister of State (Foreign and Commonwealth Office)

That takes up about two thirds of the rest of my speech, so I shall carry on.

That model of Europe is designed to maximise the success and minimise the strains of the Europe of the coming decades. I stress that it is one that is designed to deliver success for the people of Europe. I say that most particularly to my right hon. Friend the Member for Mid-Sussex (Mr. Renton) and my hon. Friend the Member for Wycombe (Mr. Whitney). It is not a model that just suits our national prejudices; it is one that we think is best for Europe as a whole.

The hon. Member for Livingston said that he thought that what we were attempting in the negotiations was impossible and undeliverable. After eight months on the study group, I am the last to say that there are not, still, powerful forces for federalism in Europe—institutional and national forces. They have been discussed eloquently today by hon. Members on both sides of the House.

I still do not agree with the hon. Member for Livingston, who said that our objectives in the White Paper were not capable of negotiation. Had he been standing at the Dispatch Box 15 years ago, he would have said that the United Kingdom rebate was not capable of negotiation, because, by definition, there was just one of us pursuing it and we had no allies to start off with. So Lady Thatcher would have had news for him.

Photo of Bill Cash Bill Cash , Stafford

Political will.

Photo of David Davis David Davis Minister of State (Foreign and Commonwealth Office)

Had the hon. Member for Livingston been standing at the Dispatch Box five years ago—I also address this to my hon. Friend for Stafford (Mr. Cash), as he intervened—he would have said that the EMU opt-out and the social opt-out were not capable of negotiation. My hon. Friend would not want them, either.

Had the Labour party been in government, the United Kingdom's rebate and other issues would not have been capable of negotiation, because the Opposition are uncomfortable with standing alone for our interests in Europe.

Photo of Denis MacShane Denis MacShane , Rotherham

Does the Minister still believe that the United Kingdom has an opt-out from the social chapter in real terms, given that everything from which we are supposed to have opted out, whether it is the European works council or the 48-hour week, is coming in anyway?

Photo of David Davis David Davis Minister of State (Foreign and Commonwealth Office)

Indeed I do, and I shall deal later in my speech with the institutions that have got around the opt-out and, nevertheless, the continuing importance of the opt-out.

I believe that the hon. Member for Livingston said that we do not take enlargement seriously enough. I reject that claim out of hand. It is unfortunate that my right hon. Friend the Member for Old Bexley and Sidcup is not here, because I disagreed wholeheartedly with what he said about enlargement. It is clear to me that the generous treatment of the new democracies of central and eastern Europe is the single most important contribution that we and other European countries can make towards the peace and stability in Europe in the next two decades. My right hon. Friend was quite wrong about enlargement, and I want to put our view on the record.

We must do a great deal more than just what is proposed at the IGC towards achieving peace and stability, most particularly in terms of policy reform. The United Kingdom has long championed the cause of reform of the CAP. That reform is inescapable. The CAP faces three major challenges: the likelihood of new food mountains early next century, further liberalisation of trade when new World Trade Organisation negotiations begin in 1999, and the unaffordability and unsustainability of the current CAP when the Union enlarges.

We must address these problems now—in parallel with the IGC—for the sake of our farmers, for the sake of the new democracies and, not least, for the sake of our consumers. Similar arguments apply to the reform of the structural cohesion funds. That reform is unavoidable. We must ensure that we do not face the doubling of those funds—as we would if we did not reform them—when we go to enlargement in the course of the new century.

I refer to the IGC. The United Kingdom strongly favours a Union that is more responsive to the needs of an increasingly diverse membership. My right hon. Friend the Prime Minister led the way in his Leiden speech when he called for a more flexible development of Europe. We should be suspicious of conformity for its own sake. The creation of the pillared structure of Maastricht was welcome recognition that Community institutions and procedures are not appropriate to every area of policy—even the Liberals agreed with that at one point today.

The subsidiarity principle needs to be rigorously applied to encourage flexible development through action at the national level wherever possible. However, we must be clear-eyed about what we mean by flexibility. We must be clear about our aims and the short-term and long-term effects of the form of flexibility that we pursue. I thought that my hon. Friend the Member for South Worcestershire (Sir M. Spicer) got that point right.

My right hon. Friend the Prime Minister and my right hon. and learned Friend the Foreign Secretary have already outlined some of the most important conditions: the need to maintain a single market, the need for non-exclusivity, the need to avoid a hard core and the need for policies undertaken by less than full membership to be agreed by all. I wish to add two conditions to that, as there are other issues that we must address. While we would normally shoulder our share of institutional costs, it would be unacceptable to be obliged to give major funding for a policy with which we disagree and of which we are not a part.

Photo of Michael Lord Michael Lord , Suffolk Central

I agree entirely with the Minister: it would be quite wrong for us to give money for a policy with which we disagree. I draw the attention of hon. Members to the fact that there are now 118 embassies around the world. Who sanctioned that and who is paying for that?

Photo of David Davis David Davis Minister of State (Foreign and Commonwealth Office)

As I have explained to my hon. Friend at another time, that is set up and organised by the Commission under the general financing, which comes out of accounts in the Parliament—a point that will not be lost in the next year. The previous Foreign Secretary, my right hon. Friend the Member for Witney—who, unfortunately, cannot be with us tonight—raised this issue last year.

In relation to flexibility, there should not be any obligation on those left outside core groups to join up at some future date. In this regard, the Government are wholly at odds with the Labour party commitment—which ruled out permanent opt-outs in its White Paper, as it termed it, of last year. Such a commitment is nothing less than a federalist ratchet—a formula that is, at best, a slow road to centralism, and we reject the concept out of hand.

The principle of subsidiarity is crucial to ensuring that the Community does less but better. We fought for the conclusion of this vital concept at Maastricht and we were successful. Many of our partners are now following our lead on that. We believe that more can and should be done to ensure greater clarity of this concept in the treaty. Action at the level of the nation state should be the rule and Community action should be the exception. The Community should act only where it has been given express competence and where action at the European level will bring clear benefits that cannot be achieved by member states acting alone.

Since Maastricht, European Councils have taken things forward. Their conclusions must now become part of the treaty, and the White Paper makes it clear that we intend to do that.

Photo of Mr Nigel Forman Mr Nigel Forman , Carshalton and Wallington

I sought to get into the debate earlier, but I was unsuccessful. The most significant thing that my right hon. and learned Friend the Foreign Secretary said earlier in the debate is that, in relation to the ratchet, we will not simply try to repatriate competences within the European Union—which I think might be sensible—but will actually seek to erode the acquis communautaire. Will my hon. Friend tell me in which areas it is Her Majesty's objective to do that?

Photo of David Davis David Davis Minister of State (Foreign and Commonwealth Office)

I shall come to that point in about one minute, when I discuss the European Court, if my hon. Friend will forgive me. Indeed, as he has used up one minute, I shall probably discuss it now.

Several of my hon. Friends have made important arguments about the European Court—most recently, my hon. Friend the Member for Chingford (Mr. Duncan Smith). We must be clinical in our assessment of the balance of British interests with the court. The European Court should not seek to obstruct or redirect the objectives of Governments in the legislation that they have adopted. As the White Paper says, the Government will make proposals to act on those, and other, concerns about the court's functioning. We will consider with interest other proposals to tackle the problem of inappropriate judgments.

No doubt some will say—indeed, some have said—"You have no hope of achieving these changes. You have no support." My right hon. and learned Friend the Foreign Secretary quoted the French Prime Minister saying with disapproval that the ECJ is becoming, little by little, a sort of European Supreme Court". He made it clear that the French want to do something about that—as do we.

I should say en passant—[HON. MEMBERS: "Oh."] Well, it was appropriate to the ally involved. When I was questioned by one of our Scrutiny Committees on that matter, I was asked specifically whether we had support for our points on the court and, for reasons of diplomatic propriety, I told the Committee that I was unable to give it any names, but it was clear then, and it is now public, that the French are supporters on that issue.

Photo of David Davis David Davis Minister of State (Foreign and Commonwealth Office)

No. If my hon. Friend will forgive me, I do not have enough time.

The court should enforce the law that Governments have agreed—not make it, change it or add to it. That is the clear point of view of the British Government. Judgments should be sensible and proportionate and should not interfere in matters where they do not belong. Our strategy in dealing with the court has two strands: reform of the court and reform of the treaty articles that have been the principal source of the problem.

I now come to the point that my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) raised. The White Paper says that we seek to limit Community action, especially where that action has gone beyond that which was intended at the time we signed the treaty. The most notorious article in that respect is 118A, the health and safety article. There is a certain irony in that, as we have probably the best, or second best, health and safety record in Europe on the basis of our national legislation alone, and we should not forget that when we are arguing these cases.

Most recently, article 118A was used for the working time directive, with the unfortunate result in the court last week. That will impose a maximum 48-hour working week. In our judgment, that will harm jobs in this country and especially damage small businesses at the most fragile stage of their development, when they are under stress, and in that way deny people jobs. The 48-hour week will become zero hours a week.

Before that, we had the young workers directive, which, if we had not obtained a derogation, would have made youngsters' paper rounds and Saturday jobs illegal. Our view is that those are not properly health and safety matters. If our partners are determined to proceed along those lines, they should do so under the social chapter. I am about to discuss that point.

I am about to discuss the scope of qualified majority voting—another issue that is a point of the difference between the parties—but first I want to deal with something that the hon. Member for Livingston raised. Despite an intervention by my right hon. and learned Friend the Foreign Secretary, the hon. Gentleman refused to correct a misleading partial quotation. He tried to give the House the impression that my right hon. and learned Friend had called for more qualified majority voting. He omitted to say that my right hon. and learned Friend said: We should like to see more majority voting under those clauses of the treaty that already provide for majority voting … We do not wish to see a change in the treaty".—[Official Report, 20 June 1985; Vol. 81, c. 470.] I wanted to place that on the record to show that my right hon. and learned Friend had been unreasonably traduced in that manner.

The Government will oppose further centralisation of decision making that would make it easier to override national concerns; that means that we will oppose extension of majority voting. My right hon. and learned Friend the Foreign Secretary has already demolished the fatuous claim that more QMV is needed to make enlargement possible. He highlighted why those changes were being made—to create forward momentum towards a more federal Europe.

The foolishness and the unnecessary nature of QMV extension are clear when we consider the areas where more majority voting is proposed. Let us look at some of them—I shall come to the point raised by the hon. Member for Gateshead, East (Ms Quin) as to why the Opposition are stuck on the hook where the Leader of the Opposition put them. In the Chatham house speech, the Leader of the Opposition called for the extension of qualified voting and the abolition of the veto in four areas.

The first of those was environmental policy. The areas of environmental policy that are currently subject to veto under article 130 include fiscal provisions and measures relating to town and country planning, land use, and energy sources and supply. The Government do not believe that Britain's vital interests lie in allowing our partners to outvote us on damaging fiscal measures, for example, under the guise of environmental policy; nor do we want our partners to be able to impose their models of land use and town and country planning. We are opposed to banning the veto in that area, and we are not alone in that view.

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.