[Relevant documents: Minutes of Evidence taken before the Foreign Affairs Committee on 30th November 1999 (HC 68-i); First Report from the Environmental Audit Committee, on EU Policy and the Environment: an Agenda for the Helsinki Summit (HC 44); and the White Paper (Cm. 4531), Developments in the European Union, January-June 1999.]
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Clelland.]
This debate gives the House its customary opportunity to discuss the issues before the forthcoming European Council in Helsinki. This is the second European summit under the Finnish presidency. The successful first summit at Tampere stepped up co-operation between member states on access to justice and the fight against crime. Britain left Tampere having secured all our major objectives.
We secured agreement to give British citizens easier access to courts on the continent. The measures that we set in hand at Tampere will be of practical benefit to the millions of British citizens who travel to the continent and the tens of thousands of British business men who do business there.
We agreed on joint action to reduce the flow of illegal immigration and bogus asylum seekers, including programmes to reduce the pressures for migration in the countries of origin, and we secured agreement to proposals by Britain for enhanced co-operation in the fight against organised crime and the prevention of juvenile crime.
In short, the first Finnish summit took some sensible measures that will provide practical solutions to real problems in the lives of our citizens. At Helsinki, we will also consider issues of immediate relevance to European citizens. For example, we will start the preparatory work for the special summit next spring on economic reform, in which Britain is making a leading contribution by arguing for a more open, flexible European economy, better able to compete in the globalised economy.
We expect Helsinki to update the employment guidelines and to adopt a paper on the information society in Europe, both of which measures serve Britain's priority in developing a skilled, flexible labour force and a knowledge-driven industry.
Helsinki will also consider a presidency report on some long-standing negotiations on tax. Britain has chaired the working group on a code of conduct on harmful taxation and we broadly welcome its proposals, which will enable British industry to compete without being disadvantaged by unfair tax breaks to its competitors.
No. Britain famously has differences with our partners over the draft directive on the taxation of savings. The directive was conceived long before the euro came into being.
I am happy to assure the House that we have no intention of agreeing to a tax on savings that does not protect the eurobond market in London. We believe that it is in the interests not only of Britain but of Europe that the market remains in a European location. It is not only Britain but our partners and other financial markets throughout Europe that would lose if the eurobond market in the City of London became uncompetitive around the globe. Therefore, we will resist taxation of the international bond market to protect not just our interests but those of Europe.
We have put forward proposals to meet the objectives of the directive without applying a tax to the bond market. We believe that there are reasonable and sensible ways of meeting both the German concern over the evasion of tax on savings and the British concern to protect the City of London as an international market. My right hon. Friend the Chancellor will continue to maintain that position at a special meeting of ECOFIN that will be held in the margins of the Helsinki summit.
On the subject of the code of conduct committee, does it not worry the Government that the report of the Primarolo group for the meeting on Wednesday will not be made public, although copies can be obtained if one telephones Brussels? Why do the Government say that the United Kingdom has undertaken to make the code of conduct principles apply in places such as the Channel Islands when, under the protocol, tax measures cannot be made to apply in the Channel Islands by the British Government? Do the Government believe that they have the power to implement those proposals or not?
We are clear with the European Union about the limits of our constitutional responsibilities and, therefore, any commitment that we give with regard to the Crown dependencies or the overseas territories, for which I am personally responsible, is clearly limited by our constitutional capacity to oversee the relevant areas of competence. I stress to the House that the code of conduct is a British initiative, and, indeed, as the hon. Member for Rochford and Southend, East (Sir T. Taylor) admits, the committee has a British chair. Together with British business, we are keen to ensure the acceptance of the principle that there should not be unfair competition in the form of special tax breaks for our competitors. It is in the interests of British industry that we see that through to success.
I turn now to the main items on the agenda of the summit for leaders. Britain goes to Helsinki with three strategic objectives for the discussions—first, to obtain agreement to the next major wave of enlargement; secondly, to obtain terms for the next intergovernmental conference which will keep it focused on enlargement and enable it to be completed in a reasonable time frame; and thirdly, to obtain a commitment to a stronger security system in Europe and a more effective capacity for Europe to handle crisis management.
Let me take enlargement first. There are already six countries in negotiations for accession to the European Union. That is a major undertaking, but progress has been good. By the end of the Finnish presidency, we will have opened negotiations on two thirds of the chapters of community law. In about half of those chapters, negotiations are now completed. Those negotiations have been co-operative, not confrontational. Both sides to the negotiations have a common interest in securing the success of enlargement.
At Helsinki, Britain will argue that we should now expand negotiations to include the remaining six countries in the accession process.
I offer my compliments to my right hon. Friend on his work in ensuring that the enlargement programme proceeds as smoothly as possible. However, is it not the case that the Commission's target date of 2002 is now, to put it bluntly, unrealistic until certain institutions of the European Union have been reformed?
My hon. Friend is right to point out that we have to reform the institutions of the European Union to prepare it for enlargement. I shall deal with that point more fully when I reach the subject of the intergovernmental conference. I disagree that 2002 is an unrealistic objective. It is possible for us to complete the intergovernmental conference in the next year, but only if we keep its terms tightly focused on the issues necessary for enlargement. In the meantime, we are keen to get agreement that the other six countries should start negotiation.
Latvia and Lithuania have made good progress, and Slovakia would have been included in the first wave had its previous Government observed the standards of democracy and pluralism achieved by its current Government. Malta is well placed to join negotiations following the election of a Government committed to reviving that country's application.
My right hon. Friend the Prime Minister visited both Bulgaria and Romania during the Kosovo conflict and gave them our pledge that at Helsinki we would support the opening of negotiations for their countries. We do not underestimate the work that both countries have to do before they are ready for membership, but both Governments are realistic and recognise that the steps that they must take to prepare their countries for the EU are the same as those that they need to take to improve their citizens' prosperity and quality of life.
If Bulgaria and Romania are to improve the life of their citizens, has not something to be done about unblocking the Danube? There was a debate in Westminster Hall this morning about the whole Balkan problem, but is not unblocking the Danube of great importance for those two countries?
I agree absolutely, and the only country blocking the unblocking of the Danube is Serbia. We continue to make proposals that would allow the unblocking of the Danube to take place. We are willing to help and to provide the technical and financial help to remove the objects that block the river. The only obstacle to that at the moment is Serbia. However, both Bulgaria and Romania loyally supported the NATO and EU position throughout the Kosovo conflict. We owe it to them to open negotiations for membership at Helsinki.
I take the point that my right hon. Friend makes about the support that Bulgaria and Romania provided during the war. However, is he aware that, at a recent meeting of the North Atlantic Assembly in Amsterdam, a Member of the Romanian Parliament said, in a very regretful tone of voice, that 2,500 jobs had been lost in his constituency because the Danube was blocked? Given that NATO bombed those bridges, is there no way that assistance can be provided towards rebuilding them?
My hon. Friend is absolutely right. Both Romania and Bulgaria face real financial and economic costs as a result of the support that they gave us throughout the Kosovo conflict. Those costs arise because traffic is disrupted and because both countries have barges stranded on the wrong side of the bridges in Serbia. Those two countries have made real sacrifices to support the objectives that we pursued in Kosovo.
I can assure the House that we are ready to assist in unblocking the Danube. We want the river to be restored as a free international waterway. We are not prepared to help President Milosevic to claim credit that he does not deserve for the reconstruction of his country.
My amazement at what the Foreign Secretary said stemmed from the fact that it seems that the condition for unblocking the Danube—of which I am very much in favour—is that Milosevic should be removed from power.
The only person putting a condition on unblocking the Danube is President Milosevic, who is saying that he will not permit it unless we rebuild all the bridges. The Government cannot accept that bargain. I should be very surprised if any Opposition Member recommended that we accept it.
Britain will also be working at Helsinki for a declaration that recognises the status of Turkey as a candidate for EU membership. Negotiations on membership with Turkey will not be possible until it has made progress towards meeting the Copenhagen criteria on human rights. We welcome the improvements in human rights that are being made by the new Government, such as the removal of military judges from the security court, the amnesty for journalists convicted under the media laws, and the proposed removal of immunity for police and prison officers against prosecution.
Much more needs to be done, but we should recognise that the political forces in Turkey working for greater freedom and stronger human rights are also the political forces that look to Europe for their inspiration, and to which Europe should be holding out encouragement.
On Friday, talks begin at the United Nations to resolve the long-standing division of Cyprus. Progress in those talks will help create a climate in which it would be easier to gain support for the recognition of Turkey as a candidate country. Britain believes that Cyprus's accession to the European Union would be easier with a settlement that enabled it to join as a single, united island, but we do not believe that a solution to the division of the island should be a precondition for membership for the Republic of Cyprus. No third country has a veto on the accession of any candidate.
I am grateful to my right hon. Friend for sending a clear message to the Turkish Government that they cannot block Cyprus's membership by not making progress. Can he also make it clear to the Turkish Government that the treatment of the Kurdish population is important? Although some changes have taken place on language in recent years, Kurdish political activists are regularly imprisoned and Kurdish political parties, including those that do not espouse violence, are persecuted in Turkey.
I am grateful for my hon. Friend's support for the formulation that we have followed in relation to Cyprus. I know of his close interest in the matter. On the Kurdish population in Turkey, it is important for both sides in Europe and in Turkey to recognise that respect for minority rights is one of the fundamental principles enshrined in the Copenhagen criteria. We have made good progress on that with several countries already in the accession process and we would expect the same standards to be met by Turkey before negotiations could be started.
The House should beware of regarding enlargement as a one-off process that will suddenly happen on accession day. Much is already happening for the better in central and eastern Europe. Across the region, the rights of ethnic minorities are improving because of the Copenhagen criteria. In country after country, painful decisions on economic reform and trade liberalisation are being taken under the stimulus of access to the single market. The Governments of three separate countries have taken steps to close nuclear power plants because of EU requirements on the safety of the environment.
Each of those candidate countries is making heroic efforts to get ready for membership. We would not be playing fair by them if we did not show the same commitment to getting the EU ready for enlargement. That is why our second objective for Helsinki is to secure a commitment to an intergovernmental conference that prepares the way for enlargement and is kept sufficiently focused to be completed in time for enlargement.
There are three changes to institutions of the European Union that are made more pressing by enlargement. The one in which Britain has the clearest self-interest is the reweighting of votes within the Council. It is a principle of the European Union that the weighting of votes diminishes the difference in size between the member states. Thus Belgium gets five votes, while Britain gets 10, although it is six times bigger than Belgium.
As each successive wave of enlargement brings in more small countries, the disadvantage to the larger countries becomes worse. Britain, France and Germany contain between them a clear majority of the population of the European Union, but they have barely a third of the votes in the Council of Ministers. That disadvantage will get even more marked after enlargement. Unless changes are made, Britain, France and Germany together will not only be a minority but will not even be a blocking minority under qualified majority voting. That is why any further enlargement needs to be accompanied by a reweighting of votes in the Council that more fairly reflects the difference in population between member states.
Of course, we must also get the balance right between procedures that give weight to larger populations while recognising that Europe is a union of equal member states. That is why Britain recognises the importance that each member state, however small, attaches to retaining a seat on the European Commission. There is a practical limit to how big the Commission can become and still remain efficient. That is why all the larger member states are willing to concede their right to a second seat on the Commission. That would enable the probable first wave of enlargement to take place with little increase in the size of the Commission. It is a fair package deal between the large and small nations. The large states would get a fairer share of the votes in the Council and the small states would retain their right to a seat on the Commission. I stress that it is a package. Britain will not concede its second seat on the Commission if there is no agreement to increase Britain's voting strength in the Council.
A fairer weighting of votes in the Council is also relevant to the third issue before the IGC—whether there should be an increase in qualified majority voting. The Government believe that some key matters of national interest are always best resolved by unanimity. That includes issues such as border controls, defence, taxation, social security, own resources and treaty amendments. Neither we, nor many of our partners, intend to accept qualified majority voting in these areas.
For much of the rest of decision making within the European Union, QMV is already the rule. Some four fifths of decision making within the Council of Ministers is based on QMV. As a result, there is limited scope for expansion, but outside the key matters of national interest we are willing to consider the introduction of QMV on a case-by-case basis.
Sometimes Opposition Members appear to be afraid of majority voting because they assume that Britain will always be in the minority. That may well have been their experience in government, but it has not been ours. Our experience has been that if we argue a good case with good will and good presentation, we can mobilise a majority vote. Last year, votes took place in the Council of Ministers on 213 occasions. Britain was overruled only twice, whereas by contrast Germany was overruled 18 times, the Netherlands 15 times and Italy 13 times. Those who insist on the national veto should recognise that the balance of advantage in bringing back unanimity in those votes would have been heavily in favour of Germany and the others, not in favour of the arguments that Britain put forward for its national interest.
The Foreign Secretary has just disclosed quite a lot of information about voting in the Council of Ministers, which I understand was previously kept confidential. Is he prepared henceforth to provide all information on voting in the Council of Ministers to the House of Commons Library so that we can have some genuine democratic scrutiny of what is going on?
I do not imagine that the hon. Gentleman was complaining that I was releasing new information. I hoped that it might inform the House and remove some of the prejudices of his honourable colleagues. It has long been Britain's position—in fairness, under both Labour and Conservative Governments—that there should be more transparency in the Council of Ministers. I personally would have no objection to revealing the votes, but it would be wrong for us to do so unilaterally without the agreement of our partners. We shall continue to argue that case. In the meantime, I hope that the information that I have provided will help to dispel some of the prejudices against qualified majority voting among Opposition Members.
There may even be some cases that are resolved by unanimity at present in which majority voting might be in Britain's interests. Transport is an example in which QMV would help the UK to advance a more liberalising agenda. Similarly, reform of the European Court of Justice would be made easier if its rules of procedure could be agreed by QMV, not unanimity. If we want to make sure that the rules of the single market are policed vigorously and effectively then we need a European Court of Justice that does not take years to reach a verdict.
However, I can assure the House and especially the Opposition that, whatever may be agreed on QMV this time around, it will be as nothing compared with the positive deluge of majority voting that occurred while the Conservatives were in power. They agreed to majority voting on 42 new articles, and they were right to do so. If they had not done so, we would never have been able to forge the single market because we would never have been able to overrule those who wanted to put obstacles in its path.
I congratulate Opposition Members on having been the architects of the biggest expansion of QMV in the history of the European Union. I would congratulate them even more if, given that record, they were now to give up the pretence of being the champions of the veto. It is a fair offer—I hope that they will accept it.
Will the right hon. Gentleman concede that there is a vast difference between QMV on trade matters compared to, for example, European government matters? Will he assure the House that we will retain the veto for those matters on which other member states want an extension to QMV—defence and foreign policy, for example?
Perhaps the hon. Gentleman would allow me to answer his question. There is already a provision in the foreign policy section for majority voting where there is implementation of an agreed strategy; unanimity is required for that. We see no case for making a change and do not intend to support one. [Interruption.] I am being perfectly frank in my response to the hon. Gentleman's question. However, he seems to care neither to defend the record of the previous Conservative Government in expanding majority voting, nor to accept that the Conservatives cannot now pretend to be champions of the veto.
Our agenda for the IGC is to keep it focused on enlargement. Some other minor items might be included in the agenda, but the Government's view is that any such additions should not be so extensive as to defeat the central objective of preparing the EU for enlargement, and of doing so as quickly as possible.
The Opposition's view, as stated to their conference, is that the IGC should be taken hostage. Last week, their Foreign Affairs spokesman, the hon. Member for Stratford-on-Avon (Mr. Maples), accused me of getting their policy wrong. I am anxious to get it right, because it is so wrong-headed that it does not need to be misrepresented in order to be discredited. I have therefore checked what the Leader of the Opposition said to the Conservative conference. He said:
The institutional protocol to the Amsterdam treaty is equally blunt. I remember it well because I drafted it at 4 o'clock in the morning in order to end the impasse in negotiations. It provides that, before the date of entry into force of the first enlargement, there shall be reform of the seats on the Commission and the weighting of votes in the Council. The political reality is that if there is no new treaty, there will be no enlargement.
Enlargement is in Britain's own interest. It makes no economic sense for us to oppose the increase of the single market that will come from enlargement.
Surely enlargement is not in our interest alone. However, will my right hon. Friend assess the damage to our interest resulting from our unpopularity with the candidate countries—indeed, from their hostility—if we were to block their aspirations towards the new Europe?
My hon. Friend puts his finger on the second big problem in the Conservative strategy. Someday, those dozen countries will be full members of the European Union. It is in Britain's interests that they should remember us as an ally and as an advocate of their membership. The Conservative strategy would leave the next generation of new members resenting Britain as a country that tried to block the treaty that paved their way to membership. When the hon. Member for Stratford-on-Avon speaks, he must defend that policy or, better still, tell the House he is going to drop it.
Agreement to the next round of enlargement and to the launch of the new treaty are Britain's two strategic objectives for Helsinki. However, there is a third: to take forward the work on the European security initiative. This is a British initiative. It was initially proposed by my right hon. Friend the Prime Minister at the Portschach European summit and was endorsed at the subsequent UK-French summit at St. Malo. Over the year since then, we have built up strong support for it among all member states, culminating last month in the first ever joint meeting of the Foreign and Defence Ministers of the European Union. This is not a case of Europe imposing a burden on Britain; it is an example of Britain shaping the agenda of Europe.
Britain took that initiative because it is right. Bosnia, Albania and Kosovo have all shown that crisis management requires a joined-up approach that brings together the economic, financial and humanitarian assets of the European Union and the military assets of the European countries in NATO; but if we are to achieve that, we must address three priorities, and we shall address all of them at Helsinki.
First, the European Union must develop a more coherent and more urgent capacity for crisis management. I shall not readily forget the crisis of the first tidal wave of refugees to reach Macedonia, when Europe's response was handicapped because it was Easter weekend. That is why we now propose a standing political and security committee of senior officials, which will provide a permanent mechanism for implementing the common foreign and security policy and responding swiftly to emerging crisis.
Secondly, we need better transmission between the European Union, which is where we agree our common foreign policy, and NATO, which is the organisation to which we commit our military assets. That is why we are proposing a military committee, which would enable the European Union, in a crisis, to draw on expert and realistic advice on the feasible military options. It would be Britain's intention, and that of many of our partners, to double-hat our military representative to NATO as a member of that committee.
Thirdly, all the improvements in decision making will make no difference in practice if we do not have the capability to carry them out. Britain has already, through the strategic defence review, reshaped our military forces to enhance their capability for rapid, flexible deployment in a crisis; but Kosovo did expose for Europe as a whole a real problem in projecting effective military assets from immobile standing armies. That is why we are advocating that the European nations, co-operating together, should set themselves the target of being able to deploy, within 60 days, a corps level of military force and to sustain it in the field for at least a year.
Has it occurred to the Foreign Secretary that, with five member states of the European Union being neutrals, with some of them not being members of NATO, and with the United States of America of course not being a member of the European Union, there are many complications in what he proposes, and that the solution that he is talking about will create additional problems instead of resolving the problems that he instanced initially?
I am grateful to the hon. Gentleman for pointing out that this is a complex matter. We have had extensive discussions with the five members of the European Union that are not members of NATO. Today I met the Foreign Minister of Sweden, who confirmed that she had no concerns about the way in which we have reshaped our proposals for Helsinki. We expect support from Finland, which will hold the presidency in Helsinki. We have also had extensive discussions with those members of NATO that are not members of the European Union.
This process is not suddenly being proposed; it has been continuing for a year, and now has unanimous support in the European Union and unanimous support in NATO. I doubt that any rational Member of the House could genuinely object to a prudent investment in stronger security for Europe. The Government's initiative has the full support of the Liberal Democrats. [Interruption.] Those wonderful, rational Members. A joint paper arguing the case for it is one of the products of our joint consultative committee.
Even the Conservative party has not dared criticise the initiative for what it is. The criticisms that there have been are criticisms of a grotesque caricature of it—a fantasy that exists only in the Conservatives' imagination. Let us therefore be clear in our minds about what is being proposed. This initiative is about crisis management, humanitarian intervention and peacekeeping—the missions that the Opposition themselves agreed to in office as the Petersberg tasks. It is not about collective territorial defence. That is and will remain a job only for NATO. Nor does it prevent NATO from carrying out those tasks of crisis management if it wishes to do so. Only last week, the Anglo-French summit adopted a joint text that explicitly states that Europe will act only where NATO as a whole is not engaged.
None of that has stopped Conservative Members roaming the globe claiming that we are plotting the end of NATO. Their defence spokesman, the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), went to Washington and told members of Congress:
European nations have embarked on a course which we consider will damage critically and even potentially destroy NATO".
Just to show that he was not prejudiced against the British Government alone, he also threw in some gratuitous insults against our German allies.
There used to be a convention that Opposition Members, while abroad, refrained from criticism of the Government. In this case, the hon. Member for Chingford and Woodford Green not only ignored the convention but deliberately went abroad to lobby against the British Government and their allies. If we had ever done that in opposition, Conservative Members would have loudly denounced us as disloyal, irresponsible and unpatriotic.
The Foreign Secretary's comments are a bit rich from someone who supported the Campaign for Nuclear Disarmament during the cold war. On the more serious point, the right hon. Gentleman said that the process would produce a deployable corps of European forces for a year. I begin to doubt that it will. Does he appreciate how big a corps is? I wonder where those troops will come from. However, if such a corps is produced, the problem is that the United States will look constantly to Europeans to deploy that force. Its commitment to NATO and to the joint political and military commitment that has sustained the west and the transatlantic alliance will begin to disappear.
Before coming to the House, I read the telegrams that have come from Washington. The telegram about the discussions held with the State Department yesterday on the Anglo-French communiqué contains the report that the State Department had been over the document with a fine-toothed comb and could find nothing in it of concern to it.
The hon. Gentleman misses the point. Neither I nor any of my colleagues at any time when we were in opposition went before a Congressional Committee to argue against the stated foreign policy of Her Majesty's Government. I would have no problem if the defence spokesman for the Opposition came to the House to argue his case and to criticise the Government. However, we object to the fact—Conservative Members would have objected to this when they were in office—that such criticisms were made before a foreign power and before the Committee of a another Parliament.
No, I wish to continue my speech.
The hon. Member for Chingford and Woodford Green was not only wrong in his conduct, but he was wrong in his facts. Far from weakening NATO, the improved military response that we demand will provide resources not just for the European Union but for NATO. The Government are firmly committed to NATO as the cornerstone of our defence. It is because of our commitment to NATO that we were able to play a key role in maintaining the cohesion and resolve of the alliance through the Kosovo conflict. It is because of that commitment to NATO that we were able to secure the appointment of one of our colleagues, Lord Robertson, as the head of NATO. What is damaging to the alliance is any attempt to play party politics in Washington and to sow unjustified doubt about Britain's commitment to NATO.
The agenda for the Helsinki summit throws into sharp relief the different European strategies of the Government and the Opposition. We go to Helsinki to make a success of the summit and to get agreement to a new treaty, progress on enlargement and stronger European security. If they had the chance, Conservative Members would go to the summit to veto the new treaty and thereby block enlargement and stop the European security initiative. They would do so not because of any calculation of Britain's national interests, but because of a prejudice against Europe.
This Government understand the enormous benefits that our membership of the European Union has brought Britain. We know that we shall best secure the future of Britain by making the most of that membership.
The free movement of goods has removed barriers to our exports. The free movement of capital has strengthened the City of London. Recognition of our professional qualifications has helped 100,000 British citizens to take up work in the European Union. Our strength in the world is greater, not weaker, as a result of our membership of the European Union. In the current trade talks, Britain is able to promote British interests more effectively as part of a European bloc than we would ever be able to do on our own.
It is in Britain's interest that Europe should be a success. We shall therefore work to make a success of the Helsinki summit. Its agenda offers the prospect of a European Union that is wider, European institutions that are more effective and a European security that is stronger. We ask for the support of the House in working for those objectives that serve both the future of Europe and the interest of Britain.
This is the first occasion on which we have had a debate on Europe with the new Minister responsible for Europe, the hon. Member for Leicester, East (Mr. Vaz), in his place. We are delighted to welcome him to his new job. The average life expectancy of people in his office is falling; it is currently about 10 months. The previous occupant was in the post for a few weeks, although at least he got promoted.
The hon. Gentleman comes to the post at a vital time, with the intergovernmental conference, in which he will no doubt have to play a significant role, about to start. In that respect, I hope that he turns out to be a better negotiator than his boss, whose tenure in office has not been characterised by diplomatic finesse and subtlety. It has in fact been characterised, particularly in the European Union, by a succession of surrenders, rather than negotiation.
We signed the social chapter and got absolutely nothing in return. At Amsterdam—[HON. MEMBERS: "Last week's speech."] There is much more in it than there was last week. I just want to remind the Foreign Secretary of his shortcomings. At Amsterdam, he gave up our veto in 16 areas and got nothing in return. The European security and defence identity, about which I shall have more to say later, is a complete U-turn on what he was saying after the Amsterdam treaty. It is a bit much for him to accuse us of being wrong because we do not share his objectives when he himself did not share them until about a year ago. Apparently, all that was done to get good will, and all I can say is that it was a very high price to pay for good will that, so far, seems to have achieved nothing.
I do not know whether you remember, Mr. Deputy Speaker, but, in the 1980s, there was a Danish politician who suggested that the Danes should scrap their defence budget and buy a tape recorder with a tape that said endlessly, "We surrender", in Russian. That is a policy of which the Foreign Secretary would no doubt have approved in his CND days, and old habits obviously die hard. We should like to see him, from time to time, standing up for Britain's interests rather than simply surrendering to other people's interests.
What has the Foreign Secretary done over the past two and a half years to get the single market completed? What has he done to stop a raft of damaging, costly regulation under the social chapter? What has he done in the European Union to stop the scandal of the Gibraltar border, which is a clear breach of the treaties? He first mishandled that matter at Amsterdam, and subsequently on Spain's entry to NATO's military command. Since then, there has been masterly inactivity while the border remains blocked. Why does he not get the Commission to take Spain to the European Court over that matter?
I sometimes wonder why the Government bother to go to summits at all, since, when they get there, they just go along with what others propose. They could save themselves a lot of money and trouble by just sending a power of attorney. As my right hon. Friend the Leader of the Opposition said:
Britain's seat is never so empty as when the Prime Minister is sitting in it.
The Foreign Secretary's incompetence has been added to by farce. We now have a bus called EUnice going around the country. [Interruption.] If hon. Members want to intervene, I will be happy to take interventions, but there should be no barracking.
That will be a much more sophisticated operation than EUnice, which is a pretty corny name even for a bus. It must have been Alastair Campbell's day off when they dreamed that one up. I thought that a classicist in the Foreign Office might have come up with Eurydice, but perhaps that is a little too complex for Foreign Office Ministers. The Minister with responsibility for Europe will have to put himself through the awful business of making a terrible fool of himself touring the country with Eddie Izzard. That shows what the Prime Minister thinks of the Foreign Office: he allows his tennis partner, Lord Levy of blind trust, to do the middle east and Eddie Izzard and EUnice to do Europe.
The name EUnice is perhaps more appropriate than the Government think, for the characteristics attributed to one who bears the name are a "tendency to make promises" that she cannot keep and
to be lavish … and spend money freely".
Nothing could more accurately reflect the Government's attitude to Europe, or Europe's freedom with its own budget. There is a surprisingly large choice of words beginning with "EU", the two most appropriate to the Government being euphemism and eunuch—hype coupled with impotence—as they have so often characterised their diplomacy. All that would be a farce, were it not costing £60,000 of taxpayers' money, with what the parliamentary answer calls "travel and accommodation" on top—since the bus has recently been in Paris, I imagine that that did not come cheap.
All that is being done to
set out the benefits of Britain's membership of the EU".
I wholly support that objective, and concur with many of the Foreign Secretary's assessments of those benefits— [HON. MEMBERS: "Oh!"] My saying that is nothing new. However, if that is the right hon. Gentleman's objective, he has been extraordinarily unsuccessful. The British social attitudes survey published in yesterday's Financial Times reveals that opposition to EU membership is now at an all-time high, with more than 50 per cent. of the British population wanting either to leave the EU, or to reduce its powers. Perhaps the right hon. Gentleman would do better to stay at home.
The truth is that EUnice, like the national changeover plan, is part of the Government's plan to take us into the single currency by stealth. The Government dare not come out and say so, but that is their purpose.
Never is an extremely long time in politics. My view of the single currency is that of my party: that we should stay out of it until it has passed through at least one economic cycle, including a recession. In addition, there are significant economic and constitutional obstacles to joining. The hon. Gentleman knows that our policy for the next general election is to campaign on not joining the single currency for the duration of the next Parliament. That contrasts with the Government, who are trying to take us in by stealth.
I thank the hon. Gentleman for the wide publicity he has given to the Government's Euro-roadshow. In the six cities that I have visited over the past two days, the bus has been warmly welcomed, and those who have welcomed the Government's action include several Conservative councillors in Newcastle.
I am delighted to hear that the pantomime is a success.
One of the serious issues facing the European Union, which is not on the agenda for Helsinki although I am sure that it will be discussed, is the millennium round of trade negotiations in Seattle. The Conservatives are committed to trying to achieve global free trade within the next 20 years, and transatlantic free trade far sooner than that. The EU will have a vital role to play in Seattle and in the meetings that follow. There have been some encouraging noises, but we must bear in mind how Leon Brittan's initiative to create a North Atlantic marketplace was effectively vetoed by France. I hope that that does not happen again. Almost all members of the EU share the view, held by the Foreign Secretary and me, that free trade is a good thing.
Tariffs are a tax on consumers. Why should EU consumers pay 9 per cent. on imported chocolate, 10 per cent. on imported biscuits and 13 per cent. on imported clothes? Why are there apparently special taxes on parking meters and life jackets? The EU has 15,600 separate import duties and 10 per cent. of the revenue gained from them is spent on collection. A recent study by a French economist estimates that the cost to the EU of that protectionism is between 6 and 7 per cent. of its gross domestic product: that is £300 billion a year, or the equivalent of nearly £1,000 per consumer and about £150,000 per job saved as a result of that protectionism. That is a bad deal for European consumers and businesses. The EU should now show that it is serious about free trade by stating its willingness during the millennium round to make a bonfire of most of its tariffs.
I know that the common agricultural policy will be a difficult hurdle. Commissioner Lamy was saying as much yesterday and today. However, reform of the CAP must come about if we are to succeed in this trade round, and I hope that we are all committed to that. Tariffs and quotas are the discredited apparatus of mercantilism and they have no place in the 21st century. We would like to see the EU take a lead in the global drive towards free trade.
A huge amount has been achieved in the past 18 years. I do not know whether the hon. Gentleman noticed the Uruguay round. He probably did not. He was probably too busy interjecting in other people's speeches from where he sits. The Uruguay round gave a huge boost to world gross domestic product.
Last week, I spent a long time on the subject of the European security and defence identity and, today, the Foreign Secretary spent a long time on it. It is scheduled for discussion in Helsinki. We should not forget that, a year ago, the Government thought that the EU had no role in this area. After the Amsterdam negotiations, the Prime Minister prided himself on how he had succeeded in vetoing the French-German initiative to give the EU capability or some role in military matters. The Foreign Secretary said the same thing after Amsterdam. However, the Government have done a 180 deg U-turn.
It is no good, as they did last week, the Foreign and Defence Secretaries pretending that there is no United States concern about the matter. The US is wholly behind the idea, as are we, of Europe beefing up its defence capabilities within NATO, but neither the US nor we like the idea of this development moving outside NATO, as it appears to be doing. We believe that this will end up as a threat to NATO, and I shall explain why.
After last week's debate, we had the Anglo-French summit, when these matters were considered more closely. As the communiqué states, military co-operation was approved in developing
rapid capability goals in the fields of command and control, intelligence and strategic lift".
Those things are currently supplied by the United States. The communiqué said that that would involve costly duplication of intelligence and command-and-control mechanisms. It added that there should be a military committee and military structures set up with a military staff under the EU, and that is outside NATO.
As recently as June, the Foreign Secretary was saying that there was no question of a European army. However, two or three weeks ago, we were talking about a Euro Corps of 40,000 people. At the summit with the French, we were talking about 50,000 to 60,000 people. The Italian Defence Minister is now quoted in L'Unità as calling for a European army of 120,000 people. It is no good the Foreign Secretary pretending that there is no such agenda. He is playing with fire. He is playing along with an agenda that he does not control and that I believe that he does not understand. It is dangerous, and it will undermine NATO.
Anglo-French military co-operation is not new and the Government did not invent it. However, it is a very good thing and we wholly approve of it. We are the two most serious military powers in Europe with the ability to project force. We have had a combined air group for a long time. There have been many combined naval exercises and our armies often find themselves doing things together.
Any additional momentum that can be given to interoperability—for example, the ability to land on each other's carriers or use each other's heavy lift capabilities—is to be welcomed. However, I believe that command and control of any European operation must be within NATO. That is now in danger of developing outside NATO and, if that move takes place, it is bound to become a competitor to NATO. The EU nations will meet first to discuss their views and then they will go to NATO. That is what frightens the United States.
The United States made its views clear at the Washington summit. It set out three tests. First, it said that there should be no duplication, but setting up new command-and-control systems, military committees and intelligence-gathering apparatus involves expensive duplication at a time when the American Secretary of Defence is criticising the Germans for how little they spend on defence. However, they want to involve themselves in expensive duplication.
Countries outside the EU but within NATO, such as Turkey, Norway, Poland and Hungary, are discriminated against. Turkey and Norway have been valuable NATO allies for a long time. For the reasons that I have set out, the present moves will lead to the decoupling of the United States. All this might be worth while if we were prepared to spend the money to build a real European capability and then say, "We want to control this without the United States." However, that is a fantasy. Governments are cutting their defence budgets. This Government have cut the defence budget by £1.2 billion a year over the course of this Parliament. The defence budget in Germany is being cut by 10 per cent. We are in danger of getting the worst of both worlds: a weak European Union and a weakened NATO.
It is no good pretending that the United States is not worried about this; it is. United States Secretary of Defence Cohen is paying a surprise visit to Europe this week, I suspect as a result of what has gone on in the various Franco-Italian, Franco-German and Franco-British summits that have taken matters forward. He wants to make sure that the US view is known before we all go to Helsinki.
I thank the hon. Gentleman for giving way. Although I disagree with much of what he says, I welcome the fact that the points are being made in the Chamber. Will the shadow Foreign Secretary give an assurance that he will not follow the example of the shadow Defence Secretary, the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), and cross the Atlantic to give evidence to a Congressional Committee that attacks the policies of this Government?
The committee was not attacking what the Foreign Secretary says the Government's policy is. He says that it is no threat to NATO. I will give no such undertaking. The matter is so serious and the Government are making such a serious mistake, with the fundamental security interests of the country at stake, that we are right to do everything that we can to stop them.
The Foreign Secretary and the Defence Secretary may be able to kid their Back Benchers, the public and us, but I hope that they are not kidding themselves. What they are doing is extremely serious. If I am right and the Foreign Secretary is wrong, the country will pay a high price for that mistake. If he studies what some of his European counterparts are saying, he will find that their view of where matters are going is different from his.
It was reported in The New York Times that, after the summit, the French Foreign Minister acknowledged that
France was out in front of some of its allies in arguing that a European reaction force should be able to operate with complete autonomy even if it was put together from units that formally belonged to the alliance.
That is new.
In the same article, the French Defence Minister is reported as speaking to his European colleagues in Brussels about the need for stronger European defences. The article continues:
Richard said not a word about the relationship that a European military staff would have to NATO.
As the Frankfurter Allgemeine pointed out, the real question is whether the European countries are ready to spend the billions of dollars that it would take for them to catch up with the United States. Clearly, they are not prepared to do so.
There has been no explanation from the Foreign Secretary or the Prime Minister why, a year ago, they did a 180 deg flip-flop on the subject. If they had gone into the election setting out their present view of the role of the European Union, that would have made sense, but they have done a 180 deg U-turn, with no explanation at all.
Why did the position change so radically between Amsterdam and St. Malo? We have never had an explanation for that. We suspect that it is all because the Prime Minister was worried about Britain not being in the first round of the euro, and the kind of reception that he would get at the summit. Indeed, we know that that is the reason because, if there were a better reason, we would have heard about it from the Foreign Secretary today, or after the St. Malo summit. The hon. Member for Dunfermline, West (Ms Squire) criticised my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) for giving evidence to Congress, but we find it appalling that the Government are prepared to sell out Britain's long-term security interests for a weekend's headlines—for a weekend's public relations. The country's interests ought to be more important than that. We shall fight the Government's policy all the way.
The Foreign Secretary was radically wrong in the cold war. He was a supporter of unilateral nuclear disarmament and he has been proved to be wrong. His judgment is no better now. He has allowed himself to be the tool of an anti-American lobby, to which many in France and many in his party have long belonged. If the policies that he is pursuing damage NATO and our security, this country, whose interests and security he seems so little to understand, will have paid an extremely high price.
Is the hon. Gentleman aware that the riposte to the evidence of the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) to the Congressional Committee was given by Elmer Brock, who was the leading member of the Christian Democrat Union in Germany—a party that one would assume to be related to the same political family as his own? Does not the fact that that riposte was given by a Conservative from Germany reflect the almost total isolation of the hon. Gentleman's party in this field, as in all European fields?
I shall never feel isolated while the United States is on my side. My hon. Friends and I know Elmer Brock well; we share some of his views, but not the one that the hon. Gentleman mentioned.
I want to consider other matters that will be raised in Helsinki, if only at the margins. It is time to kill off the withholding tax; the Government should have done that a long time ago. It would have done better for the City and our relations with European Union partners if the Government had said from the start that they would not tolerate the tax and that they would veto it. Instead, a great deal of damage has been done. The Treasury's paper on the withholding tax, which was published in September, states:
The proposed directive is already having an impact on the market … Swiss bankers have been reporting unprecedented capital inflows since the Spring of last year.
The uncertainty is causing enormous damage. We handled the matter by saying that we would not tolerate it and that we would not even discuss it. However, the Chancellor and the Foreign Secretary have given supporters of the tax a little hope and, consequently, a messy compromise will be proposed. [Interruption.] Why do the Government continue to negotiate about it? It has been said that we will have a withholding tax if the eurobond market can be accommodated. It should have been made clear that the European Union has no role in setting individual countries' tax policies and that we would use our veto. If there is an opportunity to kill off the withholding tax at Helsinki, we should take it because that would be better not only for the bond market but for our relations with our European partners.
It is ridiculous for the German Finance Minister to blame the weakness of the euro on the lack of a joint approach to the withholding tax. Its weakness is due to all sorts of other reasons, which may prove to be temporary. The euro may bounce back.
Currency values go up and down. It is not surprising that a new currency is initially weak.
The drive for harmonisation will not stop with the withholding tax. We will be told that our corporation tax rate is unfairly low, and we will be asked to increase that to meet standards in Europe. The Foreign Secretary shakes his head complacently. However, time and again, Conservative Members have witnessed initiatives, which began by being small and specific, becoming wider and general. For example, the social chapter began as a social charter—a series of aspirations that were not intended to have legislative effect—but where are we now? The working time directive costs £2 billion.
I want to consider droit de suite, which is the effective tax on art sales that the European Union wants to impose on everyone. It may succeed in doing that, because the proposal is subject to qualified majority voting. It is a classic example of a European Union directive that will simply increase business costs and drive business abroad. One or two countries have that ball and chain round their ankles, and they are trying to use the European Union to shackle everyone else.
To give it its due, the Department of Culture, Media and Sport has fought hard. Ministers have pointed out in parliamentary answers that £750 million of sales a year could be lost and that many jobs could be put at risk. No one gains from this beggar-my-neighbour policy. I hope that the Government's attempts to prevent its adoption are successful. However, if the new relationship with the European Union and the good will that has been bought at the heavy price of true British interests is not good enough to stop the directive, which uniquely damages Britain, or to allow the Foreign Secretary to tell our partners that it is important to stop it because many jobs in London are at stake and businesses will be driven to Zurich or New York, the relationship has not been worth it.
The single market will also be considered in Helsinki. An enormous amount of work remains to be done. The Commission's primary task for the next two or three years should be to concentrate on opening the markets in telecoms, utilities, airlines and financial services. There are too many blocks in the single market's way.
The Foreign Secretary said that the agenda for the intergovernmental conference was one of the most important items for discussion at Helsinki. I agree, and if the agenda is restricted to the items that the Foreign Secretary specified, we shall not have much trouble with it. The European Union has taken far too long to start serious negotiations about including the countries of eastern and central Europe. Their inclusion requires institutional, but only minimal, change—the unfinished business from Amsterdam needs to be dealt with.
There needs to be redistribution in respect of the number of Members of the European Parliament, and votes in the Council of Ministers need to be reweighted. I would like there to be a dual majority and a population threshold should be introduced as a second tier of qualified majority voting. I agree with the Foreign Secretary that the relative influence of the larger states should be increased, although the smaller states must have influence as well, and perhaps a two-tier voting system on qualified majority voting is the way to solve that problem. I agree that that needs to be achieved and should be happy for it to be done on those lines.
The Government appear to be ready to concede our second Commissioner. That would be a big sacrifice for us to make, but I agree with the Foreign Secretary that a Commission of 30 or 35 people is unthinkable. Such a concession would be acceptable only if there are significant changes in the balance of power in the Council of Ministers. We have to sort that problem out and must have that in the bag before we give up our second Commissioner.
I have the greatest fears about the extension of qualified majority voting. The Government have laid out a serious of categories in which they say that they will not give up our veto, and I hope that we can rely on that, but I have to say to the Foreign Secretary that Ministers from other Governments, and certainly the Commission, want to go a great deal further. The Government appear to be ready to concede in some areas, and I hope that they will stop at the two or three that he named but, if he has read Chancellor Schröder's speech to the Assemblée Nationale yesterday, he will have seen that the German Chancellor, who wants much more qualified majority voting, does not share his view.
We are constantly told that we need qualified majority voting to be extended if an enlarged EU of up to 25 nation states is to make any progress at all, but what great queue of directives that are in Britain's national interest will come about only because of such an extension? Will my hon. Friend confirm that our policy remains what it was at the European elections—no extension of qualified majority voting?
May I make a little progress?
I am concerned about the call for new powers for the President in the nomination and selection of Commissioners. Mr. Prodi has made it clear that there is no doubt in his mind, or anybody else's, that he wants the Commission to be the Government of Europe and himself to be its President. I do not believe that we should cede those powers to the President of the Commission; they should remain with the Council of Ministers, which is properly and democratically accountable.
What really worries me about the IGC is that the agenda outlined by the Foreign Secretary is not the one that the President of the Commission has. When he was appointed President, he formed a committee—the so-called wise men's committee—of Simon, Dehaene and von Weizsäcker to look at degrees of institutional reform that would be necessary to make a much larger Community work. Its report is just what he wanted because it gives him the agenda that he wants, which is very dangerous and one that many others share.
The report calls for a massive extension of qualified majority voting to almost everything else: justice, home affairs, common foreign and security policy and some taxation issues. It calls for the EU to be given legal capacity—effectively, to be made a state—for the purposes of international negotiations and making treaties and for the division of treaties into two texts, one of which could be amended by qualified majority voting. We are now talking about surrendering the veto not only over tax, home affairs and justice, but over future treaty amendments. The Prodi agenda talks about integrating into treaties a charter of fundamental citizens rights, although the Minister of State, Foreign and Commonwealth Office, the hon. Member for Leicester, East, has said that the provision is not intended to be enforceable. I hope that he is right, but his intention is not shared by Mr. Prodi and others—they want it to be enforceable.
As we have seen before, such things start small—as a good intention and good words—and I have referred to the example of the social charter. It was never intended to be a basis for legislation but, within five years, it had become the social chapter. Ministers should be careful because things that start as sentiments and expressions of good intention wind up in the law of the European Union. Mr. Prodi makes no bones about his agenda; that is what he wants and many other European politicians share that aim. However it is wrapped up, it is an agenda for a European super-state and the Commission would become the Government of Europe, which is totally unacceptable to us and, I believe, to most British people. That is the ultimate dividing line and, if the Government allow it to be crossed, we shall inevitably be on a one-way street to a single European state.
Does my hon. Friend agree that, instead of simply saying that he intends to keep the veto in relation to defence, border controls and tax, it is time that the Foreign Secretary declared categorically that he will vote to stop in its tracks any treaty that removes or diminishes our national veto in any of those three areas?
My hon. Friend has made a good point. I raised that very question with the Foreign Secretary three and a half weeks ago, during Foreign Office questions. One of the reasons for my doubts about whether the Foreign Secretary really means what he says about going to the intergovernmental conference at Helsinki and maintaining our veto is the fact that, on that occasion, he refused to give the commitment that I sought—the commitment that my hon. Friend seeks now.
If the treaty contains provisions that erode the veto in regard to any of the issues that we are discussing, will the Government refuse to sign it?
If the Government go to Helsinki, as we are committed to doing, and oppose qualified majority voting on those issues, there will be no treaty making such a proposal for us to sign. The hon. Gentleman seems not to understand what actually happens during negotiations of this kind. Let me explain our position, for the avoidance of doubt. Our position is that unanimity will remain on all those issues and, if we do not agree to what is proposed during the negotiations, there will be no such treaty.
I am delighted to discover that the hon. Gentleman apparently shares my view of what the agenda for the intergovernmental conference should be. Will he now explain what his leader meant when he said, "The next treaty will contain a flexibility clause, or there will be no treaty."? Does the exchange that took place at the Dispatch Box mean that the Conservatives have dropped their commitment to a flexibility clause, or have they recognised that they cannot in all conscience ask for enlargement in such circumstances?
I dealt with this matter at length in last week's foreign affairs debate. [Interruption.] I did. I spoke at length about what we wanted in terms of a flexibility clause, and our policy remains the same. If the treaty has been negotiated but not ratified at the time of the next general election and if we form the next Government, we shall negotiate the inclusion of a flexibility clause along the lines that we have described, and we shall not accept a treaty that does not contain such a clause.
I have already given way to the Foreign Secretary. [Interruption.] I have already given way to him.
What I said to the Foreign Secretary was exactly the same as his answer to my hon. Friend the Member for Buckingham (Mr. Bercow). The Foreign Secretary said that he would not sign a treaty in those circumstances; indeed, he said that there would be no such treaty. Effectively, the right hon. Gentleman has said that there is no way that the British Government, represented by him, would put their name to such a treaty. We are saying exactly the same: that is what we would do if we could not get what we wanted.
The hon. Gentleman and I are not saying the same thing at all. I can stop any qualified majority voting on those issues, because unanimity would be required for a change to be made. The hon. Gentleman's problem is that inserting a flexibility clause would require unanimity, and no one else in Europe supports him. I repeat my question. Is the hon. Gentleman really saying that a Conservative Government would block the treaty, and block enlargement of the European Union?
I have made it clear that the answer to the question, "Would we refuse to sign the treaty in such circumstances?" is yes. Enlargement is proceeding separately—[Interruption.] It is. The enlargement negotiations are taking place with each—[Interruption.]
The enlargement negotiations are proceeding separately, and the timetable relating to them will come into effect considerably later than the Helsinki treaty, or the Lisbon treaty, or whatever it will be called. I think that the earliest new accession will be in 2004. There is plenty of time in which to sort this out. I must say that I have rather more faith in my party's negotiating abilities in those circumstances than I have in the right hon. Gentleman's.
Flexibility is one of the issues on the Helsinki agenda, and it is one of the issues that a fair number of other people want to discuss. They want to talk about flexibility—about some countries proceeding with further integration at a faster rate than others. What we want is flexibility in both directions, as I explained in some detail last week. We must not just allow deeper integration on the part of some countries; we must allow others to integrate at a slower pace.
The final item on the agenda that I want to mention is the millennium declaration, which is supposed to be a statement of vision of the European Union into the next millennium. Given the Foreign Secretary's speech, there is not much chance that the Government will contribute much, as they have to wait to be told by others what their vision is. I suspect that they will just carry on as usual.
What really worries me is that the Prodi vision will be the vision that is outlined as the "aspiration" in that declaration: massive extension of qualified majority voting, more power for the Commission—in short, an integrated Europe. The vision is of a European super-state, in which business will become increasingly uncompetitive, in which calls for protectionism will be heard, in which NATO will be fatally undermined, and in which the voice of the nation state will inevitably be subsumed.
That is one vision of Europe. It is widely held. It is the vision that the Government dare not challenge, but we have a different vision. It is of an outward-looking, free market, free trade, competitive Europe, whose security is founded on the Atlantic alliance. Above all, it is of a Europe of independent nation states.
Members of the Select Committee on Foreign Affairs are grateful that the business managers arranged the debate for the day after the Committee met the Secretary of State for Foreign and Commonwealth Affairs. I hope that all who attended the meeting thought that it was highly productive. Consistent with our aim of providing a service to the House, we are pleased that the transcript of yesterday's proceedings is now available in the Vote Office.
I say in passing that I hope that all colleagues who serve either on Select Committees, or on outside bodies—whether the NATO parliamentary assembly, the Council of Europe or Western European Union—will be ready to feed their expertise into the House. Too often, there is a gulf between the expertise that is built up by colleagues in Select Committees, or outside and that in the Chamber, where the real debate should still take place.
The Helsinki summit, by all accounts, is capable of being one of the key summits in the history of the European Union. As always, there is some overlap from past summits and a looking forward to the future, but it is likely that key decisions will be made on enlargement, the intergovernmental conference and the European security and defence identity at the summit; at least, preparations will be made for key decisions in that area.
As the Secretary of State and the hon. Member for Stratford-on-Avon (Mr. Maples) have said, there is a danger that the conflict with our partners on the withholding tax could seriously affect the spirit at the summit and, indeed, the time available. Ministers at ECOFIN—the Economic and Finance Council—are unlikely to reach an agreement. The battle lines have been drawn. If a compromise were easily available, it would have been found by now. If ECOFIN Ministers do not find that ready compromise, the matter will be referred to the Heads of Government.
We have made it clear that the eurobond market is a key interest. We shall not yield. I am delighted that the Government have shown that, where key UK interests are concerned, we shall stand firm, but we stand firm in the spirit of being partners. From my experience of dealing with European colleagues since the election, a sea change has come over the relationship with Europe. Until that time, there was clear isolation. Our friends in the United States did not value our isolation from Europe under the Conservatives. That was made crystal clear, but now we are accepted as members of the club, fighting our interests on the withholding tax, but essentially seeking to find a way through in a European spirit. I congratulate the Secretary of State on the way in which he and my right hon. Friend the Prime Minister have set that new tone in relations with our European partners, not European enemies.
That is why I find it so unfortunate and unhelpful when Conservative Members say that we are surrendering. Clearly, we have criticisms about the European Union and we are ready to make them, but, in the real world, there are a number of positive things that we value. We find that we can enhance our interests.
I see my hon. Friend the Member for Greenock and Inverclyde (Dr. Godman). He will know, for example, that Scotch whisky manufacturers were unable to make any serious headway in Japan on their own through the UK Government. It was only when we were able to negotiate with Japan on an EU basis that we had sufficient clout to ensure that the British interest was protected. That is how partnership works. It enhances our reach and the projection of our interests overseas rather than hampering and confining them, as the Opposition would.
We have criticisms of the European Union, but it would be helpful if from time to time there was a scintilla of positive remarks about it from the Conservative Front Bench. I should be grateful if the hon. Member for Stratford-on-Avon would trawl through all the speeches made by the Leader of the Opposition since the election and try to find a single example of him saying anything positive about the European Union. The Leader of the Opposition is not living in the real world, but indulging in the worst sort of populism, pandering to the old ladies at Conservative party conferences and trying to treat us as though we were a conference. He is trying to put the frighteners on people.
I shall give way, but perhaps the hon. Gentleman could tell us whether anything positive has escaped from his lips on the European Union.
Does the hon. Gentleman accept that every previous Prime Minister, including Conservatives, has started with a positive and co-operative approach to European policy? Does he remember our previous leader, who said that he wanted to be at the heart of Europe? Their minds are changed when they find that, sadly, the European Union is not in a position to solve problems and simply creates more nightmares for its people and those who suffer from its policies. If he doubts that, will he tell me the point of spending so much money on destroying a million tonnes of food every year?
I find no evidence of any such change in my right hon. Friend the Prime Minister. It is sad that the hon. Gentleman cannot find it in himself to say anything positive. Could we just have a little word about something that the European Union is doing right? Is it a totally bleak, negative and black world? That shows the sort of world that the Conservatives live and thrive in.
I shall talk mainly about enlargement. The intergovernmental conference is an essential prerequisite for enlargement. My right hon. Friend said yesterday that the British Government see the IGC as dealing essentially with the leftovers from Amsterdam. That is probably sensible because of the time constraint.
One of the frighteners that the hon. Member for Stratford-on-Avon put to us related to the Simon, Dehaene, von Weizsäcker report. It was commissioned by Mr. Prodi and the Helsinki council will pave the way for an intergovernmental conference, where the Commission has a subsidiary role. The report of the three wise men—we can call them what we will—is visionary and contains some useful matters for debate, but it will not be a key part of the IGC, which will have a more limited and sensible agenda.
My hon. Friend is talking about essential prerequisites for enlargement. Does he agree that radical and comprehensive reform of the common agricultural policy is essential for the development of an enlarged community? Where does Poland stand in the scheme of things? Are we to end up with a two-class system of membership because of a failure to reform the CAP?
Taking a positive approach, my hon. Friend has put his finger on a key matter. For some, the CAP is the ark of the covenant or the high water mark of European advance. Many vested interests are involved. Sadly, we were not in Europe when it was devised to help to shape it to our advantage, but the lines along which CAP reform will proceed were, if not set in stone, at least set down at the March summit in Berlin. That package is largely to our advantage. There is no serious prospect of radical revision before the expiry of the seven-year term of the budget agreed at the Berlin summit in March. Poland will have formidable problems of adaptation but that will be after 2006, and we will need essential derogations or major transition periods prior to that to ease Poland into the EU.
On the European security and defence identity, I was at Chatham house when Strobe Talbott made that important speech. Of course there are fears within parts of the US Administration—and properly so—as to where this process might lead. Our vision is clear and is shared by some of key players within the EU, including the Dutch and others. Clearly, we will seek so to mould the new European defence identity that it will be relevant to Europe, and not so visionary as to be unreal.
One of the major constraints is that European countries will not be prepared to pay the sort of money on their defence budgets which will make some of the visionary schemes practicable. However, one of the lessons of Kosovo is that there are real dangers that bush fires may start in areas such as the Balkans which neighbour Europe and which vitally affect European interests in terms, for example, of refugees, but on which we can do nothing or on which we are not prepared to help because the US, for various reasons, is not prepared to commit its own resources.
What is envisaged is not less US, but more Europe. There will be a preliminary stage at which the US decides whether it wishes to be engaged or not. Thereafter, clearly the sharing of assets will enable Europe—in a limited field, and on the tasks set down at Petersberg—to carry out tasks which are very much in the interests of the EU, but which we are not now capable of doing on our own.
France is outside the integrated military structure, and has confirmed that it will remain so since 1966. We have now agreed to set up a joint military committee and military staff with France which, as night follows day, means that that will be outside the integrated military structure. Does that give the right hon. Gentleman cause for concern?
It does not give the United States cause for concern because of the nature of the agenda that we are seeking. The United States has said that it would have reservations if the scheme went further along a particular road. It is our task, with the partners who share our views within Europe, to deal with this complex matter in such a way that it serves our interests and those of the Alliance as a whole. That is what the Government have set out to do.
Enlargements in the past have been, in part, for political reasons. The enlargements to encompass Spain, Portugal and Greece came after periods of dictatorship and sought to provide stability and democracy in those countries. I believe that the same motive is now relevant for the current six, and for the six who are likely to be endorsed at the Helsinki summit.
I very much agree with what my right hon. Friend the Foreign Secretary said yesterday about Cyprus. He said that we had hoped that the dynamic of Europe would provide a stimulus for a solution to the tragic division of that island. If it does not, we have made crystal clear that Turkey will not have a veto, and that the Republic of Cyprus—with all the complexities which will follow—will be eligible to join the European Union.
Slovenia was dealt with badly in its exclusion from NATO, and has been a victim of wider considerations. Slovenia—the most prosperous part of the old Yugoslavia, at the southern part of the Austrian Alps—is very much a democracy and should be able to glide into the European Union with no great difficulty.
Poland, the Czech Republic and Hungary have always had a European vocation. I lived in Hungary en poste in our embassy for a couple of years, and I saw then—even under the darkest days of communism—the European vocation of Hungary, the historical spear point of Europe against the east.
Poland has made enormous strides and Estonia, as a result of its application and the pressures on it, has made crucial changes in respect of its Russian minority and its economy. I am glad that they will be joined in the second wave by Latvia and Lithuania, so that we can consider the Baltic countries as a whole. Latvia and Lithuania are relatively small. They are absorbable and have made serious democratic strides. As it is difficult, because of Russian sensitivities, to bring them into NATO, there is all the more reason to bring them into a European Union security structure so that, together with their Scandinavian sponsors, they can help to provide an acceptable buttress.
That all presupposes greater centralisation and, as the Foreign Secretary said, dissipation of Britain's power at the centre of Europe. What evidence is there that the British public want that? This morning, I heard the Minister of State, the hon. Member for Leicester, East (Mr. Vaz), saying on the radio that his battle bus campaign was a great success. Every time the battle bus gets outside the garage, public interest in the Government's proposals seems to plummet. What legitimacy does the proposed extension have?
Expansion does not presuppose further centralisation. It will surely lead to greater diversification and more difficulty in finding the centralisation of which Conservative Front Benchers are so afraid. I have been involved in the European debate as a diplomat and in various other guises for many years and I am convinced that the British people are persuaded by facts. It is a fact that all other countries neighbouring Europe are desperately keen to clamber on board. They do not get frightened and run to nanny as Conservative Front Benchers do. They see the future for our continent in a positive way. It would be sad if the Conservative party were to run scared from Europe at a time when so many others want to join in a positive spirit.
Slovakia, after Meciar, is making enormous strides, and the Czech Republic is a ready sponsor. Malta has no serious problems and I hope that the Maltese Labour party will go through the same transformation as my own party. Stabilisation and democracy have been established in Romania and Bulgaria.
Clearly, differentiation is important. We cannot have the countries, either in the first six or in the following six, joining one by one, in part because of the ratification process. In national parliaments political constraints will arise, but we are talking about an historic and welcome task, which the British people will support, to widen and make more powerful the new Europe.
My right hon. Friend spelled out how, in the summit, we would respond to the withholding tax when it affects our interests but also spoke of how we would work positively with our European partners, because that too is in our interest.
It is clear that the principal issues that will be discussed in Helsinki will be enlargement, the related issue of the remit and terms of reference of the intergovernmental conference in 2000, and the European security and defence identity.
It would be a great pity if the withholding tax were allowed to overshadow the Helsinki summit, at which such important issues are to be discussed. There are more important things to focus on, such as enlargement and the ESDI. The truth is that the withholding tax would not achieve the objective of stamping out tax evasion among European savers and could, as we have heard already, do substantial damage to London's international bond market. The solution for individual countries that have a problem with tax evasion is to reform their own domestic systems of assessment and collection. The bond market in London is worth £1.86 billion and it must not be allowed to be disturbed, as the New York market was some years ago when a similar proposal was made and carried through.
There is no reason, however, why we should not explore the possibility of a voluntary code on unfair tax competition, which is against the interests of a properly functioning single market. If it is also against the interests of UK exporters and manufacturers, we should do all that we can to ensure that unfair competition is removed. One can legitimately say of the withholding tax that it should simply be withheld.
It is right on such an occasion to ask what the purpose of enlargement is. It is easy to offer the answer that it is to provide for suitable candidates the economic opportunities of trading in a single market, but it is more than that. It is worth reminding ourselves of the purpose of the European Coal and Steel Community—the primary forerunner of the European Union—which grew out of the terrible maelstrom of Europe during the second world war. When we offer suitable candidates the opportunity to join the European Union—and NATO, too, for that matter—we offer them the chance to entrench the values of freedom and democracy that have emerged in those countries, rather as the countries have emerged blinking into the daylight like the prisoners in "Fidelio", sometimes from a period of impenetrable totalitarian darkness.
Those countries have fledgling democratic institutions, some just a few years old. Those institutions would be underpinned by membership of the European Union, and experience tells us that. It is inconceivable, for example, that Spain might revert to a Franco, Portugal to a Salazar, or Greece to a handful of colonels. Those countries' membership of the European Union inhibits any such regression.
We should be clear that negotiations to join the European Union must proceed on the basis of merit, not of compassion. The Copenhagen criteria, to which reference has already been made, must not be weakened or undermined for any one country, no matter how deserving it might appear to be in other respects. There is little doubt, as the Foreign Secretary rightly recognised, that Turkey poses an especial challenge. Some say that there should be no dialogue about the entry of Turkey until it obviously and clearly meets the Copenhagen criteria. Indeed, some Liberal Democrats say that any such dialogue without the criteria having been met would simply encourage the view that entry could be achieved at a lower standard, thus providing no incentive to change.
My own view is rather different in emphasis. We must recognise that the European Union's treatment of Turkey in the recent past has caused great resentment in that country. I am sympathetic to the view that dialogue on human rights and enhanced political exchanges—always with the prospect of membership—are more likely to be successful. They should be accompanied by the clear understanding that no matter what progress may have been made on some of those issues, and no matter how deserving in all other respects Turkey may be, the Copenhagen criteria will not be reduced or diluted. Turkey would also be well advised to consider the consequences for its legitimate aspiration to join the European Union if it were to proceed with the execution of Mr. Ocalan.
The issue of enlargement leads naturally to some consideration of the IGC of 2000. We must recognise that the conspicuous failure to prepare for European Union enlargement has created an enormous pressure for success at the IGC. As has already emerged in at least one exchange this afternoon, reform of the common agricultural policy is one of the matters that must be resolved.
Even if enlargement were not on the table, there would be compelling reasons for reform of the CAP, but those reasons are doubly compelling under the pressure of enlargement. Indeed, one might go so far as to say that, without reform of the CAP, there can be no enlargement.
However, every step taken by the IGC must be measured against the principle of subsidiarity. The EU should exercise powers and competencies only if the policy outcome is demonstrated to be more effective and efficient than could be achieved by member states acting individually. To put that in less complicated language: decisions should always be taken at the level where they are most likely to be effective.
That embittered critic of the EU, the hon. Member for Rochford and Southend, East (Sir T. Taylor), shouts that there is no chance of that, but I directed my question to the right hon. and learned Member for North-East Fife (Mr. Campbell). Is he optimistic that CAP reform can take place in the next two or three years?
I apologise for describing the hon. Gentleman as the "hon. Gentleman for the Scottish constituency". I suppose that I run the risk of equating him with "Macbeth", the Scottish play whose title is never mentioned: if I call him "the Scottish constituency", his name may never be mentioned again.
I have some anxiety about whether the CAP can be reformed, but enlargement cannot take place if it is not. The common agricultural policy cannot be sustained if the agricultural industries of Poland, Hungary and the Czech Republic are admitted. Pressure will be applied from all directions to try and achieve CAP reform, but we must be realistic: if it is not achieved, enlargement will not take place. Europe sometimes does best when it is presented with a precipice and is able to respond to very considerable pressures. Without movement or change, what is on the table becomes impossible to attain.
No, I want to make progress.
I was dealing with the question of subsidiarity. The Liberal Democrat party argues for a constitution for Europe, to define and limit the powers of European Union institutions, to clarify and simplify treaties, to enhance transparency—a matter about which I shall say more in due course—and to prevent the unnecessary accumulation of powers at the centre. A constitution would also set out the rights of individual citizens.
It is perhaps too much to expect the IGC to achieve all that in the year 2000, but it most certainly should begin that process. A constitution for Europe would provide a stable, legitimate and accepted framework for future development, but we must make Europe's institutions more democratic and accountable. It has already been hinted in the debate that we should start with a powerful freedom of information regime—as powerful as the regime that may be established in Scotland, and possibly rather more powerful than what appears to be proposed for the rest of the United Kingdom.
The European Parliament should have equal status in law making with the Council of Europe. It should also have the power to vet and veto the appointment of every Commissioner, and to dismiss individual Commissioners. The size and working methods of the Commission must be streamlined, and there needs to be the reweighting of votes to which the Foreign Secretary referred.
The procedures of the European Court of Justice must also be streamlined. Justice delayed is justice denied, in Europe as elsewhere. It would be ludicrous if the beef problem were to take two years to resolve because of the sclerotic nature of the procedures of the European Court of Justice. As a lawyer, I can argue with some justification that those procedures must be streamlined.
The Council should vote in public. There should be a presumption that its proceedings be public unless good cause is shown.
The risible protocol on the application of the principles of subsidiarity and proportionality in the treaty of Amsterdam obliges member states to respect and uphold the existing institutional balance and acquis communautaire. Do the Liberal Democrats favour any change to those?
I thought that I had made that clear. I set out the principles by which I thought that the intergovernmental conference should work, the strategic objectives that it should adopt and the elements of reform necessary to make the Community's institutions much more transparent and accountable. The strategy must be to decide how best we can entrench subsidiarity and define the limits of the European Union.
That takes me to the European security and defence identity. When we last discussed that only a week or 10 days ago, much of the debate centred around a rather fine textual exegesis of the speech that Mr. Strobe Talbott delivered in September in London. Many said that the speech was against the ESDI. Those who read it know that it clearly sets out that the United States Government support a European security and defence identity subject to a number of entirely reasonable and sensible conditions.
It sometimes appears to me that the visceral anti-Europeanism of some of our Conservatives prevents rational discussion of the future of European defence. Their contributions are confined to predictions of damage and detriment that are wholly unjustified by the facts or political reality. Let us suppose that the shadow Foreign Secretary is right that the Prime Minister's enthusiasm for the ESDI is related to his unwillingness to make the sort of commitment that we urge upon him in relation to the single European currency. If trading in Europe is to be condemned, there is much anecdotal evidence to suggest that the previous Government acquiesced in the recognition of Slovenia in return for the right to opt out of the single currency.
An hon. Member who may be better informed than I am says that it is true. To accuse this Government of trading in Europe comes a little ill if there has been previous such trading.
We should not allow that to prevent us from considering the merits of the proposal. We criticised the Government's strategic defence review because it dealt dismissively with Europe in 11 or 12 lines. The position changed almost as we were debating it in the House. The Prime Minister was speaking elsewhere, or at least giving an interview to a journalist that appeared the day after the debate. He said that there had been a change in Government opinion. We welcome that change, because it was considerably in the direction of the policy position that we had often argued for.
I regard the joint paper agreed between the Government and the Liberal Democrats to which the Foreign Secretary referred as a sensible contribution to the debate. There was some amusement about that among Conservative Members but when the Maastricht treaty went through the House, the Whipping was, to say the least, robust. The famous book kept in the Conservative Whips Office was well thumbed. I do not remember the Conservative Government objecting to the fact that in almost every vote of significance, they enjoyed Liberal Democrat support.
NATO remains, and must remain, the bedrock of United Kingdom and European security. It is our collective defence. Europe's security would not be enhanced in any way by allowing the transatlantic relationship to be dismantled. The ESDI will succeed if it increases the operational effectiveness of European forces within NATO. It should allow European forces to act alone when the United States is unable or unwilling to contribute forces to joint actions.
The taxpayers of Europe will get better value from their defence budgets if their Governments work more closely together. In some cases, possibly under the influence of the defence capability initiative launched at the Washington summit earlier this year, Governments may have to seek to increase those budgets.
An effective ESDI can strengthen NATO and redistribute the burden of European security. It can answer the paradox whereby the United States calls on the Europeans to do more for themselves but when the Europeans show signs of doing so, the Americans feel that they are excluded. If the ESDI is to work, it requires a comprehensive European defence review.
We have some idea of where Europe is deficient: heavy lift, intelligence gathering, deployable forces, advanced technology weapons and joint command and control structures. We need a coherent strategy to address those shortcomings. We can take that agenda forward through the European defence review. subject to the following qualifications: all parties with an interest are consulted; all nations are involved and understand their responsibilities; there is no infringement of the national interests of member states; and we ensure that NATO is not undermined.
Conservative opposition to the ESDI is increasingly well documented. The Foreign Secretary, in what was then the absence of the Conservative defence spokesman, drew attention to the fact that he had gone abroad and given evidence that, on the face of it, was contrary to a Government policy. When he wondered what the consequences might have been if that had happened under the previous Government, I could not but think of the indignation that the then right hon. Member for Finchley, Baroness Thatcher, would have shown. Those of us who sat through those occasions when she was, shall we say, dismissive of Neil Kinnock, can only wonder how dismissive she would have been if it had come to light that a member of the Labour party had gone to Washington and given evidence before a congressional committee contrary to the policy of the then Government. That puts the matter into perspective.
What is absent from the debate is a genuine effort by the Conservatives to provide us with an alternative. I made this point 10 days ago. I am not still not clear from what the shadow Foreign Secretary said how he thinks that the relationship within NATO should be rebalanced or what assessment he has made of the likelihood of the United States playing as prominent a part in any future action as it did in Kosovo. How does he think that Europe should equip itself to cope with obligations that arise if and when the United States declines to become involved?
I see nothing suspicious in the joint declaration after the Anglo-French summit. It makes it clear that NATO is to remain the foundation of collective defence and that we are seeking autonomous capacity for the EU to launch and conduct EU-led military operations where the alliance as a whole is not engaged.
Some argue, particularly in the United States, that NATO should be given the right of first refusal. That proposition is worth exploring for two reasons. First, it emphasises the primacy of NATO. Secondly, if NATO is given the right of first refusal, it will compel the United States to make its mind up quicker and earlier than it was willing to in Bosnia or Kosovo, where American reluctance and reticence was very damaging to the joint effort, at least in the first instance.
So long as what we achieve contains no unnecessary duplication, does not discriminate against non-European Union members of NATO such as Norway and Turkey or against neutral members of the EU who are not members of NATO and there is no decoupling of the United States, the ESDI makes sense. It may not be a revolution, but it certainly makes common sense.
We have had a demonstration again this evening of the increasingly sceptical position that the Conservative party takes in relation to the European Union. The Foreign Secretary has already pointed up that rather unambiguous passage in the speech of the leader of the Conservative party at his conference, when he said that the new treaty must contain a flexibility clause, or there would be no new treaty. As the Foreign Secretary rightly said, if there is no new treaty, there will be no enlargement. The words of the leader of the Conservative party did not so much draw a line in the sand as build a pretty impenetrable fortress. One cannot resist the observation that the loudest cheers at the Conservative party conference were for those who argued for complete withdrawal from Europe. That is rather close, some might think, to the policy of the UK Independence party.
It is now possible to ask the question which, as I said last week, was previously unthinkable. Are there circumstances in which, under a Conservative Government, Britain would seek to withdraw from the European Union? That tells us a great deal, but in particular it tells us why it would certainly not be in the interests of the United Kingdom for the Conservative party to represent us at Helsinki or any other EU summit for the foreseeable future.
I am grateful to have been called so early in the debate. It is a pleasure to follow the right hon. and learned Member for North-East Fife (Mr. Campbell) and to have heard the other speakers in the debate, all of whom were positive, with the exception of the shadow Foreign Secretary, the hon. Member for Stratford-on-Avon (Mr. Maples). It is disappointing for Britain that there is a great divide within the Conservative party on Europe. In France, Italy, Germany and other European partner countries, there is not that divide. At Helsinki and other summits, their Governments have had the backing of their Parliaments in their negotiating stance, whereas the British Government go there with the Opposition unwilling to take part in developing that national consensus.
Not this early in my comments.
My position on Europe has been one of slow persuasion. Back in 1975, I voted no in the referendum. I supported our policy in 1983, but accepted that there had been a change for the 1987 election, when I entered Parliament. I will never forget the statement that Baroness Thatcher made on her return from the Rome summit in 1990. I was sitting where the hon. Member for West Worcestershire (Sir M. Spicer) is sitting now. Baroness Thatcher's manic anti-Europeanism in her statement that afternoon made the penny drop for me for the first time. Her Euro-scepticism was nothing more than pure undiluted English nationalism. As the right hon. Member for Caernarfon (Mr. Wigley) knows, I have spent the past 20 years fighting Welsh nationalism in my constituency. That afternoon, I felt that I had not fought Welsh nationalism at home to come here and adopt English nationalism from Baroness Thatcher or whomever.
The hon. Gentleman will recall that I voted yes in the referendum in 1975. He may not agree with the politics of Plaid Cymru in detail, but does he accept that we do not have xenophobic politics that close our minds and make us turn our back on the European dimension, which is so important to us all?
That is also true of the Scottish National party. I am pleased that there is a wide pro-European consensus in Wales and Scotland. We do not have any Conservative Members representing Wales and Scotland in Parliament. Unfortunately, the membership of the Conservative party drives it more and more into English nationalism. The Conservative party does a disservice to the country and ultimately to itself. For at the next election, the electorate will have nothing to do with this rampant anti-Europeanism.
In trying to be fair minded, I point out that many Scottish Conservatives, even though there are none in this place, are much more positive in their approach to the European Union than that lot on the Opposition Benches, as I am sure the right hon. and learned Member for North-East Fife (Mr. Campbell) will agree.
I am grateful to my hon. Friend for those remarks.
My dramatic change of view happened on hearing the comments by Baroness Thatcher in 1990 after the Rome summit. Unknown to me, that very afternoon no less than the then Foreign Secretary, now Lord Howe of Aberavon, was equally hurt and he resigned within two weeks—and within weeks, Baroness Thatcher was out of office. From 1992 to 1997, the right hon. Member for Huntingdon (Mr. Major) was Prime Minister and his big problem throughout his premiership was holding his party together on the European issue. Since 1997, the pro-Europeans within the party have given up the ghost; they have allowed the sceptics to take over. The right hon. Member for Richmond, Yorks (Mr. Hague), the recently elected right hon. Member for Kensington and Chelsea (Mr. Portillo) and all the influences within the Conservative party are leading the Tories like lemmings to the precipice.
I thank the hon. Gentleman for giving way on my second attempt. According to the hon. Gentleman, one minute the Conservative party is deeply divided, and the next, it has given way to one side. Is it not a fact that the Conservative party is in line with 64 per cent. of the British people, who have made it clear that they do not want Britain to abandon the pound and replace it with the euro? We are united to the point that 84 per cent. of our members support the leadership's policy.
I shall come shortly to some comments on the single currency, but the Conservative party is moving towards a position of wanting to renegotiate—that is the word that it uses—which is just a euphemism for withdrawal. It is moving rapidly towards withdrawal.
I have read comments made at the Conservative conference by the shadow Foreign Secretary and the hon. Member for Buckingham (Mr. Bercow), who is also a Conservative Front-Bench spokesman. They said that the alternative was to pull out of the EU. That is seriously being considered in certain Conservative quarters.
I return to the Government's line on the EU. Since May 1997, there has been much more constructive and positive engagement with our European partners. It is clearly our intent, over one or two Governments, to move to being at the heart of Europe in all its deliberations.
In his speech to the Lord Mayor's banquet a couple of weeks ago, the Prime Minister described Britain as a pivotal power in world affairs. In the past 12 months, we were influential in big decisions taken on the war in Kosovo. We helped not only to move British opinion, but to lead European opinion on what had to be done to bring Serbian atrocities to an end. We have influence not only in NATO, but in the United Nations and Europe—but before we can become that pivotal power, we have to join the single currency at some stage. When the economic pointers are in the right direction, it is the Government's intention—subject to the five economic tests—to join the single currency. I am a strong supporter, notwithstanding my realisation that, at present, the general public are wary and sceptical; possibly even 2:1 against joining.
I notice that the Confederation of British Industry is not against joining the single currency. Many leading businesses realise that, at some time in the future, we have to cross the rubicon. Next month, we look forward to a statement on our progress towards convergence. My right hon. Friend the Chancellor is running the economy extremely well; I understand that his public support rating is now ahead of that of the Prime Minister. The general public realise that the Chancellor has cleared up the problems that were left to us, and ensured that the accounts are in surplus. We have economic growth and stability and the prospects for the economy are extremely good.
My one criticism of our economic policy is the problem of the strong pound. As international confidence in Britain is so high, we attract speculators' money, which has driven up the value of the pound to unrealistic rates. That gives three spin-offs. The first is that there are great difficulties for manufacturers and for agriculture. In a sense, that has created a north-south divide. The service sector has not been particularly badly hit, but, during the past year, manufacturing has been affected by the strong pound.
The second relates to the balance of payments, where there are substantial problems that will become more apparent next year and in the following year. There will be difficulties in financing our trade because of those in-flows and out-flows. Thirdly, and most seriously, there will be problems for our membership of the euro. If there was a referendum on membership tomorrow, our membership would be unsustainable with the pound at its present level. We need the pound to fall by at least 10 to 15 per cent. against the deutschmark—to about DM2.60 or DM2.70. In a sense, I am critical of the Government's policy, although some matters are not directly under the control of the Chancellor or of the Monetary Policy Committee. However, problems are presented by the high value of the pound.
In autumn 2001, if we win the next election—as we are confident of doing—we shall review our position on membership of the single currency. During the two years until then, much could change, and that will help to change public opinion. The European economy is recovering. The European Commission's projections for next year anticipate that the European economy will grow by 3 per cent. That will help the value of the euro. The EC's projections for the UK are even better than those of the Chancellor—it estimates 3.4 per cent. growth next year and 3.6 per cent. for the following year.
In the light of the hon. Gentleman's remarks, will he confirm that further cession of sovereignty on fiscal policy would not, for him, represent a constitutional objection to British entry to the euro?
I see no political problem with membership of the single currency, but I am not going into any philosophical ideas beyond that. I can see no constitutional obstacle. Of the 15 members of the EU, 11 are currently members of the euro and have encountered no problems. All the indications are that Denmark, Sweden and Greece are moving towards joining the single currency. If we could join the currency at about the same time as those three countries, it would be in the interests of the people of Britain and, indeed, of the people of Europe.
The one problem—these comments are addressed more to my colleagues on the Treasury Bench than to the Opposition—is that we have promised to hold a referendum on joining the single currency. In the European elections, turnout in this country was only about 20 or 25 per cent., although the turnout of 41 per cent. in my constituency was the highest in Britain. I fear that those absurdly low turnout figures would be repeated in a referendum on the single currency. In that case, what interpretation could we put on such a referendum?
There is a parallel with the referendum on devolution held in Wales two years ago. Sadly, the turnout was only 50 per cent., and the vote in favour was barely 50 per cent. That is not a powerful mandate—I would have preferred an 80 per cent. turnout, and an 80 per cent. yes vote, but it was only 50 per cent. of 50 per cent. When we hold the referendum on the single currency, there will not be a 50 per cent. turnout, even though there may be a 50 per cent. vote in favour of joining. I wonder whether the result of such a referendum should be binding—[HON. MEMBERS: "Ah!"]—I put that as a constitutional question.
In 1976, there was no problem with the referendum on the renegotiations of our terms of membership of the EU; there was a good turnout and a yes vote. However, I leave my colleagues on the Treasury Bench with the question of whether we need to reconsider our policy on the referendum.
The Conservative party lets itself down and lets the country down by so crazily taking an anti-European direction. If the Conservatives want to win back any of the people of Wales and Scotland, they should drop their appalling English nationalism. The Government are doing extremely well in Europe—working with our partners and making progress. However, I should like us to make faster progress towards the single currency, so that, in 10 years time, we will be pivotal not only in the Commonwealth and NATO, but in the European Union.
I am sorry that my English nationalism offended the hon. Member for East Carmarthen and Dinefwr (Mr. Williams). However, to reply in all sincerity to his extremely fair speech, I hope that he will realise how much his comments will have offended those who believe in democracy.
The hon. Gentleman said that Labour is committed to a referendum on the single currency; the signs are that there may not be a full turnout; and the result will probably go the wrong way, so perhaps we should disregard it. I have heard speeches from many strange people, but I think that the hon. Gentleman is a sincere person and I hope that, on reflection, he will realise that it is appalling to state that something should be disregarded because the result might go the wrong way, especially as this is the end of the road. I hope he realises that if we were to join the single currency, there would no longer be much point in the good people of Wales voting at all, whether they were to vote for the splendid Welsh nationalists, the Labour party or even the Conservatives.
I hope that the hon. Gentleman will also reconsider his view that one can join the single currency with no effect whatever on one's tax affairs. Hon. Members should listen not only to English nationalists such as myself but to the president of the Bundesbank, Mr. Tietmeyer. The other day he said:
A European currency will lead to member nations transferring their sovereignty over financial and wage policies as well as in monetary affairs.
But here is the key part of his statement:
It is an illusion to think that states can hold onto their autonomy over taxation policies.
Indeed, it is an illusion. There is no way that a single currency could work for Europe unless there was co-ordination of taxation policies and regional aid policies.
If the hon. Gentleman doubts that, he should ask himself whether there has ever been a successful single currency anywhere in the world. The answer is no; no such currency has ever worked. It has been tried time and again, and it simply cannot work unless—as in the case of the United States—it covers an area with one Government, one Treasury, one policy of handing out money and a feeling of nationhood.
Currency unions have been tried twice in Europe—the Scandinavian currency union and the Latin currency union. Both failed. It has been tried elsewhere.
The most notable example of a single currency that has worked, which seems to have escaped the hon. Gentleman's attention, is the dollar, which prevails throughout the 50 states of the United States.
I was making that very argument. A currency union can work in an area such as the United States, where there is one Government, one Treasury, a system of aid and a feeling of nationhood. Does the hon. Member for East Carmarthen and Dinefwr realise how different things are in Europe?
Let us consider the issue of taxation and wages. I obtained some figures that I thought might be of interest to the average person. If a person on a salary of £12,000 lives in the USA, he keeps 83 per cent. of his salary. If he lives in Britain, where we have a splendid new Government, he keeps 80 per cent. If he lives in France, where they also have a splendid Labour Government, he keeps 73 per cent. If he lives in Germany, he keeps 66 per cent. That is a huge difference.
If we move to a higher level of £25,000—I believe that the hon. Member for East Carmarthen and Dinefwr may know more people like that—a person would keep 78 per cent. of his salary in America, 73 per cent. in Britain, 67 per cent. in France and only 55 per cent. in Germany. It is simply not possible to have a kind of harmony between nations with such a huge variation in taxation.
Let us take overall taxation. The hon. Gentleman will know that there is a wide variation between the 44 per cent. of GDP that goes to tax in Europe and the 36 per cent. in Britain. Although single currencies have never worked when they cover an area with different countries and different Governments, the chances of such a currency working in Europe are even smaller.
I thank my hon. Friend for giving way to me as someone who has respected the fact that, on this issue, he has been singing the same song for much more than 20 years. Is he aware that the chief economist of the European central bank, a gentleman by the name of Dr. Otmar Issing, has said in support of his thesis that there is
no example in history of a lasting monetary union that was not linked to political union"?
My hon. Friend is absolutely right. I just hope that people who support the single currency in Europe will realise that. We are not trying to be difficult and to be English nationalists. We are saying that people will be in terrible trouble because when single currencies are established, we always end up with a great deal of unemployment and misery. Often there is disruption too, because, sadly, part of the area experiences strong economic growth while another part suffers deep recession, resulting in terrible trouble.
It strikes me that the hon. Gentleman's argument is not so much about whether Britain should join the single currency, but that the single currency is destined to fall apart anyway. I accept that the euro has had a difficult first year, but what if, in three or five years' time, that single currency turns out to be a resounding success? Is he saying that Britain should still not join it?
I would have to feel very like Jonah. The book of Jonah is one of my most popular readings in the Bible. It is a good lesson in humility for any Member of Parliament, or for anyone who thinks that he knows anything, to read about Jonah. Poor old Jonah went around telling all the people that Nineveh was going to be destroyed; and then God changed his mind, and poor old Jonah, having given up a great deal—I have given 25 years to fighting against the European Community—learned a lesson in humility. It would be terrible but a very good lesson in humility, and I would be happy for the people of Europe and the people of Britain.
I repeat in all sincerity: I have been screaming and shouting and making a nuisance of myself for a long time, with others, saying certain things; and the trouble is that, to date, we have been right. To date, an awful lot of deplorable things have happened, and an awful lot of people have suffered a great deal as a consequence.
I give the hon. Member for East Carmarthen and Dinefwr one silly example. I remember when we were about to join the exchange rate mechanism. I am not saying that I am clever; I am saying that we must start to look at things as they are, instead of being carried away by nonsensical slogans. At ERM time, everyone thought that the ERM was great. The Government at the time, who probably were not Labour—I cannot really remember—said that the ERM would bring us growth and stability. All the top organisations of the world, including the Confederation of British Industry—which I am sure gets a Euro-grant for saying such things—said that if we joined the ERM it would bring growth and stability, and that things would be great. A few silly twits like myself—the English nationalists—were saying, "This will inevitably bring artificial happiness or artificial misery." That was obvious. It was not that we were clever; it was obvious that that would happen.
What did happen? Five hundred thousand good people—many of whom were in Wales, I am sure—had to be put out of work because of that nonsense. We had to spend piles and piles of money supporting our currency at an illogical, nonsensical level, and ultimately it was a crisis—a disaster. We even had to have a poor old Conservative Chancellor of the Exchequer making himself look silly and apparently disagreeing with the Prime Minister, which was very, very sad indeed.
Would my hon. Friend care to recall the sage observation of the Eritrean ambassador to the United States—whose country, after a long and bloody conflict with Ethiopia, came to mint its own coinage—that:
An independent nation with its own policies needs its own currency to implement its decisions"?
How right he was.
I am genuinely not trying to cause political disruption or to attack the Government. I simply ask them please to consider that whenever we have said things like this, we have been proved right.
I remember hearing optimistic statements, such as those made by the hon. Member for East Carmarthen and Dinefwr, when we held a referendum on our membership of the European Economic Community. I think of the farmers who are constantly on to Members of Parliament. There are many farmers in my present constituency, which is not very nice for them. I have them all coming at me. I keep reminding them that, many years ago, they were told that they would have a wonderful time if the United Kingdom joined the EEC, and that it would be great. They were all for it then—just like the fishermen in Scotland. They have indeed had a wonderful time, but inevitably such a situation creates oversupply.
There is now a massive oversupply of food, and no one knows what to do about it. It is not that Governments or organisations are being nasty. The EU spends massive amounts—larger than ever—on agriculture, as do the UK Government and others. We are simply spending lots of money on dumping and destroying food, and in the meantime the farmers are getting deeper and deeper into trouble.
What can we do? The answer is nothing. We have massive oversupply, and if we were ever to extend the European Union and bring in delightful countries such as Poland and Romania, which would love to join and take advantage of the common agricultural policy, it would simply make things worse.
I know that the farmers are delightful—they tell me so all the time—nice, decent, respectable people, but what can we say when we meet them? We can try to con them, but we are wasting our time if we do. It is the same with the fishermen. I remember that I originally came from a place called Scotland, although I am an English nationalist. During discussions on the referendum, I could not find one Scottish fishermen to support the no campaign; but when I go to Scotland now, I find that all the fishermen hate the EEC. They did have a great time, but it has caught up with us, and now the poor old fishermen are being ground into the dust and cannot find any income or prospects. It is a horrible situation. I just wish that people would face up to it.
I have heard all the arguments. We were told time and again that membership of the EEC would be great. We know that it has been a disaster for our trade, with a total deficit of more than £150 million. We have heard, too, about how the CAP would be reformed, but it is not being reformed and cannot be reformed. We have heard that Europe will be tough on fraud, but we know that Europe is hopeless at dealing with fraud, and that there is no chance of that.
I may have mentioned to one or two colleagues that the thing that really offended me was hearing about the gentleman from Liverpool, a convicted criminal, who received a grant of £140,000 from the European Union to try to improve the social situation of prostitutes in Hungary, who were very much neglected. What upsets me is that he never did anything for the prostitutes—they are still as neglected as ever—but bought two new cars and a new house. I find that type of thing appalling.
Those who believe that they can find easy answers are kidding themselves. I believe that the worst are the National Farmers Union. I even heard that the NFU approached a very respectable supermarket in Britain, whose name I cannot remember, and said, "Because we have so much meat on sale, we must get you to tear up your contracts with that wonderful country called New Zealand"—which has always helped us if we are in trouble—"and stop selling New Zealand lamb." The supermarket did what it was told, which was horrifying—one of these days I will remember its name. However, when one thinks of what New Zealand has done for us when we have been in trouble, it is shameful and shocking that that supermarket stopped selling New Zealand lamb simply because there is a glut of meat in Europe. I wish people would realise their obligations.
If we accept that those who have complained about the EU in the past and English nationalists have regrettably been proven right to a small degree, can we not at least ask the Government of whichever party—I am not sure who will be in power next year—to think carefully about the fact that for the first time Europe has gone too far and is about to suffer major problems? The first problem is the single currency. I know that Ministers are cautious and say, "We know that the euro has gone down some way, but don't worry, it will come up again." However, it will not, because international people do not and cannot have confidence it.
If the Liberal Democrats doubt what I say, they should consider the figures for 30-year bonds that I obtained yesterday. Let us take the example of someone like a Chief Whip who is rich and has access to funds. If he puts money in a 30-year bond in Britain, he will receive only 4.78 per cent. in interest from the bank, which is not very much. In Germany, he would get 6.06 per cent. and in France he would get even more—6.14 per cent. What does that tell us? It tells us that, for 30-year bonds, international money markets say that we should avoid the euro like the plague, but that Britain is quite good even with its splendid Labour Government and the possibility of an English nationalist Conservative Government taking office after that. International money markets do not have confidence in the currency and it will continue to decline. Even though we shall receive help from our friends from Japan who have kindly said that they will try to prop up the euro—I know that they will do everything possible to help us—that will not be enough. We cannot buck the market; we are heading for a major problem.
If such a problem arises, what on earth will Europe and the British Government do? We are interested in the success of Europe and we want it to be successful. Therefore, it is desperately important that the Government and Europeans should consider what they will do if the euro continues to go wrong. If it does, that will affect not only people with money but those with jobs. The question, I am afraid, is serious.
The second problem is the expansion of the European Union. I honestly do not think that people realise the extent to which that will create a dramatic crisis if it goes ahead without a fundamental reform of the common agricultural policy, which is not possible. Those who think that they can reform the CAP are simply kidding themselves. Instead of being carried away as they probably will be with the idea of expanding the EU, they should realise that that is not possible.
My final point is about the Commission. Critics of the EU have constantly pointed out that its whole structure is so undemocratic that it leads to a great deal of unfairness, fraud, mismanagement and misdirection of public money. We have said that over and again, but not because the Commission is made up of bad or nasty people. The structure of the Commission is such that if we kick them all out, as we did this year, and bring in a new crowd of 30 saints, the same problems will arise. Mr. Prodi is now in charge of the Commission. He is a rather unusual person and perhaps not a saint—I am sure that none of us here are. However, the Commission's structure is such that we will face a crisis.
I congratulate the Chancellor of the Exchequer on what he did in the discussions on tax and savings, but I hope that he will not cave in at the Helsinki summit. I also hope that he will listen to those whose arguments have been borne out by events and that he will accept that Europe may be heading for a great crisis. We should be concerned just as much about Europe as we are for ourselves. I hope that people will think about the points I have made, because I genuinely think that they are true.
I welcome the opportunity to take part in the debate. The most important issue on the agenda at Helsinki will be enlargement. We have a moral and a practical responsibility to push forward enlargement as quickly as possible. We have a moral responsibility because, for decades, we lectured the former eastern bloc countries about the need to move to democracy. When they have done that, it would be wrong and irresponsible for us not to acknowledge that and to bring those countries into membership.
We have a practical responsibility involving our own self-interest and security interests. The real danger following the cold war is that of a continued division in Europe between those nations that are permanently rich and, those that are permanently poor. The permanent exclusion of some countries will create the threats of illegal migration, a growing drugs trade and a degree of political instability that is not in this country's interests. That is why enlargement is crucial and should not be just a pious aspiration.
We must will the means as well as the ends. That is why the agenda for the intergovernmental conference must be set firmly in place at the Helsinki summit. We must pick up on what my right hon. Friend the Foreign Secretary described as the leftovers from the Amsterdam summit, but they are large leftovers and we must get to grips with the problems quickly. We must bring the decision-making structures and the institutional structures of the European Union, which were originally designed for six countries, up to a standard that can cope with an EU of 20, 25 or more countries.
That will involve considering the size of the Commission, the reweighting of votes and a further extension of qualified majority voting. There is a strong argument for reforming the voting system. The point has already been made—it is worth repeating—that if enlargement takes place without reform of the voting system, we will be in the indefensible position in which the countries that represent the majority of the population of the EU would not be able to muster a blocking minority under qualified majority voting. We cannot support that. Clearly national sensitivities are involved and votes cannot accurately reflect the size of populations. However, there must be movement towards the larger nations. To put it crudely, Britain, Germany, France, Italy and Spain must have proportionately more votes.
In any organisation—the EU is no different in this respect—achieving such change would mean us offering something in return. Therefore, along with the other larger countries, we should consider giving up one of our Commissioners, so that each country has, at this stage, one Commissioner. I would however like to go further than that, and I would welcome the comments of Ministers on this subject. It has not been fleshed out in the past.
If the EU is ultimately made up of 25 or 30 nation states, it will be preposterous to have 25 or 30 Commissioners. There are only portfolios for 12 or 15 Commissioners. The devil makes work for idle hands, so if we accept the proposal to have 25 or 30 Commissioners, we will create the impression—and often the reality—of excessive bureaucracy. Too many people will be trying to do the same jobs, and that is an impediment to decent decision making in the European Commission.
If we stick to the notion that every country must have a Commissioner, we shall support the false notion that the Commission is a quasi-Government. Although I am strongly pro-European—it is in Britain's interests to be in the EU—I am not in favour of a federal Europe. Dealing with that issue sooner rather than later is in all our interests. For the next wave of entrants, we could accept the proposition that every country has one Commissioner, but at a later date—possibly in 2009 or 2010—we should limit the number of Commissioners to, for example, 20. That would be a sensible move.
Clearly, we would have to consider what to do when there are more than 20 member states. It would be perfectly proper, in those circumstances, to consider a system of rotating Commissioners from the different nation states, and the focus of decision making would then be on the Council of Ministers and the European Parliament. That would be a far more effective way of dealing with the democratic deficit and of beginning to explain to people what influence they have over decisions in the European Union.
At the intergovernmental conference and in the discussions at Helsinki, we need to address the issue of extending qualified majority voting. In the right circumstances and on the right issues, that is a perfectly sensible arrangement and could be in our national interest. The Conservatives extended qualified majority voting 42 times while they were in office. Either they were going through an 18-year temporary loss of their senses—which is always a possible explanation—or they realised that it was in Britain's interest to extend that procedure on certain issues. I therefore support the Government's position that there are certain areas in which it is in our interest to be prepared to consider such an extension.
I strongly make the point that an extension is not against the national interest. When the Foreign Secretary opened the debate, he gave some figures that I shall expand on. He said that last year under QMV, we lost a vote on only two out of 213 occasions, and so far this year, we have not lost a vote on any of 181 occasions. The idea, therefore, that QMV is not in this country's interest is simply not borne out by the facts, and we should use it to stop other countries unreasonably blocking reforms that are in our interest.
We need to focus on the reform of the Commission, where Neil Kinnock is doing sterling work, but we need also to consider what we should do when there is clear evidence that individual Commissioners have been involved in misconduct and have committed an act that brings them and their political office into disrepute. There should be a clear and readily understood mechanism for dealing with that.
In securing the nomination of the existing Commission, President Prodi secured an informal right to dismiss Commissioners on the basis of the personal undertakings of the commissioners who were the nominees in 1999. There is a strong, or at least arguable, case that we should go further and enshrine that right in the treaty so that it is clear that if misconduct occurs, there is a mechanism to deal with it. I heard the shadow Foreign Secretary say that the matter should be left to the Council of Ministers. Considering what happened last year, however, I do not think that that is an effective mechanism, and we should consider including a provision in the treaty.
Offstage at the council, there will also be bilateral discussions with the French Government about the continuing beef crisis and their refusal to lift their ban. I hope, however, that the matter will be resolved shortly. Let me make it clear that there is no dispute between hon. Members on either side of the House—the French Government are clearly in the wrong. The scientific evidence is overwhelming, and the changes that have taken place mean that British beef is among the safest in the world. The key dispute is not about interpreting the French Government's position but about how we resolve the problem, get the beef ban lifted and stop the French Government blocking our exports.
I argue, as do the Government, that our only leverage over the French is our membership of the European Union, because a set of legal rights and responsibilities gives us influence. It is worth repeating that outside the European Union, 60 countries are imposing a ban on British beef and there is nothing whatsoever that we can do about that. Australia, Canada and the United States of America all oppose lifting the ban on British beef, and we can do nothing.
We have the right to adopt selective import controls, but that is a dangerous course because we regularly export £10 billion of goods to the European Union, and only British exports and jobs would be the losers.
I am glad that my hon. Friend asked that question because it leads me on to my next point. Conservative Members have argued that we should ignore the rules and the legal situation, and simply begin a trade war by imposing an illegal ban on French imports. As I said, our exports and jobs would be at risk. There is a history to the Tory tactics on that issue. At the beginning of the beef dispute, when the right hon. Member for Huntingdon (Mr. Major) was Prime Minister, there was a time when he said "We shall not accept this. We shall not agree to any European Union decision until the issue is resolved." He said just that on 21 May 1996, and then humiliatingly climbed down on 21 June 1996.
That underlines that such tactics do not help us to make progress, or protect and pursue the British national interest. We should continue to do as we are doing and use the rules that apply by dint of our EU membership, while pursuing the French diplomatically so that we can get the ban lifted sooner rather than later.
At Helsinki, there will also be a substantial debate about the withholding tax. Some people, including many Conservative Members, will say that it is the thin end of the tax harmonisation wedge and that if we join the single currency, we will be on a slippery slope and eventually all tax rates will be set in Brussels. There is no evidence to substantiate that allegation. Certainly, nothing in the Maastricht treaty implies that there must be centrally set and co-ordinated tax rates. There is a 3 per cent. limit on Government deficit as a proportion of gross domestic product, but individual nation states still retain the right to comply with that limit by using either high tax, high spend policies or low tax, low spend policies.
Earlier, we discussed countries that share a single currency but do not have harmonised tax rates. The United States is the most obvious example. Contrary to popular Euro-sceptic myth, there is no great desire among other European Union nations to push for further tax harmonisation. A Conservative Member referred to corporation tax earlier in the debate. The Italian Finance Minister is on the record as saying, last December, that harmonisation of corporation tax would be untimely, questionable and, above all, hardly feasible. The Spanish Prime Minister has made it clear on a number of occasions that he is opposed to a single tax rate because it would be a recipe for inefficiency. The Conservative party's argument that there is a great momentum towards having unified tax rates throughout the European Union does not stand up to detailed scrutiny.
In principle, the withholding tax is logical because its purpose is to tackle tax evasion—a notion that I should have thought we would all support. However, the current proposal is seriously flawed. Like some hon. Members who spoke earlier, I believe that there is a danger that we will drive capital out of Europe. There are many issues that should be dealt with in the nation state and many that should be dealt with at a European Union level, but tax evasion should be tackled at an international level, across the board. I welcome the fact that the Organisation for Economic Co-operation and Development is currently considering the issue.
If the withholding tax proposal makes further progress, however, the best way to proceed is to have banking transparency, which I know that the Government are proposing as an alternative. I hope that we can convince our European partners on that issue.
Let us be absolutely clear: the withholding tax is a specific proposal, not the thin end of the wedge of broader tax harmonisation. That disagreement has arisen is not a huge problem. I believe in Britain's membership of the EU, but I am not in favour of a federal Europe. It is inevitable that, from time to time, substantive disagreements will erupt between different EU countries. When legitimate disagreement arises, it is important that it is not used as a stick to beat the very principle of the EU, as some Conservative Members would like. In addition, we should be careful that disagreement does not occur too often, because that might damage and undermine our negotiating position on other issues.
The withholding tax would affect not only the London bond market, but Jersey, Guernsey, the Isle of Man and many Caribbean territories, including British overseas territories. They are not involved in tax evasion or other acts currently deemed illegal, but their markets would go out of business if the withholding tax were to be imposed.
That is why I do not support the withholding tax as currently formulated. However, I sincerely believe that we have to tackle the issue of people investing income and profits overseas and not properly paying tax due within their own country. The issue cannot be tackled solely within the EU, because of the danger of flight of capital. It should be dealt with internationally, so I welcome the OECD's consideration of the issue.
We as a nation should make clear at Helsinki our fundamental commitment to Britain's membership of the European Union because membership is manifestly in our interests. More than 50 per cent. of our trade in goods and services is with other EU countries; eight of Britain's top 10 trade countries are EU countries; 3.5 million British jobs and one seventh of all UK income and production depend on sales to European countries.
The hon. Gentleman is generous in giving way. Why does he believe that, were we to be outside the EU or to have a more remote relationship with it, Europe would erect some sort of trade barrier around us in revenge? Is it not fanciful to suppose that, if we were to negotiate with Europe, not stridently, and succeed in establishing a relationship with which we all feel comfortable, all trade would be cut off at a stroke?
I do not think it fanciful. If we were to withdraw, significant impediments and barriers to British goods would be erected by those who are currently our partners. It is fascinating to note that the hon. Gentleman's question clearly implies that there is now a substantial body of opinion on the Conservative Benches that is not merely Euro-sceptic, but fundamentally hostile to Europe and in favour of Britain's complete withdrawal from the EU.
I always enjoy listening to the hon. Gentleman's orations, but he strikes me as a rather slippery specimen on this issue. He says that he opposes a federal Europe, but does he agree with the President of the European Commission, who is on the record as having stated recently:
The euro will inevitably lead to closer and closer integration of countries' economic policies … This demands that member states give up more sovereignty."?
Is the President right or wrong to say that?
I do not agree with that proposition. In reply to the accusation that I am slippery, I can only say that people in glass houses should not throw stones. I take the accusation on the chin.
The degree to which our fortunes are tied to those of the EU was highlighted by the great non-appearance of the Leader of the Opposition's flat-bed truck. The House will remember that, when the Britain in Europe campaign was launched, the right hon. Gentleman said that he intended to tour Britain in a flat-bed truck, denouncing the single currency, all its evils and all its ills. He said that the details of the lorry would be available within a week, but six weeks have passed and we have heard nothing. Apparently, the reason for the delay is that the right hon. Gentleman has discovered that the only such trucks available are made by companies in receipt of foreign investment and he wants to avoid the embarrassment of travelling in such a truck.
That is all good knockabout fun—it is good to have a laugh at the expense of the Conservatives and their leader. However, the importance of that story is that it underlines certain facts. Yes, there are in this country four firms that produce trucks, all of which are derived from foreign investment. However, 2,200 British people derive their livelihood and income from those firms, and their jobs would be put at risk if we followed the Conservative policy of withdrawing from the EU.
We are having a serious discussion and want to avoid party games. Therefore, will the hon. Gentleman tell the House what happened to the two European countries that voted in referendums not to join the EU? Were they ruined? Someone is spreading a rumour that they have great prosperity and the lowest rates of unemployment in Europe.
If the hon. Gentleman is seriously comparing Britain with a country such as Norway in terms of dependency on trade with EU countries, he needs to look at the facts. It is possible for a small nation to survive on the edge of Europe, but it would not be possible for a country such as Britain, 50 per cent. of whose exports go to the EU, to survive after withdrawal, because we would face enormous retribution from our current EU partners.
Let me conclude—[HON MEMBERS: "Hear, hear."] Had I taken fewer interventions, I might have finished sooner. However, let me end with the single currency, which is not on the agenda for Helsinki, but is an issue that is likely to be discussed at the summit. I support the Government's policy on the single currency, because it will be in Britain's interests to join a strong single currency. We should strive to meet the five criteria we have set and, having met them, we should put the issue to the people in a referendum.
I disagree with my hon. Friend the Member for East Carmarthen and Dinefwr (Mr. Williams). Were we to pursue the policy he suggests, it would be manna from heaven for Conservative Members, who would accuse us of all sorts of duplicity. Regardless of turnout, if we cannot convince the British people in a referendum, we should not join the single currency. Therefore, I hope that we stick to our commitment to a referendum on a single currency.
Before that referendum is held, we have our work cut out to inform the British people and persuade them of the merits of Britain joining the single currency. In that context, I welcome the work done by my right hon. Friend the Foreign Secretary and his colleagues in making the case for Britain joining a strong single currency in the right circumstances. The longer we stay out of the single currency, the higher the price we pay. Last week, The Daily Telegraph—not the most Europhile of newspapers—reported major inward investors in car manufacturing in this country saying that, if Britain adopted the Conservative policy and stayed out of the single currency indefinitely, they would withdraw their investment from this country, putting millions of jobs at risk. That is the real issue that we should be addressing in this debate.
The debate should focus on our identity; what future vision we have for our country within Europe and how that identity matches the real world. The world has changed fundamentally over the past 20 years, and I want a Government and a policy that will deal with the world as it is, not as we would wish it to be and not as it was 20 or 30 years ago. I am confident that this Government will begin to build upon that at the Helsinki summit.
I agree with the hon. Member for Harlow (Mr. Rammell) that difficult decisions will need to be taken on enlargement, the weighting of voting and on the number of Commissioners. I part company with him rather sharply on his view of the capability of Mr. Neil Kinnock and the abilities that he may bring to the difficult task of reforming the Commission, which is much needed. I know of nothing in Mr. Kinnock's career that suggests that his experience and talents are those that are required to make sense of the Commission.
Next week's European summit at Helsinki will take place at a time when we must all accept that the people's view of the European Union is that it is tarnished and tired. Those of us who want it to work must say that something needs to be done about it. To say that a relaunch is needed is not too strong a phrase. It is important to recognise, however, that a great deal has been achieved over the 50 years of its existence. That is something that is almost never heard in these debates. We should also recognise that there is much more to do.
In no member country is there more to do to increase acceptance and understanding of the EU than in this country. We all understand the reasons for that, which are our history, geography, perhaps our temperament, and our culture. Those factors make it quite difficult for us to accept some of the things that continental Europeans accept, given all the wars that they have endured. Their experience gives them a very different perspective of the EU. However, it is difficult to believe that, nearly 27 years after our accession, as we were told yesterday, the results of a British social attitudes survey would show that 50.3 per cent. of people want to leave the EU or reduce its powers. [Interruption.] My hon. Friend the Member for Teignbridge (Mr. Nicholls) cheers. I do not share his enthusiasm for that. I lament that that is the position 27 years on, but we must recognise it. Those who are on my side in the debate would want to do something about it.
Part of the reason for 50.3 per cent. of the British people taking such a view is the media. All politicians blame the media, but many of them have much to blame the media about. In my political experience, there has been an unprecedented campaign among so much of the media, a good deal of which is owned by foreigners, who seem intent on souring Britain's relations with our European partners. We all have our own examples, and there are hundreds of them every month.
I shall not detain the House too long, but I shall give two examples. The Sunday Telegraph told us that the wicked European Union was going to do away with St. John Ambulance vehicles. It stated that EU regulations would force it to buy a new fleet. When tackled about it, the executive of St. John Ambulance said that it was nothing to do with any EU directive—it was just the responsible thing to do.
I shall give one more example and then move on. The News of the World stated that there was a "totally bonkers" proposal that the EU intended to ban the sticks used by our lollipop ladies. That had nothing to do with the EU. The Government had decided to introduce a new and coherent design, one already used in Wales and based on one agreed by a United Nations-backed convention dating from 1966.
Such examples are very funny, but they are extremely serious because they have poisoned the view of our electorate about our relationship with, and our interests in, the EU. It is us, the political classes, who must bear the main responsibility. We can have our side swipe at the media, but is we who have failed. Indeed, both parties have failed. We know that the issue transcends parties. We remember the see-sawing and zig-zagging of the Labour party. We are all too well aware of the problems and differences that we have in the Conservative party. The Foreign Secretary has quite a long record of being anti-Europe. My memory tells me that, when the Prime Minister fought a by-election in Beaconsfield, the neighbouring constituency to mine, he did so on an anti-European ticket. We all have responsibilities and difficulties. We know that there are Labour Members who share the predominant view of those of my hon. Friends who are currently in the Chamber.
In support of what my hon. Friend has said about politicians being responsible, would he accept that some politicians in the EU are themselves responsible? I have in mind that Neil Kinnock and others felt it necessary to resign as being part of a collective responsibility for corruption, and then felt able to return to office. Surely that creates a cynical view among the British electorate about what is going on.
As I said at the beginning of my remarks, I would be the first person to agree that many mistakes have been made, of which my hon. Friend has drawn attention to one. With respect, there is nothing gained in scoring points on that matter. We must move forward and get things right in future, whatever mistakes have been made in the past.
On those issues, there are fundamentally two groups. As I have said, views on them go across party. There are those who think that the EU will never work, or at least will never work for the United Kingdom. They want us to get out of it. A larger group, of which I am one, believe that we must stay in, make the EU work as best we can and get the best deal for the United Kingdom.
I believe that the first group is completely wrong and would harm the United Kingdom if its ambition of removing us from the EU were achieved. I do not wish to sound patronising, but the members of this group have a complete right to their view. I could mount a defence of their view even though I do not believe in it. I speak rather like a barrister.
I have only one request for those people who take the view that we should get out of the EU, and that is honesty. If they want us out, they should say so. Damage is being done by those who want us out but who are not prepared to say so. They criticise continuously, using the silly sort of newspaper reports to which I have referred. They demand new initiatives in the EU, which they know our partners would find completely unacceptable, because they are against the spirit of the union. They look for defeat and, having been defeated, their enthusiasm for getting out is rekindled.
My hon. Friend's appeal for honesty in this context is justifiable. Will he tell me honestly whether he has read the treaty of Rome? Secondly, if he has read it, will he honestly deny that it is patently a document in which a common market with a single currency are not ends in themselves but part of a project for a federal Europe? Has my hon. Friend read the treaty and will he deny that that is its content?
I have not read every word of the treaty of Rome. However, when we were debating other treaties, I referred to the treaty of Rome and worked my way through it. I have ploughed my way through most of it.
The treaty envisages an ever-closer union of peoples. It is up to us as more or less intelligent political leaders and individuals to make sense of the treaty of Rome, and not to be bamboozled by legal terminology. My hon. Friend should not denigrate what has been achieved and what more can be achieved. Those who want us out of Europe should be honest. We need an end to the subterfuge of those who will not declare that they want us out, but seek to make such a withdrawal inevitable.
For the second group, in which I include myself, the first task is to make sure that we state our case more clearly. The declared policy of my party is to be "In Europe, not run by Europe". I endorse that slogan. There are two elements to that proposition, and both are important.
For me, and surely for any reasonable person, to be in Europe means to approach Europe in a positive spirit—a spirit that will ensure as far as possible that the union will work—and to recognise that, in a union of 15 countries now, and more in future, working with so many partners entails compromise and sometimes pragmatism. Pragmatism is a great principle of the Conservative party.
We must make sure that people understand that there are benefits from being in Europe, and what those benefits are. If there are no benefits, let us get out and stop saying that we want to be in Europe. When more than 50 per cent. say that they want to get out, that demonstrates our failures so far and the need for us to work harder.
On the other part of the formula—"not run by Europe"—I can think of no hon. Member who would claim to want to be ruled by Europe, but too many in our party refuse to recognise and welcome the fact that, since Maastricht, things in Europe have been moving in a direction that ensures that there need be no question of being ruled by Europe.
Maastricht was a watershed, followed by Amsterdam. After that, the European Union switched from being a nascent European federation in the days of Mr. Delors, to become a treaty-based system of managing relations between sovereign states. If any of my hon. Friends are in doubt about that, I refer them to a useful article that appeared in The Economist on 23 October, which sets that out in interesting detail.
If we understood that, we would put away the fear and the myth of the European super-state that seems to keep some of my hon. Friends awake at night, tossing and turning in their beds. The Heads of Government have taken back from the Commission the powers that were drifting to it. We should understand the degree to which the situation has changed.
I am dismayed when I have discussions with colleagues who fail to recognise that change. They also fail to recognise that European politicians, for various understandable reasons, use different rhetoric from us. The word "federal", for example, means different things in different states—we are all familiar with that old chestnut. I know of no leading politician in Europe, whether in government or in opposition, who is aching to hand over the power to govern his country to some supranational body or other group of foreigners.
Take the euro. Let us understand that the member states of the EU are not led by idiots. They have extremely successful economies, and their Governments will not jeopardise what they have achieved over the past 50 years. They decided that, for both economic and political reasons, the single market and the single currency made sense. However, they did not hand over control to the European Commission. They handed it over to an independent central bank, because their experience, which on the whole had been successful, showed that independent central banks work.
Such a climate is relatively new—it is certainly new to some of my hon. Friends. It gives Britain a chance to achieve our objectives in Europe, and to implement the initiatives for which we are well qualified—to liberalise trade, to open up markets, and to do what our former right hon. Friend, Sir Leon Brittan, did in the Uruguay round. We have our chance in Seattle to do that again.
If Britain operates with good will, it can bring to the European Union the sort of initiatives that most of my hon. Friends would welcome. We have many more friends in Europe and potential allies in such objectives than we sometimes seem to think.
I am grateful to my hon. Friend for giving way. Does it perturb him that entry to the euro would entail monetary policy being run by a governing council of the central bank that comprises three Germans, two Dutchman, two Finns, two Frenchmen, two Italians, two Spaniards, a Belgian, an Irishman, a Luxemburger and a Portuguese, whom we are legally prohibited from seeking in any way to influence in their conduct of policy?
As we have not allowed ourselves to be in at the creation of the central bank, we cannot complain. My hon. Friend is a classic example of being hostile to Europe, calling for initiatives which go wrong, and exulting when they go wrong. He is smiling, and he knows that I am right.
We have heard much in the debate about defence. It has been known for a generation that western Europe has failed to keep pace with the Americans in its defence effort. I was involved a quarter of a century ago in a project called the two-way street. I tried in my modest way to help in that, but we failed for various reasons. We go on failing, and the gap between the American capability and the western Europeans' gets worse. That was highlighted in Bosnia and Kosovo, and we all know now about the differences in weapons, strategic lift and all the other aspects that my hon. Friend the Member for Stratford-on-Avon (Mr. Maples) listed.
In Europe, we have 50 per cent. more population than the Americans, but they spend 60 per cent. more than we do on defence. According to last year's figures, the average per capita defence expenditure in the United States was $1,038; in the European Union, it was $389. The gaps in expenditure and capability must be closed. We Europeans must do more and do it better, whether through the Anglo-French initiative, the Franco-German initiative, the rapid reaction force, EDSI—the European defence and security identity—or by changing the Western European Union. We must have a capability of our own.
All of us who are dedicated Atlanticists know that we must be extremely careful about NATO, which is the most successful alliance that there has ever been, and the commitment to the Americans. They know that, we know that, the Germans know that, and I have every confidence that we have enough nous to create a relatively modest but effective European military force without upsetting NATO and the European Union. We have had that debate in the Conservative party for many years; I hope that it will not last much longer. I hope that we will face reality and tell those who want us out of Europe to be clear, open and honest. The rest of us can then make sure that we are truly "In Europe, not run by Europe".
I end with a quotation from a former distinguished Prime Minister, who said:
Britain does not dream of some cosy, isolated existence on the fringes of the European Community. Our destiny is Europe, as part of that Community.
Those were the words of Baroness Thatcher 11 years ago.
Like the hon. Member for Rochford and Southend, East (Sir T. Taylor), I opposed joining the Common Market in 1975. The difference between us—apart from the fact that he was Member of Parliament for Glasgow, Cathcart and I was 11 at the time—is that he opposes the single currency on the ground of English nationalism, which is a principled position, while I oppose it for good, solid, democratic, Labour reasons, to which the Labour party clung for a long time. It has not entirely abandoned them, but it has moved away from them in the past few years. Clearly, my view brings me into conflict with many of my hon. Friends, who perceive the European Union to be a liberal and enlightened force for good in the world. I do not impugn their motives; they genuinely believe that the European Union is a force for good. However, reality does not bear that out.
The starkest example is not from within the European Union, but is provided by its record in the third world, towards which it has behaved in a way that is reminiscent of the colonial ambitions of last century. It has ridden roughshod over the third world, and treated some of the poorest countries in the world contemptuously. The Select Committee on International Development has done good work in exposing the way in which the European Union, under the Lomé convention, manoeuvres third world countries into taking on disadvantageous trading arrangements, and tries to remove barriers that have been put up by democratically elected Governments—not only in countries but between Governments—so that those countries can be more easily exploited by the big banks of Europe and multinational companies based in Europe.
European Union aid has been mismanaged and is mired in corruption. The Commission has direct control over approximately a third of Britain's aid budget to the third world—that is a third of £2 billion. For example, two or three years ago, the Commission dreamt up a scheme to help the Guarani indians in Paraguay. That was a laudable aim, but the Commission was told not to plough any of the money—which was £12 million—into Paraguay to help the indigenous indians until their land claims had been sorted out, in case the money was used for corrupt deals, bribes and seedy activities.
Last year, the Commission decided to start handing over the money as part of phase 2 of the operation. Two independent reports pointed out that hardly any land deals had been settled. One report was prepared by St. Andrew's university and the other was by Dr. John Palmer, a British anthropologist, who pointed out that only one out of the 47 land claims had been settled. Later, Jonathan Mazower of Survival International prepared a report, which found that indigenous indians continued to sleep on the streets and to live in extremely poor and deprived conditions. Nevertheless, the Commission did not care and, against the opposition of the United Kingdom Government, it ploughed the money into Paraguay. That money is now helping to finance bribery and corruption. That is only one example. Corruption is rife in the European Union's dealings with the third world.
Surely the hon. Gentleman does not condemn all the European Union's actions in the name of development. The Lomé convention has protected the banana growers of the Caribbean from having to resort to other crops, such as types of drug, to make a living. It has done much good, and it may disappear soon. Many good aid projects come from the European Union. I accept that some are inefficient and misplaced, but not all of them are in that category.
There are probably examples of good aid projects, but the European Union and the Commission are structurally mired in corruption and mismanagement. While we are on the subject of bananas and the third world, let us consider the European Union delegation to the World Trade Organisation in Seattle. A resuscitated multilateral agreement on investment is hidden among the delegates' position papers. The WTO had originally intended to agree the MAI some time ago. It was dropped because of enormous opposition, not least popular opposition, which continues. However, the Commission has revived it, stuck it in the proposals to the WTO and taken it to Seattle. Despite the fact that it is a slightly watered down version of the original MAI, if it is adopted, multinational companies will be able to sue elected Governments for implementing the policies that they were mandated to carry out.
Against that background, economic and monetary union can be seen for what it is—a plan by a small, rich, white club of countries to institutionalise monetarism while exploiting the third world. Yet those of us who point out the deficiencies in the system are condemned as illiberal luddites, who live in the past. I have heard no real justification for the Maastricht treaty, which is a clear institutionalisation of monetarism. The right hon. Member for Horsham (Mr. Maude), who signed the treaty in 1992 is now shadow Chancellor and is hardly a dyed-in-the-wool socialist. He believed at the time that the treaty made a strong case for monetarism.
I have read the Maastricht treaty. As I turned the pages, my heart sank to my boots. It is a monetarist's poisonous dream. I have never heard a sound justification for handing over enormous power to bankers who sit in Frankfurt and are removed from the people about whom they make decisions and whose lives they affect. They are unelected and unaccountable.
Monetary policy is currently more important than it has been for a long time. In the 1940s, Britain had interest rates of 2 per cent. or 3 per cent. Fiscal policy was used to keep the lid on inflation and to control the economy. That system has largely been abandoned by many western European Governments. Monetary policy has become increasingly important, and powers have been handed over to bankers headed by Mr. Wim Duisenberg.
The next stage will involve establishing a central tax-gathering mechanism. A single currency has never been established without some central tax-gathering
mechanism. That is a step on the path to political union. If hon. Members do not believe me, let us consider the views of some of the key supporters of the single currency. Hans Eichel, the German Finance Minister, argued:
We will now strive towards political unification … EMU will not be enough.
Wim Duisenberg—that loveable mop top and President of the European central bank—said:
The process of monetary union goes hand-in-hand with political integration and ultimately political union.
In 1994, the President of the Bundesbank, Hans Tietmeyer said:
In my opinion there is good reason to believe that, to ensure lasting success, a monetary union requires—over and above the joint central banking system—a more far-reaching political association than that defined in the Maastricht Treaty.
My hon. Friend the Member for Harlow (Mr. Rammell) mentioned the current Prime Minister of Spain and to answer him I refer to Felipe González, the previous Prime Minister of Spain, who I would have expected to have more in common with my hon. Friend and I politically. He said recently that
the single currency is the greatest abandonment of sovereignty since the foundation of the European Community … we need this United Europe … we must never forget that the euro is an instrument for this project".
I am grateful to the hon. Gentleman for giving way, and I endorse the thrust of what he has said. Does he agree that it is important also, in the light of what my hon. Friend the Member for Wycombe (Sir R. Whitney) has said, to recall the remarks made by the former Irish Prime Minister, John Bruton, who said:
We must recognise that political unity of purpose will be vital if the euro is to work. Countries will not be able to dine à la carte at the European table any more … Europe needs to develop political institutions which have sufficient democratic legitimacy to demand sacrifices of Europe's peoples and to mobilise them in a common cause.
Could it be any clearer?
The key phrase is "democratic legitimacy". The EU as it stands will never have any democratic legitimacy and the same is true of reform of the common agricultural policy—I do not see how it can be done, and the ability to carry out such reform is simply not in the current system.
My hon. Friend the Member for Buckingham (Mr. Bercow) referred to a former Taoiseach talking about freedom of political action and monetary union. Does the hon. Gentleman not recall that, for decades, the punt and the pound were linked? That seemed to have no impact in restraining the foreign policy of the Irish Republic.
We could have come out of such an arrangement at any time, but the single currency and EMU represent the point of no return. We could not return from EMU unless the currency collapsed; if it did, we would pay the price with massive levels of unemployment and poverty beside which the unemployment and poverty of the 1930s would begin to pale by comparison.
I respect the views of my hon. Friends and know that they are genuinely held, particularly by my hon. Friend the Member for Harlow, but the reality of the record of the EU and, in particular, the Commission is completely at odds with the perception held by some of them.
I would like to put a couple of points to my hon. Friend the Minister. First, this decision is clearly the most momentous that this country will face in the next 50 years or has faced in the previous 50 and, rather than looking at the propaganda that is flying back and forth, the Government should launch a White Paper or a Green Paper—as was done in the early 1970s, when we started talking about the Common Market—that sets out the arguments objectively. Secondly, a lot of taxpayers' money is being spent on promoting the EU and the single currency. The European Commission uses a lot of money to propagate its belief in the single currency, particularly in schools across Europe. That is certainly happening in schools in this country. Are we to see taxpayers' money used to put the opposite point of view?
One of the lessons of 1975, which created great bitterness about the referendum, was that the "Yes" campaign was absolutely loaded to the gills with cash that flowed in from multinational companies and the big institutions. The "No" campaign was almost skint and was hardly able to launch itself because of lack of finances. There should be some way of making finance available—in this case, to the "No" campaign—to achieve balance. I should like my hon. Friend the Minister to reply to those two points.
We are indeed heading towards a serious and deep watershed in respect of the next intergovernmental conference and the future of the European Union. We have heard much today and on previous occasions about the euro and the implications of the single currency. As far as I am concerned, we should have vetoed the Maastricht treaty in the first place, but, having said that, European government has indeed been created. It has also been endorsed by the Government under the Amsterdam treaty, which has taken us further and deeper into European integration and more European government.
We are heading for another intergovernmental conference and on its agenda are extensions of qualified majority voting in the arena of European government. I intervened on the Foreign Secretary on that very point because one simply cannot talk about qualified majority voting without having regard to the functions to which it is being applied. I made a similar point to the Minister of State, the hon. Member for Leicester, East (Mr. Vaz), when he appeared before the European Scrutiny Committee a couple of weeks ago. He gave me no satisfactory answer because there is not one.
We are being taken further and deeper into that process, so I have to disagree profoundly with my hon. Friend the Member for Wycombe (Sir R. Whitney). He seems to believe that, somehow or other, the idea that we are being taken into European government—or, to use another expression, a European super-state or one country divided into provinces—is an illusion. I strongly urge him to read all the quotations that have been mentioned throughout the debate and many others besides. He should perhaps even read the Official Journal of the European Community, where he will find many quotations that he could read to his satisfaction.
Rather than reading quotations, taken in or out of context, why does not my hon. Friend look at what is happening on the ground? Does he not see that the Heads of Government have taken back from the Commission the sort of powers that cause him understandable concern?
The short answer is that if my hon. Friend looks at the treaties, he will see that functions have been continuously moving in the direction of more centralisation and more European government. That is what the Maastricht and Amsterdam treaties were all about and that is why I took such a vigorous part in tabling 240 amendments in respect of the Maastricht treaty.
At the risk of adding another quotation to those already deployed, what does my hon. Friend make of the remarks of Romano Prodi, President of the European Commission, who was quoted in The Times of 27 October? He referred to the European Commission as the "European government". Asked to justify that term, he said:
But what is the Commission? We are here to take binding decisions as an executive power. If you don't like the term government for this, what other term do you suggest? … I speak of a European government because we take government decisions.
Absolutely. I am delighted to be reminded of that quotation by my hon. Friend because that is exactly what such people say. Only in this country is there the ridiculous charade that these developments are not all about political union. Are we to be regarded as crazy because we know that what is going on in the rest of the continent is being recorded—day in, day out—in every newspaper? Only in this country is there a ridiculous attempt to try to cover it all up with camouflage or smoke and mirrors.
On the question whether we should co-operate with the nations of Europe, of course we should; it is absolutely crazy to imagine that we would not want to co-operate with other countries. However, the issue is not co-operation, but the legal framework and the co-ordination resulting from the creation of European government. The European Court of Justice enforces the legal decisions that are being taken. On the question of the recent Financial Times survey, is it not interesting that this, of all newspapers, refers to 50.3 per cent. of people saying that they want to get out of or reduce the powers of the EU?
The crucial point is the second one. Three times this year, we—I—have been accused by the Prime Minister of never having wanted Britain to join the European Union in the first place, and of wanting to leave it. When I tried to challenge him on the day in question, he refused to accept my intervention. I subsequently received a letter from his private secretary, which said nothing at all.
The fact is that an attempt is being made—and the Government have been building it up—to smear the Conservative party by attributing to it a policy of withdrawal. I should be delighted to engage in a full-blown debate with the Minister of State and the Foreign Secretary, not to mention the Prime Minister, about the veracity of their allegations. It is a monstrous slur; it is not justified. Some of us argue for renegotiation of both the Maastricht and the Amsterdam treaties. I certainly do, because I think that otherwise it will be all words—all smoke and mirrors. I do not believe that we can solve the problems that face the European Union unless we have renegotiation on those terms.
The Government, however, are getting away with the allegation that renegotiation means withdrawal. It is up to us to repudiate that, and I state emphatically—certainly on my behalf and, I believe, on behalf of many colleagues—that those of us who want to sort out the problems of the European Union do not accompany our desire with a demand for withdrawal. I want to put that firmly and clearly on the record.
I think that it may help some of my colleagues to reconsider the question of their refusal to renegotiate the Maastricht and Amsterdam treaties, because the two issues are complementary. I am not thinking only about the questions of the euro and tax harmonisation, which we heard today—and I entirely agree—would lead to increasing harmonisation through corporate taxes and, eventually, income tax. There is a simple reason for my view. All those functions have been created, and a good many more will be created in a few months time, but the question will then arise of how to fill the gap between the creation of some functions and that of others—we are talking of rights, duties and responsibilities—with a federal budget of only 2.5 per cent.
The answer is that it will be done, but that it will be necessary to impose a tax to pay for defence, foreign policy and all the other matters that will be involved in the next treaty, but which have their origin in the Maastricht and Amsterdam treaties.
I personally would not, although I see good reasons for altering the basis on which some of the provisions of the single market operate, and I think that mistakes were made in the creation of the regime. I voted for the Single European Act because I believed, as I believe now, that if we could get it right we could secure tremendous gain for all European countries, in terms of prosperity and so forth, by reducing the logjam of restrictions on trade and making Europe competitive. I have never had a problem with the Single European Act in principle, but the same does not apply to the Maastricht and Amsterdam treaties.
I believe that, especially as we move from Amsterdam to the next treaty, foreign policy and defence policy are on a par with the question of the single currency. We need to get that into the open. The idea that the whole issue is just about the single currency is a massive delusion. I am totally against the single currency: I would say "never", I have said "never", and I will continue to say "never". I say that, however, because the adoption of a single currency would subvert the House of Commons and our democracy.
I shall not argue the case in depth because there is no time for me to do so, but the adoption of a single currency will completely undermine the democratic decision making of the House of Commons, which depends on the ability of voters to go to polling booths and exercise free choice. It depends on the subsequent general election and the convening of Members here as a free Parliament. The decisions of those voters in those polling booths will effectively be taken away if we have a single currency and a central bank: in that event, decisions will be made by people who are both unaccountable and independent. I am against the single currency for that reason.
On the question of foreign policy, we are moving into dangerous territory. I was interested to hear the Foreign Secretary refuse to rule out the idea of qualified majority voting on that. I strongly recommend those who read this speech in Hansard to refer to an excellent pamphlet produced by Sir John Coles, entitled "British Influence and the Euro". Until 1997, Sir John was head of the British diplomatic service and permanent under-secretary at the Foreign Office. Given the authoritative weight that it carries, the pamphlet is compulsory reading. It is absolutely brilliant.
The pamphlet deals with, for example, the question of foreign policy. Referring to Maastricht and Amsterdam, Sir John says:
That is what the CFSP"—
the common foreign and security policy —
has come to. For the time being, it falls short of a single European foreign policy but only just.
Sir John then demonstrates the way in which the policy will develop, commenting:
If the centralising tendencies of the EU continue unchecked"—
in the coming years and indeed if the CFSP moves any closer to a single European foreign policy, then the independent British voice will be increasingly muffled, with consequences for our influence in the rest of the world".
Sir John proceeds to develop his argument further. He issues another warning in regard to defence policy:
Should that ability"—
our ability to have our own highly professional and well-equipped armed forces—
ever become limited by the creation of European armed forces, subsuming national forces and subject to central EU direction, then British influence overseas would be sharply reduced.
I was interested to note that the Foreign Secretary did not refer to the Franco-German meeting on defence and security in Paris yesterday. Contrary to all the assertions
we have heard today that there would somehow be adequate protection for the existing arrangements in the Western European Union and NATO, and that we were all members of an harmonious club, Sir John said:
France and Germany are waiting from the European Council of Helsinki for substantial advances on agreement of European policy for defence and security and are in favour … of decisive progress for the development of military capabilities of the European Union and of decisions to put in place a decision making body as a military instrument at the heart of the European Union. These elements are indispensable to give the EU the autonomous capability to make decisions, and … to launch and carry out military operations",
with a nod in the direction of the alliance.
France and Germany
propose to create strategic mobility, in stages and within the appropriate multinational frame, and a European command of aerial transport"—
European Union transport planes, and so forth. The fact is that we are now witnessing the undermining of NATO on a substantial scale. Those who argue the opposite must answer my allegations.
Sir John says:
The more centralised the EU becomes, the less distinctive will be the policies and activities of the individual member states. There can be little doubt that the single currency is the most important act of political centralisation in the EU's history … We are on the way to a single economic government of Europe. And since government is largely about economic policy, the ultimate prospect, unless the process is checked, is one of little power being left in national capitals.
Those are the statements of a man who, until recently, was head of the diplomatic service; he retired only in 1997. By going down the route of qualified majority voting, we will increasingly be ensnared in European government.
Another issue came up when the European Scrutiny Committee went to Finland recently—the charter of fundamental rights. I should like to hear from the Minister of State that we will definitely, without any shadow of a doubt, veto any attempt to put such a charter under the aegis of the European Court of Justice. In the Select Committee, he said that it would be a showcase of rights—a political statement. Yesterday, the appointment of Lord Goldsmith as a member of the drafting committee was announced, but the language was imprecise. There are suggestions that it should not be a legal text. I want to hear from the Minister that it will not be a legal text.
I can give the hon. Gentleman that assurance. I have told him before, and will tell him again, that the charter is to act as a presentation point of the rights and responsibilities that citizens of Europe have received under treaties. It will not be legally enforceable or binding. Lord Goldsmith will be an excellent person to serve on the drafting committee.
I hear what the Minister says, but there is much determination among other member states to take us in another direction.
On the question of the Prime Minister and my call for a constitutional White Paper, it is inconceivable that the British people should not be informed of the rights that they enjoy at present under our constitution and to have those explained in terms of the developments in the EU—not just the single currency, but matters such as justice and home affairs and the whole business of the new judicial area. The Prime Minister cannot be allowed to get away with it. An early-day motion in my name has well over 100 signatures. I strongly urge other hon. Members to sign it. It is inconceivable that the British people should not be given a proper White Paper. In his evidence the other day, the Minister of State said that there would be a White Paper, but that it would not deal with the questions that I have raised with the Prime Minister. I should like the Minister to explain why not.
For the simple reason that it encourages, all the way down the line, further and further integration. The more those people have their place men, the more certain it is that they will take us deeper and deeper into European government. That is the clear intention.
I regret to say that I do not have much confidence in the idea of flexibility. Some years ago, I secured an Adjournment debate about the European Commission's view on flexibility, but I have considerable reservations about applying the restrictions to new areas of legislation and, indeed, to unspecified core areas.
Having said that, I believe that today's Conservative party is very much on-message. I am concerned that renegotiation should be part of the package. To renegotiate Maastricht and Amsterdam is a fundamental prerequisite to getting ourselves and Europe out of the mess that Europe is in now. The direction in which the Conservative party is going is the right direction. On some counts, 75 per cent. of the British people are against the single currency. The party has to get itself up in the opinion polls from 29 per cent. to at least 70 per cent. We will win the general election by getting our priorities right.
I should like to concentrate on the European security and defence identity aspect of the Helsinki conference.
As has been mentioned, the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) is waging a campaign on that front, starting with his infamous appearance in the United States Congress and continuing in The House Magazine. The essential theme is, "But what will the Americans think about it?" It goes along the lines that, if Europe shows that it can operate alone, the American attachment to NATO will be weakened. It is almost like saying that we should stand around in Europe looking helpless, and charitable America will come along and underwrite European defence policy. The message from my own side and many other sides is that such a policy is both a forlorn hope, in that the Americans would never tolerate it, and undesirable from the point of view of our foreign policy interest.
American foreign policy interests are not congruent with those of Europe. There is a substantial area of common ground, but it is not an exact parallel. Therefore, although NATO should and will be preserved, and is the keystone of our defence policy for common areas of interest, we need a dimension that enables us independently to tackle other interests that are not in that sphere.
Even within NATO, Europe needs to ensure a contribution that is much more in line with its growing economic strength. At present, European gross domestic product totals $8,346 billion, which is almost the same as the United States GDP of $8,231 billion. There are no economic grounds why we should take an inferior place in such defence matters. At present, despite that position, the defence capability of the European nations of NATO is nowhere near a match for that of the United States.
While such an imbalance exists and Europe remains dependent on United States defence capability, our ability to conduct foreign policy will suffer—it will be circumscribed—and there will be political pressure from the United States, which will complain that Europe does not shoulder enough of its own defence burden. That alone will weaken the alliance; some of the murmurings in the United States Congress have already made that plain.
That will weaken the NATO alliance far more than any indications of a separate capability for Europe to operate on its own. After all, why should young men and women from Kansas and California be involved in Bosnia and Kosovo, on the doorstep of the European Union, if young men and women from London, Lille and Ludwigshafen are not? Today, the answer to that question is ignominious for Europe.
American troops have to be involved because, without them, European forces lack the necessary range of capability and so cannot mount a substantial operation on their own. It is not because of a manifest lack of resources. Last year, European defence budgets totalled $200 billion and the American defence budget $250 billion, according to the House of Commons Library. Europe spent 80 per cent. of the United States defence budget on defence, but its capacity is nowhere near that of the United States.
European countries were recently unable to mount an operation of 50,000 to 60,000 personnel in the Balkans without American help. What an indictment—and what complacency from the Conservatives, who are objecting to the first step now being contemplated in the European Union to remedy such a glaring inadequacy.
Surely the hon. Gentleman understands that what worries us is not an improvement in Europe's defence capability, but the fact that it is proposed to be outside the structure of NATO. If it were being done inside the structure of NATO, it would add to our combined strength with the Americans, but the proposals will undermine the whole structure.
The capability is required for times when Europe's foreign policy diverges from America's or is outside its realm of interest. If the capability were within NATO, it would be under the American command and control system and the other NATO controls. That is why it needs to be outside. The European Union provides an eminently suitable vehicle for such a capability.
The proposal is for a self-contained, multi-national European force of 50,000 or 60,000, drawn from within NATO earmarked forces. That would be a valid way of starting to address the problems, while respecting the argument that it should not be a lever that separates us from NATO or weakens NATO in any way. Had such a force existed, it could have made a vast difference to Balkan diplomacy when Milosevic began his expansionist probes in the early 1990s. We are now addressing the defence issues that are most likely to confront European nations, as the strategic defence review pointed out.
We also need to review all areas of European defence capabilities, with a view to plugging the gaps and realising the full potential of the present force. Heavy lift transport aircraft are but one example. We do not need to waste time and political energy on grandiose concepts such as a European army. We are embarking on a pragmatic, step-by-step approach to ensure complementarity and value for money in Europe's defence forces. If each step is justified, NATO will gain and Europe will be able to exercise an independent foreign policy.
That is the more mechanistic aspect of a European defence and security policy. The other aspect is mainly diplomatic and economic and relates to Russia—a country that has seen an immense 30 per cent. drop in its standard of living in recent years. To put that in perspective, the recessions that cause us great anxiety over here account for barely a 3 per cent. drop in GDP. The dissolution of social, civic and economic institutions has followed. Russia is an area on which European and American foreign policy might diverge.
I have read the headlines on all the current European initiatives to aid Russia. They are all worthy. Hardly a sphere of human endeavour is left untouched. However, it is not clear what is happening or what effect the initiatives have had. We need a focus, to have a discernible impact on what is happening in Russia. It is time to explore with the Russian Government the scope for a major European Union initiative to transfer technological and managerial skills, improve public administration, particularly tax collection, and establish a programme for regenerating derelict infrastructure. Letting the situation deteriorate further by turning the other way is inhuman and dangerous.
As the wealth gap widens, there will be increasing pressure for migration to western Europe, which will fertilise the ground for political extremism and move the prospect of addressing strategic arms reduction further into the future. Those issues cannot be left to the International Monetary Fund, any more than Kosovo can be left to the Red Cross.
Europe is still a hotbed of big issues, as it has been for much of this century. The saving grace now compared with Europe in the middle of the century and before the second world war is that then it had no institutions to address such problems; but now, in the second half of the 20th century and at the beginning of the new millennium, it can use or develop institutions to address the problems. That is the course that the European Union has embarked on with its defence initiative. I am pleased that the Government whom I support are in the lead on those issues.
Like the hon. Member for Swansea, East (Mr. Anderson), I thank the Foreign Secretary for the helpful paper that he provided to the Foreign Affairs Committee when we met yesterday afternoon to discuss the Helsinki summit.
We should look at what has happened throughout the current presidency, not just the final summit. In the first two months after Finland took over, the European Commission existed only in a caretaker capacity because of the great row about corruption. It introduced very few initiatives at that time, but the European Union did not fall apart as a result. I have never regarded the European Union as a bicycle that will fall over if we do not keep pedalling. The Commission does not always have to be in overdrive. It was in neutral during the first two months of the Finnish presidency and Europe did not suffer at all.
There have been three very good moves while Finland has held the presidency. I welcome the press release of 29 November on economic and social matters, which said that there should be a reduction in work taxation. Another positive statement was made on the same day at the Labour and Social Affairs Council, stressing the fact that
social protection remains a part of each member state's own decision making.
It was encouraging to have subsidiarity confirmed in that aspect of policy.
However, the most important Finnish initiative was the Foreign Ministers conference in Helsinki on 12 November to discuss the promotion of security and sustainable development in northern Europe. I particularly welcome the fact that the Russian Federation was invited, and participated. In their post-1945 relations with the Soviet Union, which was often in a sullen mood, the Finns gave a dazzling display of how to walk on a tightrope above eggshells scattered on a minefield. It is 60 years since Mr. Churchill described Russia as
a riddle wrapped in a mystery inside an enigma.
He suggested that the key to that enigma was Russian national interest. It is in the Russian national interest to have good relations with the European Union and it is certainly in the European Union's interest—that includes ours—to have good relations with Russia.
We should build on the new Finnish initiative in three ways. First, we must not disengage from Russia and pass by on the other side. Global and European stability is at stake. The nightmare scenario is that Russia might lurch backwards and think that the way out of its problems is to take lots of doses of more Marxist nonsense. Secondly, ordinary Russians must be encouraged to feel that they have a stake in the prosperity and future of their country. That comes only with a genuine free market, which must be underpinned by an intelligible tax system and a legal system which is seen to be acceptable and fair.
Thirdly, Russia needs private investment and European management skills. However, the investment needs to be tightly focused on specific projects, with every effort being made to avoid the clumsy, expensive and over-mighty bureaucracy from which Russia suffers so much and which holds back economic developments and opportunities for the Russian people.
I mentioned that the Foreign Secretary had provided a helpful paper for us yesterday, and this paper was mentioned in public. The Government say that the accession negotiations with Turkey
could not begin until Turkey met the Copenhagen political criteria.
In other words, Turkey must improve its record on human rights.
Also, what will happen about northern Cyprus? I know talks at the UN are starting on Friday between both parts of Cyprus to try to resolve the problem. However, what happens if Turkey says it has improved its human rights record and the EU accepts that? What happens if Turkey says that it nevertheless wishes to stay in northern Cyprus? What happens if there is a plebiscite in northern Cyprus—recognised by the EU as fair and reasonable—and the people of northern Cyprus say that they wish there to be a continuing Turkish military presence on the island? That has to be resolved.
The Government—as the Conservative party did in government—have not said that there cannot be accession negotiations with Cyprus because it is divided. We have said that the fact that it is divided must not be a ban to Cyprus becoming a member of the European Union. The Government need to think about what the reaction of people in northern Cyprus will be if Turkey gets into a position where it is an accredited candidate for membership of the EU.
In the paper on defence, the Government said:
Our main aim is to set a challenging performance goal for European military capabilities: by 2003, Europeans to be able to deploy more effective forces for crisis management, either as part of a NATO operation or as an EU-led operation.
I take it from that that any EU-led operation would be within the European theatre. Presumably there would be no question of any military action or operation east of Cyprus.
As the Government build up the European military capability, they must monitor constantly the attitude of the United States. They must assure the people of this country that, by making this change, there is no weakening whatever of the commitment of the United States to the defence of Europe and of this country. The Government must reassure people, and there are many ways in which they can do that.
When we become the Government in 2001, we will have to look at this matter, but I can tell the Government that one of the cornerstones of the defence of these islands has been the Anglo-American alliance, so well forged by Mr. Churchill and Mr. Roosevelt in 1941.
We cannot get away from the fact that our current relations with our EU partners are not in an easy state. There is no need to dash around from think tanks to focus groups or interdepartmental Government working groups to find out why that is the case. The answer is that the nature of current events—particularly in finance and agriculture—means that our interests and those of our European partners do not coincide at present.
The positive advantages of our membership of the European Union remain well above the disadvantages of our being outside. There is an unanswerable case for our staying part of the EU—there are many economic and industrial benefits. There are also opportunities for British diplomacy in Europe. I ask the Government not to be over-ambitious. The problems that we have had in Europe over the years have been because the Commission and some countries have been over-ambitious. When people get over-ambitious, disappointment and setbacks follow.
Of all the politics on this planet, European politics is simply the art of the possible. It is difficult and challenging, and we must keep at it in this country in our national interest.
I speak as someone committed to the European ideal. I see nothing wrong at all in arguing that there is a political dimension to Europe, as well as an economic one. I see nothing wrong at all either in arguing the case for a federal Europe—although I realise that I would be very much at odds with most Opposition Members in that. It was for that reason that I was a yes voter in the 1975 referendum, and that is why I want to see the European institutions grow and develop democratically, and to have those powers that are appropriate to their function.
As we approach the Helsinki summit, I wish to address some relevant points. The EU has become, and is becoming, increasingly important for Wales and for other parts of these islands. It is certainly an important dimension for those of us serving in the National Assembly. Policies are increasingly determined at a European level, and changes in the structure and the nature of the EU will affect those policies.
The expansion to the east inevitably has a direct bearing on matters such as agricultural policy within these islands. Brussels, more than London, now decides on that policy. We found that out the hard way in October when our calf scheme was blocked by Brussels at the eleventh hour. That taught us a salutary lesson about getting a stronger voice for Wales in Brussels. Clearly, the current arrangements were totally inadequate as a means of ensuring that a scheme proposed perfectly legitimately by the National Assembly could make progress. Our National Assembly will be seeking ways of strengthening our links through UKrep and Wales's European centre to make sure that that sort of mistake does not happen again. The failure of the UK channels within the European Union to look after our interests in Wales on the calf scheme has become a driving force for Wales to develop direct links with the EU.
We are also aware of the massive importance of European Union structural funds to the economy in Wales. Those, too, will inevitably be affected by the expansion of the EU, and properly so. Wales will secure £1.7 billion from EU structural funds over the next seven years. Our challenge is to ensure that London gives as much priority to our objective 1 areas as Brussels gives. The key questions of additionality and match funding have yet to be resolved and need to be soon, so that we can obtain full advantage from the schemes.
At Helsinki, there will be discussions of forthcoming financial and taxation arrangements. No doubt the question of the UK Fontainebleau rebate lurks in the background of those discussions, and was recently debated in the European Parliament. The present arrangements have an unfortunate side-effect which was not fully foreseen at the time of the Fontainebleau agreement. As the current formula works, for every additional £100 million that the UK gets from the EU—for example, through objective 1 money—the Treasury loses about £70 million through the loss of the rebate. The net benefit, then, is only £30 million. Because of the additionality rules and the match funding that is required for some structural funds, the Treasury may have to find an additional £100 million. The UK then gains £30 million net but the Treasury is £70 million out of pocket.
That is a direct disincentive for the Treasury to maximise the take-up of EU funds and colours its attitude to some available sources of European money. Agriculture and regional policy have suffered from that. The Secretary of State conceded the point in the Welsh Grand Committee on 5 May 1998.
I hope that the UK can maximise its take-up of European Union funds to the point where they are greater than the Fontainebleau rebate, and that the Fontainebleau formula can then be phased out. Until that happens, the mechanisms are contrary to the interests not only of Wales but of any other part of the UK that may benefit directly from EU funding.
Enlargement is another issue looming above Helsinki. Plaid Cymru welcomes the extension of the European Union to take in eastern European countries, but that is bound to have implications for the way in which small nations and historic regions are represented in the European structures, as was recently flagged up by our leader in the European Parliament, Jill Evans.
The Commission told Jill Evans that paragraph 2 of article 190 of the treaty says that the composition of the European Parliament will have to be modified to
ensure appropriate representation of the peoples of the states brought together in the Community.
It is worth dwelling on that wording. I stress the words "appropriate" and "of the peoples" and ask how the Government foresee the provisions affecting not only the level of UK representation in the European Parliament but the representation in the new structures of Wales, Scotland and Northern Ireland as peoples of Europe.
The enlargement strategy is a main agenda item at Helsinki. The Commission recommends the opening next year of bilateral accession negotiations with all the candidate countries that comply with the political criteria as established at the Copenhagen summit in 1993. If questions arise concerning, for example, the accession of Turkey, what assurance can we have that the UK will insist that the criteria on human rights and respect for minorities must be met before Turkey's accession can be countenanced? Until it treats the Kurds properly, there is no room for Turkey in the European Union.
I urge the Government to be sensitive to the economic and social challenges that will face eastern European states that have only recently emerged from long periods of limited sovereignty. There is a real danger of free-for-all market access undermining their fledgling free economies. We need a sustainable integration policy that takes account of economic, environmental and social challenges in those countries.
We in the more affluent west must accept that a larger proportion of European structural funds post 2006 will have to go to the new member states. If we want the political benefits of a wider united Europe, there is a price that we will have to be willing to pay. We may need a greater European tier of finance, even involving direct taxation—carbon tax, for example, is relevant in this context—to help to finance the cost of helping the new member states.
Asylum and immigration policy, minority language provision and the avoidance of ethnic tensions will clearly have to be discussed at Helsinki. We need a transparency of negotiations so that the new member states and their people, as well as the existing states, fully understand the implications of those eastern European states' membership.
I am especially concerned about the effect of expansion on agriculture, both for the new member states and for the existing EU countries. We need to have more exchange projects to help to develop an understanding on the matter.
The safety of nuclear reactors in the candidate states is a key issue.
I am glad that my hon. Friend agrees.
We still live in Wales with the aftermath of the Chernobyl disaster 13 years ago, with continuing limitations on the movement of sheep on our farms. If that is difficult for us, how much more difficult it must be for the people in the areas immediately proximate to the disaster: not only Ukraine but parts of eastern Europe nearby. Decisions on the closure dates of Soviet-designed reactors and on the development of alternative energy sources must be a central part of the accession negotiations.
Those issues touch on the basic question of the economic viability of constituent countries of the EU. We must put even greater emphasis on policies of full employment in both existing and potential member states. Such a strategy must include positive policies to encourage entrepreneurship and new business start-ups. The move in Wales towards establishing a development bank, which we heard more about in the National Assembly this afternoon, aided by the structural funds, shows the positive way in which the European Union can help.
I am concerned about the rigidly stratified way in which the two groups of applicants are being considered as the first wave and the second wave. There is a danger of excessive stratification. Some countries are moving more quickly than others within each group. Would not it be more sensible, as the Commission recommended on 13 October, to have a fully flexible, multi-speed accession process, based exclusively on merit?
Enlargement has direct consequences for the internal structure of the European institutions, which must adopt more rigorously the principle of subsidiarity so that decisions are taken at appropriate levels. There must be a review of the division of competencies. We must strengthen the role of the Committee of the Regions, as Eurig Wyn urged in the European Parliament recently.
Helsinki must resolve the vexed question of the re-weighting of qualified majority voting in the EU, as the Foreign Secretary said. I listened to him with care, but I am still far from clear about the Government's objectives regarding qualified majority voting. It may be that we do not want to show a full hand now in the negotiations, but I would be grateful to hear the Minister's comments when he winds up.
My final point concerns the move to a common security strategy. There are good reasons for that move—for example, what happened in the Balkans—but I have listened to both sides of the argument. Certainly we would have grave reservations if the European Union were to become a nuclear power in its own right, because we feel that that could be a destabilising factor. Side by side with a common security policy must go greater efforts to develop non-military crisis management, and policies should be underpinned by a proactive role in conflict prevention.
As this century closes, it is as well for us to recall that it was marred by two bloody world wars that broke out here in Europe. The vision of the founding fathers of the European Union was to create structures that would prevent such tragedies from ever happening again. As the Governments meet in Helsinki, we can only hope that that basic vision still drives us forward to achieve greater unity in an ever widening European Union.
I have always regarded this debate as the most important of the year, even though it does not deal with the great issues about which our constituents write to us, such as the national health service or law and order. It is not about the decisions, but about where those decisions are made. I cannot think of a more important debate than the question whether we continue to make decisions in this House or watch our ability to make those decisions pass to another place.
As I listened to the speeches tonight, I wondered what some of our European friends would make of this debate if they had heard it. They would have concluded that they were listening to a description of a European Union that does not exist. The impression given of the state of the European Union by the Government, and Labour Members who supported the Government's approach, is not held in Europe. It is a view of Europe that does not exist in reality and is now heard of only from Ministers and a small number of Conservative Members. It is as if those people think that we are still dealing with a common market with some extra twirly bits and some knobs on. I travel frequently in Europe, and I used to do so as a Minister, and it is unreal to suggest that that vision of Europe is shared by our European partners.
I give due credit to my hon. Friend the Member for Wycombe (Sir R. Whitney) for arguing the case for the Europe that I have just described. I hope that he will not take it amiss if I describe him as a semi-grandee, but one might have hoped that the mega-grandees would have come to argue the case in favour of the European Union of their vision. If my hon. Friend had not argued the case, it would have gone by default.
I was troubled when my hon. Friend the Member for Wycombe said that he was not sure whether he had read the treaty of Rome. I have some sympathy with that, because I did not read the treaty of Rome until about 1988. At that time, I had to go to Europe suddenly because a ministerial colleague was taken ill, and I had to make an unexceptional speech in an unacceptable place. The experience was nicely done—the car was waiting downstairs to whisk me off to the plane, for example. When I opened my red box, it contained a copy of the treaty of Rome, so I read it. It does not take that long, because it is an easier read than the Maastricht treaty. However, it is also a horrifying read, because it makes one realise that the prospectus that was put to this country in the early 1970s was wrong.
I was a political activist at the time, and I accepted what I was told by my party. It was claimed that we were entering a common market. Yes, there were one or two strange people at the margins who wanted to go further, but we were told that that would not happen. I accepted that, but I was wrong to do so. The truth about the nature of the European Union is now obscured by the great Labour lie, but it was a great Conservative lie first. Conservatives, therefore, should discuss the subject with a fair amount of humility. It was the failure of the Conservative Government of the 1970s honestly to tell the people of this country what was at stake that bedevils our relationship with Europe to this day.
I did not see the light for many years after I should have done, because it was there to see for those who were prepared to do so. I can do no better than to cite the example of a letter sent by the then Lord Chancellor on 14 December 1960 to my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath). It said:
My dear Ted … You wrote to me on the 30th November about the constitutional implications of our becoming a party to the Treaty of Rome … I must emphasise that in my view the surrenders of sovereignty involved are serious ones … these objections ought to be brought out into the open".
Indeed they should have been. It continued:
To confer a sovereign state's treaty-making powers on an international organisation is the first step on the road which leads by way of a confederation to the fully federal state.
That was the warning from the Government's chief Law Officer 10 years before we were finally taken into what was to become the European Union.
A number of sensible, principled Europeans have been quoted today who believe in a destiny for their countries that I passionately reject for my own. Those quotations make the prospectus abundantly clear. I shall not quote again the remarks of Hans Tietmeyer in that regard, but hon. Members must not think that he was a Johnny-come-lately who perverted the great ideal that Europe should be no more than a common market. As far back as 1963, Bundesbank president Karl Blessing said:
The final goal of the Commission is a European Monetary Union … A common currency … is feasible only if, apart from a common trade policy, there is also a common finance and budgetary policy, a common social and wage policy—a common policy all round. In brief, this would only happen if there was a federal state.
Those aspirations have not been forgotten today. Early last month, former German Chancellor Helmut Kohl spoke at the celebrations to mark the fall of the Berlin wall. According to The Daily Telegraph—and the House will appreciate that the sentiments are his and not mine—he urged
the current German Government to continue his policy of European integration or there would be 'no peaceful future for Germany and Europe.'
Mr. Kohl told the audience at the Reichstag that 'the gift of unification obliges us … to drive forward the building of the European house with powerful steps'.
Perhaps it sounds menacing in German, but he was building on remarks he had made previously. As long ago as 1996—in Belgium, of all countries—the former Chancellor said:
The policy of European integration is in reality a question of war and peace in the 21st century.
He added that the only alternative to closer integration would be war on the continent.
People who have been prepared to read the source documents and to listen to what European statesmen have been saying have always known that that was the agenda. It was not the agenda that the Conservative Government of the day put to this country on a false prospectus, and it is not the agenda that the Minister of State, the hon. Member for Leicester, East (Mr. Vaz), will put to the House when he winds up the debate.
The reality facing the House and the country at large is not some fantasy Europe that we think might rather suit us, but the Europe that is in fact on offer. Although I commend the courage of my hon. Friend the Member for Wycombe, it is not good enough to say that we should not get too exercised by the words that have been used. People used those words to frame their vision of the European destiny that they desperately wanted. That destiny might have been right for us as well if our history had been like theirs, but our history is different. It would have been more honest to tell the Europeans, "We wish you well, but the destiny that you see for yourselves is not a destiny for us."
I can do no better than to quote my right hon. Friend the Member for Huntingdon (Mr. Major)—not someone who could ever be derided as a snarling Euro-sceptic. On 1 March 1995, he said:
The often unspoken fear of many people—we should address it honestly and clearly and examine it—is that Europe might develop into a super-state, an overarching Government with no national veto, no control over our own borders, prescriptive decisions, a single currency imposed and the nation state retreating to a wholly subordinate role. That fear exists out there … and we should recognise the fact that it exists … I for one would find such a Europe wholly unacceptable for this country. I do not believe that it is remotely likely, but, if that were to be the future, it would not be a future that would be suitable for this country."—[Official Report, 1 March 1995; Vol. 255, c. 1062.]
The treaty of Rome foretold the creation of a super-state. There is no other way in which it can be interpreted. I do not know where my hon. Friend the Member for Wycombe has been since 1998, because we are now on the verge of the creation of that state. We are almost there. That state now has its own anthem, flag, Parliament, civil service and passport. It has common citizenship and its own embassies. It has its own policies for defence and taxation—and it has its own currency as well. We do ourselves no credit, and betray our country, if we do not realise that that is what we have created. When my hon. Friend the Member for Wycombe says that he knows no one on the continent readily prepared to surrender their powers, in that regard at least, my contacts seem to be more extensive than his.
When I was in Government, I well remember talking to a former Italian Prime Minister. I asked, "Why do you want to give away your power to a new state?" He said, "Are you serious? I would love to go into the Italian Parliament and say that I cannot possibly deal with this. It will have to be dealt with by the European Union." He may have been expressing things in his own way but his point was that from his perspective, the European state that they wanted to create was decent and right. It is right for them but it is not right for us.
What are we going to do about that? I am with my hon. Friend the Member for Stone (Mr. Cash), who mentioned the easy jibe about how we just want to withdraw from Europe. In some ways, it is sad. I get criticised by Christopher Booker for not really wanting to come out of Europe but when other people look at what I say, they say that I do.
We cannot go on this way. It is in the interests of this country and of the European Union that we should have a relationship with which we all feel comfortable. Only a fool, a self-deluding person or the Foreign Secretary could honestly look at the state of our relationship with Europe today and say that we can feel comfortable with it. That is a self-evident absurdity. People such as my right hon. Friend the Member for Henley (Mr. Heseltine)—it is usually hon. Members on this side of the House—say, "It is no good talking about doing anything about this. It is over. You cannot possibly do anything. Our partners will never let us get away it."
When I hear such rhetoric, I think what a dismal view it is to have of our European partners. I do not believe that they want to hold us in thrall in a relationship that we do not enjoy. They are entitled to a Government and a political party that will honestly say that we came in under false pretences, that it is our fault and that we want to achieve a relationship with which we can feel comfortable. If we approached our partners with such humility and honesty, we could achieve such a relationship with Europe.
It is not a question of withdrawing from Europe because we cannot. It is there; it is our principal trading partner and our common heritage. Twice in a lifetime, a million war dead have testified to the fact that Europe is part of our destiny. If we faced up to what we did by not admitting that their destiny and future were different from ours, think of what could have been achieved.
Could we withdraw from the European Union? Of course we could. It is an illusion and wrong in law to pretend that we could not. If we do not say, "Do what we want or we'll leave", but that we want to achieve something that could be common to us both, then provided that we are prepared to admit that we have not, as a sovereign Parliament lost our ability withdraw—we have not quite yet—I believe that much could be achieved.
When the hon. Gentleman puts to members of the European Union the proposition that he wants to renegotiate the treaty of Rome, what would he do when they lack all interest in it and say that they will not renegotiate?
The hon. Gentleman tempts me, but I will not be drawn down that path. He has a jaundiced idea of our partners. From having done the job, I know that, at the moment, we go into Europe, berate them and say that they have changed the rules. [HON. MEMBERS: "You did.] Hear me out. The Government say that they will be at the heart of Europe and achieve everything but in the end they stand alone foolishly. The Labour Government have nothing to teach us in respect of saying that they want to do it their way and getting egg on their face. The fact of it is that we have gone into Europe and told the other countries that they have changed the rules. They have never changed the rules. We are the ones who, in wilful ignorance, went in with a different perspective. We have never tried honestly to admit that to the Europeans.
Is the hon. Member for Bexleyheath and Crayford (Mr. Beard) seriously saying that the Europeans would not turn round and say, "You have been straight about this. We now understand where you are coming from. You admit that it cannot go on like this. We know that our relationship does not work. We know that it causes ill temper. We know that every British Prime Minister, whether Labour or Conservative, comes in wanting to be at the centre of Europe and years later is isolated because Britain has a different agenda"? I am saying that we could put all that behind us. The idea that it would serve European interests to say, "Right, the relationship does not work, but we will not negotiate one jot," is wrong. If that is what the hon. Gentleman thinks of our partners, I do not understand why he is so keen on the partnership.
What could come out of the debate tonight is a recognition on both sides of the House that it is not in our interest or that of Europe to continue in this way. If we can honestly confront that, we could achieve something that has never even been thought of.
My hon. Friend the Member for Teignbridge (Mr. Nicholls) was right to concentrate on the different backgrounds and attitudes of the European countries and their different expectations of the European Union. Our relationship with Europe has never been totally harmonious, because our expectations are different.
France has been marched over three times in 130 years. That affects the attitude of the French. They want not just bridges but close bonds with Germany. The Germans are conscious of their record. They were shaken after the war, and looking for markets for their manufacturers. Spain, Portugal and Greece have seen lack of democracy in quite recent years. I remember talking to a Greek friend who said, with his hand on his heart, "I was born a Greek, but I will die a European." That is not something that many British people would say. One might even say that he was putting his hand in the wrong place, bearing in mind the amount of money that has gone into Greece.
Italy has been politically unstable. I have heard many Italian politicians say that they would welcome the harmony and sense of continuity that would come from a strengthened European presence. The Netherlands, Belgium and Luxembourg really are at the heart of Europe, and they have gained enormously in stability and prosperity. Austria, Finland, Ireland and Sweden are distinguished by military neutrality. All those countries look to Europe in their different ways as a safeguard of their stability, democracy and freedom, whereas the United Kingdom has a different background. We stood alone during the war. We are Atlanticists, not only because of the shared language. We are traders. Our City is predominant. Our stocks, financial markets and insurance are extremely important as part of our national economy.
Yet both Harold Macmillan and my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) led us towards continental Europe, inspired not just by trade and business opportunities but, above all, by the desire to forge a more united Europe in which internal wars would not recur. In that, we have been triumphantly successful, and I welcome that initiative. However, we do not look to Europe as the safeguard of our democracy and freedom. Our background is different. The people of this country look to us in Westminster as the safeguards of our democracy and freedom.
There is a second strand of difference between us and our continental European allies. The United Kingdom is much closer to the United States than other European countries. That was demonstrated graphically in the bombing of Libya and Iraq. We co-operate in military intelligence. The United States is supreme in satellite intelligence, but we make our contribution to the joint international security situation. An indication of the value of American-British support was over the Falkland Islands, where we were given considerable support in intelligence and other matters.
With the United States and others, we have been partners in NATO for 50 years. Phase 1 was during the Warsaw pact. Phase 2 was when we saw the Warsaw pact collapse and the Berlin wall go down, leading inevitably to the garnering of the peace dividend, with 30 per cent. cuts in defence. The United States is now the only military superpower because of its technological drive and because the European defence effort is focused through so many different countries and command and control procedures.
We now look towards phase 3 of our co-operation with NATO and for a new NATO role. Should that role be more interventionist? Should Europe have a military capacity to cope with European problems? It is true that Europe needs what military people describe as sinews; we need intelligence, heavy-lift capacity for aircraft, command and control mechanisms and smart weapons. Not surprisingly, the United States supports European initiatives to promote a European leg for our defence; partly because the Americans have their own, other concerns—the Korean peninsula, the middle east, Taiwan and China.
It would be wrong to think that the US is obsessed with foreign intervention. The US is one of the world's most insular countries; less than 7 per cent. of its population hold a passport—indeed, some Congressmen regard it as a badge of pride not to possess a passport. However, in general, the American people—certainly the Senate and the House of Representatives—want fairer burden sharing, so there is support for the European security and defence initiative and for the defence capabilities initiative announced in April 1999.
We need to fold into the equation the common foreign and security policy—the CFSP—which, in February 1992, established a second pillar of the EU under the Maastricht treaty. The central point of the CFSP policy is included in the words
the eventual framing of a common defence policy, which might in time lead to a common defence.
There is a problem in mingling the defence capacities of NATO and the EU. Six countries are members of NATO, but not of the EU—Iceland, Norway, Hungary, Poland, the Czech Republic and Turkey—while four countries are members of the EU, but not of NATO; Austria, Finland, Ireland and Sweden are neutrals. Faced with that, with whom should the UK have chosen to explore such a difficult conundrum? Inexplicably, the Government chose France, whose principal characteristic in NATO matters is its reluctance to fall in line with international co-operation, especially that which it perceives to be American-led.
The NATO website states:
France, which remains a full member of the North Atlantic Alliance and of its political structures, withdrew from the Alliance's integrated military structure in 1966. It does not participate in NATO's Defence Planning Committee, Nuclear Planning Group or Military Committee. Regular contacts with NATO's military structure take place through a French Military Mission to the Military Committee.
Those are the people with whom we have chosen to throw in our lot.
A Foreign Office press release, dated 25 November, states:
We therefore call on the European Council in Helsinki to take a decisive step forward for the development of those military capabilities and for the setting up of the political and military instruments necessary to use them. This is necessary to give the EU the autonomous capacity to take decisions and, where the Alliance as a whole is not engaged, to launch and then to conduct EU-led military operations.
On page 3, it states that
we call on the European Union at Helsinki … to endorse the proposal which the UK and France have put forward on the role and composition of a Military Committee and a military staff and the planning and conduct of EU-led operations.
That means that the UK has joined with France—the only member of NATO not to participate in the alliance's integrated military structure—to set up and promote a military committee and a military staff. At the time of the announcement of that initiative, President Chirac made it absolutely clear that France would not change its attitude to the integrated military structure—it will remain outside that structure.
By definition, the committee that we have created is outside the integrated military structure—exactly what the Americans most feared. Several hon. Members have quoted from the speech made at the Royal Institute of International Affairs on 7 October by Strobe Talbott, the Deputy US Secretary of State. He said clearly that
the US is for ESDI.
He wants us to set up a European leg of security. He continued:
will it help keep the Alliance together and that means the whole Alliance, European and non-European, EU and non-EU?
We would not want to see an ESDI that comes into being first within NATO but then grows out of NATO and finally grows away from NATO, since that would lead to an ESDI that initially duplicates NATO but that could eventually compete with NATO.
That is exactly what the Government are now proposing.
How could this be? I am convinced that the truth is that the Government's hope for a narrow agenda at Helsinki and the intergovernmental conference will be outflanked by a push for a wider agenda led by Mr. Prodi, the President of the Union. We are already sidelined by our abstention from the euro. The Government fear increasing isolation from European colleagues.
The Government have previously opposed European Union involvement in defence matters. The Government's switch appears to be an attempt to win euro credentials, but I fear that the price will be high. It will involve dilution of defence effort because of the confusion over NATO membership and EU membership. Moreover, it starts from the wrong point, even within the EU, because it starts from linking us with the French, who are not involved in the integrated military structure.
Defence is too serious to treat in that way. NATO has been our safeguard, and we weaken or dilute it at our peril. In that sense, I completely disagree with the hon. Member for Bexleyheath and Crayford (Mr. Beard), who felt that we should set up an independent defence leg in Europe.
There is a tendency to think that major, nation-threatening attacks will not occur, and that we should instead concentrate on lesser, localised conflicts. That cannot be guaranteed. We might again face nation-threatening attacks, and I plead that the Government avoid actions that might be thought to weaken NATO.
I first met my hon. Friend the Member for Gosport (Mr. Viggers) in the early 1980s, when he was appointed by the Prime Minister to co-ordinate the efforts of those groups that were working with the Conservative party to undermine the movement for unilateral nuclear disarmament by the west. No one is more qualified than he to draw attention to the dangers to the North Atlantic alliance of what is being proposed by the creation of what is effectively an independent Europe defence policy separated from the United States. I warmly endorse the timely warning that my hon. Friend gave the House in his speech.
I recall that, at the time when my hon. Friend was leading that campaign to preserve our defences, I read a book by the late Ian Greig, called "They Mean What They Say". It was an attempt to warn democrats in the west that they should not disregard the rhetoric of Soviet leaders. I say that that also applies to the rhetoric of pro-federalist leaders in Europe today. They do mean what they say. What are they saying? I shall quote a few more examples for the record.
The German Finance Minister, Hans Eichel, who was hailed as a moderate when he replaced "red Oskar" Lafontaine, has said:
I cannot imagine that Europe can successfully compete … without the prospect of a uniformly acting political union … The euro is not European unification, but it is one important step towards this end.
The German Foreign Minister, Joschka Fischer, has said:
My goal is to turn the EU into an entity"—
that is, a single thing—
under international law.
The German Chancellor, Gerhard Schröder, has said:
National Sovereignty will soon be a product of the imagination.
He has also admitted that
The introduction of the common European currency was ultimately by no means only an economic decision. It was an original political act to hand over sovereignty over one of the most important areas of national authority to a European authority … For this reason alone, monetary union requires of us Europeans decisive advances in the field of political integration.
I mentioned in an intervention that the chief economist of the European central bank, Dr. Otmar Issing, has said,
There is no example in history of a lasting monetary union that was not linked to political union.
Wim Duisenberg, the president of the European central bank, has said:
The process of monetary union goes hand in hand, must go hand in hand, with political integration and ultimately political union. EMU is, and was always meant to be a stepping stone on the way to a united Europe.
I come right up to date and The Times of 4 November 1999. It reports the President of Germany, President Rau, calling for the European Union to be transformed into a "European Federal Union" complete with its own constitution. The Times states:
He said the imminent enlargement of the EU meant that there must be 'decision-making procedures which guarantee Europe's capacity for action'".
At least, the president of the European Commission, President Prodi, is honest enough to admit that. According to The Times of 27 October, he wants the European Commission henceforth to be described as the "European government". The Times reports:
Asked to justify the term 'government of Europe' Signor Prodi said: 'But what is the Commission? We are here to take binding decisions as an executive power. If you don't like the term
government for this, what other term do you suggest? Consultative commission? I speak of a European government because we take government decisions.
Funnily enough, in the middle of last month, the Prime Minister was quoted as saying that the reason he objected so strongly to the hon. Member for Brent, East (Mr. Livingstone) being Labour's candidate for the mayoralty of London was because of what the hon. Gentleman had done in the 1980s. The Prime Minister said:
In the Eighties, when he was in charge of the Labour Party in London, we"—
that is to say the Labour party—
were a byword for extremism … we were unelectable as a political party.
That was certainly true, and the Prime Minister should know all about it because he was part of that extremism. He stood for election to the House in 1983 on the following commitment. In his electoral address, he stated:
We'll negotiate a withdrawal from the EEC which has drained our natural resources and destroyed jobs.
That is where the Prime Minister stood at that time. Yet he has the impudence to call those of us who want to be "In Europe, not run by Europe" "extremists". If we are extremists, we are extremists along with 64 per cent. of the British people.
I have commissioned ICM to ask a simple, single question at six-monthly intervals over the past year. That question is:
Do you think that Britain should replace"—
it does not use pejorative words such as "abolish"—
the pound with the single European currency?
When I first asked that question in October 1998, the results were 32 per cent. "Yes" and 56 per cent. "No". By March of this year, those in favour of the euro had fallen from 32 per cent. to 30 per cent. and those in favour of keeping the pound had risen from 56 per cent. to 60 per cent. It was exactly 2:1 against the euro.
Now the gap is even greater. At the end of September this year, the results were 27 per cent. "Yes" in favour of the euro and a massive 64 per cent. "No" against it. That is almost identical to the figures that we used to get for comparable polls on the issue of unilateral nuclear disarmament in the early 1980s when the Prime Minister proudly wore his Campaign for Nuclear Disarmament badge and when he wanted, and called for, withdrawal from Europe in its entirety. Its policy on nuclear defence was an electoral albatross to the Labour party then, and its current policy will be an electoral albatross to it now, because two thirds of the British people disagree with it about abandoning the pound and replacing it with the single currency.
Given the hon. Gentleman's great interest in opinion polls, has he seen those that point out that the majority of the British people think that this country will join the single European currency? Is he aware that an interesting development is taking place in Europe whereby this currency will be established over the next few years? Will he tell us—yes or no—whether he wants that currency to be a success or a failure?
It is my view that the single currency is bound to be a failure, because it will force the states that subscribe to it to join together in a unified political entity, as all those quotations illustrate.
As to the point about polls showing that people who oppose the move nevertheless believe that it will happen, I assure the hon. Gentleman that the more people come to realise that they are the silent majority against joining the euro—a majority which is getting greater month by month—the more confident they will be that the battle will be won by those who want to preserve the pound and our sovereignty.
I shall make only one more point because I wish to leave time for two colleagues whom I believe want to speak. It was the great fallacy of Marxism that all politics is about economics. Marx tried to define politics in terms of economics, and I regret to say that the Government are doing precisely that in setting the criteria for whether this country should ever join the single currency. They say that the only criteria that they will apply are five economic tests.
I first raised that matter with the Prime Minister on 15 December 1997, when I asked him whether his position meant that
no loss, however great, of political sovereignty would deter him and his Government from entering economic and monetary union, provided that what they regard as economic conditions alone were right".
His answer was very revealing. He said, "No," because of course he could not possibly agree with me, but he went on to confirm that it was precisely what his position meant. He said that
it simply means that we should judge whether we enter monetary union according to our national interest, and"—
wait for it—
that is defined by the economic tests that we have set."—[Official Report, 15 December 1997; Vol. 303, c. 36.]
I returned to the subject on 10 November, just three weeks ago, when I asked the Prime Minister at Question Time:
What factors other than economic ones will determine whether Britain joins the single European currency.
He replied only:
A decision will be taken on the basis of what is in Britain's best national interests.
I knew that he would say something like that, as I had asked it as a closed question. I was then able to respond and point out that he had not answered the question and that he had known for a fortnight that the question was not about economic tests but about whether there were any political tests at all that would influence whether Britain should sign away its economic, and therefore its political, independence.
In reply to my pressing him, the Prime Minister said:
The national interest of course includes the economic conditions that we have set out, but … we believe that the national economic interest should be the determining factor in whether Britain joins the single currency … Our policy is the sensible one—leave the option open and determine it on the British national economic interest"—[Official Report, 10 November 1999; Vol. 337, c. 1120–21.]
The Prime Minister is saying that, if the single currency works as it is intended to, and does not implode—as it may do, and as the exchange rate mechanism did—and creates a politically united Europe, he will want this country to join that structure and lose its independence for ever.
I conclude by reference to the remark of the hon. Member for Ilford, South (Mr. Gapes) about whether it is inevitable that Britain will join the single currency even though two thirds of the British people are manifestly opposed to it. There is only one way that it could happen, and that is if the country could be brainwashed by a tidal wave of propaganda, funded by Government money, to convince the people that there is no alternative.
All the signs are that this wretched Government will try to do that. They will try to rig the referendum by coming up with a complicated formula that will ensure that millions more pounds of public money are used to brainwash people into thinking that they have got to join the euro than can possibly be used to demonstrate that the euro is, in fact, a disaster waiting to happen.
The Government think that their strategy will work; it will not work. The British people will defeat them on that and force them to change their policy, just as they defeated Labour on its mad unilateralist policies in the 1980s, when the current Prime Minister was arguing for the extremist position—which is not the position of the Conservative party—that we should come out of Europe altogether.
In the 1999 Reith lectures, Anthony Giddens, the director of the London school of economics, refers to globalisation—this links in with the speech of my hon. Friend the Member for New Forest, East (Dr. Lewis)—as being political, technological and cultural as well as economic. He had said earlier that he agreed with the radicals who say that the era of the nation state is over. I do not agree. As my hon. Friend the Member for Gosport (Mr. Viggers) said, there may be some at the centre of Europe, such as the Benelux countries, that can rightfully say that, but it is not true for most other countries in the European Union, including this country. I shall not be around to see what happens in 100 or 200 years' time, so I shall not make any forecasts.
I believe that, on the Conservative Benches, some things are the same as they were in 1975. There was a referendum that was lost by the anti-Common Market people—the anti-Europeans—and won by those who were, on a cross-party basis, in favour; the result confirmed our remaining within the Common Market. Three weeks later, there was a by-election in Greenwich, Woolwich, West in which I was elected as its Member of Parliament. I had the support of Neil Marten, who had been one of the leading lights among the anti-Europeans. He said that he wanted even those who had been on his side during the referendum to vote Conservative—for me—even though he and I did not hold the same views on the issue.
The Conservative party will continue to speak up for the views and the long-term interests of the people of Britain. Our position on the euro and other issues unites the spread of legitimate opinion that has been expressed in the debate. I was delighted when, yesterday evening, my right hon. Friend the Member for Richmond, Yorks (Mr. Hague) spoke as an officer of the Conservative group for Europe. He said that we should be in Europe, not out of it, and went on to talk about how we did not want to be ruled by Europe and about party policy at the next election. Those statements are worth repeating.
However, we on the Conservative side have a problem. Here, I am not making a national point, or a mainly European point, but a purely Conservative point. There are those who credit us with having done badly in the last general election in part because of the involvement of the Referendum party, which then became the Referendum Movement and is now the Democracy Movement, as the director of the Democracy Movement recently confirmed to me.
In the past two and a half years, the Conservatives have won back control of West Sussex county council; we not only held Arun district council, but increased our majority to a significant level; and we won back Worthing borough council. In the last national election—the June elections to the European Parliament—Labour lost and the Conservatives won. That might have come as a surprise to those who were guided by the opinion polls. In the week preceding the vote, I suggested to various political journalists that they ask Labour apologists how they would react if Labour got fewer votes than the Tories, but they thought that outcome so improbable that they did not bother. How much more fun it would have been if they had asked in advance, rather than waited until after the election to hear that the reason Labour lost was that fewer people voted for it. That is the nature of politics.
Let me now turn to the next general election. There is concern that the successors to the Referendum party might cause another Conservative defeat and that there will another overwhelming Labour majority that has the support of the Liberal Democrats, who consistently have been more in favour than Labour or the Conservatives of what can loosely be described as European integration. I shall briefly detain the House and quote my response to the first person who wrote to me on behalf of the Democracy Movement.
I told my correspondent how grateful I was to receive a postcard with my photograph on it. I had been told by that person that my response to various Europe-related questions would influence the way he voted in the Worthing, West constituency at the next general election. I suggested that he and the Democracy Movement should consider three points. I wrote:
Any prospective candidate for MP who is swayed by cash for election expenses"—
which is what Paul Sykes offered at the last general election—
or cash for this postcard campaign is in my view a political prostitute.
I asked my correspondent to tell those who thought up the approach that they would, in relation to me, be "a frustrated punter." Having been told that my replies would influence my correspondent's vote, I assured him that:
Every voter and every candidate knows we have secret ballots so neither you nor I know how other people vote in the election.
I pointed out:
You would only be able to vote for me or for another candidate in Worthing, West if you become a registered elector in the constituency.
I did that because my correspondent was holding out from a point outside my constituency the promise of voting for me. I ended with these words:
With renewed thanks for the photograph, I remain unbribed and unbullied".
I believe that that is true of most members of the Conservative party.
Somewhat to my surprise, I found myself in agreement with the hon. Member for Harlow (Mr. Rammell) when he said that in his view the European Community could not continue much longer with a system of decision making which had been drafted by six member states in western Europe in the 1950s, which was now having to be applied to decision taking in a Community of 15, soon to number 20, 25 or perhaps 30 different and diverse member states.
As has been said, virtually every Member of whatever party in the House is pledged to support enlargement on both moral grounds and grounds of self-interest. We must confront the fact that in the light of enlargement, the decision-making processes in the European Union will have to be changed.
There are broadly two options available to us. One is that which was set out with coherence and fluency in the report from Mr. Dehaene, Lord Simon and former President von Weizsäcker. It is a perfectly honourable and openly espoused vision of a federal Europe, for want of a better shorthand term, where the prime focus of authority and loyalty would be to supranational European institutions. In the absence of a clear statement of direction from the Government, that is the sort of vision that I take the current Government to have in their mind too. That is given not only Lord Simon's former membership of the Government, but given what the Government have done in terms of signing up to the social chapter, seeking in principle to participate in economic and monetary union, their approach to the withholding tax and the extension of qualified majority voting, to which they have subscribed through the Amsterdam treaty.
I believe that that approach is profoundly wrong. My hon. Friend the Member for Stratford-on-Avon (Mr. Maples) is advocating a more flexible Europe with the concept of flexibility written into the treaty of the EU. That is a common-sense and mature way in which to come to terms with the reality of a European Union which is increasingly diverse. I have yet to see evidence that the Government have come to terms with the nature and the gravity of the challenge which enlargement will mean for the entire EU. Some of the problems may be transitional, but we are talking about long transitional periods and long derogations. How realistic is it for us to think that a country such as Poland, let alone some of the south-eastern European states which have inherited the environmental catastrophes wrought by nearly half a century of communist rule, will accept as acquis communautaire, as is intended, the environmental standards written into the treaties and into European law?
How realistic is it for us to expect that it will be easy or quick for those countries in central or eastern Europe to impose tight border controls against the former members of the Soviet Union, such as Ukraine, Belarus and the Russian Federation, while at the same time participating fully in the freedom of movement of persons, which they sign up to once they become members of the EU? How are the two things to be made compatible?
Some of these issues may be only short term but others seem to me to be more permanent. I question how long we can have one legal framework to govern agriculture or environmental policy when perhaps we shall have a European Union stretching from Rhodes to Reykjavik and from Estonia to the Canary Islands or to Madeira. I therefore urge my hon. Friend to stick firmly to and to develop the concept of flexibility that he outlined in his speech today. Conservatives should be confident and unashamed about advocating that such flexibility be written into the treaty at the forthcoming intergovernmental conference.
We can see some of the problems that may arise in the context of the on-going discussions about co-operation on justice and home affairs matters. I want to make it clear that I am completely in favour of practical, sensible co-operation between European countries in combating drug trafficking, fighting organised crime, and dealing with money laundering and international fraud. The habit of working together, which membership of the European Union encourages among its various member states, assists us in that co-operative work.
However, there are others on the continent of Europe who openly want to go much further than such co-operation and to have a common judicial system throughout the EU. They want it written into the Amsterdam treaty as a new objective that the EU should
maintain and develop the Union as an area of freedom, security and justice.
In his comments at the press conference immediately following the Tampere summit, Mr. Prodi spoke about embarking on the long march to the goal of a common judicial system. Officials of the Finnish presidency appearing before the Select Committee on the European Communities in another place have called for a "single market" in justice and home affairs matters, and for qualified majority voting.
The Amsterdam treaty implies that we are at present in a transitional stage. It refers to five years until the Commission gains exclusive right of initiative under title IV, and five years until we move towards qualified majority voting on visas, asylum policy and immigration policy. At the Vienna summit, the Heads of Government agreed that within five years we should move to common measures and practical policies on asylum throughout the union.
The legal experts whose views I have read and sought on the fruits of Amsterdam say that as a consequence of the varied conflicts of national interest that were evident during the Amsterdam negotiations, we have ended up with a legal basis for justice and home affairs matters that is fragmented and complicated.
There are certain to be pressures from the Commission and from other member states at the forthcoming IGC for that to be clarified and made more coherent, and for a further push to be made in the direction of the communitisation of justice and home affairs matters. I hope that Ministers will reiterate their determination to resist such moves.
My final point relates to a matter referred to by the Foreign Secretary in his opening remarks, and by the right hon. and learned Member for North-East Fife (Mr. Campbell) during his speech—the matter of openness and transparency with regard to proceedings of the European Council.
Having been a member of one of the European Standing Committees for the five years of the previous Parliament, I recall vividly, as someone charged with scrutiny of draft directives and other legislation on behalf of the House, the sense of frustration at being unable to discover what views were being taken by other member states, and sometimes being unable to discover the view of our own Government with regard to forthcoming decisions.
That made the work of scrutiny difficult. It is not just a matter for occasional political debate. It is becoming something of a constitutional and democratic scandal that the European Council is, in effect, a legislature—not an Executive, but a body that takes decisions to agree to laws, which then become enforceable upon British citizens through the courts of this country, and that those decisions about law-making are taken in secret, without the press or the public knowing what is to be determined and what position is being taken by the various Governments represented at the Council. During the debate, I have detected common ground between members of different parties on the need for greater openness, which would be a prize well worth winning. I hope that the Foreign Secretary and his colleagues will pursue it with vigour.
The debate has been colourful and lively, and many interesting contributions have been made from both sides of the House. I regret that time does not allow me to mention them all, and I hope that hon. Members to whose remarks I do not refer will forgive me.
We all agree that enlargement should be a priority for Helsinki. The right hon. and learned Member for North-East Fife (Mr. Campbell) made the point eloquently when he said that it was more than a matter of economics. Other hon. Members made the same point.
Serious doubts about European integration have been expressed in the debate. The hon. Member for Hornchurch (Mr. Cryer) put the case no less forcefully than my hon. Friends the Members for Stone (Mr. Cash), for Teignbridge (Mr. Nicholls) and for New Forest, East (Dr. Lewis), who made characteristically powerful and lucid speeches.
My hon. Friend the Member for Rochford and Southend, East (Sir T. Taylor) made a powerful speech on the single currency, about which he has been consistent over the years. I hope that he will not take it amiss if I say that his speech was marred only by his unfortunate reference to supermarkets.
Labour Members who expressed unreserved support for the Government's position were conspicuous by their absence. There was a mixed response from both sides of the House. Many hon. Members, including my distinguished hon. Friend the Member for Wycombe (Sir R. Whitney), who made a courageous speech, called for honesty and straightforwardness in the debate on Europe. The appeal for honesty and openness is common ground for many hon. Members.
Behind all the arguments lies one great difference of view. It is the difference between the two visions of Europe. Helsinki and enlargement brings to the fore the choice between them. The first is that of Romano Prodi and many other European centre-left leaders. It is the vision of a highly regulated European super-state, in which, as the President of the Commission said:
QMV should become the norm".
That vision includes all the apparatus of the federal state: an army, converged legal systems and a Commission that looks, talks and acts like a Government. There is no point
in Labour Members belittling that view because we have heard today an abundance of quotes, from Prodi and many others, which made that agenda explicit.
That vision contrasts sharply with the Conservative vision of a flexible, outward-looking, deregulated European Union, in which there will be a firm balance between the role of national Governments and that of EU institutions. The Helsinki summit presents a vital opportunity to set out and debate those choices once and for all.
Both sides of the House share a commitment to enlargement; we owe that to the former iron curtain countries. It is embarrassing that it has already taken so long. However, it will be accompanied by serious challenges to the European Union, which has already regulated too far, is—as the hon. Member for Hornchurch pointed out—incapable of managing its existing budget effectively, and struggles to retain the confidence of the people of Europe. Enlargement is a watershed and calls for far-reaching and visionary changes in the outdated, regulatory, interventionist model of Europe.
The Foreign Secretary, faced with that challenge, has proposed nothing that resembles a coherent strategy to tackle it. I fear that the Minister has been left with an enormous task in the limited time available for summing up. He must demonstrate that the Government are seriously addressing the challenges that enlargement poses, and that they recognise the enormity of the choices ahead. Those challenges are considerable and I shall list three or four of them.
The first challenge is creating a European Union that can allow for the flexibility to accommodate a much more diverse group of member states, ranging from Poland to Portugal. To most people, it is common sense that the same employment or social legislation cannot sensibly apply in Hungary as in Britain. That is what we mean by flexibility and the Conservative approach to it is modest and focused only on future legislation outside the core areas. That concept is being discussed in the report of the so-called three wise men and many European Governments support the idea that flexibility should be on the Helsinki agenda. The Government are unusual in saying that there should be no debate about flexibility, but that there should be a substantial extension of QMV. They are arguing for a rigid future for the EU, not flexibility, and they are nearly alone in so doing.
Secondly, there is the challenge of establishing a better check and balance to what has become the inherently regulatory tendency of the EU institutions. Even the most ardent integrationist must now accept that there is no point, in the context of enlargement, in piling regulation on to regulation when there is no chance of applicant countries such as Poland and Hungary meeting the existing directives for years to come. Enlargement must mean that we have already reached the high-water mark of regulation and higher hurdles in respect of cost-benefit and tests of practicality for new legislation should be built into the treaty.
Thirdly, there is the challenge of paying for enlargement, which was wholly unaddressed by the Foreign Secretary and remains wholly unaddressed by most member states. Everyone knows that the Berlin forecasts will be blown to bits when the new members enter the EU. The President of the Commission himself has said that he "assumes" that expansion will result in the loss of the British rebate. Perhaps the Minister will comment on that: what is the Government's position and who will pay? [Interruption.] It is no good the Foreign Secretary shaking his head; that is what Romano Prodi has said. What is more, it is absolutely clear that, once there are 25 member states, the common agricultural policy will no longer be affordable and the Berlin projections will simply not hold water. Somebody has to pay.
Fourthly, the people of Britain will want to hear what the Government will negotiate into the treaty to protect their sovereign and democratic rights from further erosion. There are limits to integration and we are near those limits now. Treaty after treaty has eroded the democratic rights of people in this country and the time has come to clarify once and for all the roles and rights of democratically elected national Governments and the role of the EU.
Since coming to office, the Government have sought to improve relationships with our EU partners, but they have made the cardinal error of confusing friendship with negotiating weakness. They have adopted a conciliatory approach before negotiations have taken place and have failed to hold the line. The track record is one of going with the flow and my hon. Friend the Member for Stratford-on-Avon (Mr. Maples) referred to many individual examples such as giving up the opt-out on the social chapter, the surrender of the veto in 16 areas at Amsterdam, the conceding of the principle on tax harmonisation and failing to insist on serious reform of the CAP. It goes on and on.
In their approach to the intergovernmental conference, the Government have started in similar vein, offering up the concessions before it even starts. In September, the policy was fairly clear: minimise the agenda, stick to the so-called leftovers from Amsterdam and the Cologne agenda and perhaps dish up a few concessions, hoping that it would all pass quietly. In September, the Minister's predecessor wrote to me—I have the letter here—to say that the Government
supports the agenda set out at Cologne".
He went on to explain that he did not see reasons for extending that agenda, but even as that letter was being written the Prime Minister's very own Lord Simon was drafting another report that would comprehensively undermine that strategy and provide European leaders and the President of the Commission with an opportunity to expand the agenda.
Today, the Foreign Secretary acknowledged that in some respects that agenda has already started slipping beyond the one set out at Cologne. More than that, the Government's own MEPs have voted in the European Parliament to widen the IGC way beyond the Government's preferred agenda to include, among other things, reconsideration of the Amsterdam flexibility clause, which he ruled out earlier this evening. It will be interesting to see whether the Minister disowns his own MEPs tonight, or whether he will be definitive about what will and will not be on the IGC agenda as far as the Government are concerned.
While we are on the subject, let me add that the Government's friends in the Liberal party have been even more explicit. Liberal MEPs have voted in favour of the extension of qualified majority voting to all areas, including taxation—a fact that the right hon. and learned Member for North-East Fife neglected to mention.
The Government have already failed to rule out conceding the veto in approximately 19 new areas, and would receive nothing in return. It is no good saying that qualified majority voting has been the general rule in the past, because it has not been the general rule in those 19 areas. It will be in the future, however, and some of the 19 areas are vital to our national interests, including transport, supervision of credit institutions, Council procedure, own resources, co-operation with the Organisation for Economic Co-operation and Development, culture and the harmonisation of aid.
The Government have already accepted implicitly that they will concede a halving of the number of Commissioners. We understand the practical arguments for that, but it has been conceded before we have started. They have accepted that they will concede a reduction in the number of our MEPs, perhaps by as much as a third, and a reduction, after reweighting, of our share of the votes at the Council of Ministers. If we take that route, enlargement cannot amount to anything other than a substantial reduction of British influence in the European Union. It is folly to accept some of the proposed changes, and to make concessions, before we have even started, without negotiating—at the very least—safeguards of the kind that I mentioned earlier.
Not only are the Government in a muddle, and bereft of any clear strategy; they have offered the bargaining chips before we have started to play. It is not surprising that British public opinion is drifting into a more and more anti-EU stance—the figures have been quoted tonight—because, as many Members have pointed out, that increasingly negative shift is a direct consequence of the Government's unwillingness to come clean on their agenda, to make the choices explicit, to make the price of enlargement explicit to the British people, and to allow them to buy into both the costs and the benefit. It is a consequence of disillusionment, as treaty after treaty and regulation after regulation erode the democratic rights of the electorate.
The Government's duty is now to make the position and the choices clear, but what do we have? We have a Minister who is off on his bus, pootling around the country, mouthing banalities about the benefits of the single market. I hope that he has learned something from the experience; in particular, I hope that he has learned from Mr. Hopkins, who is quoted in today's Financial Times as saying:
There was just not enough flesh on the bones for businesses … I used to be all for the euro, but what worries me is the pernicious onset of bureaucracy that goes with it.
I am sure that the House will take the Minister's reference to his travelling companions with the good humour that was doubtless intended. I understand that the leaflets in Hull refer to a new improved Vaz, but I fear that, if this is what that means, we would rather go back to the old version—classic Vaz, perhaps.
The Minister has a serious task ahead of him, and the sooner he gets off his bus and on to the job the better. The forthcoming negotiations will require great resolution, knowledge and wisdom. Nor is the country done any service by the tendency of the Government and the Foreign Secretary to make remarks about Conservative policy that imply in some sense that it is extremist, when it actually has the support of the majority of the British people.
It is the hallmark of the closet federalist that every attempt to address the issues seriously, or to criticise today's inadequate structures, is described as prejudiced or extreme. It is naive and starry-eyed to go into the enlargement process without recognising that the existing institutions of the EU are already not without their problems, and that those problems must be tackled alongside enlargement. We have the problem of regulatory addiction. We have an EU that is already regulated too far, and has failed to implement existing directives: we have a backlog of 2,979 unimplemented directives. We have an EU that has not delivered some of the most basic tasks of the single market, and one that has proved incapable of handling its own budget professionally and without fraud, as the recent Court of Auditors report showed.
To make those points is not anti-European. They are facts against which enlargement must be planned. An EU of 25 member states must allow for flexibility and diversity. It must for its own viability retain its people's democratic support. That means clarifying and establishing once and for all the role of member states and of national Governments.
The summit marks the first stage in a treaty that deserves serious debate. It marks the final choice between the two opposing visions of Europe. The vision of the Conservative party is of an EU that is free trading, flexible, outward looking, deregulatory and enlarged. The Labour party's vision is of an EU that has the untrammelled powers and apparatus of a super-state—whether we call it that or not—envisaging the same laws, applied in the same way, in the UK as in Poland, and more regulation, not less.
The time has come for the Government to come clean on their intentions. Do they support the Prodi agenda? No longer is it possible to pretend that the federalist vision is not writ large on the face of the treaty agenda. The Government would like to say one thing in Brussels, another in Westminster and another in Helsinki, but no longer can they belittle the treaty. It is in many respects the endgame that will determine the shape of EU institutions for decades to come. Let it be the beginning of a new, flexible, enlarged and free-trading Europe. Let it not be the endgame for the freedom of democratically elected national Governments.
Debates that precede European Council meetings are excellent opportunities for hon. Members to express their views on the important decisions that lie ahead—in this case, at Helsinki next Friday. I join my right hon. Friend the Foreign Secretary in commending the way in which the Finnish Government have handled the presidency. It is a model for other countries.
Conservative Members' speeches on Europe were, as usual, like a box of Celebrations—colourful, but different. No one view was the same as another. It would be churlish of me not to thank the hon. Member for Stratford-on-Avon (Mr. Maples) for his kind comments on my appointment. He asked whether I would last longer than my predecessor, but I imagine that, with all the speculation about the future role of the right hon. Member for Kensington and Chelsea (Mr. Portillo), it is probably the hon. Member for Stratford-on-Avon who should worry about job security.
No such worries affect the hon. Member for Tunbridge Wells (Mr. Norman). He seems already to have three jobs and is eyeing up another. Not content with being the shadow Minister for Europe, he has a golden handcuffs deal with Asda, is a putative Conservative candidate for mayor of London, and is the brains behind the reverse takeover of the month—that of a company named, appropriately, Nutsford. His various employments bring new meaning to the word "enlargement."
For reasons that the Foreign Secretary has made clear, the Helsinki Council will be a landmark Council. Enlargement will be the main business. We have heard a clear statement on the issue from the hon. Member for Stratford-on-Avon, the shadow Foreign Secretary. He stated unequivocally that, if the Conservative party were ever in a position to do so, it would block enlargement because it would not sign up to any treaty that did not include flexibility. It is an odd way in which to support the case for enlargement. It seems to be completely at odds with comments of the hon. Member for Tunbridge Wells.
In the time available, I will try to deal with the points that have been raised. The hon. Member for Stratford-on-Avon accused the Government of being involved in a sell-out of NATO. Nothing could be further from the truth—NATO is the cornerstone of our defence policy. The common foreign and security policy will work in tandem and complement our relationship with NATO. We have made that clear at every opportunity. It was certainly made clear when I attended the historic meeting of the General Affairs Committee of the Council, when Defence Ministers joined Foreign Ministers in supporting this Government's initiative on a common foreign and security policy.
We shall keep close to NATO. As soon as we completed our discussions in the General Affairs Committee, we met the non-EU NATO members and other countries which had reason to want to be kept informed of developments. It is rubbish to suggest that we are in any way sidestepping our role with NATO.
The hon. Member for Stratford-on-Avon should be ashamed of himself for not supporting what my right hon. Friends the Chancellor and the Foreign Secretary have said about the withholding tax. The Government are in no way prepared to support the tax because of the devastating effect that it would have on the eurobond market. That is why we have fought so hard to prevent it being imposed. He knows that and should be supporting the Government.
The hon. Gentleman should also be supporting the Government's action on the droit de suite, which he also mentioned. Ministers are fighting day in, day out to protect our position. The blocking minority on the droit de suite remains. There will be further discussions on 7 December on that important issue and we shall stick to our policy.
The hon. Member for Stone (Mr. Cash) referred to the charter of rights. I am surprised at him, because I made it clear in my evidence to the Scrutiny Committee that it is a charter of existing rights. It sets out the rights that have been granted to EU citizens as a result of treaties and legislation. It is not binding or enforceable. It is a charter, as we have said, not a new treaty. It is right that we should send the distinguished lawyer Lord Goldsmith as our representative on the drafting Committee.
My hon. Friend the Member for Swansea, East (Mr. Anderson) has told me that unfortunately he cannot be present for the closing speeches. He was right to say that on 1 May 1997 there was a sea change in the relationship between this country and the rest of Europe. He said that that was important, because at last we have a Government prepared to defend the interests of the United Kingdom, fully engage with our partners and ensure that this country's interests are paramount. As the right hon. Member for Henley (Mr. Heseltine), the former Deputy Prime Minister, said, no one can wield a handbag from an empty chair. For far too long, this country's negotiations were conducted by those who did not want to engage with our European partners.
My hon. Friend was also right to mention the importance of meeting the expectations of the people of Hungary, Poland and the other applicant countries. I have visited Hungary and Poland, where there is a tremendous mood of expectancy. Those countries are working very hard with EU negotiators to ensure that they meet the necessarily tough criteria set down in the acquis. I am confident—
No; the hon. Gentleman has had a lot of time to put his views forward and I shall come to him later in my speech.
The sooner that the tough negotiations are completed, the better. We have made it clear that there is a self-imposed deadline. The European Union has to be ready for enlargement by 2002. We hope that the negotiations will be completed as soon as possible. When they are, the deal has to be ratified by the member Parliaments, so it will be some time before it comes into force. We shall be ready by 2002 and we shall do everything that we can to help the applicant countries.
The eloquent right hon. and learned Member for North-East Fife (Mr. Campbell) rightly talked about the values of freedom and democracy, and the political advantages for the new democracies. It would be quite wrong for the EU to turn its back on these new countries. We believe that it is important that the EU should be as wide as possible, and that it should not be exclusive. It should allow entry to countries which meet the terms and conditions required—not just the Copenhagen criteria, but all the other economic criteria implicit in joining the EU.
On Turkey—a subject raised by a number of right hon. and hon. Members—our position has always been that Turkey should be confirmed as a candidate in Helsinki. No special conditions should be applied to Turkey. We understand all the points that have been made today—including by the right hon. Member for Caernarfon (Mr. Wigley)—on human rights. We are aware of that, as are the Turkish Government. However, it is not right that special conditions should be applied to countries seeking to become candidates. We hope that that will be confirmed at Helsinki.
My hon. Friend the Member for East Carmarthen and Dinefwr (Mr. Williams)—an old friend of mine from my days in the corridor at the cloisters—reminded us of the divisions within the Conservative party and of the pivotal role that Britain now plays not just in Europe, but in the world. As the Prime Minister said in his Lord Mayor's speech on Monday—and as the Foreign Secretary repeated the day after—it is important that this country should play its role not just in European affairs, but world affairs.
My hon. Friend the Member for East Carmarthen and Dinefwr mentioned the euro. Our position on the euro has been clear since 1997. Five economic tests have to be met and, once they are met, there will be a referendum. In the end, it will not be the hon. Member for Stratford-on-Avon or I who decide by vote of this Parliament—it will be the British people who decide whether we join the euro. However, we will be in that position only when those crucial economic tests have been met.
The hon. Member for Rochford and Southend, East (Sir T. Taylor) is one of the most passionate and principled Members on the EU. He did not change his mind under the previous Government, or under this Government—as some hon. Members have done. There have been some remarkable conversions over the past few years. He wanted to know the Government's position on tax. The Government approach taxation in the EU in the way that we approach all other European issues—with a hard-headed assessment of what is in the British national interest. The UK is working actively and constructively with our European partners while retaining the national veto over tax. The hon. Gentleman described himself as this House's very own Jonah. I wonder which of his colleagues would be prepared to play the whale.
My hon. Friend the Member for Harlow (Mr. Rammell) was right to say that we must look at the size of the Commission. That is the purpose of the IGC—it is one of the key issues to be discussed. If a number of countries are to join the European Union, all of which have an emotional attachment to having their own Commissioners, the Commission will get too big and bureaucratic. It is important that we look at the structure of the Commission. My right hon. Friend the Foreign Secretary said that the larger countries were prepared to give up their second Commissioner provided that—but only then—there is a reweighting of votes on the European Council.
We heard an excellent speech from the hon. Member for Wycombe (Sir R. Whitney)—but how mean of the hon. Member for Teignbridge (Mr. Nicholls) to describe the hon. Gentleman as a semi-grandee. I thought that once one received one's knighthood within the Conservative party, one became a full grandee. The hon. Member for Wycombe was right to say that certain sections of the press have been poisoning the minds of sections of the British people. It is vital that we have an honest debate about the issue. I respect the hon. Gentleman for being able to do so, bearing in mind the views of some of his colleagues. Like the hon. Member for Rochford and Southend, East, he has not changed his mind in the way that the personality of the Leader of the Opposition has changed. He has remained firm to his principles, for which I respect him.
My hon. Friend the Member for Hornchurch (Mr. Cryer) asked whether we would publish a White Paper on economic and monetary union. There are no proposals for one at this stage, because the issue is not before the British people. On the fair distribution of propaganda for either side, of course it is important that everyone should have an opportunity to put his case.
It was a delight to hear from the hon. Member for Stone. He reminds me of the character in the film "In the Line of Fire". He is obsessed with Mr. Prodi. I am sure that if we burst into his bedroom we would find faded newspaper cuttings about Mr. Romano Prodi on the wall. He said that he was against withdrawal from the European Union, but then said that he wanted to renegotiate the treaties—just like that. Neither he nor the hon. Member for Teignbridge had an answer to my hon. Friend the Member for Bexleyheath and Crayford (Mr. Beard), who asked what would happen when our partners refused to renegotiate. The logic of the attitude adopted by certain Conservative Members is withdrawal.
No; the hon. Gentleman has had his chance.
The hon. Member for Stone assured his Front-Bench colleagues that they were on-message. I wish that he could have seen the face of the hon. Member for Stratford-on-Avon when he said that.
My hon. Friend the Member for Bexleyheath and Crayford was right to re-emphasise NATO's role.
In a careful and thoughtful speech, the hon. Member for South-West Bedfordshire (Sir D. Madel) spoke of the importance of the northern dimension. My right hon. Friend the Foreign Secretary asked me to represent the Government at the northern dimension conference. It is absolutely right that we should engage with Russia on these issues, and the Russian Foreign Minister was present. We were forthright in criticising the Russians over Chechnya—my right hon. Friend wrote a letter to that effect—but it was also right to be at the conference and to continue the dialogue that had started via the Finns. We will put a great deal of time and effort into ensuring that the northern dimension is a success.
The right hon. Member for Caernarfon said that he felt that Wales was being left out. I assure him that there is no reason to worry. I agree that it is very important to ensure that Wales and Scotland get a fair share of European money. That is why the Government fought hard and successfully to obtain the best ever structural funds deal in Agenda 2000 negotiations in March, including objective 1 status. For the first time ever, west Wales and the valleys will get funding.
What can I say about the hon. Member for Teignbridge? He demonstrated humility. He quoted from letters going back to 1960. Goodness knows what the cupboards in his bedroom must look like. I assure him that his worst fantasies will never be realised. He, too, wanted to renegotiate the treaties—and he believes that our partners would accept that. No, they would not.
No; I have dealt with the hon. Gentleman's point. There is no need for him to jump up again.
The hon. Member for Gosport (Mr. Viggers) tried to put France against Britain on the common foreign and defence policy. France and Britain are on the same side and, properly, leading on the issue. That is why, at the end of the Anglo-French summit last Thursday there was enormous support for the views that we had propounded.
The hon. Members for Stratford-on-Avon and for Tunbridge Wells talked about the Government's roadshow. The roadshow has demonstrated to me that the British people want to engage in a serious debate about Europe and have overwhelmingly supported our decision to go out and talk to them about it. Since 1 May 1997, we have fully engaged in Europe. We fight hard for the national interest and to ensure that we do the best for the people of this country and of Europe.