European Affairs

– in the House of Commons at 6:38 pm on 5th December 2001.

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

Photo of Peter Hain Peter Hain Minister of State (Europe) 6:50 pm, 5th December 2001

Next week, on 14 and 15 December, the Belgian presidency of the European Union will host the final European Council of the year at Laeken, at which Britain will play a strong role as a European power, now, under the Labour Government, more influential than at any time since we joined the rest of Europe in the early 1970s.

By co-operating with our fellow members of the EU, Britain gets practical benefits: more jobs, faster economic growth, safer food, cleaner beaches, cleaner air, purer water, less crime and, crucially, better security. In the modern world, our strength as a nation derives from the strength of our partnerships and our alliances. Nations are stronger when working together than when alone. In the modern world, sovereignty shared is sovereignty regained. We should be more confident and get more real about our sovereignty. Does getting more involved in Europe mean that we will give up our sovereignty? No, because there is a difference between giving up and choosing to pool sovereignty because doing so promotes Britain's interests.

We have already given up our right to do what we like in defending Britain, because we are members of NATO. We already pool sovereignty with the United States of America and others because by doing so Britain has stronger defences. Anyone attacking us invites retaliation from all the NATO nations.

Photo of Graham Allen Graham Allen Labour, Nottingham North

We are discussing a matter of fundamental interest to our country. Would my right hon. Friend care to comment on the fact that although Labour Members are paying great attention to his speech, there is not a single Conservative Back Bencher

Photo of Graham Allen Graham Allen Labour, Nottingham North

Oh, forgive me. I withdraw that remark. One Conservative Back Bencher is present in the Chamber. What does that tell us about the views of the Conservative party?

Photo of Peter Hain Peter Hain Minister of State (Europe)

I do not want to intrude on the Conservatives' private grief. Presumably, their desire for a truce in their internal civil war over Europe is the reason why all their rabid Back Benchers are away.

More than 50 years ago, we gave up our right to do as we liked in foreign policy by joining the United Nations. Its Security Council resolutions have the force of international law, and everyone, including Britain, has to respect them, but as a permanent member of the Security Council we can make the laws. By pooling sovereignty, the British people have greater influence in building a safer, more stable world.

Photo of Mr Michael Trend Mr Michael Trend Conservative, Windsor

Will the right hon. Gentleman give way?

Photo of Peter Hain Peter Hain Minister of State (Europe)

The hon. Gentleman will reply to the debate later, but why not?

Photo of Mr Michael Trend Mr Michael Trend Conservative, Windsor

Perhaps the Minister might care to comment on the fact that had the Government not lost control of the business last night and today, the start of this debate would not have coincided with the meeting of the 1922 Committee. That is why Conservative Members are not here.

Photo of Peter Hain Peter Hain Minister of State (Europe)

I know that many of my hon. Friends want to speak, so I shall be reluctant to take any more interventions from Conservatives, especially interventions of that quality.

Pooling sovereignty can entail compromises. That is sometimes hard for some commentators and politicians to understand, but real people know that in real life we cannot always get exactly what we want, and nor can other countries in those international bodies. We can better advance British interests by being right at the centre of NATO, the UN and, indeed, the EU.

In recent weeks, the EU has acted with great resolve and rapidity to tackle the threat of terrorism. Already we have agreed that there will be a common European arrest warrant, a common definition of terrorist offences and common measures to freeze the assets of terrorist suspects. None of those measures could have been achieved outside the EU. By co-operating with other countries we strengthen our defences against terrorism—an evil that knows no national boundaries.

There is more to do. We have to boost co-operation between our national law enforcement and counter- terrorist agencies, approve without delay the Commission's proposals to improve air transport security, and ensure that all member states ratify the UN convention on the suppression of the financing of terrorism and strengthen their domestic legislation. The EU has emerged as a key player in the global fight against terrorism. The natural alliance between the countries of north America and Europe is at the core of the international coalition.

At Laeken, we have the opportunity to show once again the strength of the EU's backing for the current military campaign and to renew our commitment to the diplomatic and humanitarian tasks, which are just as vital if we are to defeat the terrorist threat. The signing in Bonn this morning of the agreement on Afghanistan's future is a significant achievement. We pay tribute to the UN and to the Afghan leaders—men and women—who have grasped the opportunity to begin to rebuild their country. It is a victory for the international coalition against terrorism. A stable Afghanistan with a broad-based Government is as important to our own security as it is to the Afghan people, who have been liberated from the clutches of the odious Taliban. At Laeken we shall reaffirm our support for the efforts of the United Nations Secretary-General and Lakhdar Brahimi to deliver on today's deal and build a broad-based, multi-ethnic Government in Afghanistan.

Photo of Dr Jenny Tonge Dr Jenny Tonge Liberal Democrat, Richmond Park

Is it not a little early to say that we have a stable Afghanistan?

Photo of Peter Hain Peter Hain Minister of State (Europe)

I did not say that the job was finished, but the hon. Lady, for whom in other respects I have considerable respect, should recognise that many of her arguments in relation to the international coalition's action in Afghanistan have been proved wrong. The people of Afghanistan—including and especially women—are enjoying greater freedom than they have had for many a long decade.

Between us, EU member states and the Commission have already committed 320 million euros to the international humanitarian effort in and around Afghanistan, and the EU will have a continuing commitment to the region. Our kind of Europe has a collective duty to act as a more effective force for good in the world, so two years ago my right hon. Friend the Prime Minister and President Chirac launched a British-French initiative on security and defence that the EU has been developing ever since.

In the aftermath of 11 September, it is all the more important to underpin our security with the capacity to carry out humanitarian and peacekeeping tasks where NATO as a whole is not involved. Far from weakening NATO, as some have alleged, we have an opportunity to strengthen NATO by strengthening the capabilities of EU member states.

Photo of Gordon Prentice Gordon Prentice Labour, Pendle

The fact that there is a crisis in the aerospace sector is widely recognised, and today aerospace workers lobbied the House of Commons. Will the European Governments at Laeken address that crisis in aerospace industries throughout the EU? Might consideration be given to bringing forward orders that have already been committed for the A400M—the military version of the Airbus? That would do a great deal to help us in the north-west.

Photo of Peter Hain Peter Hain Minister of State (Europe)

My hon. Friend speaks forcefully, as always, on behalf of his constituents, and I know that many hon. Members have interests in the aerospace industry. Those points will be taken on board because we want to ensure that Airbus Industrie has a positive future—I think that it builds the best aeroplanes in the world. Given the difficulties it has already experienced, the aerospace industry overall should take advantage of all the opportunities that might lie ahead.

The European security and defence capability has been welcomed by President Bush, by all NATO members, by all candidate countries, and by almost everyone else across the world—except that fount of all wisdom, today's Conservative party.

I especially welcome Ankara's confirmation this week of support for Turkish participation in European defence—an outcome that our officials and my right hon. the Foreign Secretary have worked hard to secure. At Laeken, we expect to be able to draw the realistic conclusion that the EU is now able to conduct some crisis management operations, and will be in a position to take on increasingly demanding operations as the assets and capabilities at our disposal increase. However, our best weapon in the fight against terrorism is international solidarity. Alongside existing EU members, applicants for admission to the EU have backed the international coalition and the anti-terrorist measures agreed by the EU.

Britain has long been a champion of enlargement. We used our presidency in 1998 to launch negotiations for the first set of six applicant countries. Since then, we have pushed for and secured rapid progress. As a result, 12 countries are now negotiating their accession. A 13th—Turkey—has been confirmed as a candidate. Our Prime Minister was the first European leader to call for the first new member states to be admitted in time for the 2004 European parliamentary elections. At the Gothenburg European Council in June, that objective was agreed. At Laeken, in 10 days' time, we shall take the matter further forward. All 10 of the candidate countries with target accession dates by 2004 have now closed 19 or more chapters of the 30 that make up the EU acquis.

The Commission's recent strategy paper confirms that we are on track for our goal of completing negotiations with the best prepared candidates by the end of next year. As the paper reaffirms, while a political settlement of Cyprus's problems is plainly desirable, it is not a pre-condition for that country's entry to the EU. Only yesterday, the first meeting between the leaders of the two Cypriot communities agreed to direct talks. We continue to support a just, viable and lasting settlement to the Cyprus problem.

With the Bill having passed through this place and having completed consideration in Committee in the other place, we are now on target to ratify the Nice treaty, which is essential for enlargement to proceed. At the Nice summit a year ago, and for the first time since we joined the common market in 1973, we won an increase in Britain's voting weight relative to the smaller countries. We succeeded in providing for a smaller and more efficient Commission. We secured more qualified majority voting in areas where the UK's interest lies in reform and change while preserving our ability to defend the status quo and vital national interests where that is necessary.

Photo of Gisela Stuart Gisela Stuart Labour, Birmingham, Edgbaston

I am delighted that qualified majority voting will help us to reach consensus but still protect our vital interests. In respect of the prospectus directive, which affects the financial services interests of the City of London, does my right hon. Friend agree that what is taking place in London is larger than what is taking place in the rest of Europe? Qualified majority voting might result in the loss of our competitive advantage, and that would not be in our interests.

Photo of Peter Hain Peter Hain Minister of State (Europe)

I know that my hon. Friend is extremely knowledgeable and an expert on the EU, but I am not sure that she is right in this instance.

At Nice, we showed also that Britain is in the vanguard of reform and change in the EU. In the 12 months since Nice, the EU has agreed other practical measures that will directly benefit British citizens. These include new rules to speed up procedures for returning illegally abducted children home, new measures to limit emissions of sulphur dioxide, nitrogen oxide and ammonia to make cleaner the air that we breathe and new airline safety measures so that we can fly the European skies more safely. Further practical benefits are in the pipeline for next year—again with British influence.

There will be a new package of measures to liberalise the EU telecommunications market, which will increase consumer choice and should help to drive down phone bills. A new Community patent will encourage innovation and make it easier for business to protect intellectual property rights quickly, reliably and cheaply. There are measures to open up the pensions market so that people can shop around Europe for the best deals.

None of those measures could conceivably be implemented so quickly and efficiently without the familiar structures and procedures of the EU. They will be of immediate and obvious benefit to all our citizens.

Several Members have raised with us the case of 12 British citizens who are being detained in Greece following their arrest near a military base.

Photo of Michael Connarty Michael Connarty Labour, Falkirk East

My right hon. Friend has listed all the benefits of the treaty of Nice, and I would applaud each one of them. Unanimity seems to have been denied by the Irish referendum, and my Irish colleagues tell me that it may be denied if a second referendum is held. Can we proceed to enlargement without the treaty of Nice being approved by all the present members of the EU?

Photo of Peter Hain Peter Hain Minister of State (Europe)

In practical terms, the answer is no. The Nice treaty is the only realistic route to enlargement, at least on anything like the timetable that we have agreed. In practical terms, we could not proceed without a similar treaty.

Photo of Peter Hain Peter Hain Minister of State (Europe)

I am trying to answer the question asked by my hon. Friend Mr. Connarty. I know that my hon. Friend Mr. Davidson is an addict when it comes to these matters, and I shall come to him in a moment.

The Nice treaty needs to be ratified by the House; otherwise, we shall deny all our friends in Cyprus, Malta, the Czech Republic, Poland, Hungary and all the other accession states the status in the EU that they have so desperately striven to secure. I hope, therefore, that my hon. Friend the Member for Falkirk, East and my hon. Friend the Member for Glasgow, Pollok, who is about to interrupt me, will support the treaty and the Government in the negotiations.

Photo of Ian Davidson Ian Davidson Labour/Co-operative, Glasgow Pollok

May I reassure my right hon. Friend that I am certainly not an addict? I am not nearly as sad as that. However, I take an interest in the plight of small countries. Is it the Government's position that they respect the decision made by the Irish people in a referendum, or is Britain pressurising Ireland to conduct a further referendum? Will he make it absolutely clear what Britain's position is on this matter?

Photo of Peter Hain Peter Hain Minister of State (Europe)

I am delighted to do so. Yes, we respect the Irish people's verdict; no, we are not pressuring the Irish Government to do anything. On the contrary, the Irish Government have come to us and our fellow European member states. They have said that they wish to offer advice, having further consulted their own people to ascertain whether there are any further assurances from the EU, and especially the European Council, that might enable another referendum to be called. The Irish people can then be invited to make up their own mind, as was done—

Photo of Peter Hain Peter Hain Minister of State (Europe)

The hon. Gentleman has been told by his leader to keep quiet as the shadow Attorney-General. He is not supposed to say anything on Europe, but he says "blackmail" from the Opposition Back Benches. When the Conservative Government whom he supported—well, sometimes; I am not sure whether he supported them on this matter—were in office the Danes initially rejected the Maastricht treaty in a referendum. On a further referendum, they were given assurances that enabled them to vote again—

Photo of Peter Hain Peter Hain Minister of State (Europe)

I think that it is intelligent to seek reassurances on the matters that one is worried about and to consider the matter again. If the Irish choose to do that, they will have our support.

I return to my point about the British citizens who are detained in Greece following their arrest near a military airbase. I can assure the House that our officials in London and at the British embassy in Athens are providing the detainees with the consular assistance that they need, and are working closely with the Greek authorities to expedite the case.

The rapid pace of change in the world means that we in Europe cannot afford to stand still. Reform is not merely desirable, it is a survival strategy. At Nice, member states agreed to take the process of reform further forward at another intergovernmental conference, to take place in 2004. At Laeken, we shall agree the remit of a convention under which a wide-ranging debate will be held on the future of Europe in preparation for the intergovernmental conference.

Photo of Colin Challen Colin Challen Labour, Morley and Rothwell

Does my right hon. Friend think that we are exercising change at the right speed, given that the general public are perhaps rather disenchanted with the EU? Given the turnout at the last European elections and the fact that possibly there is only one referendum every generation, should we be doing more to address these issues?

Photo of Peter Hain Peter Hain Minister of State (Europe)

I agree. We are doing more. At the convention launched at the Laeken summit the weekend after next and at the following IGC we will address the key objective of closing the gap between the leaders and citizens of Europe.

The House will welcome the fact that its direct participation in the convention is already assured. Two Parliamentarians from each member state will be members. The rest of the convention will consist of one representative from each Government, 16 Members of the European Parliament and one representative from the College of Commissioners. The candidate countries will also participate. We expect the convention to address fundamental questions, such as how to demarcate the powers of the European Union and the member states; how to ensure that co-operation in the EU remains rooted in democratic legitimacy; and how to simplify the treaties so that citizens can better understand and appreciate what the EU does in their name—the point made by my hon. Friend Mr. Challen.

We welcome a debate to clarify who does what. We also welcome the simplification of treaties so that people can understand them, as I have sought to do in a new booklet summarising them in 300 words; it was published last night and I am happy to send a copy to every Member of Parliament who wants one. In addition, we want to involve national Parliaments more. All of that is a British agenda, which is now being accepted by our colleagues across the EU.

Photo of Mr Denzil Davies Mr Denzil Davies Labour, Llanelli

My right hon. Friend talked about simplifying the treaties; lawyers get a bit worried when they hear such talk. Will the simplified treaties be legal documents and, if so, will the European Court of Justice adjudicate on them?

Photo of Peter Hain Peter Hain Minister of State (Europe)

I am always reluctant to cross swords with my right hon. Friend who is an expert, not just on Europe, but on the treaties in particular. In fact, I venture to suggest that he knows a lot more about them than I do. He makes a legitimate point; there will be a disclaimer on the simplified directive and the treaties stating that they cannot be quoted in a court of law because they are a lay person's guide; I am sure that my right hon. Friend will welcome that.

The convention will not take decisions on the future of Europe; that task properly belongs to the Governments of the member states taking part in the IGC. The Governments of nation states will take that decision; in Britain it will be subject, as ever, to the final word of Parliament.

Photo of Angus Robertson Angus Robertson Shadow SNP Spokesperson (Defence), Shadow SNP Spokesperson (Foreign and Commonwealth Office)

Returning to the convention and UK representation, will the Minister share with the House his thoughts on the make-up of the UK delegation? He will be aware that the German lander will be represented by the upper House of the German Parliament. He said that it is vital that national Parliaments are involved. Does he agree that the national Parliaments of Scotland, Wales and Northern Ireland should be represented directly on the convention delegation?

Photo of Peter Hain Peter Hain Minister of State (Europe)

No, I do not; that is the simple answer. Two representatives of the House of Commons are provided for under the provisional agreement, which will be finalised at Laeken. European policy is a reserved matter for the House. I recently had the privilege of being invited to the European Committee of the Scottish Parliament and was pleased to answer its questions. I see myself working in partnership with that Parliament, the National Assembly for Wales and the Northern Ireland Assembly to make sure that the vision that we project in Europe is as inclusive as possible. It would not be possible to have direct representation by all the lander, the Scottish Parliament, the Welsh Assembly and so on in the convention unless it was much larger than is being contemplated.

Photo of Bill Cash Bill Cash Shadow Attorney General

As the Minister will know, I have certain responsibilities for the interpretation of treaties and other responsibilities for legal advice to the House. In the context of the question asked by Angus Robertson, the Minister is right that those matters are reserved. However, I remember crossing swords with the late Secretary of State for Scotland on the requirements of the Scotland Act 1998; although countries can aspire to the partnership described by the Minister, in practice if there is an ultra vires provision it is down to the Minister in Whitehall to override it by order. That is prescribed in the Scotland Act and applies to questions of European law if there is a conflict between the two countries.

Photo of Peter Hain Peter Hain Minister of State (Europe)

I will take the hon. Gentleman's word for it; his authority on those matters is unsurpassed. I am delighted that his voice has not been silenced on European matters and I hope that he will intervene throughout the rest of our debate.

Photo of Ms Joyce Quin Ms Joyce Quin Labour, Gateshead East and Washington West

Does my right hon. Friend agree that while it is important for the convention to pursue its work in Brussels, it is also sensible for its members to report regularly to their national Parliaments and, to pick up the point made by Angus Robertson, liaise with regional bodies as well? Throughout the life of the convention, there should be as much consultation and involvement of people as possible; we are all worried about the gap between European institutions and the people, and that would at least be an attempt to close it.

Photo of Peter Hain Peter Hain Minister of State (Europe)

That is a positive and constructive suggestion from my right hon. Friend, a distinguished predecessor of mine. We shall certainly look at that important proposal and I hope that the House authorities and the usual channels will look at it as well.

It is important that we know what the British people think about Europe. Today, I have placed in the Library the results of an opinion poll that we commissioned from ICM, which surveyed a relatively large and authoritative sample of 2,000 people across Britain. The main findings include the fact that a majority of two to one think that our membership of the EU is a good thing for Britain. Big majorities agree that the EU promotes peace and security in Europe and is good for British jobs and trade. The poll shows that the British people's priorities for the future work of the EU are maintaining peace and security and fighting poverty, unemployment and crime. It is that same practical Europeanism that the Government are seeking to advance.

Photo of Peter Hain Peter Hain Minister of State (Europe)

I shall come to that.

The poll confirms that many people know too little about the EU; no surprise there. But it also shows, rather more interestingly, that the more people know about the EU, the more positive they are about it; knowledge is a wonderful thing. The Government will continue to encourage that, especially among Conservative Back Benchers—indeed, among Conservative Front Benchers as well. The poll confirms that, like our Labour Government, people are worried about EU red tape and bureaucracy. Like our Government, they are concerned that the UK's national identity should not be lost in the EU. The poll shows that a majority are not at present convinced that we should join the euro—no surprises there either—although the majority against is rather smaller than in other polls; 47 per cent. of the ECM respondents were against joining it, while 36 per cent. were in favour.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

There has been much play on the issue of national identity. Will my right hon. Friend reflect on whether the Scots or Welsh have less of a sense of national identity after hundreds of years of membership of the United Kingdom? Has the fact that the French, Germans and Italians have been EU members from the beginning made them feel that they have lost their national identity?

Photo of Peter Hain Peter Hain Minister of State (Europe)

My hon. Friend makes an extremely valid point. As a Welsh MP like him, I know—as do you, Madam Deputy Speaker, hailing from Wales—that our Welsh constituents are fiercely patriotic about their Welshness, but are also proud to be British. The same is true in Scotland and, indeed, France; I do not detect that the French are any less French or less proud of being French citizens as a result of being positively pro-European. The same applies to the Germans, the Spanish and the citizens of any other EU member state. They are proud to be French, Spanish or German, as we are proud to be British, and proud to be European as well. That, I think, is the point that my hon. Friend was seeking to emphasise.

The poll to which I referred confirms what we have long been saying as a Government: that what matters about the EU is what it delivers, how it makes a practical difference to the lives of its citizens, and how it helps sustain and strengthen the real, prosperous, safe Europe in which our people want to live.

The European Council at Laeken will be the last before euro notes and coins are issued on new year's day in member states that are part of the single currency—a momentous step that will have an impact on us all. The change-over has been carefully prepared. We all have a strong interest in its success. A successful euro is in the interests of Britain, because so much of our trade is with countries in the euro zone.

Meanwhile we shall continue to pursue our agenda for economic reform in Europe, pioneered by my right hon. Friend the Prime Minister and his Spanish counterpart at the Lisbon European Council in 1999—an agenda that will be given further impetus under Spanish leadership at Barcelona next year. That is yet another example of how, by building partnerships and engaging wholeheartedly with our friends in the European Union, we can deliver practical reforms and practical benefits for the British people.

The coming 12 months will provide ample further evidence of the ways in which the EU delivers what Europe's citizens want. Key decisions are due on freedom, security and justice in the European context; action against terrorism; European defence; economic reform; and enlargement. These are all issues that matter to our citizens, and they are all steps towards our goal of building our kind of Europe: a practical, people's Europe that, in a world full of challenges, is the surest way to underpin British security and British prosperity.

Photo of Richard Spring Richard Spring Conservative, West Suffolk 7:21 pm, 5th December 2001

Since our last debate on European affairs, much has changed. The continent of Europe has had to face up to the challenge of terrorism. Just as in a previous generation many millions of people recalled the moment when they heard about the death of President Kennedy, so hundreds of millions of people alive today will always have in their memories the terrible visual images of 11 September. Yet out of that unspeakable horror, countries with very different political traditions have made common cause as the evils of terrorism are recognised.

As we reflect on the past few decades, however, perhaps we find that the most astonishing political event in Europe was the collapse of the Berlin wall—a momentous event which gave an opportunity to millions of our fellow Europeans to breathe freely and escape a hideous totalitarianism that had gripped their lives for decades.

A number of those now democratic countries are already valuable members of NATO and, we hope, will soon be embraced politically and economically by the European family of nations. Given their history, their accession to the European Union is a moral imperative, as well as a political and economic one.

For Russia, the collapse of the old Soviet Union and its satellites has resulted in a particularly difficult period of adjustment. Old suspicions and distrust have lingered on. That is why few developments have been more welcome than Russia's positive response to the appalling events of 11 September. It has given the international coalition much-needed support in fighting the terrorist threat, and President Putin has shown himself to be a strong national leader. The House will no doubt agree that it has been important for the cause for which we are fighting that Russia has joined the battle against terrorism so wholeheartedly and helped to provide crucial logistical support.

That has been accompanied by an overdue thaw in the relations between Russia and NATO. We applaud the Prime Minister's efforts to build bridges based on the new rapprochement. We in the Opposition were pleased to see how much Lord Robertson's visit to Moscow last month accomplished. The proposal to set up a Russia-North Atlantic council has considerable potential. Both parties stand to gain far greater security by working together.

There is still, however, a small dark cloud on the horizon in the picture of eastern Europe. It is regrettable that September's elections showed that it is not for nothing that Belarus's Alexander Lukashenko is called Europe's last dictator. The Organisation for Security and Co-operation in Europe said that President Lukashenko's Government

"did everything in its power to block the opposition" and that there was

"a campaign of intimidation directed against opposition activists, domestic observation organizations, opposition and independent media, and a smear campaign against international observers."

The future of countries such as Belarus and Ukraine, for different reasons, causes concern to the eastern European EU accession countries, which want stable and successful neighbours.

The welcome warming of relations with Russia, especially the lessening of its concerns about NATO's post-cold war role, makes it easier to address the concerns of the Baltic states about security, by admitting them to NATO. Arising out of the experience of close co-operation over Afghanistan and our gratitude for that, Russia should no longer feel threatened by the Baltic states joining NATO. Every NATO state gains when a new member is admitted, and for the Baltic states admission would be a further sign of their acceptance and recognition by the world as full and independent parts of democratic Europe. Admission to NATO would enable them finally to put their difficult past behind them, at no risk to the interests of Russia or their own Russian minorities.

Photo of Gisela Stuart Gisela Stuart Labour, Birmingham, Edgbaston

Although I agree that the Baltic states should be admitted to NATO as quickly as possible, does the hon. Gentleman agree that we should distinguish between the situation of Estonia, Lithuania and Latvia, which are all slightly different, and that there would be problems with Kaliningrad, should they join NATO and the EU?

Photo of Richard Spring Richard Spring Conservative, West Suffolk

I am grateful to the hon. Lady for making that point, as I know that she takes a particular interest in these matters. Following the events of 11 September, we should explore the position and take the opportunity to derive some benefit from the horror that occurred.

Since the House last debated European affairs, a great step has been taken in the struggle against state-directed terrorism. Last June, Slobodan Milosevic was handed over to the International Criminal Tribunal for the former Yugoslavia in The Hague. It is clear that in Europe at least, state terrorism has been shown not to pay for the individuals who direct it. Nevertheless, the western Balkans remains a region of great instability. Ethnic hatreds still hang over the region's future. In Kosovo, much progress has been made and free and fair elections have been held, in which all ethnic groups took part.

That brings us to Macedonia. I am sure that the entire House regrets the continued shootings and strife there, after it seemed that a peaceful settlement had been reached. It is clear that unless a way can be found to give Macedonia's inhabitants stability and security, the whole region will be in danger of another inter-ethnic flare-up.

The military framework for dealing with the Balkan crises has been NATO, and it has proved flexible and successful. European Union countries outside NATO, such as Austria and Finland, have worked with it in peacekeeping operations such as KFOR. We should never risk losing such practical flexibility, which demonstrates NATO's importance and pre-eminence.

The greatest strength of the response to the events of 11 September has been that it was a flexible and layered response within a flexible and layered coalition. It has been flexible in that it has not required every member of the EU to sign up to precisely the same response, and layered in that it has allowed for different levels of enthusiasm, and different levels of participation as a result. Some members have felt unable to make a military contribution in the fight against terrorism directly or to the campaign in Afghanistan in particular, while others have deployed forces or stated their intention to do so.

A single European foreign or defence policy as advocated by Romano Prodi and others would have limited the effectiveness of the European response to that of the lowest common denominator, rather than allowing flexibly for a varied and layered response which allowed the EU to hold together while responding according to individual national capabilities. It is manifestly absurd that the advocates of greater integration have adduced 11 September as a reason for it. In fact, it plays in entirely the opposite direction. We need to ask ourselves this question: what would a single defence and foreign policy on this issue have been? The lesson of the challenge of 11 September shows that a flexible Europe met that challenge as an integrated and harmonised Europe could never have done.

Photo of Mr Roger Casale Mr Roger Casale Labour, Wimbledon

Does the hon. Gentleman accept that it is the existence of a European defence identity and the capacity to act in areas such as the Balkans that allow the flexibility that we have seen since 11 September, which has enabled us to build an international coalition that can act in areas such as Afghanistan?

Photo of Richard Spring Richard Spring Conservative, West Suffolk

I am not sure that I follow the hon. Gentleman's thought process exactly. Of course, there should be European defence co-operation. We have always been in favour of that, but we believe that it should work under the umbrella of NATO. That is the difficulty that we now face as a result of Nice.

Photo of Ms Joyce Quin Ms Joyce Quin Labour, Gateshead East and Washington West

Will the hon. Gentleman make it clear whether he is definitely repudiating the part of the Maastricht treaty—let us remember that it was signed up to by a Conservative Government and a Conservative Prime Minister and Foreign Secretary—that included a commitment to the

"progressive framing of a common defence policy"?

Is he now repudiating that commitment?

Photo of Richard Spring Richard Spring Conservative, West Suffolk

The right hon. Lady knows perfectly well that there was never any intention to establish a separate command structure outside NATO, but if one looks at exactly what was agreed at Nice, one sees that it is entirely different. I remind her that, originally, the Prime Minister himself bitterly opposed the moves that arose out of St. Malo. That is on the record.

The most practical thing that we can do to help our friends in eastern Europe is to proceed with enlargement of the European Union, which is the greatest task that faces member states. Regrettably, what the Government signed up to at Nice now threatens to undermine the very raison d'être of Nice: enlargement. There is no guarantee that the Irish people would change their minds if the Irish Government held another referendum on Nice. For enlargement to occur, a fallback position is clearly needed. We have pointed that out to the Government before and they need to answer the point. It is no use carrying on pretending that this is not a problem. I am sure that the whole House will be glad to hear whether such a fallback plan exists, and if so, what it is. I would not like to think that the Government had not comprehensively and urgently considered the problem.

The other great difficulty in the accession process is the lack of reform of the common agricultural policy. We know that, if there is no reform, the costs will explode and enlargement would be made virtually impossible. We have talked about these matters frequently in the Chamber, but I ask the Minister to note the final declaration at the recent World Trade Organisation meeting in Doha, which committed members to improvements in market access and substantial reductions in trade-distorting domestic support. It would be very helpful to all hon. Members to understand exactly what that means in practice, as it applies to the common agricultural policy. I hope that he will refer to the matter. Of course, agricultural reform was not even raised at Nice, which is very regrettable.

Before Nice, we were told by the previous Foreign Secretary that the accession process arising out of the so-called Amsterdam treaty leftovers probably did not require a formal treaty to pave the way for enlargement. If the accession process is, as we believe, a historical imperative, Nice should have been focused on it unequivocally and overwhelmingly. Before Nice, the previous Foreign Secretary told us about the 50 items for potential extensions of qualified majority voting put forward by the French presidency and then substantially ruled them out. In practice, however, at Nice the Government agreed wholly or partially to the majority of such extensions—so much for rhetoric versus reality.

As I told Joyce Quin, with regard to St. Malo our own Prime Minister flatly rejected the creation of any military structure outside NATO. What emerged at Nice was a European rapid reaction force that had nothing to do with improved defence capabilities or enhanced burden sharing, but everything to do with a structure that could ultimately undermine NATO and the United States presence in Europe.

Photo of Peter Hain Peter Hain Minister of State (Europe)

In that case, why have NATO and the United States welcomed it?

Photo of Richard Spring Richard Spring Conservative, West Suffolk

I have read what President Bush had to say. The Prime Minister's interpretation does not accord with what was signed up to at Nice. If the Minister looks at the annexes and exactly what was spelled out, he will see that there is a separate structure. As he will know, there is genuine concern in NATO, the United States and this country about a rival structure that may cause tensions within NATO in future. I am sure that he would not want that to happen. The separation of the command structure is spelled out unequivocally in the Nice annexes, and the Government simply cannot pretend otherwise. There are those who say that, since 11 September, there has been much rethinking. I hope so, for it is not only the decreasing military capabilities of Europe that have been put under the spotlight.

Let us turn now to the charter of fundamental rights. I am delighted to see the former Minister for Europe, Mr. Vaz, in the Chamber as it was he who compared the importance of the charter with that of the Beano. He said:

"We do not . . . favour the Charter's incorporation into the Treaties."—[Hansard, 1 February 2000; Vol. 343, c. 541W.]

A matter of weeks later, he said:

"I think it would be premature to decide now whether or not it should go into the treaties."

Furthermore, the Prime Minister appeared to rule out an EU-wide constitution in his Warsaw speech.

Photo of Keith Vaz Keith Vaz Labour, Leicester East

Obviously, the hon. Gentleman does not read my speeches with the same enthusiasm with which I am listening to him now. He will know that I said that the charter of fundamental rights was not a legally enforceable document. There was no question of its being entered into the treaties.

Photo of Richard Spring Richard Spring Conservative, West Suffolk

I shall address that point specifically in relation to the interpretation of the European Commission's view of its efficacy in that respect. We said at the time that the charter would be the basis for a European constitution, and of course that is exactly what is happening at the moment.

When I recently asked the current Minister for Europe about discussions that he had had regarding the inclusion of a possible EU constitution in the forthcoming Laeken declaration, he declined in a written reply on 22 November to answer that very simple question. The plain fact is that numerous European leaders, including Chancellor Schroder and President Chirac, have made powerful calls for a European constitution based on the charter. Our Government know what the consequences will be for our country; we have no written constitution. Nothing will alienate the British people more from the EU than a wholesale increase in judge-led law and the further blurring of the division between the legislature and the judiciary.

So, Nice was a catalogue of bad preparation, bad judgment and a lack of foresight on the part of our Government. It not only put in place the seeds of an intrusive and damaging European supranational constitution and the potential for tensions in NATO, but most of all, to the extent that it dealt with enlargement—as it should have done—it may well have obstructed it.

Of course, we would have accepted the functional changes associated with enlargement, such as those in voting power. Nice was not about stopping the processes that are alienating Europe's citizens from the institutions of the European Union. It has simply aggravated the problem. All of this was signed up to by a Government who have failed to repatriate one single power to national Parliaments and to stop the remorseless process of political integration—a failure that has arisen because they have absolutely no view or conviction whatever about what an enlarged European Union should look like in 10 or 15 years' time.

However, as the Minister for Europe said, the processes that lead up to Laeken, and subsequently to the intergovernmental conference in 2004, are in place. We want to make a positive contribution to the discussions that lead up to the IGC. In contrast to the thought-free zone opposite, we have already devised fresh ideas to reinvigorate the role of national Parliaments and give proper force to subsidiarity.

Let me spell out some of our ideas. We want to put a senior Minister directly in charge of our Brussels representation, who regularly reports back to Parliament, answers questions, faces scrutiny and spends part of the week in Brussels. He or she would sit on the Committee of Permanent Representatives on that basis. We support a formal subsidiarity panel to which national Parliaments, not the courts, could appeal. We support enhanced scrutiny, and consideration of how national Parliaments can amend EU legislation. We want a structured and open dialogue between national Parliaments and the Council of Ministers. We also support a national parliamentary committee that oversees EU expenditure in every member state and monitors any possible fraud and abuse.

Photo of Mr Roger Casale Mr Roger Casale Labour, Wimbledon

It sounds increasingly as if the hon. Gentleman is arguing for some sort of European constitution.

Photo of Richard Spring Richard Spring Conservative, West Suffolk

We got used to the hon. Gentleman's interventions in the Committee that dealt with the Nice ratification process. I shall not comment further.

The proposals that I outlined, among others, would completely alter the balance and tone in the EU. We want clear limits on what is being done at the centre.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

Let me take the hon. Gentleman back three or four sentences. He briefly mentioned a proposal for national Parliaments to be able to amend European legislation. I am not sure whether he means that an individual country should amend the legislation for all the countries. However, that is an unreliable process unless all the countries get together to amend the legislation for everybody. That is the purpose of the European Parliament.

Photo of Richard Spring Richard Spring Conservative, West Suffolk

I was trying to make the point that we need to enhance the role of national Parliaments. The Minister for Europe has also said that. We should consider the matter properly. We are making suggestions that can subsequently be discussed and debated to ascertain whether they can be developed. I am sure that the hon. Gentleman agrees that there is no point in discussing the disconnection of national Parliaments from the architecture of the EU without making some practical proposals. Those that I have outlined are among several ideas that we want to consider. It is important that our national Parliament has a role in the EU that it currently lacks.

Photo of Angus Robertson Angus Robertson Shadow SNP Spokesperson (Defence), Shadow SNP Spokesperson (Foreign and Commonwealth Office)

I thank the hon. Gentleman for allowing yet another intervention. He talked about several ideas on subsidiarity, yet he did not mention the role that sub-state Parliaments in the United Kingdom might play. Perhaps he has missed something out or has no ideas about subsidiarity apart from the role of the House of Commons.

Photo of Richard Spring Richard Spring Conservative, West Suffolk

I appeared before the European Committee of the Scottish Parliament with the hon. Gentleman, and I spelled out my views in great detail. His memory is a little imperfect.

We support a change in the tone and structures of the EU. We want clear limits on what is done centrally. How does that square with the Prime Minister's view that there should be no finality to what is done at the centre? Of course, exceptional and unforeseen circumstances may arise and demand a unified response; that is different. However, it is ridiculous to diagnose the problem constantly and offer no prescription. The British people want not high-flown, windy rhetoric, but a clarity that is absent from current Government thinking.

The Minister for Europe talked about the eurozone and the fact that the euro will come into play in a few weeks. Of course, the strength of the euro will depend on the performance in the economies of the countries in the eurozone. As the right hon. Gentleman said, we can only hope that the economies of Europe will grow, because they are important export markets for us.

However, it is worth remembering what the Prime Minister said before the 1997 election when he talked about his love of the pound and his feelings about the Queen's head on the £10 note. He said:

"I feel it too. There's a very strong emotional tie to the pound which I fully understand. Of course there are emotional issues involved in the single currency.

It's not just a question of economics. It's about the sovereignty of Britain and constitutional issues, too."

Since then, the Prime Minister and the Minister for Europe have made further comments. They have said that there is no constitutional bar to the single currency. At what point and by whom was that resolved? Did a group of learned Queen's Counsel pronounce on the matter? Perhaps it was the Attorney-General, or did the Lord Chancellor make a magisterial pronouncement? We await the right hon. Gentleman's explanation with bated breath.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

Will the hon. Gentleman give way?

Photo of Richard Spring Richard Spring Conservative, West Suffolk

Many Labour Members would like to speak. I hope that the hon. Gentleman will acknowledge that I have given way generously this evening.

The Minister for Europe recently gave his views on the euro on "Newsnight". He expressed such wonderful banalities as, "We can't afford to be left behind in Europe." He showed that he had no clue about the operation of the European central bank by saying, "Where we don't have influence yet is in the direction of monetary policy." However, his most fatuous remark was, "Even if you opt out you are affected by it."

Leaving aside our position as the fourth largest economy in the world, let us consider Canada, which is a member of the North American Free Trade Area and has an economy that is far more dominated by and more inextricably tied to the United States than our economy is affected by its relationship with the continent of Europe. Yet no one in Canada believes that it is essential for the Canadian dollar to be abolished. There are many other examples around the world.

As the Bank of England has confirmed, foreign investment has not been dissuaded from coming here because we are not in the eurozone. What economic statistic can the Minister for Europe produce to reflect the disadvantages that apparently burden us?

The single currency has little to do with economic considerations and everything to do with the politics of integration in the EU. As Mr. Duisenberg, president of the European central bank, openly said:

"The process of monetary union goes 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."

Let us not be in denial. The Chancellor's five economic tests are wholly subjective. The only test that matters is the sixth test of how and when to win a referendum. We shall argue for retaining our currency on economic, political and constitutional grounds.

If the Minister for Europe wants to elevate the important debate above woolly rhetoric, he should consider producing a White Paper to examine the economic, political and constitutional implications of the single currency. If the Government did that, I am sure that the document would bear out our view that it is in Britain's interests to retain our currency. That view is held by a clear majority of British people.

I have already referred to the tensions and difficulties in the Balkans. I should like to mention two other worrying areas in Europe. Today a meeting is taking place in Nicosia between the representatives of the two Cypriot communities, Mr. Denktash and Mr. Clerides. The position of successive Governments has been clear: we favour a bizonal, bicommunal, federal structure for the island. We have strong historic ties to Cyprus, and its accession to the EU has put a spotlight on the island. The continued division can be no bar to Cypriot accession.

Turkey also has ambitions for EU membership that we have accepted. However, it is greatly in Turkey's interest to resolve the problem in Cyprus, not least because of the growing disparity of living standards between the two parts of the island. Cyprus has already closed 23 out of the 31 accession chapters. We can only hope for a settlement. However, its absence cannot be allowed to impede full EU membership.

Lastly, I want to consider Gibraltar, where passions have risen dramatically in the lead-up to and the aftermath of the recent Brussels process meeting in Barcelona. We welcome the Government's commitment to ensuring that Gibraltarians will participate in the next European elections and we look forward to hearing the details. I hope that the Spanish Government will try to minimise the points of friction across the border.

The people of Britain have a special feeling for the people of Gibraltar, for good historic reasons, and value their continued association with us. I am sorry to have to say to the right hon. Gentleman that nobody is more directly responsible for the upsurge of concern and anxiety in this country and, particularly, in Gibraltar than he is. He said:

"Our European partners do not understand why a dispute between two member states over a territory with a population one fifteenth that of Luxembourg should be a deciding factor in such decisions."—[Hansard, Westminster Hall, 7 November 2001; Vol. 374, c. 90WH.]

When the right hon. Gentleman made that statement, he showed a deeply patronising attitude. It was highly provocative. He then dispatched his Parliamentary Private SecretaryCaroline Flint—to appear on television to discuss Gibraltar with Mr. Hoyle and me. The hon. Member for Don Valley made the disgraceful and inaccurate statement that smuggling was taking place on a massive scale. Where is the evidence for that? The Select Committee on Foreign Affairs rejected the accusations of massive smuggling and money laundering last year.

So, despite assurances about respecting the right of Gibraltarians to determine their future, an atmosphere of bullying hostility has been created. This is a mess entirely of the Government's making; it is destructive and wholly unnecessary. We have made it clear that the way forward in any negotiations should be based on the concept of two flags and three voices, echoing the successful peace process in Northern Ireland. We would encourage the Spanish Government to seek a productive and friendly dialogue with their Gibraltarian neighbours and, in that atmosphere, encourage Gibraltar to respond.

All hon. Members hold Spain in great admiration. In the time span of a generation, it has transformed itself into an exemplary parliamentary democracy and a successful constitutional monarchy. It is also a valued EU and NATO partner. Despite all that, there is no question but that the right of Gibraltar's citizens to maintain their constitutional arrangements is an absolute one, and no amount of weasel words will alter that fact.

Photo of Gisela Stuart Gisela Stuart Labour, Birmingham, Edgbaston

On Gibraltar, I broadly agree with the hon. Gentleman that we need three voices round the table. However, the Chief Minister of Gibraltar made it quite clear when he gave evidence to the Select Committee that he believes that the interests of the people of Gibraltar are better served by an empty chair than by his presence at the negotiations.

Photo of Richard Spring Richard Spring Conservative, West Suffolk

The hon. Lady does the Chief Minister an injustice, because he has made it plain that the concept of two flags and three voices is one to which he would be happy to accede. In fact, we have had discussions about such a process echoing the peace process in Northern Ireland. The hon. Lady is not being fair to the Chief Minister, because the situation might be quite different had the matter been handled differently by the Minister.

Photo of Peter Hain Peter Hain Minister of State (Europe)

The fact is that we have offered the Chief Minister exactly the same conditions for participation in the Brussels process talks—which are aimed at securing an agreement that will improve life in Gibraltar—that previous Chief Ministers have agreed to, and which have been offered by previous Conservative Governments. We are simply picking up the baton in a process started under Baroness Thatcher in 1984, seeking to promote dialogue with Spain and Gibraltar to resolve this intractable problem.

Photo of Richard Spring Richard Spring Conservative, West Suffolk

Of course, the right hon. Gentleman is right to want to resolve this intractable problem. He must, however, ask himself why there has been such fury and passion on the subject, and why the Chief Minister adopted the attitude that he did. It is no good the right hon. Gentleman shrugging his shoulders. He should not be shrugging his shoulders about an issue such as this, because it is of deep concern not only to the people of Gibraltar but to the British people who write in their droves to Members of Parliament because they are concerned about what is happening. All I am suggesting is that there is a way of resolving this issue, but it does not involve using the kind of language that the right hon. Gentleman and his Parliamentary Private Secretary have used with such reckless abandon.

There are many lessons to be learned from the last 12 months. Nice was a failure of aspiration and influence by this Government, and the Brussels process was turned wholly unnecessarily into a cauldron of anxiety and suspicion. Nevertheless, following September's truly terrible events, we have been forced to examine the nature of our own societies. Despite our being a pluralistic, socially liberal country, tolerant by world standards and slow to anger, the Prime Minister's determined response overwhelmingly had the support of the nation. It has brought all of us who cherish civilised standards more closely together, from the Atlantic to the Urals and beyond. But it has also shown us in Britain that we abandon our ultimate independence and flexibility at our peril. If we disconnect our people from our institutions—as we continue to do, particularly with regard to the EU—the validation of our democracy will surely be further weakened. This is clearly a lesson that the Government must urgently learn.

Several hon. Members:

rose

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Clearly, many hon. Members wish to contribute to the debate, for which there is limited time available. I urge hon. Members, therefore, to keep their contributions brief. More may then be able to catch my eye.

Photo of Mr Alan Howarth Mr Alan Howarth Labour, Newport East 7:55 pm, 5th December 2001

We are now being encouraged at the highest level to address ourselves to the possibility of an early referendum on membership of the euro. My right hon. Friend the Prime Minister sees the barometer rising; the chairman of the Labour party—the Minister without Portfolio, my right hon. Friend Mr. Clarke—has boldly pushed the boat out.

I am a European. I have lived in France and remain an unrepentant francophile, and I have studied the classics and history—how could I not be a European?

The motives and ambitions of the founding fathers of the European communities were noble. French and German officials who had jointly administered occupied France were determined that enlightened politics and bureaucracy should prevent any further such catastrophe.

I confess that during what sometimes felt like the rather long hours that I spent seated at the table of the Council of Ministers, there were moments when I allowed my mind to wander from the immediate agenda. I have watched the representatives of 15 European nations, with their histories of conflict between them, earnestly thrashing out their policy differences under the auspices of this still new institution, the European Union, and I have been moved.

My right hon. Friend the Prime Minister has expressed regret that Britain did not play a shaping part in the inception of the European Union. But why did we not do so? It was not for reasons of insularity. The fact is that nothing in Britain's historical experience disposed us to feel that we should be part of the new system that the French and the Germans were creating. We had not experienced almost total destruction in war. We had not been occupied since Norman times. We had seen off the threat of German invasion. We were complacent about our institutions of parliamentary sovereignty.

If we had deep national doubts about more limited propositions in the 1950s and the 1970s, there are now even deeper doubts about merging our currency with the single European currency.

For all my personal sense of being a European, and notwithstanding that I believe firmly that it is right for Britain to be a member of the European Union, I cannot believe that we should join the single currency—in the foreseeable future, at any rate. The reasons that we should not do so are both economic and political.

Fixed currency regimes have not been good for Britain. The 1960s saw a struggle, first to avert devaluation and then to cope with its consequences. The Bretton Woods system collapsed in the early 1970s. The snake, the crawling peg, the shadowing of the deutschmark, and the exchange rate mechanism—all the subsequent devices to fix currency parities—were damaging to the British economy.

On the other hand, since we fell out of the ERM in 1992, the British economy has prospered remarkably. Low inflation, low long-term interest rates, low unemployment, successful export performance, and our standing as the world's fourth largest economy—all the achievements that I was so pleased and proud to hear my right hon. Friend the Chancellor expound in the pre-Budget report—are attributable in very real measure to the freedom, which we have in the main skilfully exercised, to concentrate on other purposes and on disciplines other than the exchange rate.

Photo of Mark Hendrick Mark Hendrick Labour/Co-operative, Preston

Does my right hon. Friend not agree that what is being proposed in terms of membership of the euro is membership of a single currency, not—as we have had in the past—membership of a basket of currencies known as the ecu?

Photo of Mr Alan Howarth Mr Alan Howarth Labour, Newport East

I agree with my hon. Friend. We therefore have to contemplate this issue with even greater seriousness.

I do not see how the great and the good of the economic establishment can know what the appropriate rate of entry into the euro would be for sterling. They certainly got it badly wrong in the case of the exchange rate mechanism. If—more by luck than by judgment—they should get it about right in 2005, why should we suppose that that rate would still be appropriate in 2010 or 2015? The economies of different countries will perform differentially, whatever the momentary convergence and whether within euroland or outside it.

A single interest rate is difficult enough to judge and manage within the United Kingdom alone. The policy that is appropriate to contain house-price inflation in south-east England is not the policy to help industrial manufacturers in south-east Wales to export, or to help the communities that have been so devastated by the collapse of steel-making to pick themselves up. How much harder it must be to operate a single monetary policy to suit the needs of a community of 12, or maybe more.

The social and political stresses consequential on the single European currency and single monetary policy will not be alleviated, as in the United States, by labour mobility, nor, as in the United Kingdom, by an automatic stabiliser—a cyclical adjustment of deficit targets, enabling public expenditure transfers to take place in favour of people and areas affected by unemployment. The Maastricht treaty sets damagingly tight limits on borrowing by Governments: it must amount to no more than 3 per cent. of gross domestic product, even when their countries are in recession. The stresses will have to be alleviated by tax-funded public expenditure.

The theory is that taxation policy will remain a matter for individual member states, but can the weaker regions of euroland realistically be expected to cope single-handed with the collateral damage caused by interest rates that are inappropriate for them? The pressure for the regional fund and the social fund to grow and grow will be irresistible. Only recently, the President of the European Commission called for the establishment of a European central fiscal institution. Tax-funded redistribution from richer to poorer across national boundaries within the European Union must entail an increase in supranational governmental powers in Europe.

A federal Europe was always part of the original project, as the treaty of Rome's commitment to "ever closer union" effectively avowed. The single currency project has always been politically driven—supported, naturally, by multinational business. It has been driven by elites, who have not carried public opinion with them at all easily. Few economists will argue confidently that it is right on economic grounds.

The enthusiasts adduce a number of economic arguments in favour of Britain's joining the euro. Their principal arguments are these. They say that Britain will not be able to cope on its own; but we are inside the European single market. They say that our businesses would be protected from foreign exchange volatility, which ignores the fact that the dollar is more important to Britain's trade than the euro, and that the euro has been highly unstable against the dollar. They say that it would be nice not to have to pay the costs of foreign exchange transactions, which is a trivial argument. They say that more international investment would be attracted to Britain. That is belied by the fact that, in each of the last five years, we have attracted more inward investment than the original six members of the European Community put together. They say that we would be better placed to influence decisions in Europe and the world. That is plainly wrong as far as the European central bank is concerned—political influence is specifically ruled out by the treaty—and ignores Britain's membership of the G8 and the Security Council. Some industrialists say that, if only we join, we shall trade happily ever after with a competitive exchange rate. That is the sort of self-delusion that makes it certain that, whatever the exchange rate, they will fail to make their businesses competitive.

The question, therefore, is whether joining is right for Britain politically. I believe it is not, for the historical reasons I have given and because of my conclusions when I examine the condition of the EU's institutions and consider the implications for democracy.

I regret to say that the Commission is entirely unfit to handle significantly greater responsibility. Both as Science Minister and as Minister for the Arts, I was shocked at its incompetence. I was particularly scandalised by Directorate-General XXIII's handling of the droit de suite issue, which must be a locus classicus of misgovernment. Despite repeated requests from British Ministers, the Commission refused to undertake a cost-benefit analysis of a policy which, when implemented, will certainly be destructive of the EU art market, which happens to be located in London. I was also deeply unimpressed by the inadequacies of Directorate-General X in developing and handling the Culture 2000 programme.

Photo of Wayne David Wayne David Labour, Caerphilly

Is not Commissioner Neil Kinnock making tremendous advances in reforming the Commission?

Photo of Mr Alan Howarth Mr Alan Howarth Labour, Newport East

Notwithstanding the heroic struggles of Commissioner Kinnock, as Vice-President, with the task of reforming the Commission, he has a job on his hands even tougher than any he had to do as leader of the Labour party.

I mean no disrespect to the European Parliament if I note that it is an immature institution, by no means capable of bearing the weight of democratic responsibility implied by the single currency. Its powers are modest. It is based on limited trust, and on shallow accountability. We in this country are not remotely ready, ideologically or organisationally, to practise democratic politics on a European scale. The remedies now proposed by the Belgian presidency to deal with the gulf that they see widening between the peoples of Europe and the institutions of the EU include cross-European political parties, further extensions of qualified majority voting, enshrining the charter of fundamental rights in EU law, and direct election of an EU President. I hope very much that at Laeken my right hon. Friend the Prime Minister will explain that it is not sensible or appropriate for Britain to accept such proposals. We would do better to concentrate on learning how to make devolution work well in the United Kingdom, and on restoring our citizens' faith in this Parliament.

The Labour party was elected in Britain to carry through a social democratic programme, particularly to improve our public services. Membership of the single currency would, at least, severely hamper our efforts. We would lose the freedom to pursue the economic policies that we judged to be right. As things are now, the Monetary Policy Committee of the Bank of England has had the freedom to cut interest rates over recent months more aggressively than the European central bank. My right hon. Friend the Chancellor's fiscal programme, which he was told by the Commission earlier this year would be out of order within economic and monetary union, looks admirably judged. The International Monetary Fund projects UK growth next year of 1.8 per cent., against eurozone growth of 1.3 per cent.

If we joined EMU, we would be members of a system whose record on unemployment—I think particularly of the loss of manufacturing jobs—has been and remains lamentable. Why should we imprison ourselves in a system locked into deflation by the remit of the European central bank, and compounded by the masochism of the growth and stability pact? Let us keep our discretion in policy making, and our capacity to configure policy to take account of our distinctive economic characteristics and social priorities. Let us not put our jobs at such risk and erode our democracy.

I greatly admire the thoughtfulness, energy, skill and courage shown by my right hon. Friend the Prime Minister in international affairs—not just following 11 September, but since 1997. His scope as a leader, domestically and internationally, would be diminished rather than enhanced in the integrated Europe to which the single currency leads. I do not think it appropriate or realistic for Britain to aspire to lead the European Union. It will be better if, true to our history, we continue from within a more limited—though positive—participation in Europe to preserve the freedom to act on our judgment of Britain's interests at home and abroad.

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells 8:09 pm, 5th December 2001

I am very pleased to follow Alan Howarth. Our political opinions have diverged somewhat in recent years, although I am glad to say that there is a convergence on this issue, at least. I have always respected his political principles, even when I disagreed with him. However, I am delighted that he puts right at the front of his political thinking the crucial need to maintain self-government in the United Kingdom. That is important for the electorate.

Although the vision that the right hon. Member for Newport, East and other Labour Members have for the United Kingdom's social and political structure differs very much from mine, I think that he and I agree that the electors must be able to choose. If hon. Members hand over all these powers to people whom we have not elected and cannot remove, we shall be giving away not so much our powers as those of the people who elect us. That will create a very widespread disillusionment with unpredictable results.

The Minister introduced the debate by referring to the forthcoming meeting at Laeken. I suppose that that will be one of the periodic episodes when the European Union goes through an internal crisis of confidence and tries to re-invent itself. We have learned that a paper has been prepared for that summit by the Belgian Prime Minister, who is chairman of a committee of wise men that includes Jacques Delors. That paper, like everything else in the European Union, is confidential, but, again like everything else in the European Union, it has been leaked.

We are told that that study has concluded that the European Union is secretive, remote and undemocratic. Although I fully agree with that analysis, I am slightly worried about this constant reinvention of the European Union. I have lost count of the number of times that it has tried to relaunch itself or give itself a make-over, a face-lift or some type of rethink. Of course nothing ever really happens. The aim is a noble one: it is always to close the gap between rulers and ruled and to create a people's Europe rather than a politician's Europe. But of course it never happens.

This particular reinvention looks particularly unpromising because its apparent solution is to entrench the European charter of fundamental rights and to introduce a written European constitution. Both policies were firmly rejected by the United Kingdom and the Prime Minister in the Nice negotiations, although I confidently expect that if the German and French Governments get their way on it, the Prime Minister will find a way of saying that he was in favour of those policies all along.

The basic flaw is that the supposed solution to widespread public disillusionment with the European Union is yet more of the same policies. I think that, one day, it will occur to Heads of Government that something is more fundamentally wrong with the Union and with the structure and direction of policy. The Minister has referred to that disillusionment in this debate. It manifests itself in various ways, such as the very low turnout in European elections, which has reached almost farcical levels in the United Kingdom. We have also had the very unexpected referendum results.

It is very noticeable that when the people of Europe are allowed anywhere near a decision, they usually reject the advice of the European political elite who tell them what to do and they reject the proposal. That is what happened in the Danish referendum on the euro, when almost all the political parties, newspapers, trade unions and employers' organisations told the people of Denmark to vote yes, but the people of Denmark voted no. The same happened in Ireland with the treaty of Nice.

Unless that disillusionment and sense of alienation is tackled fundamentally, the results will be dangerous and even unpredictable. However, I do not want to be only critical; I have a few suggestions for the Government, the first of which is simply to tell the truth. As I know that that is difficult advice to give to the Government, I shall give an example. The other day, the Prime Minister came down to earth from his mission to save the world and set about trying to save the reputation of the European Union. He came up with the old familiar figure that 60 per cent. of our trade is with the European Union. That is simply untrue.

The Pink Book, of which I am a regular reader, gives a most useful geographic breakdown of the United Kingdom's trade patterns, and it breaks down our current account into earnings and payments. The recently published 2001 edition of the Pink Book says of those earnings and payments that

"The European Union (EU) accounted for . . . around half (48 per cent.) of the world total".

That figure is less than half of the total. Even if we took out investment earnings and other transfers, the figure for trade alone would be 51 per cent. There is no figure anywhere in the tables or the text of the Pink Book, even for goods alone, that even approaches the 60 per cent. figure that has been quoted by the Prime Minister and the Government. Let us, right at the start of this debate, at least respect the facts. If the Government ever again produce the figure of 60 per cent. of our trade being with the European Union, we will know that they have something to hide or a very weak case.

We also have the debate on the euro. I was very struck by the acute analysis of the right hon. Member for Newport, East, and I agreed with much of what he said. Again, however, we are not having a proper debate in this country because we are not being given the facts. We are not even told what the estimated cost of changing over to the euro would be for this country. Various private-sector estimates are that the cost for the United Kingdom private sector will be £30 billion, but the Government have to tell us what the public sector cost will be. I know that such an estimate exists. I was in the Treasury five years ago, and even then there were outline estimates for Departments and Government agencies of the cost of changing over to the euro. If the Government are serious about having a debate on this crucial issue, let us have the facts.

We know that the truly difficult debate is occurring not yet in the country but inside the Government and that the Prime Minister and the Chancellor are circling round each other looking for political advantage. They have the agreed five economic tests, but we all know that those are highly subjective and that the same people who are asking the questions will be answering them and then judging the result. We also know, as my hon. Friend Mr. Spring said, that there is an unannounced sixth test, which is whether public opinion can be changed in time.

Therefore, on this crucial issue, all we have from the Government is a policy of fudge and delay. If the Government really want to start a rational debate and include people in this assessment, they should try to advance some of the arguments for joining the euro themselves, rather than leaving it all to poor old Britain in Europe. I do not know whether Britain in Europe still exists as an organisation; it is certainly very demoralised and bankrupt. Nevertheless, it is most unfair for the Government to expect Britain in Europe to make all the running when Ministers themselves are unwilling to try to dream up some of the supposed advantages.

The arguments so far simply resolve themselves into one of inevitability: we are told that it is going to happen and that it is therefore a good thing. That is less of an argument than an attitude, and a pretty feeble one at that.

We used to be told that communism was inevitable, but free people in a democracy have choices to make. We need to know what is best for this country.

The only other argument that we hear is the influence argument. We are told that we have to join the euro to sit at the top table, whatever that is. Sometimes, the metaphor changes: unless we join, we will miss the bus or be left behind in Europe in some unexplained way. Of course, that is all nonsense. I want influence over the matters that I am sent here to decide by my constituents. I want 100 per cent. of that influence, but it is a secondary matter whether I have influence over other countries with their own electorates.

In any case, what brings a country influence in the world is not membership of some bloc but economic success, combined with military capability and the freedom to use it, and a foreign policy that is clear and over which the country has control. All that is on display in Afghanistan. We have influence on that issue, but it has nothing to do with our membership of the European Union or whether we are in or out of the single currency. In fact, the reverse is true. All our influence is threatened by the European Union.

Economically, the EU is in the slow lane. The eurozone has an appalling record of job creation. It is sitting on a demographic and pension time bomb that it will not acknowledge. It endlessly talks about economic reforms, but nothing happens. After the Lisbon summit, the Prime Minister came back here with wonderful declarations about reform, but nothing happened. Nothing ever changes. Meanwhile, the regulations, the red tape and the tax harmonisation continue, eroding the competitiveness of Europe in the wider world—and that is the really big issue. I simply do not understand how we would benefit economically. If we take into account the fact that our gross contributions to the EU are running at £20 million a day, of which we get back only about half, the profit and loss account looks distinctly unappetising.

Politically, the Government persist with the old-fashioned view that we exist as a country only in so far as we belong to a bloc. There are far more important forces at work in the world today, driven by issues such as information technology and the internet that have made geography irrelevant. We have witnessed the rise of the English language to world dominance, which is a huge advantage to this country that has nothing to do with the European Union. In fact, it is threatened by the EU, which persists in refusing to recognise that English has become the language of business and information technology in the whole of the rest of the world. Multilateral trade talks in the World Trade Organisation and tariff reduction talks are increasingly making the EU tariff wall irrelevant. Those developments reinforce the global maritime tradition of the UK. It is thus bizarre that the Government should defy that and attempt to lock us irreversibly into a low-growth trade bloc on our doorstep.

The big lie at the centre of the debate is that it is about economics. I agreed very much with what my hon. Friend the Member for West Suffolk said about that issue. It is widely acknowledged on the continent that this is a political project. Sometimes we pride ourselves on the quality of our debate on the issue, but we should not boast like that because the other EU members are far more honest about it. For example, Otmar Issing, a chief economist at the European central bank, said:

"There is no example in history of a lasting monetary union that was not linked to one state."

That is true, but it is dismissed by the British Government as the ramblings of a continental eccentric. However, people such as Mr. Issing and his colleagues are serious, sensible, intelligent men and they know what they are talking about. They are speaking the truth. It is only the British Government who pretend that the euro project is all about some five economic tests dreamed up by the Treasury. There are enormous political and constitutional implications that are simply dismissed by the Government. I respect those hon. Members and others who make the political case for joining the euro. I disagree, but at least we can have a debate. I have no respect for people who advance the case for joining the euro and ignore the political implications or claim that they are irrelevant.

Let us also be honest about what is happening to our democracy even in the absence of joining the euro. The Government are now regularly outvoted in Europe, which means that policies are imposed on us that, by definition, the House and the Government disagree with. The right hon. Member for Newport, East mentioned the art market, which is a good example. Some 50,000 people are employed in the British art market, but it will go off to New York because the EU intends to impose a resale levy on works of art.

Photo of Kevan Jones Kevan Jones Labour, North Durham

Does the right hon. Gentleman accept that he is a member of a political party that has taken the major steps over the past 30 years to get to where we are today? Does he now suggest that his party has been wrong for the past 30 years and is he calling for withdrawal from Europe?

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

I am giving a specific example of an issue on which the hon. Gentleman's Government have been outvoted, and it should worry him. Instead of asking what I would have done if I were still in government, he should ask what is happening now when the Labour party is in control. Is he worried about the 50,000 people employed in the British art market? The change will not affect the big auction houses, of course. They already own assets in New York and will simply transfer their sales out of the EU to avoid the droit de suite or resale levy. As usual, it is the small people—the packers, the porters, the insurance agents and the transport agents—who will suffer and lose their jobs.

To be fair to the Government, as I try to be on occasion, they understood the danger and voted against the tax, but they were outvoted. Where was the influence in the EU? That is the danger of what is happening. We are undermining those areas of national life in our economy where we have a competitive advantage, not to the advantage of the rest of the EU but—in that clear case—to the advantage of the art markets in Zurich, Tokyo and New York. They cannot believe their luck. They cannot believe that the EU would drive out of its jurisdiction an area of economic activity in which it has been so successful.

Moreover, ratification of the Nice treaty means that more matters will be subject to majority voting and that the problem will therefore get worse. Even where we agree with EU policies, more and more decisions are being taken at the level of the European Union and further from the people whom we represent. The Government talk a lot about devolution and about moving decision making down so that it can be more relevant to electors and our constituents. Progressively, however, more decisions are being taken by a higher tier of Government, even more remote from people's day-to-day lives.

The same is true of expenditure in Europe. Money is being spent ever further from individual taxpayers. It is transferred to Brussels automatically. No vote in this House is required, and no budgetary process takes place in this country to agree the annual tribute that we pay to Brussels. It all happens under the European Communities (Finance) Act 1995. There is nothing that the House or the Chancellor of the Exchequer can do about it. A sum of £20 million a day is automatically transferred to Brussels, some of which filters back to us as a result of the fraud and mismanagement that is inherent in the system.

The electors have rumbled that. They know what is going on. Member states and the Commission denied for years that fraud and mismanagement were a problem. Finally, the members of the Commission resigned over the matter, but then half of them returned to office and the system goes on as it always has.

The European Court of Auditors still refuses to pass the EU's annual expenditure accounts. If I were a director of a public company that did that, I would probably be in prison, but that is the system to which we belong.

The budget goes on getting bigger, so the problem does too. Neil Kinnock has been mentioned. I am sure that he is doing his best to clear up the mess, but no one thinks about turning off the tap so as to stop the problem arising in the first place. We are reinforcing failure, and the people whom we represent have seen through that.

My final point concerns an immediate example that I should like to share with the House. The European arrest warrant directive will be decided tomorrow or the next day in the Justice and Home Affairs Council in Brussels. The warrant has received no scrutiny in this House. The relevant European Standing Committee met on Monday to consider it but broke up because the Minister arrived with the wrong documents.

When he opened the debate, the Minister said that one of his aims was to increase the involvement of national Parliaments. The treaty of Amsterdam, signed by the Government in 1997, makes that a requirement. It states that it wishes to encourage greater involvement of national Parliaments in the activities of the European Union. That is a mandated requirement by treaty law, but what is happening? The European arrest warrant directive is about to be agreed without any involvement of this House.

That is a very serious matter, as the directive proposes the forcible transfer of suspects from this country to other member states. If another member state lodges an arrest warrant, we would be obliged to hand over a suspect, even if the alleged offence was not a crime in this country. Even more remarkably, the alleged offence might not have to be committed in the country making the application, but in this country. As a result, we will hand over citizens to other criminal jurisdictions because of events in this country that do not infringe British law.

By any standards that is a remarkable development in British jurisprudence. It has not been debated in this House at all, but it is due to be decided tomorrow. It was debated in another place, where it caused much confusion. The Minister involved could not give many answers. The directive will be decided in secret, and on the basis of certain assurances given in another place that have not been given to this House.

Photo of Nicholas Soames Nicholas Soames Conservative, Mid Sussex

Does my right hon. Friend agree that it would be impossible for a British Minister to accede to the decision in Brussels tomorrow, if the matter has not been debated in this House?

Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

It is certainly impossible politically and morally, but we wait on events. Points of order have been raised in this House and, I understand, in another place, but no assurances whatsoever have been given on the matter.

The European arrest warrant will be the subject of primary legislation. A Bill is promised for early next year. Another startling development of recent days is that under the Anti-terrorism, Crime and Security Bill, which is still being considered, it need not come before the House for primary legislation but could be dealt with by secondary legislation. That is unamendable, and where it is debated is at the discretion of the Government. It can be debated upstairs in Committee, and whatever its members may say or think, any motion that the Committee passes can be overridden and the matter can go through forthwith, without debate in the Chamber. That is what secondary legislation means.

The entire issue of criminal sanctions for British people and our ancient judicial protection, built up over centuries, can all be changed in future by secondary legislation. Yet the Minister says that he wants to improve the involvement of national Parliaments. That is another example of all words and no action. Grand declarations and high-sounding assurances mean nothing.

Unless we can close the gap between words and deeds, the disillusionment felt by our constituents will become uncontrollable. Will the Government, for once, give us the unvarnished information so that we can debate these matters? Above all, they must stop fooling themselves and trying to fool others about what is really happening in the European Union.

Photo of Keith Vaz Keith Vaz Labour, Leicester East 8:36 pm, 5th December 2001

These European affairs debates are an opportunity for the House to discuss the forthcoming European Council. Mr. Heathcoat-Amory has just spoken for 27 minutes and, to paraphrase him, it was all words and no content. It was the same speech that he gave six months ago or 12 months ago. We can imagine him sitting in Wells with a blanket around him and his hot cup of cocoa, reading his Pink Books. It is time that Conservative Members realised the importance of European debates. Only one Conservative Member is left now on the Back Benches, which shows how enthusiastic they are about Europe.

I pay tribute to the work that the Government are doing on Europe. It is because of the work done by my right hon. Friends the Foreign Secretary and the Minister for Europe that the Prime Minister has been able to take such an important lead in world affairs. Europe is behind us and behind the alliance in our coalition against terrorism because of our positive engagement in Europe over the past four and a half years.

I have a few points for my right hon. Friend the Minister for Europe, and I hope that he will take them with him when he goes to Laeken. We have been talking about enlargement for a number of years, and are getting to the stage when the applicant countries need a firm date for entry. I used to favour the idea of small groups of countries joining separately over the next few years, but I think that the mood has changed and that most European countries—although I do not know the Government's position on the big bang principle—probably favour the entry of a large number of countries, perhaps the majority of those applying.

I realise that some countries, such as Romania and Bulgaria, probably have not reached the stage that others have reached. Turkey, of course, has only recently been confirmed as a candidate country because of the lead taken by the Prime Minister. However, I think that the other countries expect to see real progress.

Without a firm date for entry, we will be sending a negative message to the countries of eastern Europe. They have worked hard on the negotiation process and public opinion is with them at the moment, but if we send a message that they must wait even longer, people in countries whose Governments strongly support entry into the European Union will feel that they have been left out.

It is most important that we are firm on enlargement, that we continue our leadership role and ensure that we put the argument strongly, because there is a feeling in some EU countries that we could wait—that perhaps we could just let in Poland and a couple of other countries and that the rest can follow. However, the mood is for change, so I hope that the Minister will go with a firm commitment to do something about setting a date for the applicant countries.

Mr. Spring, who is no longer in his place, talked of the need for positive engagement. The right hon. Gentleman wondered what had happened to Britain in Europe. To divert him from his constant reading of Pink Books, I shall send him a book that Mr. Simon Buckby sent to me recently: "The Case for the Euro". I hope that the right hon. Gentleman will have an opportunity to read it. I know that Mr. Cash is keen to read such literature.

It is important that hon. Members realise that the Government have been putting the positive case for the euro. The Government support the euro; we believe that membership of the European Union is extremely important. That is why the chairman of the Labour party so recently said that membership of the single currency needed to be put before the British people as soon as possible.

However, the fact remains that the five economic tests laid down by the Chancellor have still not been met. My right hon. Friend Alan Howarth will find himself in a minority in the Labour party on that point. The vast majority of members of the Labour party and of the public are in favour of a strong relationship with Europe and, from conversations and meetings that I have held over several years, I believe that the vast majority of the British people want to join the euro, but the arguments being put by the hysterical tabloid press have distorted the case. If we are to win a referendum, we must put our arguments—exactly as the Government have been doing.

I should point out to my right hon. Friend, however, that we are not yet ready for that referendum because those tests have not been met. We need to follow proper constitutional arrangements before we reach the referendum. Conditions must be assessed and they must be in the interests of this country. The matter must then go to the Cabinet; if the Cabinet agrees it, it must come to Parliament and then—and only then—will it go to the British people. All the British people will then have an opportunity to discuss it. There will be a wide-ranging debate and the hon. Member for Stone and the other horsemen of the Apocalypse who are not in the Chamber today—the hon. Members for Aldershot (Mr. Howarth) and for Buckingham (Mr. Bercow) have suddenly been promoted and are thus silent on this issue—will also have an opportunity to put their views.

Photo of Keith Vaz Keith Vaz Labour, Leicester East

I am sorry that I cannot give way to the hon. Lady, because other hon. Members want to speak. The Liberal Democrat position is the right one—except on the tests. It is important that the tests should be met. The Liberal Democrat view that we should go ahead with a referendum without the proper economic case is wrong.

The Minister is right to talk about reform. I have not read his latest leaflet, which reduces the treaties to 300 words. It is a brilliant idea. It is exactly what we should be doing. Indeed, as there are so many Welshmen in the House today, I wondered whether they might want a Welsh translation—I can think of a few other languages into which the leaflet might also be translated.

Some Opposition Members, in the hysteria of the tabloid press, are trying to turn the European issue into one of not only language but the complications of the European Union. It is important that we should explain those points and the arguments to the British people in simple language.

It is vital that we continue to push ahead with the reform agenda in Brussels. It is time that Brussels took off its burka. So much takes place in secrecy that people do not understand what is happening. I favour the televising of European Council meetings as an opportunity for people to see the good work that is being done by the Prime Minister, the Minister for Europe, the Foreign Secretary and other Ministers. It is important to raise the veils of secrecy.

I pay tribute to my hon. Friend Mr. Miliband for his work in the group of Laeken. It is essential that Britain is represented in that group by such an outstanding individual, ensuring that our agenda is discussed in Europe at the highest level.

Unless we reform those institutions and the way in which the EU operates, we shall not be able to make the case for the euro in a referendum and win. As I have said before, the people of Britain will learn to love the EU only when they learn to love reform. My right hon. Friend the Minister has spoken the language of reform today, so he has our wholehearted support on this issue, and I wish him well in the forthcoming European Council meeting.

Photo of Michael Moore Michael Moore Shadow Minister (Foreign and Commonwealth Affairs) 8:45 pm, 5th December 2001

I am pleased to follow the contribution of Mr. Vaz, not least because he has restored some of the balance to a debate that has been going one way for a prolonged period. The Liberal Democrats broadly support what the Government seek to achieve on Europe, and we hope that they will continue to promote progress in reforming and developing the EU at the summit in Laeken next weekend.

We are disappointed with the Government about one major issue—the single currency, to which the hon. Member for Leicester, East has just referred. Despite the Government's bold assertions in arguing the case, to which he referred, we believe that their approach is characterised by timidity and a lack of unanimity, so a rather confused message is coming across. Outside the environs of Westminster, few people could say with any clarity where the Government are going.

Of course, in a few short weeks, the single currency will be a reality in the shops of Amsterdam and—dare I say—probably in some shops in the United Kingdom as well, and the transactions of Britain's exporters will be very much embedded in the process, too. Finally, the bogeyman of the single European currency will be put to rest, with the realisation that the single currency works across Europe and that the sky does not fall in as a consequence of its use.

The Government's approach to persuading the British public about the merits of the European single currency continue to dismay its friends and encourage its enemies. It takes a massive leap of faith to find any unity throughout the recent speeches of the Prime Minister, the Chancellor and Foreign Office Ministers. The Government need a clarity of purpose, or at least a consistency of spin. It is not enough simply to send the spin doctors out to tell the journalists what the speeches meant. Positive steps need to be taken to argue the case and prepare the country for the full reality.

Only when we get the conditions correct for entry can we possibly hope to win a referendum; it cannot possibly be won in six weeks of campaigning. We need a sustained programme of education and persuasion, and we need a sustained Government voice. The Government will witness some of the details being finalised at Laeken in a few days' time, so they must substantially increase their efforts to promote and prepare this country for what we believe to be an important development for us.

Of course, the main aim of the summit will be to put in place the mechanisms to assist the debate on EU reform and the preparations for the 2004 intergovernmental conference. We Liberal Democrats hope that the intergovernmental conference will be able to produce a constitution for Europe. We do not hide from that, as Roger Casale suggested that those on the Conservative Front Bench do, and they ducked dealing with their fears on that issue.

A constitution is important simply to set out clearly the roles and responsibilities of the different EU institutions, to define more clearly their relationship with individual member states and to prescribe the rights of individual citizens, by incorporating the charter of fundamental rights in that constitution. In that way, we can begin to address the huge concerns that people have about the progress of Europe and the growing disillusionment that dismays those of us who support Europe.

The convention to be set up by the summit is crucial to the process and, in due course, to the outcome of the intergovernmental conference. If the convention is to be meaningful, its terms of reference must not be too restrictive and it must not prepare for a set outcome. If the debate is to be effective, it must be structured but not prescriptive.

The European Scrutiny Committee report on the issue makes important recommendations. The convention should focus on the four key points coming out of the Nice treaty, but it should be free to consider other matters as well. It should be required to give an indication of the particular option that it prefers while not ruling out the others that it has considered. In addition, a House of Commons Member should be appointed to it by a motion of the whole House and not as the result of a stitch-up by the Whips. When appointed, that person should be required and given the opportunity to report back to the House on the convention's progress.

One key point from Nice has become increasingly evident. Whatever we are doing, we must make Europe better understood. The treaties need to be simplified into something that approximates to language that we can all understand and about which we can hope to persuade others.

Among the other issues, I wish to refer particularly to European security and defence policy. Much has been made of the transformation of the world since 11 September. Some aspects of the common foreign and security policy work well, but others require improvement. The policy covers 15 member states, with a population of approximately 370 million. After accession of applicant states, the population will increase to more than 500 million.

European Union states spend about 150 billion euros each year on their military capabilities. That is about half the United States defence budget, although it recognises that there are more limited regional responsibilities. The EU population is 40 per cent. larger than that of the USA, but the gross domestic products of the two regional blocs are roughly the same.

It is inconceivable to us that such a rich and populous region as ours should not make greater provision for its collective security. As the Minister said, now that the arrangements with Turkey over access to NATO assets are moving in the right direction, we are making progress towards achieving the European capability that we need. One by one the difficulties are being overcome. Over the past few months, there has been much rhetoric about standing shoulder to shoulder, but if that is to mean anything, we must be prepared to shoulder the burden of providing for our own security.

The final issue that I want to consider briefly is the EU arrest warrant. Its purpose is straightforward and appealing enough, not least in that it is designed to remove the complexity and potential for delay that is inherent in the present arrangements for extradition which, through bilateral agreements between countries, are often complex. It is logical and desirable to replace that system with a common EU framework. Current procedures are clearly out of date, they are complex and require rationalisation.

However, we are concerned about the breadth of the warrant that has been proposed and, not least, by the fact that the definitions in it are extremely vague. The general headings include "high-tech crime", "environmental crime" and "racism and xenophobia". Three times the proposal has come before the European Scrutiny Committee and it is still not satisfied with the Government's definitions. We understand that the proposal will not be included in the Anti-terrorism, Crime and Security Bill, but will appear in primary legislation next year. However, the agreements at Laeken in 10 days' time with other EU member states will be reflected in the legislation. As the House has not proved itself satisfied with the proposals as explained by the Government, we believe that it would be better not to sign up to the warrant at the summit. By delaying its acceptance until national Parliaments are happy with it, a better arrangement will come to the fore.

After the euro is introduced in January, the face of Europe will change significantly. In a recent speech to academics and business men in Birmingham, the Prime Minister said:

"The tragedy for British politics and for Britain is that too many politicians have consistently failed, not just in the 1950s but up to the present day, to appreciate the reality of European integration and in so doing they have failed Britain's interests".

Whether the Prime Minister was talking about the single currency or the agenda for reform and progress, he must not forget those words when he goes to Laeken.

Photo of Graham Allen Graham Allen Labour, Nottingham North 8:55 pm, 5th December 2001

Tonight's debate is a classic example of why Parliament is held in contempt by the electorate and hon. Members. Seven Labour Members will not be able to contribute to it, which clearly demonstrates why we need a 10-minute limit on all Back-Bench speeches and a 15-minute limit on Front-Bench speeches. Those hon. Members who cannot contribute to this important debate should be allowed to place their contribution on the record or give it to the Clerk at the end of the day as they do in Congress. We have had a frustrating experience of what should have been an interesting exchange across the Floor of the House. Labour Members in particular have ripped up their speeches in order to squeeze in their remarks, and I shall confine my comments to the forthcoming European constitution for the EU.

A few days ago the EU was savagely attacked for being too bossy, remote, secretive and undemocratic; for failing all its peoples; and because its critics are growing daily, its priorities are wrong and its procedures are inadequate. That attack did not come from The Sun, the Daily Mail or The Daily Telegraph, but from the Prime Minister of Belgium, which holds the EU presidency. He is a convinced integrationist and his opinion was endorsed by a committee of wise people of eminent Europeans, including Jacques Delors.

The Belgian Prime Minister's report urges the EU to reform and reinvent itself, and it is right. Those of us who care about Europe, and I include all hon. Members in the Chamber in that, know that it is time to move on and for Europe to grow up. At the Laeken summit next week, the EU must begin to create a new democratic settlement between its institutions and the citizens of Europe. The United Kingdom needs to be at that table, helping to set the agenda. The British experience of constitution making—our experience of creating the rule of law and of civil liberties, and our distrust of state power—would be useful.

The Prime Minister pointed out in Birmingham the other week that our history in Europe is one of missed opportunities. Another big juggernaut is coming over the brow of the hill; will we miss this opportunity, too? The 2004 intergovernmental conference will follow Laeken and it will commit the EU to a written constitution. People in the House and the UK have nothing to fear and everything to gain from the process. The opportunity should be welcomed by Europhiles and Europhobes alike. Uncertainty and mystery feeds the paranoia of both those groups, as well as the fears of the wider public. A written constitution will reassure everyone.

The EU needs a written constitution, and it is going to get one. Barely a fortnight ago, France and Germany committed themselves to that. It is also a personal project of the German Chancellor. As has so often happened in the history of the EU, a fundamental project is under way and the British Government are faced with a choice between positive engagement and grudging acquiescence. We have seen the results of half-heartedness: our European partners create institutions that do not suit our national needs, and we join them years later, having lost the ability to influence the agenda and the design of the project.

A constitution is part of the answer to reconnecting with our citizens—a plain, honest statement of where we are, rather than an obscure text that requires elite translators to teach us how we are governed. It also presents an opportunity to place an insurmountable roadblock in the way of that tiny minority who want a European superstate. Hon. Members are right to demand assurances on that issue, and it is precisely because we oppose a centralised state that it should be baldly stated on the face of a constitution. Only a written constitution will set clear boundaries to the power of the EU and underpin the authority of national and devolved institutions within the nation states. It can check any appetite, real or imagined, for regulation and interference in our daily lives.

Limiting the tendency to centralise will also require the beefing up of that much abused word "subsidiarity". It will be a key test that the principle of subsidiarity is made clearer and more meaningful in the coming European constitution. It is unacceptable that no regulation, no directive, no act of power by any European institution has been challenged successfully on the grounds of subsidiarity. Subsidiarity must be placed at the head and at the heart of the new European constitution.

I should alert the House to the fact that if that principle is made as clear as I want it to be, it will be rapidly and rightly employed by local and regional government in the United Kingdom. Far from abetting centralisation, such a European constitution will halt it and become the tool whereby citizens are able to reverse the process that has concentrated power in Brussels and in Westminster. Subsidiarity is the antithesis of the catch-all phrase, "ever closer union"—it has become the antidote to executive licence to go further and deeper without specific consent. The phrase "ever closer union" must be struck out of all the drafts, wherever it appears.

Incidentally, it will be of great assistance to the EU if its constitution is written in elegant and inspiring language, not Eurobabble—and briefly, not bureaucratically. To be helpful, I intend to draw up such a constitution and present it to the House as a Bill, although I am not confident of out-doing the excellent 300-word distillation achieved by my right hon. Friend the Minister for Europe.

The EU has already achieved a semi-constitution of sorts, albeit by accident rather than by design. In late-night hurried deals struck in an atmosphere of acrimony and exhaustion, European leaders have often appeared less concerned to establish a wise and happy government for the EU than to satisfy the transient demands of their domestic electorates and media. Their debates are largely secret, unreported and ignored. That semi-official constitution is the playground of cognoscenti of all parties who think that their being involved in the process means that the electorate and citizenship of Europe are also involved.

The result of such methods is clear—the stark report of the Belgian Prime Minister who pointed out that, for all its real achievements, the EU's current governance inspires little loyalty or affection among its citizens. The EU has had ample warning of that alienation in opinion polls, turnouts for elections, the referendums in Denmark and the Irish Republic, and the growth of extremist parties throughout the Union, but all too often the Euro-executive dismiss it as a failure of the people to understand, or the mendacity of the media. That alienation could easily turn into outright hostility as the EU launches its two big projects, the euro and enlargement.

Against that background, any losers and those who fear losing in the EU will not accept decisions that they feel are imposed upon them by remote, unaccountable European institutions.

Without consensus and without citizens feeling ownership, the EU will stagnate. It might even dissolve in bitterness and secession. We will not get such consensus and such ownership across the EU without a contract with our people and without a constitution to provide legitimacy and democracy for the decisions that affect our citizens. To those who formed the current Union, from Schuman to Thatcher, we say thank you. Now, as the Union approaches maturity, we need a new set of people and a new structure. Otherwise, as Jefferson said,

"we might as well require a man to wear still the same coat which fitted him as a boy."

A constitution is not a panacea, but it gives an open framework in which conflict can be peacefully reconciled. By the United Kingdom engaging in the process of creating a constitution, we will not only serve British interests but safeguard the future of Europe on a basis that is acceptable to our citizens.

I ask the House and my right hon. Friend the Prime Minister not to add to the UK's list of lost opportunities, but starting next week in Laeken to seize the opportunity of a written constitution with both hands for the benefit of the people of our country.

Photo of Angus Robertson Angus Robertson Shadow SNP Spokesperson (Defence), Shadow SNP Spokesperson (Foreign and Commonwealth Office) 9:06 pm, 5th December 2001

I am pleased to take part in the debate of behalf of the Scottish National party and Plaid Cymru. I commend the brevity and consideration of Labour and Liberal Democrat Members, to try to ensure that as many Members as possible are able to contribute to the debate. I, too, shall try to be brief.

I thank the Minister for remaining in his place throughout the debate to listen to us all. I am sure that all Members on both sides of the House are grateful to him for that.

I agree with the Minister on some of his key points. His argument in favour of pooling sovereignty both in terms of the European Union and the United Nations was compelling. Perhaps he did not intend that it should sound like a compelling argument for Scotland's direct representation in those bodies. I endorse the views that he propounded regarding security and defence policy, especially in fulfilling the Petersberg principles, and in terms of the eastward enlargement of Europe and the treaty of Nice, which is why both the SNP and Plaid Cymru supported the Government and the passing of legislation earlier in the Session in that regard.

The recent Liege conference was attended by 51 devolved Governments throughout Europe, including those of Scotland and Wales. I commend its findings to Members on both sides of the House. Part of the resolution reads:

"In the scope of the debate on the Future of Europe, the Presidents of the Regions with legislative power ask to consider the lack of regional participation to the EU decision-making process as a theme to be addressed by the Declaration of Brussels/Laeken as well as by the forthcoming Intergovernmental Conference."

I endorse that view.

I shall restrict my comments to matters of accountability and scrutiny, especially with regard to the reality that we live within a state with four nations and a devolved system of government in three of them. Members will be aware that there are many areas, especially in Scotland, where legislation is passed that involves justice, the environment, transport, agriculture and fisheries matters, which are also decided at an important level at the EU. Indeed 14 of the 22 areas that the Council of Ministers meet to consider are devolved matters. For that reason I want to highlight some concerns in the hope that even within current UK structures, these areas can be improved.

My concerns include establishing key facts to help in arriving at good governance and transparency, the ability to scrutinise Ministers and EU measures and the ability to hold Governments to account. In terms of key facts with regard to decision making, I go back to my previous occupation as a journalist. The first questions that one is always supposed to ask are the hows, the whens, the wheres and the whos. Against the background of both the Council of Ministers and working group representation, unfortunately we have very few answers.

I have tabled a number of questions, as have colleagues from other parties. The answers tend to be along the lines of one given by the Minister, in which he said that the UK Government are working in partnership with the Scottish Executive. Unfortunately, we do not get specific details about how, when and where; we sometimes get details about who is involved, but that is not enough to hold Governments—the UK Government, the Scottish Executive, the Welsh Administration or the Northern Irish Administration—to account.

The Conservative Government gave Scottish Office Ministers the right to attend meetings of the Council of Ministers; the present UK Government are continuing that policy. More than half of the debates held by the Council of Ministers are directly related to devolved matters, but at the moment only 12 per cent. of meetings are attended by Ministers from the Scottish Executive, so I am concerned that there is a gap. The Minister and his Government have had a regular opportunity, in responding to written and oral questions from me, to explain exactly how the system works; that could shed light on the matter and I might not have any more concerns, although I doubt it. For the sake of transparency and good governance, I invite the Minister to shine more light on the way in which the system works.

By contrast, having worked both in Austria and Germany, I know their systems well; for example, the concept of Bundestreue relates to the ability of the lander to influence and bind central Government, who effectively represent their views. The Austrian system of governance involves the provinces through the Verbindungstelle, an office in which various policy positions are brought together and developed. We have had no idea from the Government how that would operate in practice in the United Kingdom. However, a joint ministerial committee, meeting once or twice a year to co-ordinate policy before meetings of the Council of Ministers is not, as I am sure even the Minister would concede, the most effective means of co-ordination.

I know that officials talk to each other, but we do not know how the structure works or how often Ministers meet and discuss issues. That concern has been expressed not just by the SNP, but recently by Jim Walker, the president of the National Farmers Union in Scotland, when giving evidence to the Scottish Parliament's Rural Development Committee; he was anxious about the way in which Scottish agriculture policy was being pursued in Europe.

I am concerned about the scrutiny of Ministers. I do not know whether Members know that there have been at least three instances in which a Minister from the Scottish Executive has represented the UK at a European level without any other UK Minister being part of the delegation. If one wants to scrutinise such Ministers, are they answerable to the UK Parliament? Nicol Stephen, the Deputy Minister for Education, Europe and External Affairs, has not, so far as I am aware, given any pre or post-Council evidence to the House of Commons European Scrutiny Committee, of which I am a newly selected member. Conversely, no UK Minister who has attended Council of Ministers meetings to discuss devolved Scottish matters has ever given evidence to the European Committee of the Scottish Parliament either before or after such meetings.

That is not good or transparent governance. I have a modicum of experience, having advised members of the European Committee of the Scottish Parliament for the first two years after devolution. The problems of the European Scrutiny Committee are mirrored and amplified in those of its Scottish counterpart. That has a lot to do with the way in which UK Departments and the UK Government disseminate European regulations and directives through the system so that, in Scotland, one cannot achieve effective influence.

Finally, bearing in mind what I have said about the inability to scrutinise Ministers, the inability effectively to scrutinise European Union proposals and the lack of key basic facts to do so, how can we hold Governments to account, whether in the UK, Scotland, Wales or Northern Ireland? That is simply not possible.

I give a great example. In today's European Scrutiny Committee meeting, we were discussing European arrest warrants and the lack of information that we need. If such information is not available to us a number of days before a key meeting, what is the position of the Scottish Minister for Justice? He probably has as little information as we have had. That is not an effective way to deal with a serious matter. Similarly, the Commission's proposals on fish catches for 2002 came out only two days ago. How can the Scottish Executive even be informed? The Commission cannot work effectively, it is not accountable and there is a lack of scrutiny.

The contributions from the hon. Members for Tweeddale, Ettrick and Lauderdale (Mr. Moore) and for Nottingham, North (Mr. Allen) on the subject of a constitution were extremely well reasoned, balanced and irrefutable. Regardless of anybody's position on further integration or in favour of more disengagement from Europe, the argument for a constitution is intellectually unassailable. The Scottish National party fully endorses it.

Mr. Vaz, who is no longer in his place, touched on the issue of the euro. My party is in favour of a single European currency, pending a referendum. As the official Opposition in Scotland, our support is unlikely to be overlooked anywhere as being useful in progressing that argument. A single currency would be to everyone's benefit in Europe, Scotland, the rest of the UK and elsewhere.

In summary, none of the improvements that I suggest in the genuine hope of better governance, scrutiny and accountability in the UK compares in importance with direct representation for Scotland at a European level. At a time of enlargement, the countries of central and eastern Europe are knocking at the door. They want the same rights that other small and medium-sized member states enjoy. I would like Scotland to have that as well. There is no substitute for being at the top table, but any progress would be gratefully received.

Photo of Mark Hendrick Mark Hendrick Labour/Co-operative, Preston 9:17 pm, 5th December 2001

Because of the short time available, I have deleted from my speech many of the topics on which I intended to speak, such as Afghanistan, enlargement, European defence, and euro notes and coins. I have decided to speak about the debate on the future of Europe, which is on the agenda for the Laeken Council. As many hon. Members know, it has been agreed that a convention will be set up to consider the future of Europe. Its conclusions will be fed into the next intergovernmental conference, which will take place in 2004.

The Nice summit set out several questions which the debate on the future of Europe should address. One concerns the delimitation of powers between the EU and member states. There should be a clear definition of the powers of the member states and of the EU, because an enlarged EU of 27 member states would otherwise grind to a halt.

I foresee a European Union in which first pillar issues are handled as they are at present, with a fairly integrationist agenda. Issues such as the single market, the environment, consumer policy and energy policy would be dealt with through assent, co-decision, co-operation and consultation. The European Parliament and Commission will still have an extremely important role in developing legislation with the Council of Ministers.

Second and third pillar issues should remain mainly the preserve of member states through subsidiarity, but there should be mechanisms to allow for co-operation of an advanced type between member states. The details of possible options for such co-operation will no doubt emerge from the convention process.

The status of the charter of fundamental human rights will be discussed at the Laeken Council. The relationship of the charter to member state law will clearly need to be addressed by member states, as well as the question of how or whether it should be incorporated. The issue of possible overlaps with existing human rights legislation in member states also needs to be addressed.

On the simplification of the treaties—another issue that was raised at Nice—we all know that they are complex documents and that they constantly need to be cross- referenced for sense to be made of them. Any attempt to make them more concise and understandable is clearly desirable. Whether it can be done in 300 words, I do not know.

Photo of Mark Hendrick Mark Hendrick Labour/Co-operative, Preston

We will see, but the simplification process runs the risk of loss of content. Enlargement brings its own problems in that regard. Hon. Members may be interested to know that it has just taken Romania a year to translate the existing treaties.

I turn now to the role of national Parliaments. The phrase "bringing Europe closer to the people" is a hackneyed one that is used by politicians to get across the idea of the need to make the European Union and its institutions more relevant to the public. It is suggested that the involvement of national parliamentarians in the process would somehow achieve that and add to the legitimacy of the European Union. I believe that the creation of an additional chamber of national parliamentarians from EU states would find little favour with other member states and would, in many ways, make the role of the European Parliament more confusing.

However, it is important that the forthcoming convention deals with increasing the involvement of national parliamentarians in the making of legislation by other means. For example, it could deal with methods of enhancing the scrutiny of EU legislation by national Parliaments and ways of making the scrutiny process more open and transparent. Another possibility is the idea of setting up a delegation of national parliamentarians to meet regularly with the Council of Ministers to discuss legislative matters. The issue of more openness in European Council decision making is also a matter for discussion. I am reliably informed that this is the only legislature outside Pyongyang that legislates in secret. Again, I am sure that the convention will propose options on those matters. I look forward to seeing what options are available when it eventually meets.

Photo of Bill Cash Bill Cash Shadow Attorney General 9:22 pm, 5th December 2001

Some comments have been made about the extent to which I would be expected to speak on European matters in my current role. My portfolio as shadow Attorney-General certainly includes a responsibility to examine questions relating not only to international treaties but to constitutional arrangements in the United Kingdom and between the UK and Europe—the matter about which I propose to speak now.

I want first to recall the comments made by Angus Robertson, who said that the arguments for a constitution were unassailable and cited, for example, the speech of Mr. Allen, as well as those of other hon. Members. I find that an astonishing idea. The one thing that we can say for certain about the Government relates to a matter that I have raised with the Prime Minister many times, not only at Question Time but after statements and on other occasions. I have asked him many times whether we can have a White Paper—indeed, this issue has been mentioned by my hon. Friend Mr. Spring—on the constitutional and political implications of where we are going. Here we are, embarking on a journey towards Laeken and the future of Europe debate. We know that we are being taken into the arena of European constitutional arrangements. Indeed, that has been happening for a long time. We know that there are people who would like such arrangements, because they would enable them to lock everybody in.

A constitution creates an entrenched situation. There is no room for the sort of reform to which the Prime Minister referred in a recent speech. He spoke about repatriating powers to the nation state. The ideas of those of us who have argued for repatriation and renegotiation are therefore being endorsed by those who have an uncontrollable vision of Europe that involves a constitutional arrangement. A huge contradiction is inherent in that view, and it makes me fear for the future of Europe. It means that there is no basis on which to apply subsidiarity to matters covered by the levers of European government and thus enable us to guarantee maintaining control over, for example, our defence arrangements or justice and home affairs.

The European arrest warrant and proposals for an extradition Bill were mentioned today. They will be considered next year. However, the constitutional arrangements that will provide for those measures apply to regulations and the sort of provisions that are included in section 2 of the European Communities Act 1972. At the moment when the Minister and others are considering the need for more information and a wider and clearer debate, we are being led into an arena of obfuscation and denied the necessary information that would be provided in a proper debate in prime time on primary legislation. Yet we are considering the important subject of the abolition of extradition in Europe.

That matter involves not only extradition, but bail and trials in absentia. It also raises the question of who is a judicial authority: is it the state prosecution service by another name in other countries? We have been considering monumental issues in the Select Committee on European Scrutiny. Some questions remain unresolved. Whatever happens on 7 December, there is a scrutiny reserve for good reasons. They are inherent in the democratic accountability to Parliament of its scrutiny Committees, which report to the House and ensure that decisions are not made without the provision of proper information. That cannot happen without debate.

European Standing Committee B dissolved in chaos the day before yesterday. There is no time for a full debate, the scrutiny reserve continues to apply and the decision on the European arrest warrant requires unanimity, yet it will apparently be made on 7 December. Perhaps the Minister will be good enough to listen because I should be grateful if he could tell us what exactly will happen.

The current proposal is that the decision will be made on 7 December, but, as I said, the scrutiny reserve applies and no debate has taken place. Will the Government defer the decision? The Minister appears to be engrossed in conversations this evening. Will he be good enough to tell us whether the Government will make the decision on Friday on a third pillar question that requires unanimity, or will they defer it because scrutiny has not been completed?

There is no point talking about constitutional arrangements when democratic accountability is being infringed in the House. That is a serious matter and I am sure that the Minister, who is a responsible person, understands that. There will be a massive row if the decision is not made according to the proper procedures and with justification.

In the context of the desire to move towards a new constitutional arrangement, I want to refer to the Government's White Paper. I do not know whether hon. Members realise that the preliminary proposals for the White Paper state that the objective towards which the Laeken conference is to be directed is a "laboratory for world governance". That is there in black and white. What on earth is it supposed to mean? There are serious constitutional questions involved here. These are serious issues relating not just to the appearances of subsidiarity, which simply endorse the hierarchy and lock it into a new, enhanced constitution for Europe, but to the central question of democracy.

Labour Members know perfectly well that I have argued over and over again for more democracy and accountability in the European Union. I have not been against the single market. I have been in favour of a reformed arrangement to provide proper governmental and democratic arrangements that ensure that people are properly heard, and that they have an opportunity to have their say when policies are made. I have argued consistently for referendums, for that reason. That is why I have played a part in—as some have kindly said to me—helping the Irish in their referendum. I was very glad to have been able to do that, as I was in Denmark and France before that.

If the Whip system in this Parliament operates, as it has, to prevent the opportunity for proper consideration of some of these matters, it is essential that some decisions should be taken by referendum. I was, therefore, delighted when that opportunity arose and the decisions were transferred down to the people at the grass roots. In the case of the Irish, they had to hold a referendum under their constitutional arrangements. When they did, every citizen was sent a clear, concise, accurate document—like a White Paper, perhaps—to their doorstep, stating what the Nice treaty was all about, and they rejected it. It is a function of a properly democratically run country that people are given proper information.

We have made requests over and over again for a White Paper, and for other information. There has been a fundamental failure on the part of the Government to respond. I am extremely surprised and disappointed that the Minister, for whom I have the highest regard, should be party to these shabby arrangements, including the arrangements in clause 109 of the Anti-terrorism, Crime and Security Bill. He and other Ministers in the Foreign Office must be involved in those provisions to a degree. Those arrangements will be fundamentally unconstitutional and undemocratic.

An interesting paper by a number of political scientists and constitutional experts, entitled "IGC 2000: The Constitutional Agenda", is described as rethinking the European Union. In it, J. H. H. Weiler—a great political and constitutional expert—states on the question of whether there should be a European constitution:

"a formal process of adopting a constitution is not only pragmatically not feasible but might even be conceptually undesirable . . . Europe may have a constitutional legal order but the problem is that it does not have traditional constitutional legitimation" because—I am now paraphrasing—in practice, there is not the necessary degree of common consent and democratic grass-roots agreement over what is going on, as exemplified by the results of the recent referendums.

This issue presents Europe with a monumental problem, which is that Europe is sliding down a slippery slope on the pretext of some high-flown idea that it can have a constitution, when in fact it lacks legitimacy at the grass roots. Nothing is more dangerous, either for a nation state or for any putative superstate or federation, than to fall between the two stools of the determination to achieve a greater degree of rule making at a higher level and the lack of consent from the people concerned.

Fundamentally, consent is about freedom. As Vernon Bogdanor said the other day in evidence to the European Scrutiny Committee—the record of which I strongly recommend that Members read—if the European Union does not adopt the principles of democracy and accountability represented by the British system, there will be no real hope for the future of Europe.

Photo of Mr Michael Trend Mr Michael Trend Conservative, Windsor 9:35 pm, 5th December 2001

I thank my hon. Friend Mr. Spring for kindly inviting me to wind up the debate. He is a well-known titan of the Dispatch Box, but I am grateful for the opportunity, and I shall enjoy it. I have a sense of deja vu, as I used to wind up debates on Europe a few years ago when I was my party's spokesman on the subject. We have heard a number of thoughtful speeches this evening; I sympathise with those who were not called, but, as we all understand, there were many reasons for that.

My hon. Friend Mr. Cash touched on some important legal and constitutional matters. The quotation that he read out about Europe's lacking the traditional constitutional legitimacy goes to the heart of the issue. As other Members have pointed out, there is no understanding between the ruled and the rulers in terms of the European Union. That is the fundamental problem. It is not, as some Members have suggested, simply a question of economic tests—say, for joining the euro. The all-important political and constitutional questions that need to be settled with the people of this country must come first; and if the people of Europe have no sense of belonging to the European institutions, those institutions cannot work.

I was impressed by what my hon. Friend said about the importance of the scrutiny process. I wish more could be done in that respect. He was also right to raise the important question of arrest warrants, which was also raised in the excellent speech of my right hon. Friend Mr. Heathcoat-Amory.

My right hon. Friend the Member for Wells referred to the droit de suite, as did Alan Howarth. I lost track of it some months ago, and was surprised to discover a few weeks ago that it had been slipped through with no chance of further discussion in the House. That is shameful. The droit de suite will have an impact on many people and organisations, including a firm in my constituency. As my right hon. Friend said, it will have serious implications for people running small businesses. It will have a devastating effect throughout the country, and I wish the Government could have found a way of giving us an extra chance to debate it.

When I listened to the right hon. Member for Newport, East, the years seemed to roll back: I agreed with nearly everything he said. I must warn him, however, that his new colleagues listened stony-faced, as I believe the expression is.

In his interesting speech, my hon. Friend the Member for West Suffolk referred to Belarus, in which I have a personal and particular interest. I now run my party's international office, and, as the Minister probably knows, I am a governor of the Westminster Foundation for Democracy. As I think he also knows, I have a special interest in Belarus, and was very disappointed by the recent presidential election there. It was neither free nor fair, and I look to the Government to state that clearly on behalf of our country. Our thoughts must be with the brave democrats who continue the struggle against tyranny and Lukashenko's Belarus. I think it can be said that, following the fall of Milosevic, he is far the most tyrannical leader in Europe.

Will the Minister say what steps have been taken to reconsider the disastrous closure of the British Council in Minsk? I think that that decision needs to be revisited as soon as possible.

Three years ago, when I last spoke from the Dispatch Box, on enlargement, I was fairly pessimistic about progress. I am less so now because I think that the will to get on with enlargement is shared more widely. I also note that many of the applicant countries have made huge efforts to fulfil the requirements that have been placed on them. I am particularly delighted—I think that this is the point that Ms Stuart was making—that Lithuania and Latvia have moved on so well in the process and are catching up Estonia.

I also agree that a big bang of 10 countries entering at the same time is highly desirable. However, I still think that there are mountains to climb before enlargement becomes a reality. The main problems associated with agriculture and the structural funds remain. With the presidential election in France, where agriculture has suddenly gained a new intensity as a political issue, and with Spain—the largest winner of regional funds—holding the presidency for the next six months, this will not be an easy time for the enlargement process. There are already noises coming out of Madrid casting doubt on the target date for enlargement. One does not have to be a political genius to know what that is all about.

My hon. Friend the Member for West Suffolk also mentioned Gibraltar. Many distinguished Labour Members have often debated Gibraltar, and I am sorry that they are not here today; we need to return to that subject. The citizens of Gibraltar have of course been full citizens of the EU for some time, but they have been treated shamefully in the past. I am very pleased that they will now be able to vote in European elections.

I believe, however, that the British Government are playing cruel games with the wishes and affections of the people of Gibraltar. I cannot understand the message that the British Government are trying to send out to Gibraltar. Of course Spain has the presidency next and it would be good if in the next six months we could resolve all our outstanding differences with Spain, but, on Gibraltar, the Government have so far only made a bad situation worse. They have embarked on a process that I think can only end in tears.

The Government have already hugely annoyed the people of Gibraltar by sending out signals that the British guarantee of self-determination has a rubbery rather than a steely quality to it. I think that that feeling will only grow worse in the coming weeks and ensure that the people of Gibraltar say no to whatever question is asked of them.

Therefore, one outcome for the British Government will be to destabilise the Gibraltarians to no practical effect. The other outcome will be to irritate the Government of Spain by appearing to sympathise with their position but then being unable to deliver. As so often, our Government will end up by failing on both fronts. The empty chair is there at the table, but it is for someone who wants to talk about sovereignty. The people of Gibraltar of all parties, all Members of Parliament and all former Speakers have made it absolutely clear—and they believe that the British Government should support them in this—that there is nothing to discuss on sovereignty.

Photo of Mr Michael Trend Mr Michael Trend Conservative, Windsor

We have different opinions on what sovereignty and other such difficult conceptual words mean. If the Government of Gibraltar are being invited to discuss fundamental principles of sovereignty there is no doubt that they do not wish to do so. There are ways in which that could be discussed, and the First Minister of Gibraltar has made that clear. However, if the empty chair is for someone who, as the British Government have made clear, is meant to discuss the fundamental principles, clearly no one from Gibraltar can occupy that chair.

I am very encouraged by the European Union's approach to Cyprus, and I very much hope that minds can be concentrated on finding a just solution to the island's problems as part of the enlargement process. Conservative Members remain committed to Turkey and wish to encourage it in the necessary reforms that will bring it, too, into full membership of the European family. However, Turkey has to understand that it cannot stand in the way and that Cyprus's place in the enlargement process is not negotiable.

Many hon. Members have rightly discussed the world situation and how it will affect the development of Europe. What we have seen in the past few months is a demonstration of how power is really exercised in today's world. After all the grandiose rhetoric about common defence and military structures that we have had to listen to over the years, the EU is not and never shall be the right forum to take action of the sort that the current world situation so evidently requires. Romano Prodi's performance in recent months has shown how tetchy and difficult the Eurocrats can be on that subject. We watched the press conference with Guy Verhofstadt, the Belgian Prime Minister, when Mr. Prodi sulked his way out of the room and told the BBC that the EU needed power in military and foreign affairs because it was powerless in the big united global war. Splendid, let us keep it that way for as long as possible.

The Government know that we wholeheartedly support them in their recent actions, but I also hope that they are learning the lesson that their earlier rhetorical gestures on common policy were mistaken. Once again, we have clear evidence of the close and practical relationship that exists between us and the United States. Moreover we have had an important demonstration of how important flexibility is in defence, and vain rhetoric on the EU's future in that respect has been undermined by the reality of the present situation.

The circus is moving on to Laeken and I wish the Minister a jolly time of it. I do not see anything in the Laeken approach that will cure a problem that has been identified by many hon. Members tonight. Nothing that will happen at Laeken will bring the EU's affairs one inch closer to people throughout the Union, especially after the experiences of Denmark and Ireland, as my right hon. and hon. Friends mentioned. Trying to make some sense of Europe for the people is, as we have long been telling the Government, the real challenge for the EU.

The biggest noise around at the moment, as many Labour Members have confirmed, is the proposed convention. We are told that one way in which the EU can grow closer to the citizens of Europe is through the new convention, but that is nonsense. Instead, the convention will be a chance for Europe's budding Thomas Jeffersons to sharpen their pencils and head for the equivalent of Philadelphia. Mr. Allen, who is unfortunately no longer in his place, is becoming an expert on making new constitutions and I am sure that he would love to take on that task. I disagreed with much of what he said, although I am always interested in how he puts things. We can agree on the analysis of problems without necessarily agreeing on the prescription of the cure.

I have not done this debate for a while, but my sense of deja vu tells me that things have moved on but much remains the same. In particular, as hon. Members on both sides of the Chamber have pointed out, the EU still uses the same tedious jargon, weasel language, skewed language and hectoring tone that have for so long marred its progress. My suspicions also go into overdrive when I am sure that we have been given only half the picture. Romano Prodi recently told the College of Europe that some of his major reforms would consist of technical provisions only. I am sure that that will raise the hackles of my right hon. and hon. Friends. When the Minister said earlier that sovereignty shared is sovereignty regained, I felt a judder inside me and questioned whether that made any sense whatever.

EU leaders, however much they protest the opposite, are responsible for the unnecessary double-speak, muddle and confusion that surrounds their utterances. They are responsible, too, for the arrogant reputation that is synonymous with the EU. When the Irish told Brussels to hold its horses, Prodi went to see them and told them that their views did not matter. Clever stuff. The great paradox of Europe remains the same as it has been for the past 10 years or so. It is the people at the top who are trying to drive the EU too far and too fast who do the damage. It is their closed doors and their private language that alienate ordinary people. It is their indifference to the lack of democratic accountability based on units of government that people understand that prevents sensible progress.

Photo of Peter Hain Peter Hain Minister of State (Europe) 9:49 pm, 5th December 2001

With the leave of the House, Mr. Deputy Speaker, I should like to respond to the debate for the Government.

I begin by welcoming back to the Dispatch Box Mr. Trend. I responded to him in his Adjournment debate on Belarus, and I pay tribute to his work on that country. I welcome too his support for enlargement, and wonder why he voted against the Nice treaty when the relevant Bill went through the House earlier this year. Opposition to the treaty would block enlargement and prevent all the countries that he mentioned from joining the EU. There is therefore a degree of hypocrisy and contradiction in that approach.

Whatever the current feelings in Gibraltar, I invite the hon. Gentleman to look ahead at what I think is a great prize for the people there, and for Britain and Spain—an agreement that will give the people of Gibraltar maximum self-government, and all the advantages of being a full part of the European Union. Such an agreement will allow them access to the wider market in Spain, from which they are largely barred at present.

I remind the hon. Gentleman that it was the Conservative Government under Baroness Thatcher who began the Brussels process discussions, which included the issue of sovereignty. He will find that Conservative predecessors of mine, including Lord Tristan Garel-Jones, have consistently been part of that process, and that sovereignty has been on the agenda.

The hon. Gentleman mentioned, in another context, sovereignty in the European Union, and noted my remarks about sovereignty shared being sovereignty regained. I draw his attention to the words of Michael Heseltine in an interview, when he said:

"a degree of shared sovereignty" was the way that "you enhance sovereignty." That is the exact point that the Government are making, and the hon. Gentleman seems oblivious to it.

Mr. Cash—my hon. Friend—appeared again on the Back Benches and made an eloquent speech. That is clear proof that there is life after death on the Tory Front Bench—but only when people are temporarily reincarnated on the Tory Back Benches. He expressed delight at his participation in the Irish referendum, and gloried in the no vote that was recorded. Our friends in Cyprus, Malta, Poland, Hungary and in all the countries of eastern, central and southern Europe want to join the EU, but his delight obviously stems from the fact that a no vote prevents them from doing so. The consequence of the failure of any of the 15 EU member states to ratify the Nice treaty, as happened in Ireland, is that those countries are denied the opportunity to enter the EU on target, as they wish to do.

My right hon. Friend Alan Howarth made an interesting speech about the euro and mentioned inward investment. I am advised that France has taken over from Britain the leadership in inward investment in manufacturing. Many inward investors—the Japanese in particular—now say that they prefer France over their traditional choices of Wales and other parts of Britain because France is in the euro. My right hon. Friend might therefore want to bear that in mind.

I welcome my hon. Friend Mr. Vaz back to European debates. In his eloquent speech, he made the important point that enlargement should go ahead quickly and that the applicants need a firm date to work with. I completely agree with him. Applicant countries should have a firm date and Britain, as champion of enlargement, is committed to setting that date as early as possible in 2004. I also agree that as large a number of countries as possible should come into the EU, as long as they complete all the chapter negotiations required for accession.

My hon. Friend Mr. Hendrick and Mr. Moore made some interesting points about the European convention. I shall take note of them and look into them further. My hon. Friend Mr. Allen made a very interesting speech about a written constitution for Europe. I look forward to his Bill as a guide to further progress.

Angus Robertson spoke about the Scottish Parliament's relation to the European Union via the United Kingdom Government. However, he conceded that Scottish Executive Ministers represent, and have represented, the UK on a number of occasions. That will continue to be the case, where appropriate, and I welcome it.

Mr. Spring spent some time dwelling on the dangerous consequences, as he saw them, for our relationship with the United States as a result of our approach to Europe and our support for European defence. I have not seen much evidence in recent weeks that the relationship between the United States and Britain or between our Prime Minister and President Bush is on the rocks; on the contrary. However, the Opposition never let the facts get in the way of their argument.

Let me try instead to reassure Conservative Members by quoting a senior British statesman, speaking in London on 13 November. He said:

"crucial to the modern Anglo-American relationship is Britain's role as a European power—not just a country anchored offshore the Continent, but a full partner in the European Union. Those who argue that Britain should weaken its links inside the EU in order to cosy up more intimately with the United States are ignoring the facts of power. Such a shift would actually reduce our importance in the eyes of American decision makers."

That is absolutely right. I hope that Conservative Members who disagree will take it up not with me but with the person who said it—their very own former Foreign Secretary, Douglas Hurd, now Lord Hurd.

The Opposition have also made a predictable and synthetic fuss about European defence. In reply, I quote Lord Hurd from the same speech, in which he said:

"we have to press ahead with the European Security and Defence Policy (ESDP). The partnership between Europe and the United States will only be valid if the effort made by each partner, particularly in military strength, is recognised as substantial by the other."

That is the policy of the Government, but I doubt whether anything that I or Lord Hurd could say would persuade the headbangers on the Conservative Benches.

For the authoritative voice of today's Tory party, I turn to my e-mail in-box. As part of my efforts to explain Europe better, I have instituted an online debate about Britain and Europe on the Foreign and Commonwealth Office website. It is a very popular website, and we recently received the following contribution from a Conservative Member of the European Parliament, one Roger Helmer. I am glad that he is keeping out of trouble by sending me e-mails. Mr. Helmer wrote:

"EU membership is the greatest threat to Britain's prosperity, democracy and security."

This is from a Conservative Member of the European Parliament. He goes on:

"The great task of our generation is European deconstruction."

He explains:

"The Treaty of Nice threatens to turn Britain into a mere off-shore province in the new European empire."

He concludes:

"We must oppose Nice, oppose the Euro, oppose the new IGC".

So he goes on, rather like the man muttering to himself whom we try not to sit next to on the bus. We wondered whether it was a crank e-mail, as we get quite a lot of those, and not only from my friend the hon. Member for Stone. Sadly, it appears to be genuine—cranky, but genuine.

So which party is the Conservative party? Is it the party of statesmanlike Lord Hurd or the party of headbangers, like Roger Helmer, MEP? Or is it the party of the people who write letters in green ink, copied to the Queen and the Pope, about the great global conspiracy that is today's Europe? The answer was given in The Guardian this morning by Nick Kent, campaign manager for Mr. Clarke. He said:

"The party I joined was full of nice old people; today, it is full of nasty old people."

He also said:

"In truth, no group of 300,000 adults, other than the membership of the Conservative party, would have chosen Iain Duncan Smith over Ken Clarke."

I cannot but agree.

I am practical about Europe. I want to deliver real things for real people: full employment, equal rights, and an end to injustice and poverty. Up and down Britain, people know that Europe is good for their jobs, their security and their future. They may not care for Eurospeak; nor do I. They are not heady about Europe; nor am I. Like the Foreign Secretary and the entire Government, they are practical Europeans.

Practical Europeans want a Europe that works for Britain, which means a Britain that works with Europe and has more self-confidence about its engagement in Europe. Yes, some things that some Europeans say are daft. Some want to take Europe in the wrong direction, but most others want—

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