HC Deb 18 December 1991 vol 201 cc275-427
Mr. Speaker

I must announce to the House that I have selected the amendment in the name of the right hon. Member for Yeovil (Mr. Ashdown) and his hon. Friends——

Mr. Dennis Skinner (Bolsover)


Mr. Speaker

Order. Sit down, please.

I must also tell the House that I have received no fewer than 75 applications to speak in this debate today, and about the same number for tomorrow. It will not help the Chair if hon. Members come to find out whether they are going to be called today—indeed, it will be counter-productive. I hope that it may be of some comfort to those who were not called in the debate in November to know that I shall give precedence to them today. I shall put a limit of 10 minutes on speeches between 7 and 9 pm, and I hope that every Member called before that time and up to 2 am will bear it in mind—including Privy Councillors.

Mr. Skinner

On a point of order, Mr. Speaker. On previous occasions you have deplored the fact that written questions concerning other Members' constituencies have been tabled——

Mr. Speaker

Order. I think that we ought to move on to the debate.

Mr. Skinner

Let me finish.

Mr. Speaker

Raise it with me tomorrow; I shall deal with it then.

Mr. Skinner

This is about a question on today's Order Paper, Mr. Speaker.

Question 129 is in the name of the hon. Member for Berkshire, East (Mr. MacKay), who has never raised the matter of dioxines in Bolsover during the past six months —yet he has a written question about that on today's Order Paper. It was deliberately planted to offset the Minister's answer to my question tomorrow. If you deplore this sort of activity when Labour Members do it, it is about time you deplored it when Conservative Members do it.

Mr. Speaker

I have no knowledge of allegedly planted questions, nor have I seen the relevant question, but I do know—the whole House knows—that the hon. Gentleman has raised this matter many times.

We move on now to the European Community debate. I call the Prime Minister.

3.41 pm
The Prime Minister (Mr. John Major)

I beg to move, That this House congratulates the Prime Minister on achieving all the negotiating objectives set out in the motion that was supported by the House on 21st November; and warmly endorses the agreement secured by the Government at Maastricht. In no other country of the Community have the issues that were decided at Maastricht been as hotly debated as they have been in this country. I have found in discussions with fellow Heads of Government that they have been frankly astonished by the amount of coverage in our media and by the intensity of the debate that we have had in this country over many months. I think that that coverage is not just a reflection of the measure of controversy; it reflects also the Government's determination to ensure that the fullest information was available to the House and the country before the European Council. It is perhaps also a reflection of a national characteristic—it is by no means a new one.

After meeting Macmillan in Bermuda in 1957, Eisenhower wrote: Any conference with the British requires the most detailed discussion. They do not like to sign any generalisations in a hurry, no matter how plausible or attractive they may be, but once their signature is appended to a document, complete confidence can be placed in their performance. He went on, rather unkindly the House may think, to say: French negotiators sometimes seem to prefer to sign first and then to begin discussion. In this country, every detail of the negotiations has been pored over both by hon. Members and by the press, and not only by them. I have had letters in recent weeks from the public—from schoolchildren, very well informed—on the pros and cons of a single currency, but I suspect that in a number of other Community countries the real debate is only just beginning.

Last month, I set out the issues that would be argued

over at Maastricht. No one here or elsewhere in Europe could have been unaware of what we were arguing for. I explicitly said that we would not change our position at the very end of the negotiations. We did not, but we did achieve our objectives.

A full text of the treaty on European union is in the Library of the House. Jurists and linguists will ensure that the text is ready for signature at the beginning of February, but the treaty will enter into force only once all 12 member states have ratified it. The Luxembourg European Council last June agreed that this process should take place during 1992 so that the treaty can enter into force on 1 January 1993.

Before we shall be able to ratify the treaty, it will need to be incorporated into United Kingdom law by amending the European Communities Act 1972. As I assured the right hon. Member for Chesterfield (Mr. Benn) last week, it would not be right to carry through that legislation in the remainder of this Parliament. It will properly be a matter for the next Parliament.

This afternoon, I should like to set out what the agreement means and how I see the future development of the European Community. The misleading and controversial word "federal" has now been removed from the text of the treaty. Our partners agreed to return to the words of the original treaty of Rome— ever closer union among the peoples of Europe". That has a different connotation. It means that the interests of the Community's citizens must come first and foremost.

That has always been the Government's approach. That is why Britain drove the creation of a single European market to the top of the Community agenda. It is why we have argued for reform of the common agricultural policy, and it is why my right hon. Friend the Member for Finchley (Mrs. Thatcher) fought for and won a fair budget settlement for this country.

I believe that the Community——

Mr. Bob Cryer (Bradford, South)

Will the Prime Minister give way?

The Prime Minister


I believe that the Community has made a unique contribution to the development of post-war Europe. Our future is as a European power, albeit as one with continuing responsibilities in many parts of the world. The balance of national interests lies clearly in making a success of our membership of the Community, so we must work with the Community to make sure that the Community works for the whole of Europe, and especially in the interests of the people of Britain.

The Community can fulfil its role properly only if it responds to the needs of its European citizens. It must respect national identity and national traditions. It must not, in the name of some wider European ambition, override the democratic wishes of the people of any one of its member states.

That is why the treaties now agreed at Maastricht were so hard-fought. Real British national interests were at stake in those discussions. The Government's job was to safeguard and to advance those interests. It was not to sign up, without critical examination, to anything that was presented to us with a European label.

I set out to the House a month ago exactly what our goals would be and what we could and could not accept. The outcome matches up to those goals and commitments in every respect. The most significant agreement of the Maastricht treaties is the agreement to co-operate in a legally binding but intergovernmental framework in the three key areas of law and order, foreign policy, and defence policy.

Many of our partners would have preferred to conduct that co-operation through the institutions of the Community. That was not acceptable to us; nor, in my judgment, would it have worked. We have been able to draw a crucial distinction between those areas, such as the single market, where the Community institutions are the best tools for the job, and other areas, such as foreign policy and the fight against crime, where direct co-operation between national capitals is likely to produce the best result.

However, despite that satisfactory outcome, no one in the House should assume that that argument has been settled for all time. Some Community member states will go on pressing for a united states of Europe, with all co-operation within one institutional framework. We shall continue to argue forcefully against that proposition, and I believe that we will win the argument in the future as we have thus far.

The treaty on political union was a challenge as well as an opportunity. The challenge was to ensure that we checked the encroachment of the Community's institutions. The opportunity was to make the Community work better. In the event, a large number of the agreements that were reached stemmed specifically from proposals that were put forward by the United Kingdom. It is worth stating the extent of those proposals. Our proposals were for stronger European security and defence co-operation, making the Western European Union the defence pillar of the European union, while preserving the primacy of the North Atlantic Treaty Organisation. For us, the prime importance of NATO was a vital national interest, and that has been secured.

Our proposals were also for a common foreign and security policy going beyond the Single European Act, but remaining outside the treaty of Rome and beyond the reach of the European Court. They were for co-operation on interior and justice matters, but also for co-operation outside the treaty of Rome and the jurisdiction of the European Court. They were also for co-operation for greater financial accountability, for a treaty article on subsidiarity—an article that specifically enshrines the crucial concept that the Community should undertake only those measures that could not be achieved at a national level—and for the right of the European Court of Justice to impose fines on those member states that fail to comply with its judgments, or with Community law, having previously signed up to it.

We won agreement to all those proposals, and it was vital to the interests of this country that we did.

Mr. Tony Benn (Chesterfield)

Will the Prime Minister help with this paradox concerning the future of Europe? The west is moving towards union; the east is moving towards a looser association—a commonwealth idea. Is it not possible that the harmonisation of the interests of individual member states along commonwealth lines rather than by means of a union would offer a more durable future, given that the break-up in the east came about because centralisation occurred without the consent of the peoples of the countries involved?

The Prime Minister

I have much sympathy with what the right hon. Gentleman has said. It is for that reason that I regard the innovation of the pillared structure operating on a co-operative basis outside the Community institutions as a very desirable development in the negotiations at Maastricht. I believe that it opens up new opportunities in the future for a European co-operation, which I believe is in all our interests—but outside the centralising institutions of the Commission, and outside the influence of the European Court of Justice. It is because of the extent of my sympathy with the right hon. Gentleman—although I would not, I believe, go as far as he would in that regard—that I believe that the agreement at Maastricht is so important.

Mr. Nigel Spearing (Newham, South)

I am grateful to the Prime Minister for allowing me to intervene on the subject of centralised institutions. He mentioned subsidiarity, and article 3b of the treaty of union. Does he not agree that that unclear principle, on which it is very difficult to adjudicate, is totally limited by a phrase in the article? It applies to the Community only when the Community does not have matters "within its exclusive jurisdiction".

Given that, by virtue of its powers of regulation, the Community has a very wide area of exclusive jurisdiction, does not that limit subsidiarity, whatever it be, to a very narrow range of topics?

The Prime Minister

Any action taken by the Community must not reach the level necessary to infringe the principle of subsidiarity. In essense, if it can better be done at national level, it ought not to be done at Community level. That is the principle that we have enshrined in the treaty. I shall return to that point in a few moments.

Mr. James Wallace (Orkney and Shetland)

Will the Prime Minister give way?

The Prime Minister

I will make a little progress. I shall return to that point; I ask the hon. Gentleman to be patient.

Had it not been for Britain's arguments, we would have had last week a treaty which brought foreign policy and interior and justice matters within the treaty of Rome. We would have had a Community setting itself up as a rival defence organisation to NATO. We would have lost our independent right to decide foreign policy. The European Parliament would have had equal rights with the Governments of member states to decide on the policies and laws of the Community, and the Community's competence would have extended into virtually every area of our national life.

I do not believe that it would have been right to agree to all that. It would not have been acceptable to this House or this country, and it would have been a betrayal of our national interests.

Let me turn to social issues, and set out in detail the reasons why we could not agree to the social chapter in the treaty. Let me first remove a misunderstanding. The issue with the Community is not the quality of social provision in the countries of the Community. In Britain, we have a national health service free at the point of use—[Interruption.] It is free at the point of use, and it is the envy of Europe. Only one other European country is in a position to say that.

We have a benefits safety net that puts many European socialist Governments to shame, and the issue before us is whether social policy should be dictated by Brussels or determined in this country. We have long accepted that there should he a social dimension to the activities of the Community. It makes sense, for example, to ensure that common standards of health and safety at work are observed. There are already agreed Community measures in the social area covering freedom of movement, collective redundancy arrangements and equal treatment for men and women in pay and social security.

Ms. Dawn Primarolo (Bristol, South)

Will the right hon. Gentleman give way?

The Prime Minister

Not at the moment, if the hon. Lady will forgive me.

They all help to make a reality of people's freedom to seek a job anywhere in the Community, widening the opportunities open to all our citizens.

We have not only agreed those measures; unlike some of our partners, we have implemented them. With Germany, we are the only member state that has implemented all the 18 directives so far adopted by the Community. We have made it clear that we will adopt and implement the majority of the proposals in the Community's existing social action programme. Nineteen of the 33 measures so far published have been agreed by the Council of Ministers, and the United Kingdom has not blocked a single one of them. We have played a full part in the social dimensions of the Community, and no one has gone further.

Mr. Tony Banks (Newham, North-West)

Will the Prime Minister make clear to the House and, perhaps therefore, the country something that is not understood? How is it that countries such as Greece, Portugal and Spain could put their names to the social chapter but the United Kingdom could riot? Does the Prime Minister really want to be the leader of the "little boys up chimneys" party?

The Prime Minister

If the hon. Gentleman had been patient, I would have turned from the social dimension to the social chapter about which he is talking.

The social dimension exists under present Community competence. It is a matter in which we have been fully involved, and I have listed many of the areas of legislation that we have accepted, with a better record than anyone else in the Community.

Several Hon. Members


The Prime Minister

The social chapter covers the point raised by the hon. Member for Newham, North-West (Mr. Banks), and the point that others may have wished to raise. We have refused to accept that, in addition, the Community should intrude into aspects of social policy best decided nationally.

Ms. Joan Ruddock (Lewisham, Deptford)

Will the right hon. Gentleman give way?

The Prime Minister

If the hon. Lady will let me finish my argument, she may not have to intervene.

The Government will not support proposals that would destroy jobs by imposing damaging costs on British industry. Companies know best how much they can afford in relation to their competitors, not the social affairs directorate in Brussels. That is why we are resisting the proposed working time directive, which would cost British employers up to £5 billion in the first year alone. There is also the part-time working directive, which would require up to 1.75 millon part-time workers to pay national insurance contributions. The effect of that directive would be to impose extra costs on those workers at modest levels of earnings whose contributions burden the House lightened as recently as 1989.

That single illustration gives the lie to the absurd notion that all proposals from Brussels are socially enlightened, and all resistance to them is from the dark ages. Who in this House wants higher national insurance contributions on low-paid workers? That is what the directive proposes. If the Opposition support that, let them say so. If they do not want to do so, let them support us in resisting its imposition.

Those are directives that the European Commission is endeavouring to make, even under its existing competence. That makes it abundantly clear why I was not prepared to accept a further massive extension of competence in this field.

Mr. Stuart Bell (Middlesbrough)

The Prime Minister is telling the House that he totally misunderstands the social charter and the social chapter. Europeans regard the social dimension, the social chapter and the social charter as one and the same. Will the Prime Minister tell me and the House how he will feel when he signs the treaty, and the protocol that deals with the social charter? He will not sign, but will exclude Britain from the institutions of the Community, from all its mechanisms and from every aspect of this policy. How will he feel when he does not sign that page?

The Prime Minister

The protocol is not in the treaty; it is adjacent to the treaty, but it is not in it. The protocol will not apply to us. It will not impose damaging costs on British industry and workers. I feel, as so many employers in this country and abroad feel, that it will give a competitive advantage to this country, not a competitive disadvantage.

Mr. John Battle (Leeds, West)

Will the Prime Minister give way?

The Prime Minister

I have given way twice, so, if the hon. Gentleman will forgive me, I shall now make progress.

The social chapter would have implied that laws could have been imposed on the United Kingdom, by a qualified majority vote of member states, on working conditions, rights of information and consultation—including that of unions to block essential business decisions—and any action related to the provision of jobs for unemployed people. These would have ceased to be a matter for decision by this House and by British employers and employees, according to the needs of this country.

The Community's ambitions would not have ended with those matters: social security and protection, union rights to representation of workers, union involvement in company management and the conditions of employment of non-resident workers from outside the Community would all have been explicit Community responsibilities. That, without a shred of doubt, would have been a recipe for a centralised Community social policy, which could not possibly have taken account of wide variations in traditional practice, culture and experience. It is clear that it would have enabled costly laws to be imposed, irrespective of the needs of our economy and our jobs, and I was not prepared to accept that.

Ms. Ruddock

Will the Prime Minister confirm that Britain has the lowest maternity pay of any country in the Community and, in the context of the remarks that he has just made, is he satisfied with that state of affairs?

The Prime Minister

Britain has the longest maternity leave, as the hon. Lady may know, of any country in Europe: this House decided that, and the hon. Lady has to recognise that point. It is for the House to determine that.

Let me turn to article 118b in the agreement of the 11, of which the Opposition are so fond. Let me explain to the House what the agreement that I rejected says about the role of collective agreements at Community level, rather than what some have led us to believe in recent days. It provides for such agreements between Community-level representatives of management and labour. That means, principally, the Union of Industrial and Employers Confederations of Europe and the European Trades Union Congress—a body whose combined membership is no more than one in four employees in the Community. It provides that such agreements shall be implemented in member states in one of two ways.

The first is to require such agreements to be implemented directly in member states according to their own procedures. Such agreements could cover any matter, including pay, the right to join a union and the right to strike. The only exclusions from those provisions are what Community-led employers and unions fail to agree on.

The second way is to require the Council, at the request of these employers and unions, to implement these agreements through Community law, enforceable through the European Court. In this case all the matters within the huge range of Community competence that I have described could come within the scope of such agreements. Only pay, the right to join a union and the right to strike would be excluded.

The Opposition told us the exclusions, but they failed to mention the list of inclusions. The matters included run to union law as well as the laws affecting individuals—rights of recognition and negotiation, the right to block company decisions—and nowhere in the proposals tabled are collective rights excluded from action, and laws could be imposed on this country without the agreement not only of its Government but without the agreement of its Government, its employers and its employees. That is not acceptable.

The Opposition cannot credibly claim that such extraordinary provisions would not recreate precisely the kind of national bargaining—but now at a Community level—which created what was called the "British disease" of the 1960s and 1970s, so I rejected those proposals.

Mr. Frank Cook (Stockton, North)


The Prime Minister

I will not give way to the hon. Gentleman.

I shall not turn back the clock to the failure of the corporatism of the 1960s and 1970s. I do not believe that the British people want to see Europe trying as national Governments tried in the 1960s and 1970s——

Mr. Tony Blair (Sedgefield)

Will the Prime Minister confirm that, in relation to the first way that he mentioned, the declaration attached to article 118 states that none of the agreements can impose any obligation to amend national legislation in order to facilitate their implementation."? Will he also confirm that, in relation to the second way, they are all covered by article 118b, which specifically exempts the right to strike and union legislation?

The Prime Minister

The hon Gentleman is wrong on his second point. There is the possibility, the probability and even the certainty of supranational agreements being imposed on this country as a result of these agreements. I am not prepared to accept that on behalf of this country. Neither—on the basis of the experience of what is happening under the existing social provisions—was I prepared to trust the Commission not to stretch the new definitions of the proposed social chapter. We have seen what the Commission is doing with the working time directive under the health and safety article—[Interruption.]

Mr. Speaker

Order. I ask the House to settle down.

The Prime Minister

We have seen what the Commission is doing in terms of the present health and safety article, and I am not prepared to take the risk of that happening again, with the Commission stretching its responsibilities.

Finally, I am not prepared to envisage a situation in which labour regulation——

Mr. Merlyn Rees (Morley and Leeds, South)


The Prime Minister

If the right hon. Gentleman will forgive me, I shall continue.

I am not prepared to envisage a situation in which labour regulation could be imposed on the United Kingdom even if the Government of the United Kingdom, the Confederation of British Industry in the United Kingdom and the Trades Union Congress in the United Kingdom had all voted against it, yet that is what the Opposition wish to support.

Mr. Rees


The Prime Minister

I told the House on 20 Novembe—[Interruption.]

Mr. Speaker

Order. There are many people outside the House who are very interested in the debate and who want to know what the Prime Minister has to say. I ask the House to settle down.

Mr. Rees

On such an important issue, on which the Prime Minister went three ways, would it not be a good idea if he were to ask the learned Attorney-General to give his view to the House?

The Prime Minister

The learned Attorney-General's view is that which I have expressed to the House.

The proposal is unacceptable, and that is why we rejected it. It is also the view of British industry and commerce and of other people all around Europe that we have made the right decision. Perhaps the Opposition would be interested to hear what the rest of the world says. The Environment Commissioner, Mr. Carlo Ripa di Meana, said that the agreements that we have reached would make Britain the most attractive country for foreign investment. The Japanese equivalent of the CBI has expressed concern about the consequences of the social chapter on labour flexibility and wage costs—we know how proud the Leader of the Opposition is of the Japanese investment in his constituency.

The director general of the CBI has said that the agreement has achieved "exactly what business needs". The director general of the Institute of Directors has described the outcome as a triumph for British business". The chairman of British Petroleum has said that he is "delighted", and the chairman of ICI that this is probably as good an outcome as could have been hoped for.

All those people with direct experience of industry are right, and the Opposition are wrong.

I told the House——

Mr. Bruce Grocott (The Wrekin)


Mr. Derek Fatchett (Leeds, Central)


Mr. Speaker

Order. The hon. Gentlemen who are seeking to intervene are Front-Bench spokesmen and know from their own experience that, if the Prime Minister does not give way, they must sit down.

The Prime Minister

I told the House on 20 November that, on economic and monetary union, there must be a provision to allow this country to decide whether—not just when—to join a single currency. That is what we have achieved—precisely, and in legally binding form. As a result, we are uniquely well placed to make a sensible judgment on this important question at the right time. If we do not wish to join, we are in no way obliged to do so. If we wish to join a single currency, it will be open to Parliament to decide to do so at exactly the same time as any of our partners.

Let there be no doubt: Britain is among those who will meet the strict convergence conditions. We took the lead in setting them and will continue to be involved at every stage leading up to the decision whether to launch a single currency.

Mr. Frank Cook


The Prime Minister

There are some who argue that the treaty creates such a strong momentum towards a single currency that, whatever our doubts, we shall be compelled by economic pressure to join when the time comes. I do not believe that. The balance of economic advantage will depend heavily on the circumstances in which a single currency is created—how many member states are involved, and whether the Community has met the convergence conditions. No one can judge now what the situation will be in five or six years' time. No economic pressure could compel this country to join a single currency if Parliament judged the political disadvantages to be too great.

Mr. Alex Salmond (Banff and Buchan)

Will the Prime Minister give way?

The Prime Minister

I believe that it has been right for this country to maintain, as we have done, a two-way option—to go in if we judge it right to do so, but to stay out if we judge it right to do so.

The debate about the European Community is littered——

Mr. D. N. Campbell-Savours (Workington)

Does the Prime Minister believe that the existence of the two-way option will help Britain to attract the central bank to the United Kingdom?

The Prime Minister

I think that it will do no harm whatever to our prospects. Many other countries believe that we are wise to have this option. We have all the advantages of determining the conditions up to entry and —uniquely—the right to go in or not, depending on whether it is right for our country.

Mr. Robert N. Wareing (Liverpool, West Derby)

Will the Prime Minister give way?

The Prime Minister

I have already given way nine or 10 times. The hon. Gentleman must let me make progress.

The debate about the European Community is littered with labels for people—anti-European, pro-European, Euro-fanatic, Euro-sceptic or Europhobe. Those labels are echoes of a healthy debate, but they should not destroy our sense of purpose.

No country has a greater capacity than ours to commit itself to a cause that it believes to be right—the history of this century clearly shows that. Many people in this country have committed themselves to membership of the Community with a similar sense of dedication. They made a commitment to an organisation which they believed would be a powerful force for good. I believe that they were right to do so.

It was right to join, not just for the opportunities that the Community offers as a common market, not even for the economic strength of the Community collectively, but for the collective power of the European democracies to improve the general weight, politically and economically, of European opinion throughout the world. Nothing that has happened in the almost 20 years of our membership causes me to doubt the rightness of the original decision to join the Community.

Mr. Frank Cook

Will the Prime Minister please, please, please give way?

Mr. Speaker

Order. Will the hon. Gentleman please sit down?

The Prime Minister

I have given way on nine or possibly even 10 occasions. I suspect that there are more than 600 hon. Members to whom I have not given way, and the hon. Member for Stockton, North (Mr. Cook) is one of them.

As I said earlier, we attach great importance to the principle of subsidiarity. It is not only a defence of our national freedom of action but a statement of our willingness to co-operate. Such co-operation does not mean compromising our national traditions or institutions —far from it. It means not allowing sentiment to stand in the way of real interests. It is right to be hard-headed in our dealings with Europe, and that was our approach in the negotiations.

At Maastricht, we ensured a safer Europe, and we reaffirmed the primacy of NATO. We set the framework of a stronger and more coherent European foreign policy, in which our national independence of action is assured. We strengthened the rule of law in the Community. We established more efficient and more effective institutions, with stronger arrangements for budgetary control.

We gave the European Parliament a greater role in monitoring the Commission. We obliged the Community to respond more directly to the needs of the citizen. We equipped ourselves to fight international crime, terrorism and drug trafficking. We secured provisions that will be good for British industry, and a Community that will be open to the rest of the world.

Our role consistently has been to ensure that the Community does not become self-regardng, inward-looking and over-regulatory. Brussels is a means to an end; it is not the end itself—[Interruption.] From their policies and comments, Opposition Members clearly feel differently. In their view, if Brussels says it, it must be right irrespective of the national interest.

There is one critical agreement among the Twelve, which is outside the treaty but in the presidency conclusions, and which I believe is vital for the future of Europe. As we reach the end of the century, it becomes even clearer that the Community does not end with the Twelve. I do not accept—[Laughter.]

Mr. Speaker

Order. These are not matters of hilarity, as many people outside would agree.

The Prime Minister

I do not accept the conflict, which is often referred to, between deepening the Community and widening it. If the Community ignores what is happening beyond its boundaries and simply concentrates on internal development, it will not become deeper; it will just become shallower. We must broaden it and open its doors.

It would be a tragedy if historians could look back and say that the Community had been sleepwalking through a year of revolutions elsewhere. That tragedy would be compounded if historians were to look back and say that, if only the Community had reached out to the fragile democracies of the east, disasters in those democracies could have been averted.

At Maastricht, the Community committed itself to further enlargement. It did so at Britain's initiative. That commitment will be seen as one of the most significant of the agreements to which we signed up last week. In six months' time, Britain will hold the presidency of the Community. In that six months, we hope to start negotiations leading to membership of the Community for Austria and Sweden, and other European Free Trade Association countries. We shall start to pave the way for the eventual membership of the countries of eastern Europe. We shall put in place the last measures needed to complete the single market—a single market that will extend way beyond the borders of the Twelve, even before the new member states join.

In the treaty of Rome, the free countries of Europe wove their own lifeline. We now have a responsibility to the other countries of Europe to throw that same lifeline to those countries now embarking on a perilous journey towards stability and democracy. If we were to fail in that endeavour, we should put at risk all the achievements of post-war Europe. The prize if we succeed in that endeavour is enormous.

I see the main task of our presidency next year as being to ensure that the Community matches up to this, its greatest challenge and opportunity—the achievement of a Community open to all the democratic countries of Europe and reducing, perhaps even eliminating, the risk of conflict within the whole of our continent from one end to the other.

That was the kind of Community that we fought for at Maastricht. That is the kind of Community that we wish to build. We can take pride in achieving our goals in this negotiation, and I commend the outcome to the House.

4.20 pm
Mr. Neil Kinnock (Islwyn)

The Prime Minister and I are obviously in agreement about the fact that the European Council at Maastricht was historic. We are obviously agreed that the decisions constitute a beginning, not an end, and that, as a result of those decisions, the European Community will continue to develop economically, politically, socially and culturally. It is also clear that it is our shared hope that the Community will not only enlarge itself but will use its relative prosperity and its democracy to improve its collective efforts to assist in the development of the economies and new democracies of central and eastern Europe. On those, and on other matters on which consensus was reached in the Community, there is broad agreement here.

But the Government have returned from the Maastricht Council with a pair of opt-outs on the most vital matters of economic and monetary union and the social chapter. Their duty was to exert maximum influence on those fundamental issues. That required involvement; they have chosen isolation.

Sir Anthony Grant (Cambridgeshire, South-West)

Will the right hon. Gentleman give way?

Mr. Kinnock


The Government's duty was to resist the development of a two-speed Community. Instead, they have contrived to get a two-speed Community, and they have put Britain in the slow lane. A Prime Minister who said that he wanted Britain at the heart of Europe spent his whole time at the Council getting two escape clauses. That is not the action of a Prime Minister who wants to be at the heart of Europe but the action of a Prime Minister who wants Britain at the tail of Europe.

Sir Anthony Grant

Will the right hon. Gentleman give way?

Mr. Robert Adley (Christchurch)

Will the right hon. Gentleman give way?

Mr. Kinnock


On monetary union, the Prime Minister is proud, as he said again today, of the arrangements which he told us last Wednesday ensure that unlike other Governments, we have not bound ourselves to join regardless of whether it makes economic or political sense."—[Official Report, 11 December 1991; Vol. 200, c. 859.] That is the Prime Minister's justification for the apt-out. The core of the Government's argument is that, while leaders of other countries are taking their people in a gathering stampede to union, our Prime Minister alone stands aloof and unbound with his opt-out.

Sir Anthony Grant

Will the right hon. Gentleman give way?

Mr. Kinnock

Let me develop my speech a little further; then I shall give way.

Is any country in the Community "bound"—I use the Prime Minister's word—regardless of economic sense? That is an important question and one that is best answered by examining the treaty procedure for moving to monetary union. In 1996, the Commission and the European Monetary Institute will report to the European Council on whether the third stage of economic and monetary union—the creation of a single currency—can begin. That is not automatic. It depends entirely, as the treaty clearly specifies, on whether the strict conditions for convergence relating to inflation, budget deficits, long-term interest rates and currency stability have been met. The Council must then decide whether to proceed to monetary union. Such a decision can be taken only if a majority of states meet the criteria for convergence. If that convergence is not achieved, the next key date is the end of 1997. If, by then, no date has been set, monetary union will not go ahead, because a majority of states will not have passed the test of convergence.

The treaty then specifies that monetary union will begin on I January 1999. However, it will obviously begin only for those countries that have achieved the convergence conditions. It is clear that at every stage of that stringent process nothing will be done—and nothing can be done——"regardless", to use the Prime Minister's words "of economic sense". On the contrary, whether it is done at all depends entirely on economic sense and on the test of practical economics—whether or not the conditions for economic convergence are met. Every country will have to face that.

Mr. David Sumberg (Bury, South)

In view of the right hon. Gentleman's passion for European unity, will he explain to the House and the country why he voted against the Single European Act?

Mr. Kinnock

The reason is straightforward and if the hon. Gentleman examined the proceedings in respect of that legislation, he would very easily discover the answer. There was absolutely no commitment on behalf of the Government to the strength of social dimension that we want for the British people.

Several Hon. Members


Mr. Speaker

Order. Many of the hon. Members who are trying to intervene want to participate in the debate. Trying to intervene now may not be very happy for them later.

Mr. Kinnock

As I was making clear——

Sir Anthony Grant

Will the right hon. Gentleman give way now?

Mr. Kinnock

I will give way in due course.

I was making it clear that every country must face that basic test which ensures that they must make economic sense in terms of convergence. No one can act regardless of that consideration.

Mr. Nicholas Budgen (Wolverhampton, South-West)

Will the right hon. Gentleman give way?

Mr. Adley

Will the right hon. Gentleman give way?

Mr. Kinnock

I have said that I will give way in due course.

The position of the Tory party and of the Prime Minister is unique, because even if the terms of convergence are satisfied, and even if monetary union goes ahead, they are still prepared, they tell us, to opt Britain out of monetary union. The consequences of such a decision would be very severe for the United Kingdom. They would be so severe that they would inflict great disadvantage on our country and on our people. That is why we believe that it would be wrong for Britain to opt out if the convergence conditions were achieved.

Mr. Adley

The right hon. Gentleman seems to have enunciated an interesting new doctrine that no cake is better than half a cake. I want to ask the right hon. Gentleman a straightforward question: will he name one specific proposal from Brussels that he finds unacceptable?

Mr. Kinnock

There are several. For example, the very long dated and hitherto insufficiently reformed proposal from Brussels—the common agricultural policy in its present form—is totally unacceptable. [Interruption.] The thing to do is not to opt out, but to stay in and fight one's corner.

Mr. Budgen

Give way.

Mr. Kinnock

I will give way in due course. I have been speaking for only a few moments and I have already given way twice. I have given undertakings that I will give way and I will do that in due course.

I was beginning to tell the House why it would be very disadvantageous for our country to use the Prime Minister's opt-out clause at the point of formation of union and given that convergence conditions had been satisfied. First, if the opt-out was exercised, our country would certainly stand to lose inward investment. Inevitably—[Interruption.] He is at his mother-in-law's funeral. Will you stop that stupid nonsense? [Interruption.]

Mr. Speaker


Mr. Kinnock

Our country would certainly stand to lose inward investment because investors inevitably would choose to put their resources in the countries that were part of the monetary union rather than in one that was outside it and subject to continual currency risks. Secondly, of course, the United Kingdom would stand to lose British investment, because to gain access to the European single market with a single currency and no foreign exchange costs serviced, British companies would choose to invest in the monetary union countries. Thirdly, if the Prime Minister opted out, the City of London could not maintain its pre-eminence. A banking centre such as Frankfurt that was inside the monetary union would become the European financial capital, with all the obvious consequences for finance, earnings and employment in Britain.

Mr. Anthony Nelson (Chichester)

As the right hon. Gentleman has already said, the agreement at Maastricht imposes strict disciplines on Governments, on the amount that they can borrow in order to finance their public expenditure. As he supports that so wholeheartedly, what calculation has the right hon. Gentleman made of the extent to which taxes would have to be raised under a Labour Government to pay for their expenditure programme?

Mr. Kinnock

The current Government are running, on their own estimates, toward a £20 billion public service borrowing requirement. They have raised taxes to the point at which they levy the highest tax burden on the citizens of this country of any Government in history. They have sensibly got extra flexibility into the fiscal deficit requirements in the Maastricht treaty, and that is extremely useful, but monetary disciplines are, of course, essential. What is important is that the domestic and the Community policies of all of the countries in the Community operate in such a way as to ensure that we do not arrive at the situation that we in Britain are in at present, where by perpetual deflation the Government have lower inflation, but at the cost of raising the fiscal deficit. Why does not the hon. Gentleman learn the lessons?

Mr. Budgen

Will the right hon. Gentleman give way?

Mr. Kinnock

I will give way in due course.

Despite those disadvantages in terms of inward investment, in terms of domestic investment and in terms of the City of London, the Prime Minister would still think that all that was worth paying as a necessary price, as he put it three weeks ago, to keep control of monetary policy. But if there was monetary union, what real control of monetary policy would there be? If our neighbours formed a single currency area within which we had free capital movement and with which we did 60 per cent. of our trade, what control of monetary policy would exist in reality? None is the truthful answer to that question. The United Kingdom would be a satellite of the monetary union, exerting no pull, no power and no leverage. Our country would drag alongside the monetary union, pinioned to it by economic realities.

Mr. Budgen

Does the right hon. Gentleman accept that many influential people in Europe believe that coherence or convergence can be achieved only by very considerable increases in expenditure on regional and social funds and upon the cohesion fund? Will he be good enough to give the House some idea of what sort of expenditure will be in place or whether, perhaps, it would be funded by an increase in VAT or by a general increase in taxation? We would like to know what the cost of the pre-conditions of monetary union would be.

Mr. Kinnock

As we make clear in our policy documents, we consider that funding of the common agricultural policy is so large and misapplied in terms of the needs of the European Community that it must be the major source of reorientated finance for the development of cohesion in the Community. That must be so. If the Government really had in mind the welfare of the whole United Kingdom and, indeed, a proper contribution to the development of the Community, that is what they would have battled for not only at Maastricht but on all previous occasions.

As we know' that Britain will have the possibility of opting out at the time of monetary union, given its convergence with the performance of the remainder of the Community, the practical question that must be asked is: what would be the meaning of the Prime Minister's opt-out clause at that point? Indeed, what is its validity now? Either the clause means that even if we achieved convergence the Prime Minister would still opt out for some reason, despite the huge disadvantages to industry, investment, finance and jobs, or it means that, because the convergence conditions had been met and the practical penalties of staying out were obvious, the opt-out clause would be redundant. We would be in exactly the same position as every other Community country capable of joining the monetary union.

The Prime Minister should tell us now what could be the reason, other than failure to achieve convergence, for not recommending entry to a monetary union that was being formed. He should answer that question. He would have to give a very good reason, because there is a heavy price to be paid for the Prime Minister's opt-out. That price has to be paid not at some vague date in the future but soon. First, by the end of 1992, the vital decisions on the location of the European monetary institute and the European central bank must be taken. Those decisions will clearly depend directly on whether the country where the bodies are located will continue to be part of the union process. A country that had opted out could not and would not even be considered.

Mr. Jim Sillars (Glasgow, Govan)

Will the right hon. Gentleman give way?

Mr. Kinnock

I know that the hon. Gentleman wants Scotland to opt out of everything, even the real world.

So long as the Prime Minister's approach on opt-out prevails, neither the institute nor the bank will be located here, despite the risks that will result for Britain's financial services industry, which earns £14 billion every year for Britain.

The Chancellor of the Exchequer (Mr. Norman Lamont)

The significance of the opt-in clause—[Interruption.] The significance of the clause is that we believe that it is right in principle that Parliament should be able to make the decision. The right hon. Gentleman has said that he does not like the arrangements for the central bank: it is too powerful, too independent and he does not like it. If that is his view, why is he prepared to say now that so long as convergence is achieved—that is what he is saying—he will give the commitment now irreversibly to join a single currency? Why does he not want Parliament to have the right to decide?

Mr. Kinnock

Opt-in, opt-out, shake it all about. It is obviously the hokey-cokey clause. On the Chancellor's first point, I repeat what I said in the previous debate that we had on this subject. Of course, barely a month and certainly not a Council will go by without Parliament being consulted and certainly no basic decision about our well-being in the Community will be taken without the assent of Parliament. That is the fact of the matter.

Secondly, on the European central bank, we have repeatedly proposed—as the right hon. Gentleman may have heard, some of his colleagues in the Community support our proposal—a relationship between ECOFIN—the representative body—and the independent central bank closely modelled on the German system that has developed with such success. Indeed, we want to bring the proposals that are before the Community now closer to that German system. I would have hoped that the Chancellor would campaign for that. I would have hoped that he would see the sense of it.

I would have thought that, as Chancellor, the right hon. Gentleman would seek to ensure that the general requirements on the proposed European central bank to conform to the general economic policies of the Community would be taken seriously and applied literally.

Mr. Norman Lamont

I am afraid that the right hon. Gentleman is wrong about the bank. The arrangements in the treaty and the treaty amendments are precisely those which the Germans wanted and precisely those modelled on the Bundesbank. That is the whole point of it. Why does not the right hon. Gentleman answer the question? Why is he not prepared to admit that he is committing his party irrevocably to move to a single currency?

Mr. Kinnock

Is the Chancellor of the Exchequer going to stand at the Dispatch Box and tell the world of finance and industry that there are circumstances in which, despite the achievements of convergence, despite the establishment of monetary union by our neighbours, he would come to the House and recommend that we still stayed out?

Several Hon. Members


Mr. Lamont

We believe that it should be decided by this House of Commons.

Mr. Kinnock

What would the right hon. Gentleman do?

Mr. Lamont

The right hon. Gentleman may remember that his own shadow Chancellor said that he did not believe that that matter should be decided until 1997, and that Parliament should be involved. That is what we say and that is the view which commands the support of the country.

Mr. Kinnock

For the second time in two weeks a member of the Cabinet has grossly misrepresented my right hon. and learned Friend the Member for Monklands, East (Mr. Smith). Let me read what my right hon and learned Friend said, instead of the contorted version produced by the Prime Minister, dishonourably, last week—[Interruption.]

Mr. Speaker

Order. Would the right hon. Gentleman withdraw "dishonourably", please?

Mr. Kinnock

I meant, of course, Mr. Speaker, inaccurately.

The Prime Minister said, exactly as the Chancellor just has, that my right hon. and learned Friend said that we should not commit ourselves in advance of 1997 to enter into a single currency. That is the point of agreement that all sensible people will have.

What my right hon. and learned Friend said on the Walden programme was: We should not commit ourselves now, in advance of 1997, to enter a single currency irrespective of what the state of the economy was—[Interruption.] irrespective, clearly, of whether convergence had been achieved or not.

No one is being asked anywhere in the European Community to take such a decision and make such a step —indeed they cannot—unless convergence has been achieved. So I hope that the Chancellor will still feel able to answer candidly the question that I asked him: in the circumstances of convergence being achieved and the union going ahead, what would he say to the House? Would he recommend that we did not join that union? Yes or no? Come on.

Several Hon. Members

Answer. Come on. Sir Peter Tapsell (East Lindsey) rose——

Mr. Kinnock

I shall give way in a moment. I must get on—[Interruption.]

Several Hon. Members


Mr. Speaker

Order. The Leader of the Opposition has given way a good deal. I think that he should get on.

Mr. Kinnock

I was drawing the attention of the House to the first price of the policy being followed by the Government—if their policies were to prevail, which thankfully they will not—which is to put in the gravest jeopardy the possibility of the European central bank being located in Britain. There is a second price——

Sir Peter Tapsell


Mr. Kinnock

No, I shall give way in a moment. I think that you would be the first to agree, Mr. Speaker, that there have been a number of responses, but there have also been prolonged distractions, and I had better get on. I shall give way later on if I may first develop this argument.

The second price of the opt-out strategy—if it can be called that—is uncertainty. If international or British companies are doubtful about whether Britain will opt out, is it not obvious that they would be less, rather than more, likely to make their investment here? It has to be asked whether Britain's best interests can ever be served by a Government whose policies create that doubt among those planning their future investment for the next five, seven or 10 years.

Of course, it was not Britain's best interests which guided the Prime Minister at Maastricht, but the desire to hold the Conservative party together. The European monetary union opt-out was part of the price for that. The social chapter opt-out was the rest of the fee. Together those opt-outs are the Danegeld, paid by the Prime Minister to the right hon. Member for Finchley (Mrs. Thatcher).

The social chapter opt-out deserts the interests of employees in Britain. It was a declaration by the Government that they want a down-market economy at the fringe of Europe. Every other Government in the Community accepts the idea that, as trade barriers come down and monetary co-operation increases, there should be a development of basic social rights and common employment standards throughout the Community.

All the Prime Minister's fellow Conservative Heads of Government in the Community take the view that, as Herr Kohl put it: Our community is not only an Economic Community, it is a Social Community too. For the Government to be against those social protections and minimum employment conditions as a matter of principle is to be not just outside the mainstream of the Community, but outside the mainstream of conservatism in the Community.

The Government have advanced a number of claims —the Prime Minister did so again this afternoon—to try to justify their opposition to giving the British people the same rights and minimum standards as those awarded to people in other countries of the Community. The Prime Minister repeatedly claimed——

Sir Teddy Taylor (Southend, East)


Mr. Kinnock

I shall give way at the conclusion of this passage.

Last week the Prime Minister repeatedly claimed that acceptance of the social chapter would mean accepting "militancy", and "strike-torn days" and much more in the same vein. We heard it again this afternoon. It just is not true.

The social protocol explicitly states that it shall not apply to pay, the right of association, the right to strike, or the right to impose lock-outs". Community legislation in those areas is effectively not possible.

When asked why other countries, such as Germany, could accept the social protocol while he could not, the Prime Minister has repeatedly said that other countries have a different structure of labour laws". But he said that knowing that the social protocol specifically lays down the requirement that the Community and its Member States shall implement measures which take account of the diverse forms of national practices". So there is no proof of imposition.

We have heard the Prime Minister repeatedly assert that support for the social protocol would mean accepting new trade union powers … handing over government to trade unions abroad and that it would mean the imposition of damaging labour laws". That is not true either.

Mrs. Edwina Currie (Derbyshire, South)

Will the right hon. Gentleman give way?

Mr. Kinnock

I shall not give way for the moment.

The Prime Minister must know that the section of the social protocol dealing with collective agreements between trade unions and employers' organisations could not result in the alteration of British industrial relations legislation —good, bad or indifferent. The declaration attached to the section, which has the same force, clearly states: this arrangement implies no obligation on the Member States to apply the agreements directly or to work out rules for their transposition, nor any obligation to amend national legislation in force to facilitate their implementation. So there is no power of imposition there.

The Secretary of State for Employment (Mr. Michael Howard)

Is not the right hon. Gentleman aware that the declaration to which he has referred refers only to the first method of compelling those collective agreements to be implemented and not to the second, and that it is absolutely clear that the effect of article 118b is to enable collective agreements to be reached at European level, to which British employers, employees and the British Government do not agree, but which would have the force of law in this country?

Mr. Kinnock

Methinks the right hon. and learned Gentleman doth protest too much. He knows very well that both on the first and on the second there are belt and braces arrangements in the protocol to ensure that there shall be no imposition.

Mr. Howard

The text of the declaration to which the right hon. Gentleman referred reads: The High Contracting parties declare that the first of the arrangements for application of the agreements will be limited in the way that he suggested. That does not apply to the second of those arrangements.

Mr. Kinnock

The right hon. and learned Gentleman knows very well that all of the provision to which he has referred falls under the requirements of unanimity, and each Government can exercise their veto.

Mr. Howard

I am afraid that the right hon. Gentleman simply confirms the extent to which his understanding of this vital agreement is inadequate and inaccurate. The decisions of the Council of Ministers that provide the second way to implement those agreements will be taken on the basis of qualified majority voting. The right hon. Gentleman does not understand what he is talking about. He would have committed this country to the most damaging obligations without the faintest understanding of what they mean.

Mr. Kinnock

As he speaks, the right hon. and learned Gentleman is depriving himself of any excuse for opting out of the social chapter, for the simple reason that clause 6 of article 118 says: The provision of this Article shall not apply to pay, the right of association, the right to strike or the right to impose lock-outs. I am certain that we shall return to this subject, and that we shall return to it——

Mr. Howard


Mr. Kinnock

No, I shall not give way.

Mr. Howard


Mr. Speaker

Order. This is not a Committee stage.

Mr. Kinnock

We shall return to this subject with great relish. Meanwhile, I must resist the efforts of the right hon. and learned Gentleman, because I rather suspect that what he is doing now is what, in his home town of Llanelli, would be called attempting some spoiling play. We shall have to come back to this on another occasion.

One after another, the Prime Minister's misrepresentations about the social chapter are negated by the provisions of the protocol. He made great play of the fact that the social chapter included provision to ensure imposition of other people's directions in a number of areas, including, not least, social security and collective agreements. The only section of the social protocol that relates to the collective defence of the interests of workers and employers is subject to veto. Therefore, it cannot be imposed.

So if it is the case, as it so clearly is, that in every single one of the areas where the Prime Minister has made allegations his claims have turned out to be false and he has misrepresented the social charter, I have to ask him whether he was misinformed or whether he knew that he was repeatedly being misleading. The only parts of the protocol that are the subject of qualified majority voting and would therefore he capable of being extended to Britain against the wishes of a British Government refer to individual employees' rights. They do not refer to collective or trade union rights.

Those individual rights are very basic, not to say rudimentary. They provide for improvement in health and safety provisions, in working conditions, in the information and consultation of workers, equality of opportunity between men and women, and the integration into the labour force of the long-term unemployed, including disabled workers. Every other Government in the Community can accept those provisions, but they are rejected by our Government because, they say, the provision of such basic rights to British workers would make Britain uncompetitive.

Would improvements in health and safety make us uncompetitive? Do the Government not accept the fundamental truth of industrial practice—that industrial accidents and disasters are not only tragic but are monumentally expensive? Did they not see the report of their own Health and Safety Executive last week, Maastricht week, which estimated that the real cost of industrial accidents and diseases could be up to £15 billion a year? Do the Government not know that the executive estimates that work-related accidents and ill-health are probably costing 30 million days off work a year—10 times as many as are lost through strikes? Do they not heed the director general of the executive, who said: incidents that are usually preventable could be costing companies well over 10 per cent. of their operating margins".

Mr. Howard

Does the right hon. Gentleman not understand that these important health and safety provisions are included in the present treaty and are covered by qualified majority voting as a result of legislation against which the Labour party voted?

Mr. Kinnock

So why cannot the Government accept the social charter?

Hon. Members

Hear, hear.

Mr. Speaker

Order. This is taking a lot of time.

Mr. Kinnock

Improved conditions for health and safety in the working environment do not diminish competitiveness; they add to efficiency and reduce costs and they are part of competitiveness. The Government consider that the improvement in the arrangements for information and consultation of workers provided for in the social chapter would make Britain uncompetitive. How could that be when the message of all managers worth their salt—certainly the managers of successful enterprises, both British and foreign owned—is that good information and consultation procedures are an asset, a source of efficiency and essential to team effort?

When the Government resist the social chapter because of its references to the integration of long-term unemployed, it is easy to see why. There are now 654,000 people in Britain who have been unemployed for more than a year. The number has increased by 146,000–30 per cent.—in the past 12 months as a result of the Government's policies. When that scale of unemployment costs nearly £4 billion, it does not do much for competitiveness.

Perhaps it is the provision in the social chapter for equality between men and women in labour market opportunities and in treatment at work that persuades the Government that acceptance of this chapter would be ruinous. Did we not hear somone who described himself as a major employer of women saying two months ago how essential it was to

remove the barriers that make it harder for women to realise their full potential"? Did not that employer ask, in ringing progressive tones, Why should half our population go through life like a hobbled horse in a steeplechase"? If the employer in question, the Prime Minister, thought it essential to take account of what he called the social revolution in the role of women when he spoke at the launch of Opportunity 2000 in October, why is he denying basic rights to women by opting out of the social chapter?

There can be only one reason for the Prime Minister's attitude. It is that the commitment that he made to widening opportunities is for occasional grand display, but his commitment to bad conditions, inequality and unfairness is for daily use. The Prime Minister's message of aspiration and opportunity for women is for public consumption. For low-paid women workers, for part-time women workers, for women working in lousy conditions, the message is put up with it and shut up about it.

The Prime Minister

Will the right hon. Gentleman join us in opposing the part-time working directive that would impose national insurance contributions on low-paid women and men, or will he continue to support it?

Mr. Kinnock

There is no obligation to pay national insurance—the matter deals with entitlements. Many women in part-time work are supremely conscious of the fact that, because they are not part of the national insurance arrangements, their rights to sick pay, to maternity pay and so on are greatly diminished.

The Prime Minister

My question was quite straightforward. Will the right hon. Gentleman now answer it? Will he support us in opposing the part-time working directive, which would impose national insurance contributions on low-paid workers, many of them women? Yes or no?

Mr. Kinnock

The Prime Minister should get a grip on the facts—there is no obligation, except where there is the same social security entitlement as for full-time employees. The Prime Minister should check the directive.

The Prime Minister is so frightened of the pressures, so ready to depart from the undertakings he gave in his Opportunity 2000 speech, that he will not accept the social chapter relating to equal treatment of women in work. The Government insist that the British economy depends on resisting decent minimum conditions and employment rights for British workers. They have spent 12 years following that dogma and taking away even basic protections. At the end of that 12 years, Britain is a country with high and rising unemployment, with the balance of payments in deficit—even in a recession—and with negative growth, reduced investment, spreading poverty, rundown public services, a housing crisis and record bankruptcies. Whatever else cuts in provisions and rights do, they certainly do not produce economic success, and they never will.

Modern competitiveness depends on competing in quality—competing up-market. It depends on a highly educated, well-trained work force—[Laughter.] I know why Conservative Members are laughing—they want a sweatshop in Britain. Economic success depends on a well-informed work force, with highly motivated men and women. Modern Governments have a duty to contribute towards that by making the proper investment and by insisting on good conditions. In 12 years, the Government have never done that and they never will. That is why, after 12 years, we have economic recession and underperformance.

The Government have compounded that failure with the "turn your back" policy that they adopted at Maastricht. That policy might be relatively harmless if the other countries in the Community were standing still, but they are not. They are getting on, as full participants, with the monetary union process and with building one community. British influence over both has now diminished; the gap has widened. After the passage of stage 2, Britain will be faced with a structure that others have fashioned. That cannot be in British interests. This Government are not only allowing that to happen, they are causing it to happen. Such a Government are no longer fit to lead Britain. The British people know that and, come the election, they will show it. [Interruption.]

Mr. Speaker

Order. We do not have clapping here.

5.3 pm

Sir Richard Luce (Shoreham)

Having listened to the speech of the right hon. Member for Islwyn (Mr. Kinnock), I came to two conclusions about the debate and about the agreement at Maastricht last week. First, the right hon. Gentleman does not understand the agreement. Indeed, I can summarise his speech as all wind and no substance. The second conclusion is that, because of my right hon. Friend the Prime Minister's statesmanship and the leadership that he gave last week—together with my right hon. Friends the Foreign Secretary and the Chancellor of the Exchequer—he has returned with an agreement that is not only in Europe's interest, but equally in Britain's interests. He should be warmly congratulated on his statesmanship during the past few days.

When I voted in favour of joining the European Commu nity in 1972, like so many other hon. Members I felt that, first, it was the only way to ensure that we would never again have to fight a world war in Europe. Secondly, I felt that it was the best means to create economic prosperity for all the members of the European Community. Thirdly, I felt that it was the best way to underpin democracy, and therefore stability, in Europe.

I envisaged a Europe that would be free of socialism and free of central direction; a Europe that would be outward-looking—something on which we need to focus our minds in this debate; a Europe that would be diverse in its strength, both at national and regional levels. I envisaged that Scotland, Bavaria and Catalonia, for example, would be as important a part of the Community as would co-operation at international level. I envisaged a community that would build closer co-operation brick by brick and step by step.

I exercised my right to vote in favour of the Community almost 20 years ago. Against the background that I have outlined, we should warmly congratulate my right hon. Friend and the Government on taking constructive steps forward at Maastricht last week. After all, there may be, as there should be, plenty of argument within the Community—there was at Maastricht—but arguing is far better than fighting, as we have done twice this century. The Government's approach was pragmatic and constructive, and that is badly needed in the Community.

The other aspects of the agreement should also be warmly welcomed. The Commission is to become more accountable and democratic—previously a failure in it that came about largely because Britain was not a member of the Community when the Commission was created. Now, we are taking steps to put that right. There are to be important new procedures for intergovernmental co-operation on law and order, crime, foreign policy and defence. Those are vital steps towards good progress within the Community.

With Britain's record, like that of Denmark, being good and effective on the implementation of agreements, the crucial decision was taken to introduce procedures to impose fines on those Governments who fail to implement them. The Community cannot develop effectively unless there is some understanding along those lines.

The Government demonstrated last week that we are fully committed partners in Europe. The old saying of Dean Acheson in the 1960s that we had lost our empire but not yet found a role has been reversed: we are part of the Community, and it would be unacceptable to think in any other terms.

The one issue on which I wish to speak is the international aspects of what happened at Maastricht. The lessons of the traumatic events of the last few months and years in central and eastern Europe and in other parts of the world show that we cannot impose unions, federations or more centralisation unless that is done democratically, peacefully and in a way that is acceptable to the people of the countries concerned. That is one quite clear lesson that we must learn. We know perfectly well that, when the lid comes off an imposed centralised regime or federation, it explodes, as witness Yugoslavia and many other parts of eastern Europe. Even in the western world, countries such as Belgium and Canada are under intense pressure. The process must be democratic and peaceful.

The lessons for the Community are that we must bring about the evolution of more co-operation by consent, pragmatic discussion and democratic progress. That is why the role of this Parliament is so crucial.

The second lesson to be learned from international events is that, in an unstable world, the Community must be outward-looking. It must be constructive in its foreign policy; and one way in which we can become more outward looking and helpful to the rest of the world would be to do away with some of the protectionism in the Community. Few things could be more important than the GATT talks, because if the world moves towards more protectionism, there will be dire consequences. The Community should take a lead, and one of the areas in which to do so is the common agricultural policy.

I welcome most warmly the emphasis that my right hon. Friend placed on the importance of enlarging the Community. The Government—it will be a Conservative Government—will have the presidency next year and will focus on the need to enlarge the Community and on the implications of such an enlargement. After all, the members of the Community do not constitute an island that can afford to turn its back on the outside world. We do that at our peril.

In a vulnerable world, we are secure within our boundaries while mayhem reigns in many parts of Europe. The best way to contribute to stability is for the European Community to adopt a positive policy towards eastern and central Europe so as to achieve a measure of stability for those countries through collaboration in trade and aid and by their eventually joining the Community on conditions acceptable to the Community.

Another priority for the Community is to focus on how, during the 1990s, other members can join—for instance, members of the European Free Trade Association that want to join and Hungary, Czechoslovakia and Poland. We must decide at what speed that should happen and what its implications for the Community will be. By the end of this decade, it is probable that at least 24 countries will be members of the European Community—a radical change.

We must always remember the lessons of that clay in 1938 when a former Prime Minister said that Czechoslovakia was a far-off country of which we knew little. We paid a heavy price for that, and the most important aspect of our work now is to embrace these countries as quickly as we can, at a measured speed, so as to contribute to stability in central Europe and——

Mr. Norman Tebbit (Chingford)

I share my right hon. Friend's view on enlargement. Does he think that the creation of a single currency among some or all of the existing Twelve would facilitate or make more difficult the process of enlargement?

Sir Richard Luce

We do not have to take a clear view on that at this stage. We can await developments in the next few years, when we have the freedom to decide what to do. We must accept that, if the Community is to grow, there will be different speeds and tiers of co-operation. That is why I welcome the fact that my right hon. Friend the Prime Minister is to take the lead in working out the implications of such a move.

I am glad that my right hon. Friend the Prime Minister believes that closer collaboration between the Community and central and eastern Europe is essential for the stability of Europe. We cannot escape that fact, and it should be the Government's mission to take a lead in helping to enlarge the Community and to assess the implications of doing just that. I congratulate my right hon. Friend on the statesmanship that he has shown. This is the right Government to lead Britain through to the next stage of the development of the Community.

5.14 pm
Mr. Paddy Ashdown (Yeovil)

I beg to move, to leave out from 'House' to the end of the Question and to add instead thereof: 'whilst welcoming the fact that the United Kingdom became a signatory at Maastricht to an agreement which represents an historic step towards a federal Europe, regrets that the Prime Minister, by insisting on opt-out arrangements for the United Kingdom on Economic and Monetary Union and the Social Chapter, rather than negotiating improvements, has left Britain semi-detached from Europe, obliged every citizen to pay a price for the divisions within the Conservative Party and damaged the prospects for Britain's long-term economic and political success.'. Although I am delighted that it is our amendment that will be called tomorrow, it is extraordinary that the Labour party has not been able to move an amendment to the motion. The hon. Member for Bolsover (Mr. Skinner) who is sitting in front of me has revealed the reason—it is the only course of action that can unite Labour Members in the Lobbies as they are as divided on this as the Government have been revealed to be.

Mr. Skinner

I am interested in the amendment moved by the leader of the Liberal Democrats as it mentions the Government's views on the social chapter. I heard the right hon. Gentleman on the "Walden" show a fortnight ago, when he instructed the Prime Minister to vote against the social chapter. Today he has tabled an amendment which states the opposite. No wonder they call him Paddy Backdown.

Mr. Ashdown

I assure the hon. Gentleman, whose intervention I know was made in a spirit of good will, that I shall come to that later in my speech—[Laughter.] I certainly will. He will then know precisely what we objected to in some elements of the social chapter. I do not wish to betray any confidences, but the hon. Member for Bolsover told us earlier that this fix among Labour Members was his work. He called himself the Earl of Warwick in this context—a strange earl indeed—but things have come to a pretty pass when cohesion in the Labour party has to be arranged by the hon. Member for Bolsover——

Mr. Skinner

I have done it many a time.

Mr. Ashdown

For the European Community, Maastricht marks a decisive and irreversible step towards integration and unity. It could have been a decisive moment for Britain, too: the moment when Britain decided to end 40 years of indecision and ambivalence—aspects which have dogged our policy towards Europe and done so much damage to our success as a nation. Maastricht could have been the moment when we learned the lessons of our past mistakes: first staying out of Europe, then having to join later, and ending up submitting to institutions and policies which had been shaped without us.

I was fascinated to hear the Prime Minister mention the need to reform the common agricultural policy. It certainly needs reform, and one of the reasons is that when it was drawn up we had opted out. Now we have to deal with the consequences.

Maastricht could have been the moment when Britain declared without qualification, once and for all, that our future belongs to a united and dynamic Europe. It could have been an historic week for Britain as well as for Europe, but it was not.

The most interesting part of the Prime Minister's speech was the unscripted portion, following the fascinating question by the right hon. Member for Chesterfield (Mr. Benn) about his agreement with the concept of a commonwealth in Europe. His only slightly qualified agreement with that model of Europe gave us an insight into the Prime Minister's mind, which for the past six months he has denied us in order to hold his party together. Now the Prime Minister's real vision—if that word is not too offensive to him—of the future stands revealed. In that moment he opened up the division between his view of Europe and that of the Foreign Secretary, who clearly does not feel the same way. He also showed his isolation from every other leader throughout Europe. That is his vision. But no other nation at Maastricht shared that vision. It is a classic example of the isolation into which the Prime Minister now wants to lead our country.

The Minister of State, Foreign and Commonwealth Office (Mr. Tristan Garel-Jones)

If that is so, why was the draft treaty text put forward by the Dutch—sporting what one might call "the other vision"—rejected by 10 of the 12 member states?

Mr. Ashdown

I know that the Minister has a different view from that which the Prime Minister has expressed on such matters. I invite him to read the Prime Minister's response to the right hon. Member for Chesterfield, which was far and away the most interesting part of the debate—[Interruption.] Amended text or not, it reveals the muddle to which the other 11 nations of Europe do not subscribe. It is a model towards which they are moving away from——

Mr. Skinner

What does that mean?

Mr. Ashdown

It is a model away from which they are now moving. They are moving towards increasing integration and increasing unity. That part of the Prime Minister's speech will he studied carefully because it reveals his intentions, although I do not believe that they are shared by the Minister.

The Prime Minister declared again today that Maastricht was a good deal. Maybe it was a good deal for the Conservative party, but it was a very bad deal for this country. Every citizen in Britain in due course—in my judgment, it will be sooner rather than later—will pay a real, direct and personal price for what the Prime Minister negotiated at Maastricht. People will pay first in higher mortgages, lost jobs and diminished economic opportunities because of the uncertainty caused by the opt-out clause on the single currency. That uncertainty means higher interest rates if the pound comes under pressure and has to be supported again. It means more doubtful inward investment. Whatever comments were made in the heat of the negotiations at Maastricht, there can be no doubt that those who wish to invest in Europe will want to invest in countries that will be part of the economic and monetary union and not in countries outside it. It will mean more doubtful inward investment at the very moment when this country needs such investment most, as we come out of the recession. It means the end of any realistic possibility of bringing the new European central bank to London. It means that London's position as Europe's main financial centre has been weakened and that that of Frankfurt has been strengthened.

Mrs. Currie

I wonder whether the right hon. Gentleman has read last week's edition of The Economist, which investigated which European Community countries conformed with the convergence conditions set in the treaty. The right hon. Gentleman is worried about uncertainty, but is he aware that the United Kingdom is already included in four of the five lists of items which create convergence and that only the fifth—the narrow band of the ERM—separates us? We are a lot closer than Germany, Italy and the vast majority of the Community. Where is the uncertainty in that?

Mr. Ashdown

I am grateful to the hon. Lady because she makes the point that I was coming to. In those circumstances, why on earth stay out? The hon. Lady is right—the tragedy is that Britain is one of the few member states which could have met the convergence conditions of the EMU almost immediately. This country has paid a high price for that in lost jobs, lost homes and bankrupt businesses because of the effects of the Government's economic policy. The Government now risk throwing it all away because of the conditions to which the hon. Lady referred. Instead of playing a leading role in the new monetary union, we shall be semi-detached from it—robbed of our full chance to shape its institutions, suffering economically because of the uncertainty, and condemned always to follow monetary union, never to lead it. That is what the uncertainty created by the Prime Minister's opt-out will cost us.

That uncertainty would continue under Labour. We have studied the Labour party's recent pronouncements and we now know that Labour proposes to renegotiate the whole deal. In last Friday's edition of The Times, the shadow Foreign Secretary stated that Labour would "review" the role and powers … of the European Commission … work for conditions to make … the single currency … possible and attractive". By the by, those conditions are wholly unacceptable to our partners and would destroy the whole purpose and form of a central bank. The right hon. Member for Manchester, Gorton (Mr. Kaufman) also said that Labour would "negotiate … for revision" of the social protocol. Come back Harold Wilson—all is forgiven. The Tories would like to repeat the mistakes of the 1950s, while Labour are determinted to repeat the mistake of renegotiation in the 1970s.

The second way in which Britian will pay for the deal is in lost influence in Europe. At Maastricht the Prime Minister reinforced Britain's wretched reputation as the chief roadblock of Europe. We are not the partners who must be consulted—we are now the obstacle around which the rest of Europe must find a way. Other member states bypassed us on the single currency by giving us an opt-out, for which the Prime Minister had to pay at Maastricht—and for which the British people will have to pay even more in the months ahead—and they bypassed us on the social chapter by simply going ahead without us.

The rest of Europe will now construct the social institutions of Europe with Britain excluded—but we shall not be excluded from being influenced by what they do in the short term. No doubt we shall, once again, want to join them in the end. Britain proves yet again that those who will not learn the lessons of history are condemned to repeat the mistakes of history. That is exactly what we have done twice before in this half century.

As is well known—the hon. Member for Bolsover has referred to this—the Liberal Democrat party was not content with all the provisions in the social chapter of the Maastricht drafts. For the benefit of Mr. Ian Aitken and The Guardian, and others, our objection was not to the social charter which was, of course, not even under discussion at Maastricht—although the Leader of the Opposition did not seem to know that. Our objection was to elements of the social chapter in the treaty——

Mr. Skinner

That is not what the right hon. Gentleman said to Walden.

Mr. Ashdown

That is exactly what I said both then and subsequently. Article 118/3 of the social chapter opens the way, as the Prime Minister said, to European-wide collective bargaining. In Britain, we have moved away from such arrangements. They are wrong for this country's future and contrary to this party's belief in decentralised wage bargaining. Again, the Leader of the Opposition seemed not to grasp the fact that, in article 118B, the social chapter provided for circumstances in which, if European businesses and trade unions agreed, they could take Europe-wide action through the Council without reference to the European Parliament, let alone this one. That is simply inimical to this party's commitment to a democratic, powerful and responsible European Parliament. Fortunately, both those clauses enjoy the protection of unanimous voting or could be changed when they came to practical application into law. However, we would have wished to see those clauses altered. Indeed, they could have been altered if the Government had not wasted their bargaining power in attempts to defend the indefensible, attack the trivial and obtain the illusory.

Therefore, when it came to the social charter, when we really would have liked to influence events, Britain was left with no negotiating power, few friends and only one course of action—to opt out of the social dimension altogether. That was not game, set and match for Britain; it was a lousy piece of negotiation which left Britain on the sidelines of Europe.

Perhaps more regrettable is the fact that a real opportunity has been missed. If there is one area in which Britain is ahead of Europe, it is in the liberalisation of our markets and the dismantling of the systems of the corporate state. At present, our partners in Europe tend to follow an old-fashioned prescriptive approach to social policy. That is very familiar to the Labour party. Labour Members like the idea that one can formulate the blueprint in Brussels and hand it down to be followed in every corner of the Community. That is the kind of approach that they would like to have again at Westminster. It is, however, an approach that failed in the 1970s, and one that will not work in the 1990s. It is too inflexible, too costly, and too rigid.

We need not a "blueprint" approach but an "entitlements" approach to rights at work and in society. Europe should be built around the concept of European citizenship, with each citizen entitled to certain defined basic rights—political rights, rights of ownership, rights at work and social entitlements. It is for the European institutions to define those "floor-level" rights, but it is not for Brussels to say how they will be observed. It is up to each individual state and each individual workplace to decide that for itself—subject, ultimately, to the decisions of the courts.

Incidentally, if our Government really believed in the principle of subsidiarity, they would have ensured that decision-making would be decentralised within the United Kingdom as well as within the Community. The new treaty tells us that decisions will be taken as closely as possible to the citizens". I say "Yes, please—and why not start in Scotland and Wales?" The third great deficiency of the Maastricht treaty—again one that Britain, to its discredit, helped to create—is its entirely inadequate response to the democratic deficit in Europe. Here is the Government's big lie: the claim that an increase in the power of the European Parliament would mean a decrease in the power of the Westminster Parliament. Nothing could be further from the truth. The truth is that in European affairs it would be difficult to diminish further the power of this Parliament.

Our Parliament does not hold the Commission to account. We do not even hold our own Ministers to account. We do not scrutinise European legislation properly; indeed, we allow the Executive to carry on very much as it pleases. That is the democratic deficit. We need the European Parliament to repair it, but in that regard the Maastricht treaty has comprehensively failed.

The European Parliament remains far too weak. In the end, it will have to be strengthened to play a full democratic part in the Community. In the end, we shall have to ensure that all laws passed by the Council must also be passed by the Parliament. That is what co-decision, democracy and accountability actually mean.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

I agree that it is important for our Parliament to examine EC legislation closely. The House has two very effective European Committees, but there seems to be an astonishing dearth of Liberal Democrats prepared to sit on them, although they have the right to do so.

Mr. Ashdown

That is a perfectly reasonable point. I will explain the position. As there are only 20 Liberal Democrats in the House—although we are supported by 23 per cent. of the electorate—it is impossible for my colleagues and me to involve ourselves in all the work of the House.

Until the European Parliament is strengthened, the events about which the Government and the European separatists most like to complain—those brought about by an interfering and inappropriate Brussels—are likely to continue, because the Government missed the opportunity to make the Community more democratic and accountable. Perhaps that is what they want, but it is not good for either Britain or Europe.

Mr. Harry Barnes (Derbyshire, North-East)

Will the right hon. Gentleman give way?

Mr. Ashdown

I think that I have already given way a reasonable number of times.

Fortunately, we in this Parliament have never seen Maastricht as an end. We have always seen it as a milestone on the road to closer integration and closer unity. There are those in the House who pretend that that is not so. The Prime Minister, to appease members of his own party, pretends to be one of them, but he knows the truth. He knows that, although Maastricht may mark a watershed in the process of integration, it does not mark the end of the process. With or without Britain, the rest of Europe will continue along the road.

Of course, we cannot be certain that Europe will succeed. There are huge problems—economic, historical and social. Perhaps those problems will ultimately prove too great. Perhaps Europe's leadership will prove too weak. Perhaps the essential task of bringing in the new democracies of eastern Europe will founder on economic collapse, ethnic unrest and social upheaval. I am certain of one thing, however: we must do all in our power to ensure that none of that happens.

Europe cannot stand still. There is no refuge for us in simply maintaining the level of integration at which we have now arrived. If Europe does not go forward, it will start to go back—back to a Europe given to confrontation and not co-operation, back to a Europe where Germany exploits its economic power and its position as broker between east and west, and back to a Europe where instability in the east is matched by impotence and indecision in the west. That cannot be in any of our interests, especially at this time.

Ministers pride themselves on their attention to detail, but I ask them to lift their eyes and survey a broader picture. They should look at the Europe that will exist in five or 10 years' time, at a Community with 18 or 20 members and perhaps even more, and at the interests that we have in common—security, defence, foreign policy, the environment, prosperity and peace in the world. That Europe must be more united, more effective and more far-sighted. It will view the events of Maastricht as important, but as yesterday's agenda, and it will marvel at the failure of countries and their leaders to grasp the opportunities for progress.

I am certain of something else, too. It is in Britain's interest for us to be at the heart of that Europe—where the Prime Minister said that he wanted us, but where he signally failed to put us at Maastricht. We should be helping to shape the democratic institutions on which Europe will depend. We should be providing leadership in the new economic institutions that Europe will need. We should be making available our experience of world affairs, which will be essential to the outward-looking Europe that we must create.

That was the opportunity that Maastricht could have given us. The Prime Minister failed to grasp that opportunity. He put the short-term interests of the Conservative party before the long-term interests of this country. Sadly, Maastricht represents the third occasion in half a century on which Britain has been given the chance to face its European future and, I regret to say, the third occasion in that time on which we have chosen to seek refuge in the past. For that failure the country will, in due course, pay a heavy price.

5.37 pm
Mr. Nigel Forman (Carshalton and Wallington)

I pay warm tribute to the Leader of the Opposition for his fine debating speech. His debating technique, however, disguised some fatal flaws and internal contradictions in Labour policy. Not the least of those was highlighted capably by my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), who pointed out that, if the right hon. Gentleman was to achieve any of his aims in regard to European monetary union and convergence, he would be required to support policies that would inevitably increase the country's tax burden considerably.

The right hon. Member for Yeovil (Mr. Ashdown), the leader of the Liberal Democrats, presented what appeared to be a coherent policy on Europe. He has adhered to that policy consistently for several years. I feel, however, that it takes insufficient account of the natural caution and pragmatism of the British people, which was admirably reflected in the negotiating approach of my right hon. Friend the Prime Minister and his colleagues in the Cabinet.

I congratulate my right hon. Friends the Prime Minister, the Foreign Secretary and the Chancellor on their negotiations leading up to Maastricht and at the conference itself. Their approach was in great contrast to what might have been the position had the official Opposition been in government. In case the House doubts the substance behind that view, it has only to consider a Gallup opinion poll that appeared recently in The Daily Telegraph. It showed that by a ratio of 2:1 the electorate preferred to have my right hon. Friend the Prime Minister in charge of the policy than the Leader of the Opposition. Liberal Democrat supporters shared that view by about 4:1. Clearly, the British people know when the policy is in safe hands.

Looking back, we can see that the Maastricht summit was the culmination of a long process—a significant stage in the development of the European Community. It was the stage at which the 12 member states did a good deal more to clarify their long-term goals. I am referring particularly to European monetary union with a social dimension, coupled with aspirations towards European political union which, as can be seen from the debates that we have had in the House and those on the continent, means many different things to many different people. It was also the stage at which the Twelve addressed the critical questions of structure and procedure for the future development of Europe: whether the Community and Europe as a whole wish its design to be more or less monolithic, whether it wants to be more or less supranational, whether it wants to have more or less qualified majority voting and more or less jurisdiction for the European Court of Justice.

Mr. Nicholas Soames (Crawley)

Does my hon. Friend agree that the pillared structure that has been negotiated by our right hon. Friends is more likely to provide the sort of flexibility that the institutions will need, bearing in mind that Europe is standing, to some extent, on shifting sands and that none of the situations extant in the 1950s, at the birth of the Community, remains the same today? It may be that there will have to be extensive changes in those institutions in the years to come.

Mr. Forman

I agree with my hon. Friend, but I go further. The 1990s provide a great opportunity for Her Majesty's Government to demonstrate to our Community partners the validity of the new hybrid approach that the Government have pioneered.

It is interesting to note that, in attempting to answer the questions at Maastricht, most of our Community partners said that they wanted to go faster and further forward. The Government correctly understood and successfully argued that in most of the new areas of competence the approach should be largely intergovernmental—as was suggested by my hon. Friend the Member for Crawley (Mr. Soames)—thus introducing a greater element of flexibility into the future institutional arrangements of the Community. That must make sense in the policy areas to which my right hon. Friend the Prime Minister referred—foreign policy, security and home affairs. We now have the opportunity to demonstrate in practice that our more hybrid approach is better suited to the needs of the next decade.

The new methods of European co-operation will prove increasingly relevant and useful in the enlargement of the Community, which will carry on apace from about the mid-1990s and—this has not yet been mentioned in the debate—in the awakening of public opinion in France and Germany where they are beginning to realise some of the implications of what their political leaders have signed. On the eve of 1992, we must encourage our partners to focus in sensible ways on the real challenges of the coming 10 years. What do I mean by that?

Sir Russell Johnston (Inverness, Nairn and Lochaber)

Does the hon. Gentleman agree that the intergovernmental co-operation which was a characteristic of the European Free Trade Association was not successful? To suggest that that is the way forward for the future must be objected to by the fact that Sweden, Austria and the EFTA countries now want to join the supranational Community.

Mr. Forman

I do not agree with the hon. Gentleman, but I understand his point from an historical perspective. However, the Community has always had variable depth in its integration—in some areas it has been deeply integrated and in others there has been shallower integration. It is appropriate that the areas of policy now being pushed forward on an intergovernmental basis should be done in that way because that is how we carry with us consent in our national Parliaments and public opinion.

The programme for the next 10 years should be based on a clear recognition of the need for an early enlargement to include the aspiring EFTA countries, to which the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) referred, and the three central European countries—Poland, Hungary and Czechoslovakia—to the east of the Community. That would make irreversible the shift to democracy, market economics and social pluralism in the former communist states. In its wisdom, the Community felt able to do that for the Iberian peninsula a few years ago and it would be right and proper for it to do something analogous for the central European countries.

I hope that the Community will concentrate on providing within its borders only those things that it does best—a common legal framework for a large liberal market economy with a social dimension. That is the formula and it is what I believe will prove most successful.

In so far as it is necessary to have new political institutions, the Community should cherish rather than threaten the rich diversity of nations and regions within it.

On external relationships, we must use all our influence within the Community to see that it is not just a magnet for new members, which it clearly is already, but an influence for global free trade and payments. If the Community can take constructive and urgent action, as my right hon. Friend the Member for Shoreham (Sir R. Luce) said, to bring the Uruguay round of the GATT negotiations to a successful conclusion, it will have done something of value for its members and the global economy generally. Assisting with the creation of a viable payments union in the area that used to be described as the Soviet Union would be the single most important contribution that the Twelve could make to that unstable and dangerous part of the world. By stabilising that part of the world, we would be making our contribution as a building block to better world monetary arrangements which will be important once the ecu is a means of exchange and a currency that can look the yen and the dollar in the face.

As my right hon. Friend the Prime Minister has said many times, we should work as hard as we can in the heart of Europe to lead our partners away from the cause of Euro-dirigism and Euro-protectionism, which if allowed to develop under the influence of Madame Cresson and such people would render the entire Community less competitive in global markets and blight the prospects of the developing countries to the south and east of the existing Community.

Once we have incorporated the Maastricht treaty into our law—presumably, as my right hon. Friend the Prime Minister said, in the first Session of the new Parliament—we must press on in the second half of 1992, when we have the presidency of the Community, to set out more clearly our vision of a common European future. In this brief speech, it is not appropriate for me to attempt that task but I shall give the House three examples of the sort of arrangements for which the Government should press in the second half of 1992 when we have an opportunity to carry them forward.

We should encourage a growing body of Community practice that builds upon the excellent subsidiarity article 3b in the Maastricht treaty. That is critical and I am delighted that it has found its way into the treaty with powerful German support. At a future review conference—such conferences will occur every few years in the Community—it might be desirable to go even further and press for a clause in the Community body of law that makes it crystal clear that all powers that are not specifically allocated to the Community should remain as of right with the member states, as is the case in the American constitution.

My right hon. Friend the Chancellor and his counterparts ably negotiated amendments in the documents on economic and monetary union. I should like to see Her Majesty's Government using all their influence in an attempt to ensure that article 104A is implemented to the letter. For hon. Members who are not conversant with every last article, that is the guarantee of a no-bail-out rule, which is important if we are to contain the development of economic and monetary union to sensible proportions. It will be vital if we are to ensure our objective of developing a European monetary union while retaining the bulk of fiscal powers unadulterated in national hands—in the hands of national Governments and Parliaments, where they should remain.

I was struck by the words of Graham Bishop of Salomon Brothers in a recent publication on the importance of the no-bail-out rule. He said: The purpose of the rule is clear: It is the circuit breaker between monetary union and the back-door creation of a 'United States of Europe', where a centralised government takes control over domestic public expenditure as the price of a bail-out. If the rule is credible, EMU should involve only the lightest fiscal interference when budgetary policies are sound, because the debt of EMU members will be of the highest grade. If we achieved such development of economic monetary union, we would be doing it on a sound basis.

I strongly welcome the text that was negotiated at Maastricht on the European system of central banks in stage 2 and the European bank in stage 3. Article 2 stresses the primary objective of price stability and article 7 enshrines the guaranteed independence of the European central bank. The full benefits of price stability and statutory independence for the European central bank, and indeed for the Bank of England—that must be a necessary institutional corollary—will be enjoyed only if a future Government and Parliament agree in good time to adopt a single European currency. In today's European capital markets, the freedom of exchange rates, to which some of my hon. Friends are so attached, means only the freedom to devalue—a course of action that would prove to be as futile as it is nugatory in modern conditions.

In a recent article in the Financial Times, Sam Brittan pointed out quite succinctly: At present the UK already has, as a member of the hard ERM, most of the obligations of a single currency without all the advantages. There would be little to be lost from going the whole hog. I agree with him, and there would be much to be gained at the appropriate time. The full benefits of a single currency will come through, which will benefit Britain and the entire Community.

I hope that the Government will draw the logical conclusions and lessons from their earlier correct decisions and lead this country forward, at the appropriate time, to a single currency and ever-closer union of the peoples of Europe.

5.51 pm
Mr. Denis Healey (Leeds, East)

People have short memories, and it may be useful to remind the House that in 1972 President Pompidou announced on French television that there would be a European common currency by 31 December 1980. The Werner plan, from which that prediction was drawn, was wrecked by events outside Europe—the Nixon shocks and partly the effects of the OPEC increase in the oil price—but no hon. Member seems able to recall that it ever existed.

Maastricht could suffer the same fate. I agree with hon. Members who have said that it may prove to be a major step towards the valuable goal of greater unity in Europe, but let us face the fact that it changes nothing in today's world. The summit did not even attempt to close any of the yawning gaps in the single market, which must come into effect at the end of next year. It simply agreed a timetable for producing a single currency by, at the latest, 1999— with or without Britain. Even in this area, nothing significant will change in the real world until phase 2 of European monetary union takes effect in 1994—more than two years from now.

I want to start by asking what are the risks that the Delors plan—the origin of European economic and monetary union—will suffer the same fate as the Werner plan did 20 years ago. Let us remind ourselves, as the Prime Minister wisely did in his opening speech, that the Maastricht treaty does not come into force for more than 12 months—at the beginning of 1993—and only if every one of the 12 Governments who initialled it get it ratified by their Parliaments. The real debate is only beginning. As the Prime Minister said, only the British and Danish Parliaments have considered European monetary union, as it is now defined, or European political union.

If we look at the initial response to Maastricht, the omens are not wholly encouraging. There is growing opposition in Germany to giving up the deutschmark without any real return in political union, which Chancellor Kohl had said was a precondition of moving to a single currency. I see from today's Financial Times that a leading member of the board of the Bundesbank said yesterday that the Maastricht summit was a failure and might prove to be "a suicidal failure"—serious words from a key member of the body that drew up the detailed proposals for European economic and monetary union.

I cannot resist the feeling that the Government's extraordinary surrender yesterday to German bullying over the recognition of Croatia had something to do with the need to appease German public opinion, which is turning nasty on the whole process—or perhaps it was just sucking up to the right hon. Member for Finchley (Mrs. Thatcher), who has succeeded in abandoning her resistance to German blandishments and has formed a common front with Chancellor Kohl in demanding the immediate and unconditional recognition of Croatia. But then, it is, of course, a funny old world.

French ratification is little more certain, because the extreme right, under Le Pen, is campaigning hard against what it inelegantly calls the "federasts" of the European movement. Le Pen may succeed in winning allies on this issue from the more moderate right wing, as he already has on the issue of immigration and race in France, which is a depressing prospect.

The ratification of the Mediterranean countries is no more certain. The Spanish Prime Minister has already said—it was said also by the Portugese at Maastricht—that their ratification will depend on more money for what is called cohesion and structural funds. They are talking of sums far higher than France, Germany or Britain seem prepared to provide. I am interested to see that the Minister of State, Foreign and Commonwealth Office, with his deep knowledge of the Spanish people and countryside, seems to agree with me on that.

But the biggest challenges to Maastricht will come, as they came to the Werner plan, in developments outside the European Community. It is clear that almost all the European Free Trade Association countries, except perhaps Iceland, will want to join the Community. They will probably all be members well before 1996, which is the earliest date for phase 3 of EMU. That will mean an enormous shift in the centre of gravity in Europe towards the north—something that we in Britain should heartily welcome, because on many issues, our approach, or at least, that of Labour Members, has much in common with the countries of northern Europe.

If things go well, it seems that, certainly by the end of the century if not by the earlier date of 1997, it may be possible to form a single currency to which Germany, France, the Benelux countries, Denmark and the EFTA countries will belong. In such a case, it seems inconceivable and well nigh insane to imagine that Britain would stand out. All of us must have been deeply disturbed by the Chancellor's refusal to answer the question this afternoon—yes, we agree that Parliament must take the final decision, but what decision will he recommend in those circumstances?

Mr. Giles Radice (Durham, North)

He does not know.

Mr. Healey

He knows very well, because he is against a single currency in principle, like his predecessor, the right hon. Member for Blaby (Mr. Lawson), who clearly expressed his views—which, I think, are shared by the present Chancellor—in an article in one of the tabloid newspapers. I believe it was the Evening Standard.

Mr. Radice

My right hon. Friend referred to the Chancellor's views but, when we asked him that question in the Select Committee, it became clear that he was not so much against it in principle as uncertain in his own mind what he should do.

Mr. Tony Banks

Sounds like a Liberal.

Mr. Healey

He does sound like a Liberal, but I do not like to explore the murky recesses of the Chancellor's mind. However, I must confess that his failure to give an answer—even that answer—to the question this afternoon was very significant.

The EFTA countries are not alone. I agree with all the right hon. and hon. Members who said—I think that almost all who have spoken so far made this point—that it is very important to give Czechoslovakia, Hungary and Poland the prospect of joining the Community at least by the end of the decade, and to give them every possible assistance in meeting the economic and political conditions for membership as soon as possible.

Of course, that will mean a big shift of gravity inside the Community to the east. By the end of the decade, power will have shifted to central and north-east Europe from its present location, which I suppose is somewhere between London, France and Rome.

Mr. Tony Marlow (Northampton, North)

And Berlin.

Mr. Healey

I accept that, although I gather that even the German Parliament is deeply divided on how much of it and how much of the Government should move from Bonn to Berlin.

I think that the biggest challenges to the Maastricht process will come, as they did before, from outside Europe. The United States is clearly already becoming much more self-centred. If, partly because of Europe's obduracy over the common agricultural policy, the GATT talks break down, the process of disengagement from external responsibilities may move very much faster than anyone expects or hopes, both from Europe and from the west Pacific area.

The most important single factor is the disappearance of the Soviet Union from the world stage. Lenin, who does not often get a kind word these days, was right in at least one of his prophecies. He prophesied that the triumph of communism would lead to the withering away of the state. I do not think that anyone has ever seen a state wither away quite as fast as the Soviet state has in recent weeks.

However, the disappearance of the Soviet Union will have very disturbing consequences. It has been replaced by a commonwealth of independent states. If, as I believe, NATO is a biological monstrosity because it is an organ without a function, the commonwealth of independent states is a political nightmare because it is a function without an organ. It has, at the moment, absolutely no institutions through which to express itself.

It is worth remembering the lessons—even the recent lessons—of history. The disintegration of the European empires after the last war was followed by 45 years of armed conflict in the ex-colonies, in which 20 million people died in the far east, in the Indian subcontinent, in the middle east, in Africa and even in the Caribbean. All those factors are likely to be at work now that the Soviet empire has disintegrated.

Even worse, the European empires at least left behind them working administrative structures and moderately healthy economies, which meant that most of the ex-colonial countries have managed to maintain stable states and thriving economies—although, of course, not thriving as fast as ours in the west—but the Soviet empire is leaving no administration at all, only economic catastrophe.

It is often said that it is not very easy to turn an omelette back into eggs. Since the perestroika process began, the Soviet economy has followed a steady course downwards, and there seems no prospect at the moment of it reversing that process. We shall all be watching the success of Mr. Yeltsin's programme to form a judgment on it, if it is introduced in January.

If economic catastrophe is added to the political disintegration, the consequences for Europe could be dire, not only in terms of the millions of refugees who are already predicted, but possibly through the sale of nuclear weapons to any body of people or any Government in the third world or elsewhere who have the hard currency to pay for them.

I do not believe in a nuclear civil war in the Soviet Union—I think that Nazarbaev and Krawczuk want to hang on to their nuclear weapons as a defence against a Russian attack. I do not think that they have any intention of using them—nor have the Russians—but the risk that, as the system disintegrates, people may simply sell off the smaller nuclear weapons is a real one. I was glad that that was recognised by Mr. Baker on his recent visit to the Soviet Union. They pose enormous threats to western Europe and more immediate threats to eastern Europe, but there is still no obvious way in which the west can help to avoid the consequences until there is at least some clarity about where authority lies in the Soviet Union.

I agree with the hon. Member for Carshalton and Wallington (Mr. Forman) that by far the most useful thing that we could do in the short run would be to fund a payments union among the commonwealth of independent states so that they could at least have a currency in which to trade with one another.

Against that background—I doubt whether many hon. Members would dispute the dangers that I have outlined—the argument about who won at Maastricht is pitifully irrelevant. Maastricht was not a triumph for any Government, although each of the Governments present claimed it as one. Least of all was it a triumph for the British Prime Minister. I was interested to see that the Financial Times and The Spectator picked the same phrase—they described it as a "pyrrhic victory".

The Prime Minister has, of course, produced some novel marriages, some very strange bedfellows. The previous Prime Minister, the right hon. Member for Finchley, said that she was "thrilled" by the Prime Minister's success at Maastricht. My dear friend—if I may so describe him—the previous Foreign Secretary, who resigned from the right hon. Lady's Government over Europe, was equally thrilled, although he did not express himself—he never does—in quite such colourful language. To complete that glorious trinity, my right hon. Friend the Member for Chesterfield (Mr. Benn) joined the throng during the debate.

I do not think that there is much for us to be proud about in the fact that the Prime Minister has relegated Britain to a second division of countries that can survive only by having low pay because they have low skills. Obviously, he sees Britain as the sweatshop of the world—he almost said as much—and, if we are unlucky enough to find him in office for more than a few more months, we may find ourselves taking the place previously occupied by the Soviet Union, as Upper Volta with rockets.

The only significant critic—I use the word "significant" with meaning—is the right hon. Member for Chingford (Mr. Tebbit) who, in spite of everything that the Whips can say to him, apparently still intends to vote against the Government tomorrow. The right hon. Gentleman glares, or rather stares impassively, at me. He certainly did not shake his head, but then, as the right hon. Member for Old Bexley and Sidcup (Mr. Heath) said, he is a "ghastly man."

Perhaps more worrying for the Government is the attitude of the Secretary of State for Trade and Industry, who was reported by a most reliable gossip columnist called Peterborough in that impeccably Conservative newspaper The Daily Telegraph as saying that it would have been better if there had been no deal at all. I suspect that the Prime Minister and the other Ministers would agree with our great national poet, William Shakespeare, that Lilies that fester smell far worse than weeds. The time has come for the Prime Minister to stop playing Conservative party politics with the issues and to rise to the real level of the challenges that confront us in Britain, everyone in Europe and, indeed, every inhabitant of the planet.

I realise that, if someone is driving a car, and sitting behind him is a lady with a handbag and a man with fangs, he may feel it wiser to drive in the slow lane. My advice is that he should pull into a lay-by, turf the others out and then hand the wheel over to firmer and safer hands.

Hon. Members

Hear, hear.

Mr. Deputy Speaker

Mr. Hugh Dykes.

6.13 pm
Mr. Hugh Dykes (Harrow, East)

Such was the ringing applause for the speech of the right hon. Member for Leeds, East (Mr. Healey) that I did not hear you call my name, Mr. Deputy Speaker, but I am grateful to you, and also to the right hon. Member for Leeds, East. The applause rang through the House. The right hon. Gentleman gave his usual vintage performance, with many justified facts and views, and it was warmly received in all parts of the House, not only for its humour but for some of his more sombre comments about the present ominous geophysical appearance of Europe.

That, too, reinforces the lesson and message of the significance of the Maastricht summit—that greater cohesion and unity of the European Community is even more indispensable for solving its own internal economic, social and political problems and those of the rest of Europe as well.

As chairman of the European Movement in Britain, I am gratified to observe that a treaty which I would describe as extensive and profound has at long last been signed.

Members of Parliament and the British press have, understandably, been preoccupied with the matters about which the Government decided—with some justification, although that is a matter for debate—that there should be hesitation. The two key areas were final acceptance of the European monetary union agreement and the Government's resistance to many of the suggestions in the social programme of the additional treaty—those were not the original social suggestions in the social action programme.

However, the press in the other European member states rightly concentrated on the long list of measures that were agreed and signed in the Maastricht treaty. There has been less debate on those here, and I guess that over the two days of the debate there will still be less. Paradoxically, I shall share that omission, refraining deliberately from referring to those many matters in order to keep my speech short. Nevertheless, they represent a considerable achievement by all the member states.

The Bundestag had a debate on those matters last Friday. Although I have read only a summary of the one-day debate and not the full text of all the speeches, I believe that my impression is correct that the British hesitation over the two key areas was hardly referred to at all. The House of Commons, understandably—again, with some justification but not with total justification—will assume that for the other member states the double hesitation by the United Kingdom was the crucial aspect of the agreements at Maastricht, but it was not. For the Community as a whole, the Maastricht agreement and all its areas—including the social provisions, which the others will accept outside the treaty on the basis of a separate protocol to be agreed in a few months' time—were the significant aspect.

Given the Community's capacity to help other European countries—not only the successful ones who now wish to join, and are already beginning to apply, but the east European countries, with all their problems—it is extraordinary and perverse to suggest that there should be greater disunity in the Community at the very moment when greater aid and support is called for.

I was impressed by the way in which our Cabinet colleagues and other members of the team—the distinguished presence of the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Watford (Mr. Garel-Jones), prompts me to add his name—negotiated successfully on behalf of the United Kingdom. I suppose that this is a small matter to mention, but allowing for a slight extension to the 24 hours of the second day, the negotiation was completed more or less in the time allotted—a remarkable feat and a testimony to the profound drafting and negotiating skills of many of the member states and many of the governmental teams. We should also pay tribute to the Dutch presidency.

Mr. Soames

Does my hon. Friend agree that when such councils involve constitutional amendments to the treaty as well as, as always, substantial business for the Heads of Government to transact, some new formula should be produced whereby meetings could be scheduled for a longer period? The agenda was in every respect unreasonable for the time allowed and it is remarkable that what was achieved was possible at all.

Mr. Dykes

That is a good point, and I agree with my hon. Friend. Indeed, an original idea suggested informally by several people a long time ago was that there could be a two-day preliminary meeting, and then a two-day summit of the European Council. My hon. Friend was correct, too, in the implication of his remarks, in that due to lack of time or the natural delegation of functions, the European Council, the Council of Ministers and various other councils more and more frequently ask for Commission reports and proposals on matters. As a result, the Commission—still with 8,000 officials, who may be well paid but are nevertheless overworked—is dealing with more and more material not only initiated by itself in its legislative function of making proposals, but increasingly at the request of the politicians in the European Council. It is a double problem, to which my hon. Friend the Member for Crawley (Mr. Soames) has rightly referred.

Although many keen Europeans in this country and a significant and growing number of people outside, not only the younger generation, will naturally be disappointed that the Government chose to refrain from full commitment in two key areas, the long list of developments that were agreed is immensely encouraging. Although it may not seem much in terms of substance, part two of the treaty which deals with European citizenship raises the intriguing idea that in the one member state in which there is not a written constitution we now gain access to the treaty additions and to the written constitution which already exists in the Community. We also gain access to all the protections that will flow from that. There is also the future possibility of building some of the elements of the European convention on human rights into specific treaty additions of the European Community.

An antediluvian handful of hon. Members, many of them retiring at the next election, are not keen on these matters, but they are a diminishing and insignificant number. There is a substantial consensus in the House for deepening the European Community, which came from the Maastricht agreements. [Interruption.] I was not referring to my right hon. Friend the Member for Croydon, South (Sir W. Clark). I know that he is retiring, but he need not be too sensitive. I was referring to other more prominent hon. Members. My right hon. Friend has always had his views on the matter, whereas other colleagues have changed their minds more frequently. I respect my right hon. Friend's views on these matters.

The direction towards a true and profound European union is welcome and inexorable. It is inescapable because——

Mr. Tony Favell (Stockport)

Will my hon. Friend give way?

Mr. Dykes

I will not give way at the moment, although I may later.

Mr. Favell

My intervention may be helpful.

Mr. Dykes

I will not give way, although it is tempting to do so.

The whole process is inescapable precisely because more and more people want it to be so. We may say, "Eat your heart out" to Norman, to Peter, to William, to Austin and to others, if I may use just first names. A growing number of the population, not just the younger generation and not only because of the superficial conversion of the Labour party, want that process. They want Europe to become one entity and they will rapidly reject the national frontiers of the European member countries, which are now losing their residual relevance. Socially, economically and in human terms, the citizens of the Community are coming together. That is the unstoppable reality.

Mr. Marlow

Never mind the detail.

Mr. Dykes

If I had time to go into detail, as my hon. Friend the Member for Northampton, North (Mr. Marlow) urges, my speech would be far longer and other colleagues would not be able to speak later.

The pre-economic and monetary union full convergence measures are more severe in their final outturn than was anticipated several years ago when the whole debate began. We must be realistic about that. As time goes on, many of the economic and financial conditions may change significantly and the final stage of the agreement will need to be—[HON. MEMBERS: "Fudged."]—not fudged, but agreed in concrete terms on a rather different basis.

Although the United States economy is embraced by a single currency, and although many harmonised conditions conceal the differences, one wonders how much real internal convergence there is between the economies of Illinois, Texas and North Dakota—probably far less than there seems. The internal rates of inflation of the different states are far greater than we think, but there is no way of measuring that because of the existence of a single currency. The same will happen in Europe as stage 2 of the European monetary system gets going.

Nothing less than the aim of a full conglomeration of the living and working conditions of all European Community citizens—who will remain patriotic citizens of their own member states—will satisfy most citizens and electors in the various countries as their own national elections occur and as the European Parliament elections occur. I do not share the view that there has been a limited addition to the powers of the European Parliament. I believe that the extra powers will evolve into a significant additional step.

Mr. Favell

My hon. Friend paints a vision that does not exactly fill me with glee. There will be another conference in 1996. Will my hon. Friend crystal ball gaze and tell us what he expects will happen there?

Mr. Dykes

To which aspect of the conference in 1996 does my hon. Friend refer?

Mr. Favell

Presumably we shall go further towards the vision that my hon. Friend has. Where does he expect us to be after the 1996 conference?

Mr. Dykes

It will be best if my hon. Friend succeeds in catching your eye, Mr. Deputy Speaker, so that he can deal with those matters himself.

Mr. Harry Barnes

Will the hon. Gentleman give way?

Mr. Dykes

I will not because I am aware of the time and I wish to be fair to other hon. Members. Although our debate today will continue until 2 am, there is a long list of hon. Members who wish to speak and I promised to be brief.

The difference between pre-Maastricht and post-Maastricht is potentially profound, exciting and striking. Until the treaty was concluded last week—it will be signed at the end of February—the provisions of the treaty of Rome had remained creaking, distorted and hard to fulfil. All that is now transformed. The new machine of European union has inexorably started to run. It will not be long before the circumstances in this country—I do not refer to a change of Government at the next election, which I profoundly do not wish to see—allow us to catch up in the two key areas which were subjected to further delay on this occasion. It will be a matter of catching up.

As the social provisions begin to come off the production line as individual items to be separately concluded in the protocol outside the Maastricht treaty, there will be enormous debate and discussion in the press in this country about the desirability of us, after all, accepting some—I emphasise "some"—of those individual proposals. That will be an interesting stage to see, either before or after the election. It will be interesting to see the reaction of people in all parties, including the party which still fundamentally believes in one nation and in basic elements of worker protection which have nothing to do with the illicit and undesirable resuscitation of trade union rights.

In the meantime, it is not that we are hesitating fundamentally. The Government are fully committed to the next stage of monetary union. As chairman of the European Movement in Britain, I am entitled to say that the European movement from all countries marched at Maastricht. The parades, including the gallant band from Britain, and the torchlight processions—which were not reminiscent of torchlight processions in the past, I hasten to add, in case my hon. Friend the Member for Northampton, North gets excited—were not in vain. I anticipate that there will be a lively and profound European Movement campaign in Britain in 1992 to persuade us to abandon some of the more hesitant stances that we have shown so far and to perceive ourselves as full exponents of European union.

6.27 pm
Mr. Tam Dalyell (Linlithgow)

After the deliciously witty and perceptive speech by my right hon. Friend the Member for Leeds, East (Mr. Healey) and after the truly formidable and memorable speech by my right hon. Friend the Leader of the Opposition—[HON. MEMBERS: "Crawler."] People have said many things about me, but I have never before been called a crawler. As one who was among the 69 Labour Members who failed to crawl and who voted to go into Europe, I am delighted with party policy.

I turn to another aspect of Maastricht. The final communiqúe says: Recalling the declaration issued by the Community and its member States on 2 December, the European Council takes a most serious view of accusations against Libyan nationals in connection with the bombings of flight Pan Am 103 in December 1988 and of flight UTA 722 in September 1989. The European Council reaffirms its condemnation of all acts of terrorism wherever and by whomever committed. The European Council has noted the demands made of the Libyan authorities by the Governments of France, the United Kingdom and the United States on 27 November. It fully endorses these demands and calls on the Libyans to comply promptly and in full". Like a number of my colleagues who, a month ago, went to visit Libya and who have taken a long-standing interest in Arab affairs, I am deeply worried about this matter. What happens if the Libyans do not comply? And, to put it bluntly, I think that it is whistling in the wind to suppose that they will.

Are we first of all to have sanctions, because if we have sanctions, the first people who will be hit by them are the 5,500 British engineers and other workers dependent on air links, who are earning our bread and butter and theirs in Libya at present.

If the Government do not believe me about that, they should have a word with Dick Morris, the chairman of Brown and Root, one of the 36 British companies involved out there. I may say, for the benefit of my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), that Mr. Morris is also the chairman of Nirex and cannot be counted on as a particular political friend of ours. I think that the Government ought to talk to him and talk to those responsible to the British nationals in Libya. It is not good enough simply to say, "They went knowing the risks and deserve anything that happens. It is up to them." We cannot behave like that.

Mr. David Winnick (Walsall, North)

Should not we bear in mind the fact that 250 people died as a result of this act of terrorism? Is my hon. Friend arguing that we should do nothing because British nationals may be the subject of retaliation if sanctions work? Such retaliation can always be used as blackmail by criminal dictatorships. Is my hon. Friend seriously suggesting that no action should be taken to bring these people to justice?

Mr. Dalyell

I will not be lectured by anyone on what happened at Lockerbie. I went to Lockerbie; it is relatively near to my constituency. As my hon. Friend the Member for Edinburgh, Central (Mr. Darling) knows, the Lothian police had to clear it up. I talked to Rev. Kirk, the Minister of Lochmaben, and to Father Keegan, who lives in Sherwood crescent, and they do not want vengeance.

Mr. Winnick

Not vengeance, justice.

Mr. Dalyell

Justice is another thing; it is a very difficult situation. We must bear in mind the fact that there are many British expatriates involved.

Mr. Norman Tebbit (Chingford)

The hon. Gentleman will be on to the Belgrano next.

Mr. Dalyell

I can say to the Member who interrupted that, in 1986, when, as a result of what happened in La Belle discotheque, Berlin, there was an attack on Tripoli by aircraft based in this country by the Americans, the terrorist attack in Germany turned out not to have been Libyan inspired at all, but to have been inspired by Syrian and Iranian groups. It is uncharacteristic of the hon. Member for Harrow, West (Mr. Dykes) to make such interventions. [HON. MEMBERS: "Not Dykes, Tebbit."] The right hon. Member for Chingford (Mr. Tebbit) was a member of the Government responsible, and they got the wrong people. The bombing of the residential centre of Benghazi on the basis of false information has created an atmosphere in the Arab world that we fail to understand. British expatriates think well of their Libyan colleagues. When one talks to them out of their Libyan colleagues' earshot, that is the general view that they express. It may surprise the House to learn that they also pointed out that the Libyan Government were, as they understood it, pretty uncorrupt, and were not feathering their own nests.

Mr. Garel-Jones

Feathering coffins.

Mr. Dalyell

Would the Minister of State care to intervene?

Mr. Garel-.Jones

Naturally, I accept that the hon. Gentleman is perfectly correct in raising this matter because it was referred to in the European Council transcript. I intervened to say that the Government of Libya may not be feathering their own nests but that they seem to be feathering other people's coffins.

Mr. Dalyell

We had better get the evidence a bit clearer. The Minister knows a lot about Europe. Does he believe that the Italians would actually implement sanctions? Bluntly, I do not believe that, whatever Mr. Andreotti may or may not sign—and it may be a question of "may not sign"—given the Italian interest in the Libyans and their connections, there would be meaningful sanctions. We are talking about people who have the largest engineering project in the western world—the great man-made river project. Vast amounts of money and numerous contracts, particularly with Italy, are involved.

If sanctions do not work, what will we be reduced to? Frankly, we will be reduced to the possibility of another air strike. The Minister of State, Foreign and Commonwealth Office, the hon. and learned Member for Grantham (Mr. Hogg), gave me a polite interview this afternoon and I have no personal criticism of him. He reiterated once again that the Foreign Secretary had said that an air strike was not ruled out. The House often accepts that personal experience is relevant. I can only say that my hon. Friends the Members for Liverpool, Riverside (Mr. Parry), for Blyth Valley (Mr. Campbell), for Tottenham (Mr. Grant), for Leyton (Mr. Cohen) and for Clydesdale (Mr. Hood) asked ex-ambassador Khaduri, who was the engineer in charge of the northern section of the great man-made river project, whether in 1986 there was any attack on that project, and he said no. He said quietly that the attack was not on the engineering project or on military installations but on people's homes, people's old people, people's children and people's houses. That was the feeling that prevailed in the place.

Like Jim Swire, I was greatly moved by my visit to the museum which was once Colonel Gaddafi's house. On the first floor is the bedroom of the three-year-old daughter killed in the attack. Her toys are scattered around the room and there are pictures of the operation during which she died. I do not wonder that Jim Swire gave a moving account of how he and Colonel Gaddafi held hands with the pictures of their two daughters. It is a very emotional situation. Before we go any further down the road, we must ask whether we are seriously thinking about any kind of air strike, because it would be a catastrophe for us in the Arab world.

Last Friday, the Lord Advocate gave me a 50-minute interview. I choose my words carefully. As the longest serving Scottish Member of Parliament and the son-in-law of a previous Lord Advocate, I think that I can say that I have a healthy respect for the law, and his office. The Lord Advocate was impeccably courteous, but I do not have complete confidence in the Lord Advocate or the Crown Office—the Lothian police, those on my Front Bench and the Law Society know why. I do not take what the Lord Advocate says as gospel, but I urge that some legal authorities should at least meet the Libyan judge in Switzerland or elsewhere, because the Libyans say that they simply do not have the information for which they have been asking for a long time in relation to the Al Megrahi and Khalifa Fhimah. Would any country surrender its own nationals, as we are asking the Libyans to do, without any diplomatic relations? I think that we would not, unless we had a great deal more information than the Libyans have been given.

Colonel Al-Dabari, the head of intelligence, said that The two Libyan persons linked by the American and British Judiciary for the Pan American plane bombing in 1988 are in custody. The real criminal is now free. I do not underrate the awfulness of Lockerbie or the awfulness of modern war. However, as my hon. Friend the Member for Walsall, North (Mr. Winnick) has said, we must do everything to achieve justice in the matter. As I said to Mr. Richard Prentice, the Foreign Secretary's private secretary, and as I repeated to the Minister of State this afternoon, it is high time that the Government talked seriously to the British ophthalmologist, whose name and telephone number I have given to the Government, who regularly treats Colonel Gaddafi. It is high time that there was some understanding of what happens in that country, which is rather deeper than what appears in the tabloid press.

Colonel Al-Dabari has said: There is no law which says a country has to hand over its citizens for investigation in another country. Is that true? If not, what is the law or legal basis upon which the Government are making their demand? I have the first question for the Attorney-General at his next oral Question Time and it is on that very subject.

Colonel Al-Dabari is quoted as saying: There is no legal basis for saying that the investigation has to take place where the incident happened. Is that right? If not, what is the legal basis? I hope that the Minister who replies to this debate at 1.45 am will answer those points.

The Minister of State, Foreign and Commonwealth Office, the hon. and learned Member for Grantham, has said: if it is a form of state crime, you really cannot expect the victims to accept that the state responsible should be playing a significant part in investigating or in trying those that we charged with the events. That is one point of view. However, Professor Turner of the University of Kent wrote a letter to The Guardian on 19 November in which he stated: There is a long list of similar questions that could be asked. Would the US have acceded to a request by the Hung Seng government in Cambodia to hand over for trial the US officials responsible for the completely illegal in both US and international law bombing of Cambodia in the seventies that cost more than 100,000 Cambodian lives? Will the US pay compensation to the relatives of 50,000 Chileans who lost their lives in the military coup in 1972, a coup organised and financed by the CIA to overthrow a democratically elected government, in violation of every significant principle in international law? [HON. MEMBERS: "What has this got to do with Maastricht]" The issue is referred to in the communiqué, so I am entitled to raise it tonight.

My hon. Friend the Member for Carrick, Cumnock and Doon Valley knows about the Chilean situation.

Professor Turner asked: Will the US now hand over to Libya the officials for the illegal bombing of Tripoli in 1986. Even I would not have been in favour of the handing over of the right hon. Member for Finchley (Mrs. Thatcher) for trial in Tripoli.

With regard to the victims to whom my hon. Friend the Member for Walsall, North, referred, Jim Swire, on behalf of most of the victims, claims that he is against retaliation. That view is shared by other people involved in that tragic loss. Do the Government believe that reprisals might alienate the Arab world? What is the Government's assessment of the likely impact of action on the middle east peace process?

The semi-official Cairo press reflects unmistakable alarm. Mahfouz al-Ansari, the editor of al-Gomhuriya and close to Mr. Mubarak's chief political adviser, warned President Bush that any shots fired at Colonel Gaddafi would ricochet against America's Arab allies. He said: You delivered your blow in the Gulf war, liberated Kuwait, and maintained legitimacy. Everyone stood behind you and with you, although the punishment was directed against a dear and brotherly country. However, this time around if you try to strike a blow or hand out punishment to another brother, to Libya, believe me, you will then be punishing friends, your friends, more than you will be punishing the colonel. A great deal more could be asked about this. For example, why did a former Transport Minister, the right hon. Member for Southend, West (Mr. Channon), in a press briefing, make it quite clear a few months after Lockerbie that the police had done a marvellous job and knew that the people who had perpetrated the crime were from Syria or Iran? Why are the suspects now entirely different from those leaked by the right hon. Member for Southend, West to the press when he was a Minister? Those serious questions must be answered.

If it is said that I have no friends in believing that the Libyans might not be wholly responsible, I need simply refer to many reports and in particular The Guardian of 19 November in which, under the headline Israel stands by Syrian link to Lockerbie", the Israelis are quoted as saying: 'We have never said that we knew the last link in the chain—the hand that actually planted the bomb' said Yigal Carmon, the adviser on counter-terrorism to the Israeli Prime Minister Yitzhak Shamir. He went on to say that they believed that others were involved.

I make no apology for having raised this issue today. By the end of the Christmas recess, we may be sucked into action that will have a serious effect on this country, for many of our fellow countrymen and on our relations with the Arab world. The matter was properly raised in Maastricht. Whenever, around 2 am, the Minister replies, I will be here, and I hope that I will receive a response to my questions.

6.47 pm
Mr. Norman Tebbit (Chingford)

I am sure that the hon. Member for Linlithgow (Mr. Dalyell) believes that those issues are more important than any other issue that we might debate today. I believe that the most compelling part of his speech was his suggestion that an Italian Government might not stand by a sanctions policy even if they agreed to one. Many of us might believe that, and the Euro-sceptics believe that that illuminates certain of the commitments into which the Government may enter.

Sir Russell Johnston

Will the right hon. Gentleman give way?

Mr. Tebbit

No, I will not give way.

For the benefit of those who are more interested in the way in which I will vote than in what I will say, I must state that I will vote for the policies of the Government who were elected in 1987 under the prime ministership of my right hon. Friend the Member for Finchley (Mrs. Thatcher) when I was chairman of the Conservative party. I am a little too old or perhaps too consistent to execute the nimble footwork required for a 180 deg change of tack. I shall vote against the outcome of the Maastricht conference.

I say that sadly, because the Prime Minister has every right to be proud of the skill and determination with which he negotiated at Maastricht. The outcome might indeed have been very much worse. Indeed, had Britain been represented by a Labour Government, it undoubtedly would have been very much worse, not least because, as we were shown again today, although the Leader of the Opposition has many sterling qualities, mastery of the detail of complex documents is not among them.

There was a great deal of talk at times at Maastricht about Waterloo, but, of course, Maastricht was not a Waterloo. Waterloo was a decisive victory—one which put back the time, if it ever comes, of monetary, economic and political union by a very long time. Maastricht was not an offensive battle of that kind. It was a limited battle—a defensive battle-and one in which Her Majesty's Government sought to minimise the damage which would be caused not just to this kingdom but to the European Community by the federalist follies if they had been allowed to go unchecked.

None the less, there was established at Maastricht a series of bridgeheads into our constitution, into the powers of this House, and into the lives of individuals and businesses in this country. However, I believe that, despite the extremely well orchestrated eulogies over the outcome of Maastricht, or perhaps even because of them, far too little credit has been given to the Prime Minister for the skill with which he has created a new structure for co-operation at intergovernmental level which is distanced, above all, from the Commission.

Unhappily, I doubt whether that structure is watertight or will remain so. In some areas, the European Parliament has involvement, in others the Commission, but none the less the structure which has been created has the possibility of becoming a non-federal road to the closer co-operation between the European nations which I and many others wish to see.

Of course, in the excitement of Maastricht, the Prime Minister declared that he had won game, set and match. With another conference scheduled for 1996, the game is not yet over, let alone the set or the match. Let me quote from the official journal of the Community of 12 December. It refers to the treaty creating the European Union covering the Community's existing and increased responsibilities". It states: These are … the creation of the common foreign and security policy covering the formulation in the longer term of a common defence policy. which may in time lead to a common defence; an increase in the role of the European Parliament … the appointment of an ombudsman plus an improvement in the Parliament's legislative powers by the introduction of the co-decision procedure; redefinition or extension of Community competence in education, training, cohesion, research and development, environment, transeuropean networks, industry, health, culture, consumer protection and development cooperation". That is not an insignificant list, followed, by the way, by the creation of a citizenship of the union—the union which begins to sound more and more like a state in many of its aspects. I oppose all of that, so I could hardly go along with the outcome. The draft treaty sets out specific objects, and among them is the promotion of the establishment of a single currency and economic union, as well as the strengthening of social cohesion through a new line of public expenditure. It also asserts the intention to implement a common foreign security and, eventually, defence policy.

Opt-out clauses or no opt-out clauses, within those structures, Her Majesty's Government, by signing the treaty, will be committed to working for the attainment of those policies. Indeed, my right hon. Friend the Prime Minister took particular pride today in recollecting how President Eisenhower commented that, when the British sign up to something, they intend to honour it. Perhaps that is why my right hon. Friend the Chancellor of the Exchequer was uncharacteristically unable to say clearly whether, if the treaty conditions of convergence were met, there could be a case for Britain remaining outside the single currency. It seems to me that, unless there is in the Government's mind a clear possibility of that, the opt-out clause is nonsense.

Moreover, why the opt-out clause if we are committing ourselves and Her Majesty's Government to work for the attainment of a single currency? That clearly implies that Her Majesty's Government have no objections in principle to the creation of a single currency, and that their objections must be solely on possible grounds of practicality at the time. That is an extremely worrying aspect.

We—Her Majesty's Government—have agreed, as I have said, that the union and its member states shall—I emphasise the word "shall"; it is not "may"— define and implement common foreign and security policy. What is more, it is declared—I checked today the wording in the current draft—that Member states will, with regard to Council decisions requiring unanimity, to the extent possible avoid to prevent a unanimous decision where a qualified majority exists in favour of that decision. Setting aside the rather unfortunate translation, it seems to me that Her Majesty's Government have bound themselves to use their best endeavours not to veto an understanding on foreign policy which may emerge by a qualified majority. If it does not mean that, perhaps my right hon. Friend the Minister will tell me what it does mean. I presume that my understanding of the matter is correct.

Mr. Garet-Jones

I am happy to answer my right hon. Friend now. The position is clear. No decision by qualified majority voting can be taken, or no subject can be brought up for qualified majority voting, unless that is agreed by unanimity. I think that that is clear.

Mr. Tebbit

I am not at all sure that that is what the section says. Even allowing for the excruciating English, it seems to me to be an undertaking on the part of Her Majesty's Government that, where a decision might arise by a qualified majority, Her Majesty's Government will use every endeavour not to torpedo it by insisting on making it a question of unanimity. That is what it seems to me to mean.

I do not have the advice of the Law Officers, but presumably the Government do, so perhaps I could be as helpful as I can to my right hon. Friends and suggest that they may come back later tonight with a very clear explanation of what that clause means. I hope that they will be able to clear it with our partners in the meantime, because it sounds very much to me as though it was in operation yesterday, when my right hon. Friend left the shores of Britain totally opposed to the recognition of Croatia and Serbia and came back totally convinced that they should be recognised. Whether that decision on recognition is right or good is not the point that I argue. It seems that, within a comparatively short trip, a substantial change in the Government's position was achieved.

Mr. Garel-Jones

Perhaps I could help my right hon. Friend a little further. A decision to recognise Croatia has already been taken by both the United Kingdom and other members of the Community. It was the timing of recognition that was under discussion yesterday. [Interruption.] I am sure that my right hon. Friend wishes to hear my reply, even if Opposition Members do not. It was agreed yesterday that if, in the opinion of the arbitration committee under Lord Carrington, certain conditions had been met, recognition would take place. If those conditions are not met, Her Majesty's Government, and, indeed, their partners in the Community, will be free to take their own decision.

Mr. Tebbit

I am happy to have my hon. Friend's explanation, because I am sure that it comes as a great illumination not only to me but to the assembled corps of press and television journalists and everyone else who has been writing about the matter.

Mr. William Cash (Stafford)

And Chancellor Kohl.

Mr. Tebbit

And, indeed, Chancellor Kohl, as my hon. Friend says.

Clearly, we had all got the wrong end of the stick. But I am glad that we have all been disillusioned and told that we had it completely wrong, and that the Government had a covert, unknown policy which they were too shy to explain to the world at large.

Mr. Gerald Kaufman (Manchester, Gorton)

Will the right hon. Gentleman give way?

Mr. Tebbit

I am always eager to accept a little help from the right hon. Gentleman.

Mr. Kaufman

I am afraid I am not able to provide any help to the right hon. Gentleman. I fear that I must disillusion him. What the Minister of State has just told him was not what the Foreign Secretary told the House at Question Time today. The Foreign Secretary gave an entirely different set of criteria for the possible recognition of the Yugoslav republics by the United Kingdom.

Mr. Tebbit

I am not sure whether that was helpful or not. It seemed to me to show that many of us were confused about the policy of Her Majesty's Government.

I notice that the treaty also requires that the presidency will represent the union—this new creation—in matters which come within common foreign and security policy. It will be responsible for the implementation of common measures; in that capacity it shall in principle express the position of the Union in international organisations and international conferences". Exactly what does that mean? Is the United Nations Security Council an international organisation or conference? If the union has a common policy on matters which are to be discussed within the Security Council, will it be represented by the presidency? Will the United Kingdom be represented by the presidency? As my right hon. Friend knows, there are two nations within the union which hold a veto in the Security Council.

I understand that the matters which I raise are difficult, but it should not be necessary for my hon. Friend the Minister to look too far into the documents to say whether the policy that appears to be set out here—that the presidency shall represent the union for matters which come within common foreign and security policy—will make any difference to the way in which Britain is represented in the United Nations.

Mr. Garel-Jones

I am happy to set my right hon. Friend's mind at rest. The position of the United Kingdom and the Republic of France as members of the Security Council is specifically safeguarded in the treaty.

Mr. Tebbit

I am grateful to hear that. But what about other aspects of the United Nations? In which intergovernmental conferences and organisations will we be represented by the presidency? It is a pretty unclear piece of work. Or, indeed, it was pretty clear until my hon. Friend the Minister began to explain it.

Ms. Clare Short (Birmingham, Ladywood)

Will the right hon. Gentleman give way?

Mr. Tebbit


While I realise that my right hon. Friend the Prime Minister feels that he has hedged around the bridgeheads established by the Community and the union with good defensive positions, all experience within the Community suggests that it will expand from any bridgehead which it has been given.

Mr. Favell

Will my right hon. Friend give way?

Mr. Tebbit

No, if my hon. Friend will excuse me.

As my right hon. Friend the Prime Minister has suggested, it would not be honourable for Britain to sign up to those aims and objectives without sincerely intending to implement them.

So now there are many other European dimensions. The treaty refers to a European dimension in education and says: The Community shall implement a vocational training policy. Then, under a protocol on economic and social cohesion, all 12 nations have agreed that a cohesion fund will be set up which will support member states with a per capita GNP of less than 90 per cent. of Community average". It sounds as if there will be many beneficiaries of the fund, but not too many payers-in.

I am glad to hear the words of my old friend Otto Lambsdorff in Germany. He questions how long people in Germany will be willing to bear the excessive costs of supporting poorer areas. I do not share the optimism of the Leader of the Opposition that all the money required could come out of the funding of the common agricultural policy. That could happen only over the dead bodies of the French, the Italians, the Bavarians, the Irish, and one or two others who would constitute something like a blocking majority.

The treaty commits us to further policies. No one could object to being committed to ensuring prudent and rational utilisation of natural resources. Presumably it is within that envelope that the Environment Commissioner will campaign for the much-talked-about tax on hydrocarbons, while his friend the Energy Commissioner proposes to subsidise coal mining. Those two policies seem slightly incompatible, but I understand the needs of social cohesion between the German miners and the Federal Government, which coughs up an illegal subsidy of £14 billion a year to its coal-mining industry.

The treaty also contains a definition of subsidiarity. Oh, subsidiarity is a marvellous thing. Presumably it is under the doctrine of subsidiarity that we are not to fix our own speed limits for lorries and motor coaches on our roads. They will be fixed "at the appropriate level". The appropriate level will presumably be the union, the federal or the Brussels level. How on earth can that happen under the new definition of subsidiarity? It seems to me that subsidiarity means whatever I say it should mean.

We also find in the treaty a new commitment that the Community shall contribute to the establishment and development of trans-European networks in the areas of transport, telecommunications and energy infrastructures The Council may, by qualified majority, establish guidelines covering the objectives, priorities and broad lines of measures envisaged in the sphere of trans-European networks". I ask myself whether every right hon. and hon. Member in the House knows in this context what a trans-European network is. I would love to go round the House asking hon. Members whether they have checked the definition and whether they are happy that the guidelines should be binding on us and should be reached by qualified majority voting. In order to encourage hon. Members to peruse the treaty with great care, I shall let them all go and read the relevant section—indeed, find it themselves—to discover what a trans-national network is.

Lastly, I turn to monetary union. As I have said before, it is possible to argue that a single currency either would be of economic benefit to the Community or would not. I happen to take the second view, and to believe that, until convergence—not the measurements for the economists but real convergence, in terms of living standards and gross domestic product—is achieved, a single currency would be a disaster. It would lock into everlasting poverty in the Community those who are already in poverty. It would require the movement of massive sources of funds and of millions of people. They would both bring about the resentments which are already fuelling the march of the Nazis and neo-Nazis in Germany, the National Front in France, the Lombardy Front, the Vlaams Blok and others. Those forces will be unleashed and will destroy the European Community, which has achieved so much good for Europe in the past 40 years.

Madam Deputy Speaker (Miss Betty Boothroyd)

The Standing Order must now be applied and speeches must last no longer than 10 minutes.

7.10 pm
Mr. Robert Sheldon (Ashton-under-Lyne)

The right hon. Member for Chingford (Mr. Tebbit) mentioned the role of the central bank, which is what I wish to talk about most. My right hon. Friend the Leader of the Opposition was right to try to circumscribe the work that it would do. The proposed central bank needs to be dealt with in that way.

One tradition is common to all parties of the left and centre—there has always been a deep suspicion of banks and bankers. That suspicion has not extended merely to the socialist parties, but also to the Democratic party in America, the centre parties in Europe and social democrats elsewhere, who have all regarded the power of such banks with awe and apprehension—the literature is abundant and the cartoons remain for ever in our minds.

The reason for that is the power of banks and bankers. If they have not been regulated, they have always been able to close companies, to withdraw support from Governments and to dominate economies. Additionally, they naturally want a high exchange rate, which provides strength for their international operations, and high interest rates to add to their profitability, which is not always in the best interests of the country concerned. That is why the nationalisation of the Bank of England received such wide support in 1945. Even Tories voted for it.

Those people who call for independence must ask themselves why the measure to nationalise the Bank of England gained such acceptance. Those who look to the Bundesbank as a model for Britain and the Community must ask themselves how it makes its decisions. Is it always unanimous? If it makes decisions in that way, we must ask what they are. What level of inflation does it want to achieve? Is it 3 per cent., 2 per cent., 1 per cent. or zero? Do the members of the Bundesbank always come to the same conclusion, and who decides? Such matters are largely political and at a time of crisis they become even more political.

Why has the Bundesbank been so successful? We must question whether it has been all that successful. The Bundesbank did not create the German economic miracle—it was made by companies such as Volkswagen, Bayer-Hoechst and Siemens. They owe little to the Bundesbank, but it owes everything to the success of Germany industry. Out of the devastation, the expertise and skills of the work force remained. Whatever is destroyed can be recreated and improved if the people remain. Our own greatest wasted assets are the liabilities and skills in the hands and minds of our people. Germany exploited them and we did not. That also happened in Japan. The economic miracle was not a miracle of brilliant minds within the Government or the central bank—it came from manufacturing industry. So when we consider such matters—creating research teams and design offices we—must remember that it was German industry rather than the bank which produced the miracle.

People who call for an independent central bank and for a Eurobank must look to a future in which it might have to deal not merely with a recession like the one that we have just experienced, but with slump and depression. We must not assume that we have finally eliminated all those problems which occurred so often in previous decades and centuries. It is easy to abandon Government intervention at a time of prosperity, but we must take into account the less happy situations which have been experienced in every century and which we may have to deal with again. At such times, Government intervention is required. Measures taken in the 1930s, such as Franklin Roosevelt's new deal, which was hated by bankers, could come into their own. There could be a time when Governments have to take charge of economies for the sake of their citizens, whom only they can represent.

I used to hold the opinion that an international depression was not possible because Governments would overcome their differences when faced with such a catastrophe. I cannot be sure that they would do that and with a Eurobank I shall be even less sure.

What do we mean when we talk about control of the central bank? The controllers would be a body of 12 Finance Ministers seeking to control the immense financial power of the Eurobank, faced with all the difficulties of language and communication. The power of the bank would rival that of national Governments. That is the monster that we could be creating.

If all Governments, or even only the major Governments, were agreed and exercised their powers it might just work, but there could be differences of view. In a crisis, one or more of the major countries might find the situation acceptable. If there were such a division of view—one would need to be a great optimist to rule that out—those who pressed for inaction would be most likely to win. Without a decisive political viewpoint, the bankers' view would almost certainly prevail.

It is hard to overemphasise the power of the head of the Eurobank. The day-to-day decision making provides enormous power, which to a large extent would have to be conceded. At a time of crisis, faced with a part-time group of Finance Ministers, invariably holding different viewpoints and anxious to return to their own countries, the head of the Eurobank would be almost unchallengeable.

The right hon. Member for Chingford mentioned the problems of convergence and there are also problems of regional development. Those will always be difficult to reconcile with problems of growth. As the right hon. Gentleman said, convergence is what it is all about and there are few pointers as to how it will be achieved.

However, all of that is subordinate to the haste with which these monumental changes are being rushed forward. The Community seems to be intent on preparing a blueprint which we are called upon to accept. There seems little place for organic growth, for co-operation leading to trust, for greater confidence leading to changes in the light of experience rather than as a result of a brainstorm. The Community should be trying to restore that process. There are enthusiasts who want to change the entire working of the Community, in contrast with the clearly nonsensical common agricultural policy, which is removed from any sensible reform. What a statement of priorities: if we cannot change the CAP, let us concentrate instead on a constitutional revolution.

Greater confidence in the workings of the Community is required. Before giving it greater powers and losing some of our own, we should examine how the existing arrangements are being administered. That is where I feel that changes need to be made.

Let us look at the report of the Court of Auditors and the strictures that it makes. The reports which illustrate implementation of Community policies are also important. The Public Accounts Committee report on external trade measures for agricultural produce states that West Germany had 583 irregularities, the United Kingdom had 130 and Greece had two. In another report Britain had 11, Germany had 28 and Italy had none. Those figures do not stretch one's credulity because they are obvious nonsense. The auditors' report needs teeth to bring about changes. Countries which tend to abide by the laws must not be disadvantaged by those who have a more relaxed or even a corrupt approach to Community regulations. If we are to grow together, we must have a minimum of trust in the administrative competence and will of member Governments.

I look forward to a number of actions which need to be taken. First, the Community's published accounts and financial and performance information need to be presented in a clear form. Many people who are best fitted to query financial matters cannot be expected to undertake an investigation to discover where the money went. The figures must be properly set out in the way that the National Audit Office has done so successfully.

Secondly, there must be more effective ways to hold the Commission to account for its expenditure. Personal accountability is important. In Britain we have that. We have accounting officers who carry the responsibility. If one wants a job for the European Parliament, let us forget some of the nonsensical views which have been put forward and let the extra powers be used to investigate areas of expenditure which are clearly fraudulent. There are already some links between the National Audit Office and the Commission and I hope that these will be extended.

What saddens me most is that the problems that I have outlined should have been appreciated by many other countries in the Community. They include the difficulties of convergence, the power of the Eurobank and the difficulties in getting control over such a body. The question before the Community is whether it has the ability and the political will to bring about the essential changes in a moving and not invariably crisis-free world.

I want a solution. I voted for entry against a three-line Whip, and I would do it again. I do not want to he locked out, but the main debate should be about the way the Community meets the basic needs of its members, providing wider opportunities and improving prosperity, establishing greater trust between countries, encouraging compatibility while respecting distinctiveness. That is what should concern us most. We should turn our attention in that direction. Mr. Delors has been too clever by half. It is time for the realists to take control.

7.21 pm
Sir Peter Tapsell (East Lindsey)

When the then Conservative Prime Minister returned from the Congress of Berlin with the plaudits of the world ringing in his ears, after helpful interventions by the German Chancellor Bismarck, he arrived by train at Victoria station. He was met by the diplomatic correspondent of The Times, who asked, "Lord Beaconsfield, how does it feel to hear the cheers of the world ringing in your ears?" Dizzy, after a pause, replied, "The whole world? There is no one left." What it is generally thought that he meant was that his mother, his wife and his sister were all by then dead, but it was also a reflection of a great statesman aware of the highly ephemeral nature of human achievement.

Our present Prime Minister has come back from another conference, again with the plaudits of the world, and certainly those of almost the whole of the Conservative party, ringing in his ears. I join in these cheers. He, together with his team—the Foreign Secretary, the Chancellor of the Exchequer and the Minister of State, Foreign and Commonwealth Office—did a brilliant negotiating job. In a difficult situation, they brought back a result that was much better than the one that I expected and feared. However, I do not share, and have never shared, the enthusiasm of those who wish to rush forward into a federal Europe.

In the 32 years that I have been a Member of Parliament, I have always voted the pro-European ticket. I voted in favour of the original application to join the Common Market in 1961 by the then Harold Macmillan, which started our negotiations for entry. I have continued to vote the pro-European ticket at every point. The nature of the case that we have to put to our constituents has altered a great deal during my time in the House. I voted against the referendum proposal because I am against referendums in principle, but when the referendum was held in 1975, I campaigned actively in favour of Europe, making 35 speeches. In every one of those speeches, I gave the people whom I was addressing, including those in my constituency in Lincolnshire, a categorical assurance that Britain could never be forced to do anything of vital national importance to which it had not consented. I said that we would always have the right to veto anything against our fundamental national security and social desires. I meant that at the time, as did all my colleagues who campaigned along similar lines in the run up to the referendum, from the leader of my party downwards.

A different situation has now arisen, and we must apply our minds to it. I shall confine my remarks entirely to the single currency, which is what I know most about anyway from my commercial experience, but also because it is by far the most important aspect of the matters under discussion. There are two aspects to the single currency—accountability and practicality. One of the things that astonish me about the parliamentary Labour party is that it hardly seems to worry about accountability. It is surely the case that if we have a single currency for the whole of Europe and a single central bank, we in the House of Commons will lose control over many of the key matters that so much affect our national life.

The Labour party is making a great and understandable fuss about mortgages, but mortgages, as we all know, are intimately linked to the current rate of interest. Once there is a single currency and a single central bank, the rate of interest will not be decided by the Chancellor of the Exchequer and the Governor of the Bank of England.

Mr. Budgen

It is not now.

Sir Peter Tapsell

I will not go into the issue of the exchange rate mechanism, because I was not in favour of joining it in the first place. The United States is also in a serious recession, but has interest rates of 4.5 per cent. compared to ours of 10.5 per cent. Were we not members of the exchange rate mechanism, I have no doubt that our interest rates and therefore our mortgage rates would be lower. However, I do not want to get drawn into that wider argument, although it underlines the point that I am making. Just this first step—joining the ERM—has limited our economic room for manoeuvre and the further steps towards monetary union that are suggested will take it away altogether.

The question is whether we are prepared to give up what the House has existed for 800 years to defend and for which our predecessors have fought—control of the economy and the distribution of money, and the control of taxation which stems from that. That will disappear if we become members of a single European currency. It is extraordinary that the parliamentary Labour party, which has always been critical of the European concept, has gone overboard on this. As far as one can understand from the speech of the Leader of the Opposition earlier today, he would sign, straight away, now, a commitment to join the single European currency in 1997, irrespective of the economic situation of this country, of Europe or of the world at that time. As Labour Governments have never been able to foresee what was going to happen to the economy even six weeks ahead, I do not know how the Labour party can be so confident about the situation in six years' time.

The second aspect is practicality. I rather agree with the fear expressed by my right hon. Friend the Member for Chingford (Mr. Tebbit), that unless there is an extraordinary economic and social convergence and a convergence of standards of living throughout Europe—by then it may stretch not just from the Atlantic to the Urals but from the Baltic to the Black sea—there will be tremendous unemployment and discontent in foreign regions.

I know that part of the scheme is an immense transfer of wealth from the richer to the poorer countries, but we all know from our constituency experience that even such a modest scheme as the rate support grant, which was introduced by Winston Churchill in the 1920s to help the poorer parts of England by transferring to them rate income from the richer areas, caused tremendous difficulties. In my constituency, throughout my time in the House, I have always heard complaints in the shire counties that people have to pay more in rates to support the industrial poor of the north. Already, criticism is building up in Germany of this concept that huge sums of German taxpayers' money will be transferred elsewhere. The burden that the five new lander impose on west Germany is only a first example of the burden that will fall on the German taxpayer in order to fulfil those obligations. I am doubtful whether they will long be prepared to meet them.

We should recognise that the French have been able to stay inside the exchange rate mechanism only by devaluing their currency seven times. When the French have a single currency and cannot devalue, what will they do? We all know what they will do. I know because I have a French wife—they will go out into the streets and fight. Let us not put Britain and modern Europe into a position where the fate of our continent will be determined, as has been the case so often in the past, by the hurling of paving stones around the Champs Elysees.

7.31 pm
Mr. Tony Banks (Newham, North-West)

It was rather wretched of the hon. Member for East Lindsey (Sir P. Tapsell) to criticise my right hon. Friend the Leader of the Opposition, who today gave a bravura performance. It contrasted with the Prime Minister's downbeat effort. Quite frankly, he gave us a vision of the future, and it yawns. It is obvious that he now realises that the deal that he brought back from Maastricht will not stick either in the country or with Conservative Members.

I accept that the Prime Minister enjoyed some success at Maastricht, but it was a party political success. It was not a national success; it was not a success for Britain. As is usually the case, the interests of the Tory party were put before the interests of the country. The Prime Minister set out to get the best deal that he could for the Tory party, not for Britain. He failed to get a deal for Britain that is worth the paper on which it is written.

Initially—and this is interesting—the right hon. Gentleman threw dust in the eyes of his party's right wing, especially the right hon. Member for Finchley (Mrs. Thatcher). As we have heard, she was thrilled by the outcome at Maastricht. The right hon. Member for Chingford (Mr. Tebbit) gave an excellent party-pooper speech: he was more appalled than thrilled by the outcome. I know that one should not repeat private conversations, but when he was on his way to the Library, I heard him say, "I am just off to read the small print in the treaty." He obviously went to the Library and read the small print to good effect because he has revealed matters to Conservative Members that I do not think they previously knew. Certainly, the right hon. Member for Finchley did not know. She knows as little about the consequences and implications of the Maastricht treaty as she knew about the likely consequences of the Single European Act. She has revealed her ignorance on two separate occasions.

Mr. Tebbit

In fairness to my right hon. Friend the Member for Finchley (Mrs. Thatcher), when she made that remark she was referring to the Prime Minister's performance in the House of Commons earlier that day—and it was an excellent performance.

Mr. Banks

I accept what the right hon. Gentleman says. I think that, perhaps, there is a little clever rewriting of history. When the right hon. Lady said that she was thrilled by Maastricht, I thought that her social life must be very down at the moment if she could be thrilled by that.

The double opt-out of the single currency and the social chapter represents a sticking plaster that the Prime Minister has tried to put over Tory party divisions. It will not hold—it is already breaking up. I have time for the Prime Minister; I like him as an individual. However, he gave a terrible performance today. I think that it was because he realises that he has brought back a bum deal that will not stick in the country or in the Conservative party.

The opt-out of the single currency is politically and economically unrealistic. The right hon. Member for Chingford revealed that. Either there will not be sufficient convergence and the single currency will be delayed by the other countries, or there will be sufficient convergence and it would be economic suicide for Britain to try to opt out of the agreement to move towards a single currency.

I thought it degrading that this country alone should not sign the social chapter. After 12 years of Thatcherism, British workers will be denied the rights of workers in Spain, Greece and Portugal. The Prime Minister said that the social chapter would destroy our competitive advantage. Does he really mean that we need a low-wage, long-hours, short-holidays, sweated-labour economy in order to be competitive in Europe and the world? If so, what an indictment that is of 12 years of Thatcherism.

Does anyone really believe that the Germans, the French, the Dutch, the Italians, and all the others really want to destroy their competitiveness? I cannot understand it. That is a simple question and I am a simple fellow. How can 11 countries sign, and one country not? That is all I want to know. I cannot believe that there is a collective death wish among the 11 countries that are our partners in Europe. Those countries contain some of the most successful economies in the world. It was ideology and party political considerations that motivated the Prime Minister's attitude towards the social chapter—it certainly was not economic factors. He revealed himself as a Thatcherite with a grin.

Despite the fact of the double opt-out—and again I agree with the right hon. Member for Chingford—we are still inexorably and irresistibly moving towards ever closer union in Europe—or ecu, to use the right term. Chingford has spotted it, and I welcome it very much. Although the word "federal" was omitted from the final treaty, what is in a word? We are still moving towards a federal Europe. This is an issue on which I disagree violently with my hon. Friend the Member for Newham, South (Mr. Spearing)—as violently as one could disagree with him. I hope that that happens and, indeed, that we go a great deal further. I want a United States of Europe, with our own independent foreign and defence policies. Of course, it must be a democratic federal Europe, and the enormous democratic deficit must be filled. It does not mean that we will be overruled by faceless bureaucrats in Brussels. We have to make sure that the Commissioners are accountable to an enlarged and empowered European Parliament.

With all the democratic traditions of this country, have we no confidence that we can make a federal Europe as democratic as what we have achieved in this country? What is so wonderful about the nation state? Its days are numbered. It has been an interesting contrast to watch western Europe moving closer together while eastern Europe breaks up. The difference is that in eastern Europe an empire is being broken—an empire based on force and coercion. The west has mature democracies, and they are coming together voluntarily because, through their collective strength, they can achieve a great deal both individually and collectively.

I like what is happening and I want the process to continue. It is true that I now have a different attitude—I have managed to do a 180 deg. turn, something that the right hon. Member for Chingford said that he could not do. I have done it because circumstances have changed dramatically in eastern Europe—[Laughter.] Hon. Members may laugh, but politicians should be able to explain why they have changed their views. It is a foolish politician who pretends that he was right then, is right now, and allows no change. "I have never changed my mind," some politicians say, "I never apologise, never explain." That is the death knell of politics. We must always explain and, if necessary, apologise. Of course, I am not apologising—I am saying that my position has changed because of the momentous events in eastern Europe.

The opportunity being presented to our generation of politicians is one of involvement in the peaceful redrawing of the map of Europe, for the first time ever. There is the possibility of a Europe that stretches from the Atlantic to the Urals. There could be a new federal structure that would take on board not just the EFTA countries—that would be easy—but the emerging democracies of eastern Europe. That is the future for this country, that is the future for Europe, and I welcome it. The right hon. Member for Chingford deplores much of what happened at Maastricht; I welcome it. However, I believe that the Prime Minister tried to do a deal for his party, not for his country.

7.39 pm
Mr. Jonathan Aitken (Thanet, South)

There is a great debate to be held on the Maastricht summit, although not the debate launched by the leader of the Labour party and his associates this afternoon. The hon. Member for Newham, North-West, (Mr. Banks), with an uncharacteristic touch of sycophancy, referred to the speech by the Leader of the Opposition as a bravura performance. I must say that it was the best speech that the Leader of the Opposition has made this year, but to those of us who have had to listen to all the others in the past 12 months that is hardly the ultimate accolade.

What staggers me about the Leader of the Opposition is that when he chooses his weapons for a great debate he manages to pick boomerangs, and I am sure that his speech today will boomerang against him and his party. The cheers that he received from his Back Benchers this afternoon will end, I predict, in the jeers of the electorate because, by his ardent advocacy of the social chapter, he is going to lose the votes of 5.5 million part-time workers whose jobs will be threatened when they have to pay national insurance and whose employers will have to pay them full-time rates, as the social chapter demands. He will also lose the votes of 2.5 million overtime workers, many of whom would be denied the right to earn their overtime by the restrictions of the social chapter.

Above all, it is extraordinary that the whole Labour party suddenly wants to embrace the social chapter and leave social affairs to Europe—one thinks of all that guff about the Health and Safety Executive. Surely, if there is one thing that this House can do well—and should, under the principle of subsidiarity—it is to devise health and safety legislation here. When we last debated the issue on 27 October 1989, when there were only four Labour Members present, they all agreed that health and safety legislation in this country was superior to that proposed by Europe. I am amazed, therefore, that Opposition Members have led us off on this wild goose chase—turning the social chapter into the great issue on which they will fight the Prime Minister's stewardship at Maastricht.

No; the debate that we ought to have is the one opened up by my right hon. Friend the Member for Chingford (Mr. Tebbit). Do these treaties as they have been negotiated set us ever more inexorably down the road to a European federal super-state, or do they offer Britain and other member states the chance to build the Europe of the future with greater flexibility, more emphasis on co-operation outside the treaty of Rome and the retention of adequate powers for national Parliaments and Governments? That is really the crucial question, and I should like to try to answer it from the viewpoint of a longstanding Euro-sceptic—one who, like my right hon. Friend the Member for Chingford, is not usually in the business of doing 180 deg. turns.

Those of us who have followed the European debate for the past 10 or 15 years know that the European Community, despite British protests, has been moving steadily in a federal direction. Those who drafted the Maastricht treaty were quite right to include that phrase in the preamble, or chapeau. It was a pleasant surprise that it was taken out as a result of British pressure. From 1972 to 1986 we moved in this federal direction with, in the Fabian phrase, the inevitability of gradualness; but from 1986 onwards. hastened on by the Single European Act, passed through this House under a guillotine, we stopped travelling with the inevitability of gradualness and started to travel down the federal road with the inevitability and rapidity of a train grande vitesse, with Mr. Delors as the engine driver. One of the most significant results of Maastricht may be that the runaway Delors train, destination United States of Europe on a one-track line, may have been slowed down. But we have certainly been offered some alternative routes and destinations. These alternative routes and destinations may become much more attractive to the other passengers in Europe as time goes by.

Here I want to pick up a point made in the serious part of his entertaining speech by the right hon. Member for Leeds, East (Mr. Healey). He highlighted the fact that ours is the only national legislature so far to have debated this issue seriously. As other national legislators in member states start to debate the Maastricht treaty there are already signs that opinion may be shifting. I do not say that closer union will not take place, but it will happen differently as a result of the German Parliament waking up to what is occurring. Other national Parliaments will also become aware of it and French political pressures may come into play—all leading to changes.

For the first time there is a chance that these changes may turn out to be different from the original blueprint. The treaty of Rome augmented by the Single European Act was a conveyor belt to federalism. Unanimity was its watchword, the European Court was its watchdog and the Commission its driving force. But the treaties of Maastricht have allowed some different thinking to emerge. There are pillars of co-operation outside the treaty now. Subsidiarity has been defined, although somewhat imperfectly. The jurisdiction of the European Court is now severely limited and opt-outs and opt-ins have, if not been blessed, at least been introduced and allowed.

My right hon. Friend the Member for Chingford asks the vital question: is this structure watertight? I do not know the answer, although I do not believe that it is as waterlogged as he seems to think it is. There is at least some basis for saying that new structures have become possible. If these pillars of co-operation work well there will be some stirrings towards a different sort of Europe, a Europe which would not follow these blueprints which have caused us such anguish in the past few years.

Will this system work? What has been negotiated? Will the Western European Union start to be a significant force? Will law and order co-operation under the pillar outside the treaty of Rome start to function? Let us not forget the importance of the European-Atlantic alliance. The special relationship between Britain and the United States has been the cornerstone of our democratic values and suddenly to start, as the federalists want, to throw that out of the window is quite wrong. I am glad that that was stopped—at least I hope it was—by the continual references in the treaty to NATO and the Atlantic alliance.

Unlike my right hon. Friend the Member for Chingford, I shall go through the lobbies in support of the Government, for the following reasons. The first is common ground between us—the Prime Minister and his colleagues delivered a negotiating triumph, in the sense that they brought back more than they promised ——

Mr. Tebbit

Less than was threatened.

Mr. Aitken

Indeed. It was a tactical success and a considerable achievement. Certain qualities of steel were required beside mere negotiating skills. Like Horatius, the Prime Minister held the bridge.

Was Maastricht a strategic success as well? On that, the jury is still out; time alone will tell. What is certain is that the federalists will fight back, having suffered a reverse, not a defeat. The next phase of the battle in Europe as we approach the future of the common agricultural policy and of the budget will be between centralising federalists and flexible co-operators. At the moment, the flexible co-operating party is led by a party of one : Britain. It should not worry us that Britain stands alone; we have a long and proud history of standing alone in Europe and of being proved right afterwards. There are signs, picked up by the right hon. Member for Leeds, East, that sentiment in Europe is changing. I can see a Europe with more co-operation between member states, less domination by the Commission, more a la carte dishes and more flexibility. None of these things seemed possible under the treaty of Rome and the Single European Act.

I am waiting for events to unfold, but if Europe goes the way that I have described this evening, as I think it may because of enlargement, and because of outside events such as Soviet developments, history will be grateful to the Horatius who held the bridge for long enough so that alternative plans and schemes could evolve. The ranks of Tuscany will cheer him then. This Euro-sceptic has enough faith in him to cheer him and to vote for him tonight.

7.49 pm
Ms. Clare Short (Birmingham, Ladywood)

I want to use my 10 minutes to explain why I am one of those who voted firmly against our remaining members of the Common Market when we had the referendum, but now believe strongly that Britain's future lies in Europe and that we should try to shape the future of Europe. I do not do so for reasons of self-justification, but because much of the debate in this country has been full of confused language, misunderstandings of history and of post-imperial delusions of nationhood from the Tory party. That has confused the debate about what is really being constructed now—democratic and political institutions that are new in the history of the world.

My vote at the time of the referendum was fairly expensively well-informed because I was working in Whitehall and spent a week in Brussels being briefed about the institutions of the Common Market. As a civil servant, I behaved non-politically, although I have always held the political views that I hold today. I have, of course, modified the way in which I think that they should be applied in the light of the movement of history. However, as a socialist, I believe that it is our job to civilise the behaviour of wealth and capital so that it can be used to improve the quality of people's lives throughout the world. That is the job of politics. It is not to rip people's lives and countries apart, but to use democracy and politics to civilise the behaviour of wealth.

When I scrutinised the institutions of the Common Market at the time of the referendum, I saw that they were fixed for free marketeering. They excluded social regulation and entrenched the free market. Therefore, because I have always believed in the need for social regulation, I cast my vote in that referendum firmly and clearly against Britain's entry. I accept the consequence of that vote in which I held the minority view. As we live in a democratic nation, one cannot insist on a vote being retaken simply because one has lost. Those, however, were my reasons. I understood them and knew why I had taken that view.

I take a different view now because history has moved on. The confusion about Thatcherism, Reaganism and New Right monetarist projects is that they were part of that moving on of history and of the new movement of capital, but their proponents do not seem to understand their political consequences.

Under the right hon. Members for Finchley (Mrs. Thatcher) and for Chingford (Mr. Tebbit), the Tory party pressed forward with deregulation so that capital could flow across the world as it wished. The nation state lost its economic sovereignty. There was a massive, historic era shift. We are talking about a change in history that is as big as the shift from feudalism to the nation state. Given their record, I am sure that those right hon. Members would have fought today for feudalism. Funnily enough, however, they were part of the project that diminished the capacity of the nation state to be the unit of democratic organisation in the world by which humanity can try to civilise the behaviour of capital.

I now believe that the people of the world need political institutions that go beyond nation states to strengthen the behaviour of capital as it moves beyond the nation states. That is what is going on—not only in Europe, but in America, Canada and Mexico. Our sister party in Canada, which opposed the free market, has said, "We'll go with it, but with a social charter." It has said no to the free movement of capital without any regulation to take account of people, but has added, "Yes, we can see capital reorganising like that and, if there can be a political dimension of regulation for people, we'll go along with it." The same things are happening on the Pacific rim. That is where we are in history—we are in a new era.

I believe that I am representative of my party in holding those views and very much go along with the explanation that my right hon. Friend the Leader of the Opposition gave of our shift of view on this question—[ Laughter.] No, in my view this is a matter of the history of the world. We are in a new era and silly little men—[Interruption.] Who is that silly little man?

Mr. Tony Banks

It is the hon. Member for Harrow, West (Mr. Hughes).

Ms. Short

The hon. Member for Harrow, West (Mr. Hughes) is giggling, but giggling about party-political matters is not to rise to the challenge of a shift in history. The hon. Gentleman simply wants to play silly little party-political games, which is what the leader of his party is doing, instead of talking seriously about what is happening to our nation, our future, our people and the people of Europe and of the world. I despise the tone that many, but not all, Tory Members have brought to the debate.

Like the leader of my party, I have changed my stance, because Europe has changed and allowed in the social dimension. It therefore reconnects to my original politics in that I want to regulate the behaviour of capital and to civilise it for people, and I believe that the nation state has lost the capacity to do that job. That is why I now say that we must embrace Europe. The social charter or the social chapter is at the heart of this issue for me, because, without it, we have only the free rip of capital.

Following our last appearance on "Question Time", the right hon. Member for Chingford and I had a conversation about this matter in which he said that he had changed his view for exactly the same reasons that I have changed mine. He was in favour of Europe in the days of the referendum because he believes in unregulated free markets and in the chance for capital to rip. He voted for Europe then, but is against it now because of social regulation. We agreed that both our views were consistent and that the reasons that I was against Community membership then but I am in favour of it now are exactly his reasons for holding the opposite view. I must advise the hon. Member for Harrow, West that this is not a matter of silly party-political games. It is about my serious political understanding of the way in which history is moving.

I am ashamed of our country advertising itself in Europe as the sweatshop of Europe. I am ashamed that that is the only level of civilisation to which we can aspire. I am angry because of what that offers my constituents for the future in terms of their quality of life and level of income. Members of the British Tory party are saying, "Mr. Delors has said that Japan will dump its capital in Britain because our labour will be cheap." But that means that our people will live badly, have low incomes and be less well educated and trained. That is the future that the British Tory party is offering the people of Britain. If I am ashamed, they should be deeply and utterly ashamed.

Furthermore, that view will not work, because a modern successful economy must have high levels of education, training and investment, and a co-operative and flexible work force. That is how we shall define the successful economies of the future. Sweatshop Britain is not only undesirable to live in; it will fail economically, yet that is what the Tory party is offering the British people.

I share some of the fears of those who have been criticising some of the detailed terms of the treaty on economic and monetary union. In mainland Europe, there is a desperation about the destabilisation of Europe that we do not fully share. There is fear about Germany's economic might and about a reunited Germany. We must bear in mind the memories of those who were occupied by Germany during the second world war. There is also fear about instability in eastern Europe and about the possibility of Germany turning from western Europe and starting to look to eastern Europe for its political alliances. There is, therefore, a desperation about political union and about the need to tie in Germany.

The desperation about building a stable western Europe in the face of massive and dangerous instability in eastern Europe has led to a willingness to move towards economic and monetary union with such speed that it could be politically destructive. On that, I share the view of the right hon. Member for Chingford. If we opt for the stringent, deflationary conditions that are built into the Maastricht agreement, which allow room for flexibility in negotiations in the future, we could see a further rise in unemployment across Europe, and further rises in racist and fascist movements, making for a dangerous future.

Therefore, although my underlying analysis is that we should go with it and that further union is inevitable, it is a joke for the Tory party to play the game of pretending that it would opt out. If economic and monetary union is to happen—and for the reasons that I have tried briefly to adumbrate, I think that it might go more slowly than is being predicted—Britain must be in or sterling and the City of London will be destroyed; but Britain will be going in without being able to influence the shape of that union. Yet again, the Tory party is doing something that is massively destructive of the future of the British nation. Britain will take such union because we shall have to—otherwise our economy will go even further down the tubes than it has in the past 12 years.

I wish that we could elevate this debate in our country beyond party politics, because we are talking about the movement of history and about the quality of life of the people of our country and of the rest of Europe. We are talking about how Europe can use its influence to shape the future of the world. We are not talking only about eastern Europe. We must remember all the poverty on the toe of Europe, in north Africa, and that horrible mounting famine.

I hope that this will be a progressive Europe, which can take a progressive view of the debt crisis and the international movement of capital. Let me tell the hon. Member for Harrow, West that that is what we are talking about: we are not talking about silly party-political games.

7.59 pm
Mr. Michael Alison (Selby)

It is refreshing to hear the hon. Member for Birmingham, Ladywood (Ms. Short) make a virtue of the necessity of backing the new, expanding Europe, in the cause of more checks and balances.

I am delighted that my right hon. Friend the Prime Minister has emerged from the Maastricht negotiations as a dominant rather than a subordinate statesman, manifestly capable of shaping and correcting the Community's future course. I do not mean that as a conventional piece of Back-Bench party piety; I am trying to emphasise the importance of strong national performances—or innings—by such people as my right hon. Friend. Europe is now evolving rapidly, and the British population are beginning to wonder just what their destiny is. In that context, my right hon. Friend's performance must have been immensely reassuring.

Perhaps for the first time, large sections of our population are beginning to realise how fundamental and far reaching were the changes in their destiny that were ushered in when we acceded to the Community treaties in 1972. Perhaps one of the most vivid demonstrations of the dawning realisation of what we have let ourselves in for is provided by something utterly prosaic, but almost universally experienced: Sunday opening by shops. I am sorry to move from the sublime to the almost ridiculous.

The Shops Bill, introduced in 1986 by my right hon. Friend the Member for Finchley (Mrs. Thatcher), provided for the complete deregulation of Sunday retail trading. The House, on the whole, did not care for the Bill, and—in one of the most vivid recent demonstrations of parliamentary sovereignty and supremacy—we threw it out. None the less, deregulation has now crept in, almost by a side wind; ironically, it has done so along the lines originally proposed by my right hon. Friend the Member for Finchley. The alleged sovereignty and supremacy of Parliament has gone, not with a bang but with a whimper.

The reason lies in a combination of sections 2 and 30 of the European Communities Act, to which Britain acceded in 1972. That Act enshrined a principle described by my right hon. and learned Friend the Attorney-General last month, when he said: since 1972, directly enforceable Community law has taken precedence over domestic provisions and forms part of English law."—[Official Report, 27 November 1991; Vol. 199, c. 914.] Sunday trading has brought home to people the shape of the revolutionary new framework of life that is emerging from those earlier decisions. I, for one, do not complain about the changes; nor, I suspect, will the millions of shoppers who, this Sunday, will quietly bless the European Court for their new-found freedom. Paradoxically, the further millions who, like me, regret the unregulated arrival of Sunday trading will look to the same European Court—perhaps by way of a different section of the legislation—to tighten Sunday trading regulations in the future.

What emerges from the rather muddled Sunday-trading scene is the way in which public perception of the Community will develop. Provided that we maintain a tolerable degree of national identity and decision-making, the establishment of an external source of authority in the form of the European institutions to which we have voluntarily acceded—in particular, the European Court —will enhance the liberty of British subjects, and will increasingly be seen to do so.

This is, in fact, a form of the separation of powers. That principle has always been one of the great avenues through which human freedom has advanced. To see the European institutions as alien, oppressive invaders, threatening our national rights and liberties, is to misrepresent them in a very superficial way. In truth, they have the potential to increase those rights and liberties. I believe, indeed, that popular perception is already moving firmly in that direction. The ready and instinctive way in which our constituents reach out for rulings from the European Court illustrates the way in which the man in the street benefits from the principle of the separation of powers, of which the Community treaties are a manifestation.

Mr. Spearing

Will the right hon. Gentleman give way?

Mr. Alison

I am afraid not; I have only 10 minutes in which to speak.

The principle of the separation of powers, which is enshrined in what we are currently negotiating, gives real scope for not less but greater freedom. The key is to maintain a reasonable balance in the evolving pattern of the separation of powers between national and supranational institutions.

Personally, I am not haunted by the spectre of federalism—although mapping out a coherent pattern of identified and separated powers between a central and a peripheral body is precisely what federations must do. Clearly, the national spirit that still exists strongly in the ancient nation states of Europe will be a solid and effective counterweight to the powers that we voluntarily confer on the Commission. As many of my right hon. and hon. Friends have pointed out, the essence of the Prime Minister's triumph at Maastricht was the refinement of that notion of the separation of powers, in the explicit recognition and entrenching of the role of intergovernmental co-operative action as one of the two or three pillars on which the whole edifice of the European Community will be sustained.

I am entirely persuaded that the principle of the separation of powers which we now see emerging in Europe will enhance the liberty of the subject. I believe that the notion of a federal future—sometimes it is labelled "the United States of Europe"—is grossly misleading and unrealistic. We have nothing to fear.

"The United States of Europe" conjures up a picture of the United States of America. The point about the federal system that exists there is the way in which, originally, a congeries of small, weak states combined to resist the depredations of a world suprapower, the British. Now, a dozen or so suprapowers—as the world outside may view the European states—are coming together to try to find a way not to erect more acres of white wooden crosses on the fields of Flanders; and one way of doing that is to produce acres of prints and documents.

The coming together of great powers will not produce a counterpart of the United States of America. It will produce an entirely different animal. As the right hon. Member for Leeds, East (Mr. Healey) made clear in his eloquent speech, there are many heavy players in the team, who will not turn themselves into mere subordinates of an overriding Brussels bureaucracy. We have before us the prospect of a productive separation of powers, and of increased liberties for our people.

8.9 pm

Mr. John Hume (Foyle)

The voices that I have heard in the House today and in public in recent weeks opposing the evolution towards what I regard as inevitable—European unity—strike me as the voices of 19th century nationalism, and I do not think that history will be too kind to 19th century nationalism, which fuelled not only imperialism but two world wars. Few of the voices seem to draw attention to the Europe that European union is replacing. We should remember that the process began as far back as 1957, just after the second world war, with the first treaty of Rome.

To look at the Europe that is being replaced, let us cast our minds back to 50 years ago this very night—18 December 1941—when millions of people across Europe were being slaughtered for the second time in a century. If anyone had stood up in the House then and said that in 50 years' time we would be discussing European union with the Germans still being German, the French still being French and the English still being English, that person might have been locked up. Yet it has happened, and it is worth considering why it has happened, particularly for those of us who have to face conflict on our own streets. The reason is quite simple. We decided at last that the answer to difference is not conflict, confrontation or war, but respect and accommodation. Europe has built institutions which respect diversity and work on the common ground of economics: sweat has been spilt, not blood. Europe has grown steadily at its own speed over the past 20 years in the natural and inevitable process of European union.

One would imagine that anybody in the House would agree that it is worth paying a price for the rejection of the Europe of the past—the Europe of slaughter. Yet we do not have to pay a price because what we are doing is economically inevitable. We are interdependent and the world is a much smaller place today that it was 50, 100 or 200 years ago. Once upon a time we had city states, then we had nation states, and now we are moving inevitably towards a continental state. That inevitability is such that we should not be following the movement but leading it. We should want to be not just in the heart of it but at the head of it. We should be shaping it because it is such a powerful answer. Integration is economically essential if we are to survive in today's world.

Everybody knows, if he is being truthful, that we cannot have a single market without a single currency. The harmonisation process for the single currency has been going on since we joined the Common Market. Decimalisation was the first step in the harmonisation process. We then had economic and monetary union and now the move towards a single currency. Imagine what would happen if one of the most powerful states in the United States decided that it wanted to separate from the dollar and have its own currency. What would happen to the economy? It is inevitable that we shall join the single currency and I am disturbed by the fact that it is being held up by an internal party squabble. I have no doubt that after the next election the Government, whoever they may be, will commit us to joining the single currency. Let us be truthf.

The voices that oppose evolution towards European union also express worry about loss of identity. The right hon. Member for Chingford (Mr. Tebbit) boasted recently about the strength of his Essexness. Is he any less an Essex man because he is an Englishman? Will he be any less an Englishman because he is a European? It sounds like a contradiction but the essence of unity is, as we have all discovered, the acceptance of diversity. There is no stable, peaceful, democratic society in the world which does not accept diversity. The moment one refuses to accept diversity and pushes difference to the point of division, one is in straightforward conflict. The acceptance of diversity should reassure us all because the day that that principle is not accepted things will fall apart.

We should be asking about the best way, politically and democratically, to give expression to that principle. To my mind, there is no better way than a federal way. By federalism Europeans mean a Europe of the regions. The first sign of that is already in the Maastricht treaty, and some people did not even notice. It set up a committee of the regions. I predict that that committee will evolve in strength and influence and the federalism that will emerge will be a Europe of the regions.

I wish to deal with some of the practical points. Cohesion is a code word for equalising living standards between the richer and poorer regions. I am delighted that the structural funds are not only to continue but to be increased and that there will not only be fixed percentages from the centre to the poorer regions but that it will be modulated. The fact that fewer matching funds will be required should help the poorer regions to raise their living standards. From what I read, the cohesion fund, which is tied to transportation and the environment, will go to member states whose GNI' is less than 90 per cent. of the Community average. Does the fund apply to the member states or to the regions? If It applies to the member states, it means that an objective No.1 region such as Northern Ireland or some of the poorer regions of Britain such as the north-east and Scotland would not be included in the fund. That issue needs to be examined carefully. It is an important issue if cohesion is to have any meaning

I see a positive sign for the last remaining area of conflict within western Europe—the area that I represent. "Remember 1690" is the great slogan of the hon. Member for Antrim, North (Rev. Ian Paisley), and it is one of the most long-lasting slogans in the politics of Northern Ireland. People tend to forget that the battle fought in 1690 was a European battle. The battle of the Boyne involved the Dutch and the Danes. The French were there on both sides, the Irish were on both sides and the English were there as well. The plantation of Ulster was England's reaction to the Irish chieftains' links with Spain. The Act of Union between England and Ireland in 1800 was England's reaction to the French invasion of Ireland in 1795 to link up with Irish republicans. In other words, the British presence in Ireland was a response to the fear that Ireland would be a back door for its European enemies. To this day, those who use guns and bombs on our streets say that their reason for doing so is that the British are in Ireland defending their own interests.

All that has been changed by what is happening in Europe. Issues such as sovereignty and independence have changed their meaning. It is now pooled sovereignty and interdependence. Therefore, the reasons used by those people are now gone and we should never cease to tell them. There is a legacy which is that we have a divided people. Let us approach that division using the same principles as the peoples of Europe who slaughtered one another for centuries. Let us accept our differences. Let us not seek victory one over another but accommodate our differences and build institutions which respect the diversity in Ireland while allowing us to work on common ground. When the channel tunnel is built, the common ground—economics—will intensify because we shall be the only part of the new Europe without a land link with the rest. Let us work together. Let us spill our sweat and not our blood and grow together towards a new Ireland, in the same way as the Europeans grew together.

8.19 pm
Mr. Patrick Thompson (Norwich, North)

I listened with great interest to the hon. Member for Foyle (Mr. Hume). He said that the spirit of interdependence that underlay the formation of the European Community in the 1950s and 1960s is needed today to reduce conflict between countries and within communities. I had much sympathy with the human point that he made.

It is a pleasure for me to welcome the agreement that my right hon. Friend the Prime Minister succeeded in achieving at Maastricht. There is no doubt that the summit was a success for the Prime Minister and his team. That is recognised in the House and in the country at large.

There is not time—and anyway I am not qualified—to talk about the small print of the draft agreement. That is not my intention, but it is important to recognise that there are issues that we shall not have time to discuss this evening, such as more co-operation in Europe on research and on education and training. We might be able to debate those important issues in more detail another time.

There is an important point that is worth making: the success that was achieved in the negotiations at Maastricht was a success for a Conservative Administration, and one of a series of successes for Conservative Administrations throughout the history of our dealings with the European Community.

I have been involved in active politics since the 1960s and early 1970s. I hope that this will not be regarded as a petty party-political point, but I find Labour's position on Europe totally extraordinary. We heard a good explanation of it from the hon. Member for Birmingham, Ladywood (Ms. Short), to whom I listened with much interest. She put the point well and explained Labour's conversion. I fully understand and appreciate the reasoning behind it and if there is time I shall refer to that again later, but surely it is a matter of fact and of record that if the Labour party had won the 1983 election—I first fought Norwich, North in 1983—it would have taken us out of the European Community and we would not have been negotiating at Maastricht. It is important to put that on the record, even though it has admitted that it has changed its mind.

Many of us who favour co-operation with the European Community welcome that change, but there is no way in which we can hide Labour's history. Nor can we hide the fact that it has changed its mind six times or more on its Community policy. Those facts are worth putting on the record.

I am trying to make the positive point that under a Conservative Government we signed the treaty of Rome, which I strongly supported at the time and still support, that under the Conservative Government led by my right hon. Friend the Member for Finchley (Mrs. Thatcher) we signed the Single European Act, and that under a Conservative Government we reached agreement at Maastricht. We should not hide that strong point in favour of this Administration.

Our attitudes to Europe are shaped by our personal experiences. I was brought up during the war and one's experience in war time is bound to influence one's attitudes to the continent of Europe and general events. I remember my first visit to Paris when I was 11 and doing my national service in Germany in my early twenties. During my time in Germany, I became convinced that the future of this country was bound with the future of Europe. Having listened to this evening's debate and the debate before the Maastricht negotiations, there is no doubt in my mind that that is the general view of the House, although it may not have been so strong about a year ago.

I was in Germany in 1957 when the discussion of Europe's future was at its height. I recall reading a book, which was published in 1966, written by Lord Gladwyn, in which he dealt with the problem that Britain had in the late 1950s and early 1960s of finding its identity. I shall quote briefly from what he said: The fact was,we were much more exhausted by our death struggle than we knew. The abrupt ending of Lend Lease in 1945 had shown up the extent of our economic weakness and the drain on our reserves that we had been obliged to make in order to keep ourselves alive. Our very victory too had been in some ways a disadvantage in that it did not compel us to reconstruct our factories, write off our debt, work like beavers and start again (as the Germans did) from scratch. The old habits therefore persisted. We tended to think that we had done so well—as we had—in the war that the world more or less owed us a living. This particular feeling was enhanced by the mere existence of the Commonwealth and Empire which Mr. Churchill said he had not been appointed the King's First Minister to liquidate. Yet this is what we had to do. That shows why Europe is important to Britain's future and why I am delighted that the Prime Minister returned from Maastricht with a positive agreement. I am also delighted that there is more unanimity across the Floor of the Chamber on the future of Europe than there has been for some time. To that extent, despite what I said earlier, I welcome the apparent conversion of the Opposition on Europe.

I should like to conclude by referring to points more concerned with East Anglia. Some time ago, I had the opportunity to read an article in "Anglia Business and Industry" written by Ron Carney. A survey was recently conducted of 1,000 companies in the United Kingdom and their attitude to Europe. Those companies could be divided into three groups—those that saw Europe as a challenge, those that saw it as a disaster and those that saw it as a non-event. I agree with the author of the article that the business men who fall into the last two categories are in for a great shock. The only way of regarding our future in Europe is as a challenge. That is the spirit in which the Government have approached Europe and the spirit in which the House is approaching it this evening.

About a year ago, my right hon. Friend the Member for Finchley opened a European information centre for East Anglia in the building of the Norwich and Norfolk chamber of commerce. I am told that inquiries from local business people in Norwich and Norfolk about the opportunities in Europe are increasing and that there is an ever-increasing list of opportunities for them to select from.

Mr. John Garrett (Norwich, South)

Will the hon. Gentleman give way?

Mr. Thompson

No, there is not time for me to give way. Without the time limit, I would have been glad to give way to my colleague from Norwich, South. I must respect the time constraint.

Europe is an opportunity. My right hon. Friend the Prime Minister was right to set out his intention to negotiate at the heart of Europe. I understand that the Government achieved all the aims that they set out in the debate before the negotiations. I believe that, as a result, they will have the strong support of the House and of the people as we look to our future in Europe.

8.29 pm
Mr. Peter Shore (Bethnal Green and Stepney)

I do not share the enthusiasm of the hon. Member for Norwich, North (Mr. Thompson) for the results of the Maastricht negotiations. Indeed, for me the most remarkable and revealing fact of the whole Maastricht summit was the clear evidence that federalism is now the major issue in western Europe.

Mr. Tony Banks

indicated assent.

Mr. Shore

My hon. Friend is nodding sagaciously because he is a recent convert to federalism and is delighted that that change has taken place. What was previously largely confined to the utterances of a minority in this country and in Europe has now become the open ambition not only of Mr. Delors but of Chancellor Kohl, of Prime Minister Andreotti, of Mr. Mitterrand and, indeed, of the Prime Ministers of Belgium and Holland. They have all sensed that and I acknowledge that some members of my party have also said so. It is crucial that we face the fact that federalism is the major issue. We can no longer bluff and say that it is perhaps a Europe de patrie or a Europe going in one direction towards ever-closer union. Those phrases are no longer appropriate and we are forced to face the major issue.

The facts are that the 11 member states—other than the United Kingd—are now out to create a federal union and that Britain alone is reluctant to join in. That is one of the great facts that we have to face and with which we must deal. The fact that we are alone and were alone in resisting the federal impulse has led to some strange and inappropriate remarks about us such as, "Britain has been marginalised", "Britain is in the slow lane", and "Britain has been left behind". I do not accept that. There are those who think that democratic self-government is a value beyond price and is indeed the first freedom of any people. The United Kingdom's refusal to join the federal camp is a matter not for reproach but for congratulation.

Unfortunately, however, the Government have not stopped the federal process—they have achieved only a British opt-out from the single currency and the European central bank which mark the third stage of economic and monetary union. For how long the opt-out will be sustained after the general election remains to be seen.

Meanwhile—and this point has not been sufficiently emphasised—the British economy is trapped by the combined effects of membership of the exchange rate mechanism and our acceptance of the first two stages of EMU. Those hon. Members—and I look especially at my Front Bench, but realise that not one of our economic spokesmen is there—who had looked for helpful changes in the final draft of the Maastricht treaty will have been disappointed. On that crucial matter—the control of so-called excessive deficits or the 3 per cent. rule which is in the treaty and which is designed to limit the borrowing power of future Governments—only a small element of flexibility has been introduced. We are now told that there can be a little leeway if borrowing has declined substantially and continuously and remains close to the 3 per cent. limit or, alternatively, if the excess is only "exceptional and temporary and the deficit remains close to the 3 per cent. reference value Perhaps the House will be glad to know that from 1 January 1994 when the second stage of EMU begins—in twoyears—if our deficit exceeds 3 per cent. we shall not be fined or otherwise penalised as we would be in stage 3, but we shall have only to endure the Council making public its recommendation that we should reduce our borrowing requirement. Of course, the effect of such a public rebuke would be to undermine the standing and credit of any Government vis-à-vis the financial markets and a deliberate withdrawal of a triple A rating and of the seal of approval for good economic management. The effects of that could be very serious from 1 January 1994.

As for the independence of the central bank and the hope of greater powers that would be given to the ECOFIN Council, on which many of my hon. Friends have placed so much importance, nothing has changed. The only power that ECOFIN has is to decide the exchange rate of the ecu against non-European currencies. Beyond that, the European central bank remains wholly independent of democratic control. As my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) said so eloquently and powerfully, control of the British economy is handed over to the European bank. I do not know how any hon. Members—but I refer especially to my hon. Friends—can look at themselves in the mirror and say, "I have denationalised the Bank of England and handed over all powers of economic management" and still hope to achieve for their people those things which we as a party were formed to try to create. I fear that it will lead our country and our party into great peril.

The treaty has enshrined deflation and entrenched price stability as the principal objective of economic policy. Everything else is subordinate to it. Every country in the Community—not only Britain—will be striving to prepare for the third stage of EMU. They will be seeking to converge and in order to do that—as we know—they must, first, not break through the 3 per cent. borrowing requirement. Secondly, they must remain within the 2.5 per cent. band of ERM and, thirdly, get down their lending rates to those of the three lowest countries in the Community. All of that requires enormous constraint and further cutbacks in the economies of the European countries involved. We shall have high and continuing short-term interest rates, high unemployment and shrinking industrial output. That is the price we shall pay for being a member of the deflationary club.

That is not only my judgment but that of most economic commentators, including those as disparate in their economic thinking as William Rees-Mogg in The Independent on Monday and William Keegan in The Observer on Sunday. William Keegan wrote: Europe generally has high and rising unemployment yet the conditions for the approach to EMU are extremely deflationary, implying even more unemployment and possibly a lot more social unrest. William Rees-Mogg wrote in The Independent: Maastricht is a deflationary currency agreement at a time of severe world recession that will either prove unworkable or catastrophic. It is the stupidest economic decision for the past 50 years. The threat to European and world prosperity is, of course, the most important outcome of the Maastricht treaty. Frankly, in the scale of things, the opt-out from the social charter is of minor importance. I have every confidence that when the Labour party wins the next election within the next six months it will be able to introduce every bit of the social charter that it wishes and to introduce it about a year ahead of the coming into force of the treaty. I shall not weep for that—it is not the real heart of the matter.

The federalists have not only extended their role over the economic and social policy of the member states. They have—as the right hon. Member for Chingford (Mr. Tebbit) rightly said—established a very powerful bridgehead in the whole area of foreign policy, defence policy and home affairs with regard to immigration and asylum

The Prime Minister sought—and I am sure that Ministers from the Foreign Office would like to do the same—to draw a sharp distinction between agreements in the treaty of Rome and those in the intergovernmental arrangements. I fear that the distinction is not too strong. For example, I fear that the Commission has the right to take initiatives and to make proposals to the Council and to the heads of state. It is given the right to have continuing consultation in all that occurs under article I, and it also has other substantial powers. So here is a major problem. It will get worse and the House should face it. There will be further intergovernmental conferences in 1996, and sooner or later we shall have to face the problem: do we go into a federal union or do we say no? I very much hope that we shall have the will to say no.

8.39 pm
Sir David Mitchell (Hampshire, North-West)

If anyone had said a year ago that the United Kingdom could participate fully in shaping the design for a single currency and then be free to opt out, he probably would have been laughed at. Yet that is precisely what has been achieved. It is a remarkable tribute to the Prime Minister, the Foreign Secretary and the Chancellor of the Exchequer that they have achieved that. It has come not by chance, but by regular, careful, firm and friendly explanation of the United Kingdom's approach to such matters, and the exploration of the consequences of the various alternatives that have been offered.

The Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Watford (Mr. Garel-Jones), who I believe is to reply to the debate, must also take a good deal of credit for the success of the negotiations.

I shall make three points. First, the number of detailed regulations that apply throughout Europe are increasingly inappropriate on that basis. They are unsatisfactory because they are unable to take account of diversity, or of the differences not only in tradition but in practice between one part of the European Community and another.

I agree with the hon. Member for Foyle (Mr. Hume), who drew attention to the problem. The number of such regulations has increased, is increasing, and should he diminished. The inappropriateness of blanket regulations will become more apparent as the Community is enlarged.

I do not need to remind the House of some of the signs of that—such as the interventions over the route of United Kingdom motorways, the classification of carrots as fruit under the jam directive, the prawn-flavoured crisps fiasco and the environmental studies on the channel tunnel, some of which took place while I was Minister at the Department of Transport. There is even the introduction of the Euro-size condom, to which the Italians apparently object because it is too large.

Those are merely illustrations of a range of detailed interventions. There is an increasing reaction against them—not only in this country. The Länder in Germany are very much aware of the level of responsibility that they have within the German constitution for much of the detailed administration of their areas. They, too, feel that such a degree of detailed intervention from Brussels is eroding their responsibilities.

In France, we have seen the rise of Mr. Le Pen—not only on immigration issues but on what are broadly known as Poujadist issues. In rural areas of France people are becoming heartily fed up with detailed interference in the smaller business community. I do not speak of Paris —Paris is not France; it is almost a separate place—but the people who are the backbone of rural France are thoroughly fed up.

Since in many areas people object to such detailed intervention, one asks oneself why we are subjected to excessively detailed regulations. The answer, I believe, is that there is genuine work for about six Commissioners in the European Community—on cross-border trade in goods and services, finance, people, pollution, and state subsidies. The trouble is that there are 17 Commissioners, each with an office and staff, and they have to justify themselves, so they churn out regulations of one sort or another to justify their existence. We should seek to reduce the number of Commissioners whenever the opportunity arises.

A valuable part of the answer has been brought back from Maastricht by our negotiators in the form of subsidiarity, and article 36, which says: In the areas which do not fall within its exclusive jurisdiction, the Community shall take action in accordance with the principle of subsidiarity only if and insofar as the objectives of the proposed action cannot be sufficiently achieved by the Member States". That seems an important safeguard.

But this is only a battle won; it is not the war. I am certain that we shall have to go on grinding away month after month, with Ministers doing battle on our behalf. In this case, the price of freedom is eternal vigilance, and if we do not keep that vigilance up, the nationhood of which we have every right to be proud will be at risk of being merged into a Euro-state. I urge Ministers to be alert for any infringement of article 36.

My second point concerns the social charter. The Commission's proposals would interfere in detailed working agreements on hours of work, night work, overtime, part-time work and other such matters. Many hon. Members have drawn attention to the damage that that would do to the United Kingdom, but I shall draw a different analogy. I shall draw attention to the damage that it would do to the ability of the smaller and poorer countries in Europe to raise their living standards. If they cannot do that by allowing anti-social hours, and so on, they will have to do it by subsidy and massive capital injections. Where will the money come from? Increasingly, it will come from the richest members of the Community —principally Germany.

He who pays the piper calls the tune, and in majority voting we shall find that the smaller and poorer countries within the Community will increasingly look to the Germans for guidance as to how they should vote. I say that not without some experience, having represented this country at the European Council of Transport Ministers. I would often say to my officials, "How will this go? Will we succeed in carrying our point?" The answer would often be, "It depends on the ringmaster", with a look at the German Transport Minister. One could see how the smaller countries were looking to him to find out how to vote, because they were financially beholden to the Germans in so many ways.

Mr. Brian Wilson (Cunninghame, North)

On a matter of balance, when the hon. Gentleman considers the German and the British railway systems, which would he prefer smaller European countries to take as a model?

Sir David Mitchell

That is wholly irrelevant, as we were then concerned with the extent to which finance was available for assistance for roads and communications in one way or another. In any case, the hon. Gentleman's slight on British Rail is not justified. It runs more trains at 100 miles per hour than German railways do. However I do not want to he diverted.

My third point is that the new powers of the European Court to ensure that countries abide by what they have agreed to are vital. In the past seven years, the United Kingdom has been taken to the court 20 times, Germany 49 times, France 82 times and Italy 157 times for non-compliance with rules to which they had agreed. It is important that the Court has the power to fine. I ask my hon. Friend the Minister to say when he winds up whether he believes that the fines will be sufficient to ensure that countries comply with the regulations to which they have agreed. Countries should be made to comply. The power to fine is important because it will have a "disinfectant" effect in ensuring that countries do not agree to decisions which they are not prepared to carry out.

8.49 pm
Mr. Dafydd Wigley (Caernarfon)

I have always been a passionate pro-European. Wales has been a European nation in terms of history, culture, language, religion and tradition for 2,000 years. We have European roots and we are proud of that. Many of our problems are experienced by other small nations and regions on the European mainland. In 1975, at the time of the referendum, I was the only one of the 14 Members on our Benches to vote yes in the referendum. I did so not for economic, but for political reasons. I was aware of the importance of the unity of Europe and of the political context that it offered for Wales. My arguments then are arguments that I would put forward now.

The other side of the coin of European unity must be decentralisation. Without that balance, there is a danger of us having the United Kingdom writ large on the European level. Wales has been part of one supranational entity for four centuries. We have known what it is like to have one common currency and we have seen what it is like to have a country without frontiers. That can be justified provided that one has the right mechanisms of government to defend one's own community. The danger for Europe is to grow as a centralised state on the model of the United Kingdom. From our experience in Wales—and, I suspect, from the experience of our friends in Scotland—we warn heavily against such a state. We need a strong regional economic policy to counteract the effects of centralisation, especially the effects that will come from a centralised currency. If we support the ecu, it must be on that condition.

I have heard it argued in the House that, in the Westminster model, sovereignty came from God to the Queen, the Queen shared it with her Ministers and it came then to the House of Lords and the House of Commons. The people were somewhere down there, out of sight. That is very different from our understanding in Wales of the concept of sovereignty. If there is any meaning to sovereignty, it is that it comes from the people upwards. The people can lend their sovereignty and their authority to different tiers of decision taking for different purposes.

The concept of subsidiarity—a horrible word, but an important idea—is vital. I have heard hon. Members refer to the talks and I have studied article 3b. There is no definition of subsidiarity in that article; there is merely a reference to it. Guenther Schaefer, in his article in Futures in September this year, said: Subsidiarity is a normative recommendation, a rule for setting up institutional arrangements in such a way that decisions affecting people's lives should be taken by the lowest capable social organisation. That does not mean that decisions have to be taken either at the European central level or at Westminster. They must be taken at the level closest to the people, whatever that level may be. More work needs to be done on that. The Prime Minister seems to believe strongly in the concept of subsidiarity in the relationship of the United Kingdom with the European Community, but when it comes to the relationship between Wales and the United Kingdom, or between Scotland and the United Kingdom, the idea of subsidiarity goes out of the window.

Article 198a deals with the committee of the regions. That is an important step forward and I regret that it has only an advisory status at present. I also very much regret the weakening of the original words. The original words —I have the French text at hand—referred to representatives having an elected mandate at regional level. Those words were knocked out at the behest of the United Kingdom Government. I should like to know whether that was done to facilitate the Secretary of State for Wales and the Secretary of State for Scotland being representatives on the new regional body. That is not an acceptable model.

Welsh Members have had a letter today from the Assembly of Welsh Counties, the body which represents all county councils in Wales. The letter, calling for a 'Welsh Assembly, takes the view that if Wales is to be properly represented in Europe, it must be on a democratic basis. The representative(s) must be able to speak for Wales and not for anywhere else. A Secretary of State for Wales—however able or well-intentioned he may be —is appointed by our national government whose appropriate outlet in Brussels is through the Council of Ministers. The draft treaty refers to that point in article 198a. It says: The members of the Committee may not be bound by any mandatory instructions. They shall be completely independent in the performance of their duties, in the general interest of the Community. Can a member of the United Kingdom Cabinet, or a member of any other country's equivalent, go as a member of a committee with such terms of reference? A Cabinet Minister will inevitably have loyalties to the Cabinet. That passage must be clarified.

The question of how many seats Wales will have also needs to be clarified. There are 24 seats for the United Kingdom. Ireland, with the same population as Wales, will have nine seats and Luxembourg, with the population of Gwent, will have six seats. At the very least, we need to know what the number of seats will be and how they will be allocated.

My hope is that the committee of the regions will eventually grow into being the second chamber of the European Parliament—a chamber made up of representatives from the small nations and regions of Europe, who will represent their own directly elected Parliament. Such a chamber will act as a counter-balance to the inevitable centralisation which is implicit in the directly elected first chamber. We need that counter-balance if we are to avoid the centralisation to which a number of hon. Members have referred.

I turn to the vexed question of additionality. It does not seem to have been resolved at Maastricht, and there has been little progress made on it. There is a danger of Wales and other areas losing out because of the way in which the Treasury takes in the receipts that come from the European Community and does not pass on the money to the areas which should benefit. In today's Western Mail, there is a focus on the RECHAR programme. Some £20 million a year is in danger of being lost because of that policy. If the European Community is to be meaningful in its economic and regional policies, the benefits which come from it in the form of grants, such as RECHAR grants, must find their way to the areas for which they are intended and they must find their way there in a meaningful form.

The definition of gross national product for the purposes of the cohesion fund is relevant here. The hon. Member for Foyle (Mr. Hume) asked whether GNP will be defined on a so-called "national" basis—on member states—or on a regional basis. If it is defined on a state basis, many areas which deserve help under the cohesion fund will miss out. As we are not part of the social chapter, which I very much regret, is there a danger that people in Wales and elsewhere in the United Kingdom will lose the opportunity to apply for grants for women, for youth, for the long-term unemployed and for disabled people, which may arise in the context of the social chapter? There are many schemes under existing provision, such as the Now scheme, the Horizon scheme and the Petra scheme, and I presume that our entitlement to those relevant to us will continue, but is there a danger of those schemes, too, being jeopardised?

Although many of us in the House are passionately pro-European—I am certainly in their midst—we need to sound a word of warning about the dangers of European chauvinism. There is a danger of racism growing on a European basis—on the basis of the idea that everyone within Europe is part of the "in" club and we should build walls against those outside. That worries me. The older generation saw the danger which came from Germany in that respect.

The way to counterbalance that is to strengthen regional government—for example, through the Lander in Germany—to strengthen European unity and to reduce the powers of Bonn and Berlin, London and Paris, Madrid and Rome. That may take years, and there may be relatively few hon. Members prepared to face up to that question. I believe, however, that we shall achieve long-term stability and unity in Europe only when we put behind us the 18th and 19th-century models on which the powers of cities and Parliaments such as London, Berlin, Rome, Paris and Madrid are based and when we build on the natural communities within Europe, towards a Europe that is united in its diversity.

Several Hon. Members


Mr. Deputy Speaker (Sir Paul Dean)

Order. It may seem a long time between now and 2 am, but a very large number of hon. Members wish to speak, so I hope that we shall maintain the momentum and that hon. Members will continue to limit their speeches to 10 minutes each on a voluntary basis.

9 pm

Mr. Anthony Nelson (Chichester)

I shall endeavour to follow your strictures, Mr. Deputy Speaker, and I invite the House to shout me down if my speech exceeds 10 minutes.

It is a great pleasure to follow the hon. Member for Caernarfon (Mr. Wigley), to whom I pay tribute for his consistent support for the European ideal. Unlike many Opposition Members, he has not changed his mind over the years, but has been a persistent supporter of the European Community and the part that Wales and the United Kingdom play in it.

I, too, would claim some consistency in this regard, having tabled an early-day motion in 1978 calling for rapid moves towards economic and monetary union. That motion attracted a great deal of support among my hon. Friends, many of whom are now in the Cabinet. Although they may have kept their support quiet for many years, I am pleased to say that they are now the evangelists and advocates of the principle, in a way with which I wholly concur.

I am delighted with the agreement that the Prime Minister brought back from Maastricht. I pay tribute to my right hon. Friend, to the Foreign Secretary, to the Chancellor and to the Minister of State, Foreign and Commonwealth Office for the adept negotiations that they concluded, for their sensitive handling of opinions within the Conservative party and in the country as a whole, and for the way in which, in my view, they have come back with the best of all worlds. They have given us the opportunity to participate in the future development of the economic and political union of the European Community, but, at the same time, on those issues on which our interests may be prejudiced we have an opportunity, should circumstances change, not to go all the way down the road.

I thought that, in parliamentary terms, at least, the Leader of the Opposition made an extremely impressive speech. It was quite apparent to me that, underneath the party politics of the matter, a welcome degree of unity now exists among the Conservative and Labour parties and the Liberal Democrats in their approach to a single currency. It is a fact—indeed, it is a truism—that no Conservative Prime Minister would come forward with a motion proposing to the House that we join a single currency unless he intended to advocate it. That is perfectly apparent. I do not think that it was a great political achievement for the Leader of the Opposition to draw that out of the Chancellor today.

No Government would come forward with such a motion if they thought that they would be defeated on it. That is not to say, however, that we should not have an opt-in clause. The importance of that is that we cannot predict how events may change over the next few years. If, by some ill fortune, we were to have a Labour Government, economic circumstances might deterioriate so rapidly that our possibilities of convergence would be diminished and we would not be able to recommend to the House or the country that we take such a course. No Labour Government would be able to come forward with that proposition either. We have got the best of both worlds, and I believe that the case was made most effectively by my right hon. Friend the Prime Minister.

I want to say something about the stance of the right hon. Member for Bethnal Green and Stepney (Mr. Shore). I know that his speech reflects the view not only of some in his own party but of many other hon. Members in the House for whose intellect and experience in government we have the greatest respect. Let me put this question to the right hon. Gentleman and to others: what is devaluation other than high interest rates by another name? Throughout our history, debasement of the coinage has been one of the worst offences committed by Governments. To call for the ability to continue to devalue one's currency is to perpetrate a fraud upon the people who hold that currency. By reducing or devaluing the exchange value of one's currency one may believe that interest rates can be held down. However, people who have borrowed in that currency and pay lower interest rates must simply pay back a larger sum in real terms. If we do not face up to the problems that cause a devaluing currency and inflation, there will be a continuous problem of decline in the economic base.

Currencies and economies with high inflation must have the highest rates of interest. Those with the most stable and strongest currencies with the lowest rates of inflation also have the lowest interest rates. We all want low interest rates for our constituents, our businesses and our economy. However, that will not be delivered and lower rates of inflation will not occur as a result of policies of persistent debasement of the coinage and devaluation. Such policies would simply feed inflation further into the economy through the high cost of imported goods.

Mr. Shore

No one would claim that currency appreciation or depreciation is a panacea for economic problems. However, it is often a sine qua non for successful operation of the economy. Unless nations, as a result of their different degrees of productivity and successful economic output, can from time to time adjust their currencies one to another, there will be a massive concentration of prosperity in one part of the world and appalling suffering and deprivation elsewhere.

Mr. Nelson

I could not disagree more. Devaluation is not a sine qua non. It is a cover-up for the failure to deal with the basic problems of the economy.

Hon. Members on both sides of the House sometimes place too great an importance on a single currency or a multiplicity of currencies. After all, a currency is only a medium of exchange. Whether it is stable or inflationary, by itself it does not promote or necessarily reduce economic growth. It should simply be a sound store of exchange on which people can plan their investments, businesses and their lives. The things that determine economic growth are quite different.

I do not believe that we will magically transform the economic prospects of this country if we have a single currency. However, if we have a single currency which is valuable, low inflationary and does not have high interest rates, together with a single market and customs union in which goods, employment and capital can circulate freely coupled with—and this is probably the most import sine qua non—free enterprise policies adopted by member states of the European Community, policies with which I associate my party, we will have a phenomenal capacity to generate growth and prosperity within the Community.

I am not starry-eyed. I am not an adventurist about what I want the Community to achieve. My objective is simply to deliver a better standard of living to my constituents and the bottom line of more prosperity in their pockets. Unless we deliver that, the political pillars will crumble and all that we are trying to erect will be regarded as a fraud.

Perhaps within the next 10 years the right hon. Member for Bethnal Green and Stepney and I will face each other across the Floor of the House and consider what has happened. I predict that if we follow through the contents of the treaty and the process of convergence, low inflation, the encouragement of a single market and free enterprise and so generate that growth, we will be able to look back on a period of exciting prosperity within the Community in the interests of all those whom we seek to represent.

A phenomenon of climbing summits is that when one gets to the top there is usually a higher summit beyond. Having climbed this summit, my right hon. Friend the Prime Minister sees a more important but related summit beyond it. That summit is the GATT agreement. After his chairmanship of the G7 meeting, I was struck by his statement to the House in which he said that he took personal responsibility for seeking to deliver agreement on the stalled GATT negotiations by the end of this year. I thought then that it was a considerable challenge and commitment. I have since spoken to my right hon. Friend about it, and I am encouraged to believe that he will be able to forge some agreement on that matter as well.

Just as it is important within the European Community to have common standards of trading and finance, it is important for our world obligations as well as our self-interest to forge an agreement on GATT. I hope that the House will join me in supporting the Prime Minister and in hoping that he will be able to make such a breakthrough, but it will be necessary for us and for many hon. Members who represent agricultural constituencies to face up to some extremely difficult decisions. If we do not go along wholly with what MacSharry proposes, at least part of it will be necessary in order to pare back production domestically and throughout Europe. If the Prime Minister can deliver a breakthrough on the stalled GATT negotiations in addition to the extraordinary success that he has had in Maastricht, he will have a grateful nation at the general election.

The agreement provides us with a great opportunity and with a conclusion to a European summit of historic proportions which meets the best aspirations of those of us who want Europe to move forward to take a positive step in the Community in the next few years and which also provides the safeguards of national interest which many hon. Members seek. To that end, it is a great success, and I congratulate my right hon. Friend upon it.

9.10 pm
Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

On this site for hundreds of years now men have been talking about power. They have done it in different groups and they have done it with different historical backings. But the reason that we are here in Westminster is that, very early on, those who sought to tax the people of this country learned that they must have representatives who would go out, gather in those taxes and deliver them to those who were in power and who would take decisions on taxation.

As the years passed, it became very clear to those people that they would no longer be able continually to take taxes from people who were unrepresented and whose views were not to be heard. Initially, the barons and the burgesses were sent out into the shires to get cash, but, bit by bit, power came to be translated in such a way that those who were taxed demanded a say in how those taxes were spent. [Interruption.] That is absolutely true, from mediaeval times onward. The translation of power has gone directly with the pressure of people who were taxed to have a say in what happened to the money. That has happened over many centuries, but big constitutional changes always came when the people of this country demanded a say in their affairs.

Sometimes there were violent incidents, and sometimes great changes such as wars actually gave power to an unrepresented group such as the women of this country, but always pressure from below has brought about constitutional change. However, we are talking about a major change that would actually take away from the elected representatives in the House of Commons the right to say how the taxes that have been raised in this country from those whom we seek to represent are to be spent in future.

It is a massive change. It is not a small movement away; it is not what we were told would happen at the beginning of the discussion about our application to join the Common Market. We were told that there would be some harmonisation, that an open market would be created without barriers, and that there would he a means by which the country, which based all its future on manufacturing, would be able sell its goods abroad and bring back enormous amounts—I was going to say "danegeld"—of any kind of geld that would help them to acquire a higher standard of living. With the Single European Act and now with, very specifically, the new treaties, we are seriously talking about letting the power of that direct connection slip away from us.

It is only right that we should make it clear to the people of Britain exactly what is involved. It is not a question of arguing about the small print of one clause that may somehow or other give some small advantage. It is not a question of saying that together we shall build an enormous new Europe in which everyone will have representation at regional and central level. We are talking about moving towards the creation of a centralised state. That is what a central bank will mean.

The centralised state will not be a state based on common language or common aspirations, or one in which the people of the various nations have chosen freely to associate because they understand all the implications. It will be a state created by our slipping bit by bit into agreements which we find ourselves obliged to accept.

We cannot talk any more about those who are Euro-sceptics and those who are not. Those who are elected to the House of Commons should tell the people they represent that everything discussed at Maastricht will affect them. We are seriously discussing handing over powers in areas of policy where no one has discussed with the British electorate whether that is what they want. No one has asked whether people want an involvement at central level in health. No one has said, "Do you want your decisions on major industries such as transport taken by majority vote when perhaps your case has not been fully put, or has been put in a way in which it can be accepted?"

No one has discussed with the British people whether they require citizenship of a new European state, whether they want their educational policies decided on a majority vote, by qualified majority vote or even by unanimity by people whom they do not control. No one has asked the British people whether they want a civil service over which they do not have ultimate and effective political control.

The House of Commons is failing in its duty if it does not point out that the real political debate is about precisely who will control our economy. I have been disappointed that my party has not seen fit to spell out the full financial implications of union if we found ourselves in government faced with the political pressures that will undoubtedly arise if the continuing recession means that important economic decisions have to be taken to regenerate industry in Britain or even to do the job in the regions about which hon. Members have spoken tonight.

I have been saddened that my party has not chosen to say in clear terms, "Yes, we believe that we should co-operate with people, but we must do so on the basis of acceptance by the British of where they want to go and what future they want."

Some people who come from a small region of the Community believe in a centralised structure because they believe that it will give them greater flexibility and more control. They must be living in cloud cuckoo land. The institutions of the Community are failing disastrously, because they take decisions at the top and seek to push them all the way down the system.

The reason why the common agricultural policy is causing enormous problems is that it is based not on climate, political need or the food interests of the peoples of Europe but on the spurious idea that it is possible to create a common policy that will be adequate for a Mediterranean area and a temperate area as well as for those who produce other products elsewhere in the Community.

The greatest political danger—greater than all the dangers that I have mentioned—is that many of the eastern European countries which find themselves outside the magic circle will be even more discomfited when they realise that enormous barriers have been raised against them. Far from being open and outward-looking, the Community is rapidly becoming a more rigid, restrained and centrally determined organisation.

That is not in the interests of the British people, and it is certainly not in the interests of those who want the economies of eastern Europe to develop. It is not even in the interests of the African, Caribbean and Pacific nations, which are being seriously damaged by the agreements that the Community is demanding. At the same time, it is keeping large areas of the third world out of the organisation.

I hope that, when it comes to a vote, the House will bear in mind the fact that these complicated treaties, which our electorates will not see, will impinge upon their lives for many centuries. We find it difficult to get people to vote in local or parish elections or for their town councils. We ask ourselves why people will not use their precious vote for those elections while they are prepared to vote in a general election. We know instinctively that it is for one reason —because they understand that there is a connection between their vote, taxation and the Government. They clearly see that line and understand it. That is why the poll tax failed, and why such enormous political pressure was put on the Government.

People will not accept a system that they do not clearly influence. Basically, they do not want a change. We are in a dangerous position. We are seeking to pretend that the European Community at Maastricht, far from simply holding an extremely expensive, diffuse and not especially impressive meeting, produced something which many people in this country do not understand. Where they understand it, they do not accept it and where they accept it, they have grave doubts about any elected House which takes them rapidly down the road to federal organisation —by any other name—without having consulted them.

No one in the House has a mandate to commit the people of this country to a federal Europe. Those hon. Members who stand for office should bear that in mind.

9.21 pm
Sir Teddy Taylor (Southend, East)

The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) rightly said that the basic issue at Maastricht was not the detailed clauses but democracy. She must have found it as embarrassing as I find it disturbing to watch Opposition converts behaving almost exactly as Conservatives did in 1973.

Instead of facts and policies, we are hearing day dreams and hallelujahs. We heard the Leader of the Opposition telling us how we would have freedom from injustice, new opportunities, better deals for the regions and new challenges. Sadly, with the conversion of the Labour party, we are simply getting a pile of slogans. I am sure that Labour Members believe them, but surely experience should show them how wrong they must be.

Exactly the opposite is happening in the Conservative party. Tired, hard-working Ministers—who obviously have to work round the clock and have to keep going to Brussels—are finding out what EEC life means in reality and what it does to our democracy.

For example, my hon. Friend the Member for Chichester (Mr. Nelson) said that we might have to ask agriculture to give up a little to ensure that the general agreement on tariffs and trade talks succeed. We all know that no such concession will be made. We know that pressure is such that the cash given in protection and subsidy comes to £127,000 per farmer per year, fully indexed.

In fact, we have heard a lot of nonsense. Therefore, we must ask ourselves about the achievements of the meeting at Maastricht. First, I think that most people would accept that opt-out from the single currency is not a major achievement because, so long as we are stuck in the exchange rate mechanism, even if we decided to opt out, Britain's freedom would be the same as Scotland's freedom in having a Scottish pound note within the United Kingdom. We could pretend that it was a pound and that it was separate, but if it were linked under the ERM, we would have no freedom apart from the tiny margin which we are allowed.

On the other hand, because opt-out has been written into the treaty for the first time, Britain is under no obligation, and at least the debate on the validity and strength of the ERM can continue within the Conservative party. There is no doubt that a growing number of people in the Conservative party realise that the EEC is becoming, more and more, a protectionist, bureaucratic racket, which is costing our taxpayers a great deal and doing damage to our people.

The second achievement was that on the rights of workers. However, there is little value in this exemption if the Commission simply implements the social charter directives through the Single European Act. Foreign Office Ministers are well aware that, while we spent a great deal of time arguing over whether to sign the social charter, or the social chapter, that will all be irrelevant if its terms are forced through under that Act. Even the most worthy people misunderstand that.

A former Cabinet Minister, speaking in the debate earlier, said that he was horrified to find out that we were to have new Euro speed limits for buses and lorries, and thought that this was related to subsidiarity. Britain and the other countries agreed these new speed limits on 16 November because the Commission was using the powers of the Single European Act. My hope is that what the Prime Minister has achieved will encourage the Government to question in the courts whether the EEC is correct in using the Single European Act to give it powers that were not in the original treaty.

I hope that this time we have achieved something, rather than, as has happened time and again in the past, been conned or misled by the EEC. The biggest achievement for the Prime Minister is the fact that we have now switched sides in the political argument. Labour Members are now the Euro-enthusiasts, with one or two honourable and sensible exceptions. They are the ones who want to press on, to go ahead, to sign everything, to agree to everything that Mr. Delors suggests, after due consultation and by majority vote.

It is clear that Labour wants to go, wham, into Europe, with great enthusiasm. There is no doubt that Labour Members have the vision and that bright look on their faces that we see with recent converts. By comparison, the Conservative party wants to take a sensible approach to the EEC. We do not want to sign up to new policies if we think that they will end up in a mess, and new debates are starting in our party.

The increasing number of Euro-doubters must ask themselves a question. All of us in the Conservative party know that, apart from a few—I am sure honourable—exceptions, people are becoming rather fed up with the EEC, with what it is doing and with what it is spending. However, if we are not going along this road, what on earth are we going to do?

We have to ask about costs—something that has not been mentioned tonight. I asked our splendid Library to do me a paper setting out what the Government get from North sea oil, because constituents keep telling me that, with North sea oil, we should be a wealthy and successful country. On 11 December, I got a lovely letter from the Library setting out the amount that Britain gets from North sea oil, in taxes, royalties and what it calls corporation tax (before ACT set-off)". All that comes to £2,503 million.

What will be paid to the EEC this year as our net contribution—the cash that we hand over, which is gone and which others get? The answer is, more than £2,503 million. We are throwing away all the benefit of our oil revenues simply by giving subsidy to the EEC, and this is only part of the cost—there is much more. We also spend money on dumping food under the crazy common agricultural policy.

I appeal to the Government, in particular to our friendly Foreign Office, to tell me, the Opposition and the public what they think this agreement will cost us, given the money that will have to go on convergence, and all that is to be spent on Portugal, Greece, Italy and the rest. We know that Governments cannot always get things right, because figures change, but we should at least have an estimate, so that we can do something about it.

If the EEC wants to spend all this money, it will have to ask for more money. What are the Government's views on that? Do they think that Europe should get more money so that it can spend more money converging? We should hear about that, because it is important.

The second matter is whether the Government will try hard to attain demarcation. All the talk about federalism was nonsense, because our federal position would be a step ahead of what we have now. At least when a country is federal it knows what belongs to it and what belongs to others. Now, basically everything belongs to the EEC. Will the Government try to establish demarcation?

Where do we go from here? How do we stop the EEC constantly seizing powers? We passed the Single European Act thinking that it would be restrictive, but that did not work. We imposed financial limits, but they did not work. How will we prevent the Commission from taking more powers? How will we prevent the Councils from taking more powers? More importantly, how will we prevent the European Court from taking more powers?

I hope that the Government will think seriously about where we go from here. Is there not a case not just for seeking exemption from the silly Euro-currency but for trying to get away from the trap of the ERM, which is forcing a decent Conservative Government to cause misery in our country simply because we do not have control of interest rates? If we pretend that the pound is worth something that it is not worth, other things have to be distorted. If people think that that will change with Euro-currency, they should ask what will happen to that Euro-currency. Will it float against the dollar and the yen? Will it be linked to something like gold? We must also ask whether Britain would benefit from getting out of the common agricultural policy.

For the first time, my right hon. Friend the Prime Minister—I commend his splendid answer to the right hon. Member for Chesterfield (Mr. Benn)—has said no to some things. It means that we can stop and think. It is an encouraging position, because Labour Members are now the enthusiasts and we are the new thinkers. I hope that there will be a great deal of new thinking in the Conservative party and in the Government.

Matters are serious. People doubt, but they do not know what to do. Perhaps, as a small gesture of gratitude and good will towards the Government for what they have done in bringing about this position, it might just be possible that, for the first time on this subject since 1973, I shall even give them my vote.

9.31 pm
Mr. John Garrett (Norwich, South)

For what it is worth, I can claim consistency because for years I was the only member of the Tribune group who voted for membership of the EC and closer European integration. For a very long time, that was thought to be a neo-fascist aberration, but now I find myself pedalling almost comfortably in the mainstream of my party's policy. I do not like it very much, so I shall have to find some new eccentricity as soon as possible.

Over the years, the debate about our relationship with the EC has been marked by deception—or, to be charitable, self-deception—and certainly by hypocrisy. Parliament has never been allowed to take developments in Europe as seriously as it should. It has always followed the Government in believing that the EC is a club, the rules of which we can alter at will. Until recently, Ministers pretended that the so-called Luxembourg compromise would give us a veto over anything that we did not like. We then invoked subsidiarity as a principle that would limit EC interference in our internal affairs. However, the Select Committee found that the term "subsidiarity" had no meaning and could be taken to mean the accretion of powers to the central institutions or no change at all. In fact, the legal adviser—probably giving a very expensive opinion—suggested that the matter was best left undefined.

Now we have invoked opt-out clauses as though, while we are opted out, the EC would not continue to develop in a way that would make it more difficult for us to opt in at a later date. There is more than a little hypocrisy in the Government's horror at the mention of the word "federal", which is now conveniently interpreted as a highly centralising arrangement, yet we created federal institutions in our former dominions and in post-war West Germany to prevent centralisation. It is hypocritical to trumpet our parliamentary sovereignty when this is the land of the royal prerogative, Crown immunity and the massive use by Government of unamendable instruments, regulations and codes of practice.

It was especially ironic that in the pre-Maastricht debate the right hon. Member for Finchley (Mrs. Thatcher) trumpeted about the "supremacy of Parliament". She headed a Parliament that guillotined 66 Bills in 10 years and produced 10,000 pages a year of unamendable instruments and regulations, some of which had a profound effect on our legislation. It ill behoves us to boast of our parliamentary democracy when we consider the autocratic power of the Executive over this legislature.

The exclusion of "federal" from the Maastricht treaty —one of the Prime Minister's victories, we are told—led to its replacement by the words "an ever closer union", interpreted throughout Europe as a move towards democratic federalism with the central institutions having competence over more and more areas of policy.

The Government conceded a number of competencies to the EC at Maastricht and they were not reported too loudly. One such area was immigration policy, to which in three years' time majority voting will apply. It will also apply to environmental issues and to education and training, and to powers of veto for the European Parliament—

Mr. Garel-Jones

It is right that article 100c of the treaty includes visa lists and the format that visas will take, but if the hon. Gentleman examines the treaty carefully he will find that all matters related to immigration policy remain firmly within the intergovernmental pillar and cannot be removed from it unless it is by unanimity and the approval of each Parliament in Europe.

Mr. Garrett

The hon. Gentleman is very sensitive about immigration. I had understood that visas were central to immigration policy and. hence, rather important. The Minister can say more about that when he winds up, if he likes.

If we adhere to the concept of a single market the logic leads inevitably to a single currency. It was the task of the Prime Minister at Maastricht to ensure that the conditions in which a single currency might be introduced would be advantageous to businesses and ordinary people in Britain. The victory of our opt-out clause on a single currency—that this Parliament will eventually decide whether to opt in or out—is a delusion, since all member countries have reserved the right to consult their national legislatures before finally agreeing to enter a single currency. Our opt-out clause will reduce our influence on the development of European monetary union, and as all other countries have said that they did not need such a clause, we are labelled firmly as second class. It is not as if we will not have to shadow the deutschmark in any case, and so closely that it might as well be our single currency. Our freedom of action in this matter is thus illusory.

It seems to me impossible to move to a truly common market and to European integration without legally binding social provisions held in common—not to mention the need to raise British standards in these areas. Unless there are measures to harmonise conditions of employment and benefits and rights to consultation, competition will be distorted by social dumping—the attraction of capital and enterprise to the parts of the Community where labour is cheap and industry unregulated. The Government hope that Britain will be the beneficiary of this, but there is no reason why our partners should let us get away with it under the competition regulation.

I find it shaming that Britain should resist improvements in the hours of work of young people, in parental leave, in the rights of part-time workers, who are mostly women, and in worker consultation. There is no reason to believe that economic efficiency is incompatible with fair employment practices.

Although we in Britain are not accustomed to the sort of declaratory statements of intent that we find in the social chapter, and earlier in the social charter, and although we may doubt the practicality of enforcement of many of these measures, they at least provide a point of reference for those affected and a set of principles against which national provision can be tested. They would help to create in Britain the general idea of having rights—an area in which we are particularly deficient.

In the course of reporting to this House on the Dublin summit in June 1989 the then Prime Minister described the Community's programme of social action as "piffling little powers". Now they are called, in the motion which we debated before Maastricht, intrusive Community measures in social areas". On 16 December the Financial Times reported that only 10 per cent. of British businesses believed that the social charter would have any negative effect on their personnel management practices.

Similarly, concerted action is essential in environmental policy, if only because pollution does not respect national boundaries. The fact that we have not carried out any proper environmental assessments of some particularly destructive road schemes is to our discredit. It is not a matter about which we should berate the Community. The Prime Minister said in October that we had no prior notice of the Environment Commissioner's interest in the four schemes. but Friends of the Earth have shown that the Department of the Environment received and replied to letters from the Commission in October 1989, January 1990, June 1990 and March 1991 about the need for environmental impact studies before the road schemes could go ahead.

Majority voting on social and environmental matters is essential because those issues demand common action across the EC. In areas where we have already ceded competence to the Commission, democratic accountability can reside only in the European Parliament. The effective decision-making body, the Council, meets in secret, passes its laws in private and consists of Ministers who authorise legislation that cannot be challenged by the national Parliaments or judicial systems. The European Parliament should be able to veto some of the proposals from the Council. There are cases where, in the interests of raising standards, it should be able to initiate legislation also.

However, it seems to me—I do not think that this view is widely held—that Parliament itself has an independent interest in these matters, whatever political party forms the Government. Ceding powers and sovereignty to another Parliament is a parliamentary as well as a Government matter. Therefore, the resources of this Parliament should be substantially strengthened so that we can scrutinise the EC. The present means of scrutinising EC directives and decisions is inadequate. At present, the means of considering future directives or the development of policy in Europe is absolutely non-existent. This Parliament needs a research and analytical staff to keep abreast of EC developments and proposals so that we, as a legislature, can develop alternative sources of information to the information with which we are provided by the Government, which is usually distorted and always loaded in the Government's favour. We, as a Parliament, should have an office and a staff in Brussels to keep us informed. By and large, we know only what the Government choose to tell us. There is a long-term case for a European sub-committee for virtually every Department that is given a Select Committee in the House.

Powers will inexorably move from here to the EC institutions. The question is whether those institutions are democratically controlled. What we need is more honest discussion and openness from our Government—from any Government—on such issues as they develop. We also need new machinery in the House for better understanding and evaluating them. Here we have as great a democratic deficit as the institutions of Europe.

Mr. Speaker

I call Mrs. Currie.

9.42 pm
Mrs. Edwina Currie (Derbyshire, South)

Mr. Speaker, you are wonderful.

I should like first to congratulate the powers that be, the usual channels, on calling a second debate on Europe. That puts into context the remarks of the hon. Member for Norwich, South (Mr. Garrett). This House does matter. It has a role to play in our debates and discussions on Europe. Indeed, it has a larger role to play, even now, than many Parliaments in the rest of Europe. It took a lot of courage for the Government to call the previous debate —I am glad that they did—and I am pleased that we have the opportunity to speak on Europe today.

I should like also to congratulate my right hon. Friend the Prime Minister and the team that went to Maastricht on the way in which they conducted themselves. They gave sterling service—and gave a new meaning to that term of quality. They gained admiration—albeit much of it grudging—throughout Europe. In the Netherlands, the newspaper De Volkskrant reported The Brits stole the show in Maastricht…it is plain the British have revealed themselves as rock-hard negotiators. That will stand us in good stead in all the discussions to come.

In France, the left-wing newspaper Liberation stated that the Prime Minister had demonstrated his devotion to economic liberalism. So he did—and Conservative Members are delighted.

On 12 December, Le Monde pointed out that my right hon. Friend was quite right to take the approach that he did, stating: It would have been premature to go much further in reinforcing Community institutions since EC institutions will have to be reformed considerably to take account of the probable enlargement of the Community. It continued by referring to the success of "realism and perseverance". Opposition Members have not referred to those opinions, but those are accurate and true quotations.

Speaking to a British newspaper—The Daily Telegraph—on the same day, Chancellor Kohl said such a conference"— the one at Maastricht, that is— has by definition got to be a series of compromises". That is what we have got, and I think that we have ended up with a first-class deal—not only for this country but for the entire European Community as it now stands, and for the nations which we hope will join before long.

Now we must consider how we are to make it all work. We face the completion of the single market fairly soon —officially by the end of 1992, although some parts may take a bit longer. We face the starting point of stage 2 of economic and monetary union on 1 January 1994. I think that we in this country should make an effort to make those developments work; not in a negative way—we should not simply be dragged along by events—but by adopting the most positive approach possible. None of that is news to my hon. Friend the Member for Watford (Mr. Garel-Jones), the Minister of State, Foreign and Commonwealth Office; he has heard me say the same before.

If we are to make the new treaties function well, and gain real benefits for ourselves and for our partners, we must not only remove the obvious, visible barriers, but begin to remove the invisible ones. This country contains far too many of those, and they prevent the British from playing a full part in Europe, and from showing as much enthusiasm as many of our neighbours. Let me give three examples: the dozy approach of British industry and British business to the opportunities offered by Europe, our lack of languages, and our general attitude to our history.

We should bear it in mind that we in the House must vote on the single currency within the next five years—by 31 December 1996. That vote will probably take place in the next Parliament. If we are to make a sensible decision then—a decision based on the conditions, economic and otherwise, that prevail at the time—and if whatever decision we make is backed by the electorate and is not unduly influenced by emotion, sentiment or ill-informed or excessively narrow nationalism, our Government will have a good deal of work to do in the meantime.

Business on this side of the channel seems to be sleep-walking. It seems to be missing a trick. Markets are opening up and developing, but we seem to be failing to adapt. We do not seem to recognise that those developments mean not only that we must go out to Europe, but that increasing competition is heading our way. Every business in the country is affected by the current changes, but are they aware of it? I sometimes wonder.

According to figures released by the German Foreign Office, in the first seven months of 1991—as a result of German unification—there was a tremendous increase in exports from other Community countries into Germany. The figure leapt by almost 24 per cent., nearly a quarter. The highest rate of export growth, 42 per cent., was registered by Spain. Denmark was second, with 31 per cent.; Belgium and Luxembourg followed with 28 per cent., and France with 27 per cent. Britain was way below the average, with an increase of only 19 per cent. I have no doubt that every business person involved congratulated himself on that 19 per cent., but it was well below the average.

The net result is that in trade with Germany in the first part of this year we stand not first, second or third, but fifth. Our exports of manufactured goods—and all the other exports of which we are so proud—to Germany, which desperately needs them following unification, are exceeded by those of countries such as Belgium. That is not good enough: British industry must pick up its feet.

Much has been said about attracting foreign industry and investment. My constituency is immensely proud of the fact that it has attracted investment not only from Toyota but from Sweden, in the form of ABB, and from Switzerland in the form of Nestlé. Constituents of mine work for Pirelli in Burton-on-Trent, and for many companies owned by other countries. We are proud that we can make them welcome, and pleased that they can make us wealthy. Last year we attracted more than half of all Japanese and American investment coming into the European Community. According to Nomura, a new estimate suggests that by 1995 Japanese investment in the United Kingdom could add £4 billion to our trade balance, 2 per cent. to output and more than 400,000 new jobs.

That is not enough. It is not enough to welcome foreign investment in our country, although our rejection of the social chapter will make that sort of investment more likely. It is not enough to encourage other European nations to invest in us, as they are doing in greater numbers. Somewhere along the line British-owned business must wake up and realise that there is a huge market out there of about 340 million people and that it has access to business throughout the Community and the world.

When the Single European Act was put on the statute book, a campaign was led by the then Secretary of State for Trade and Industry, Lord Young of Graffham, on what was called 1992. That seems to have faded somewhat since then, but it is even more important now. I urge the Government to have a new campaign to raise British business awareness of the opportunities offered by the single market and of what will happen if it continues to behave as if Europe does not exist.

We still act as if all foreigners speak English. They do not, but we act as if they should. That attitude is not only bad manners, but bad business. If the Japanese came to our country and sold goods with booklets in Japanese, we would not buy them. Yet we go to other countries where the majority of people speak their native language and try to sell them goods in English. Our salesmen speak English and we wonder why we retire baffled from the fray, even in a country next door such as France. We wonder why it is so difficult to penetrate their markets. It reduces drastically our chances of winning contracts overseas and it perpetuates the dislike of foreigners and the hostility to Europe that are still common in our country.

What are we doing about that? Last year 44,000 students took an A-level in modern languages. That is only 6 per cent. of the 700,000 A-levels sat last year. Two thirds of those students took French, barely one in five took German—the main business language—and only a handful, a few hundred, took the other main languages. The students have the right idea. Between 1990 and 1991 we have seen a 13 per cent. increase in the number of students taking A-level French, a 12 per cent. increase in the number taking German and a 10 per cent. increase in those taking Spanish—I know that my hon. Friend the Minister of State will be pleased about that. We should be teaching those languages in the same way as English and other languages are taught in countries such as Denmark and Holland. They should be taught not only from the age of 11 simply as part of the national curriculum. Children should begin to learn languages when they are seven or eight, as that is when they start to learn language properly. We should teach those languages in the same way as we teach our children road safety, because that knowledge is essential for their future.

We have a real problem in doing that because there is an extraordinary shortage of language teachers since business is employing many of the available people. My hon. Friend the Minister will know of article A in chapter 3 of title VIII on Education, vocational training and youth". It says: Community action shall be aimed at: —developing the European dimension in education, particularly through the teaching and dissemination of the languages of the Member States. My hon. Friend the Minister is nodding his head. He signed it and I hope that he means it and will do something about it.

The worst barrier of all is that of attitudes. It is high time that we abandoned for ever the notion that we can survive outside Europe. It is time for a culture switch—[HON. MEMBERS: "Time."] I have waited 26 hours to make this speech.

We are no longer a top-dog nation telling other nations what to do. We are a partner nation, sharing., being convinced and convincing other countries—a talent that our Prime Minister has shown. The real culture change will come when we realise that we are British and Europeans, and that we are lucky to be both.

9.54 pm
Mr. David Winnick ( Walsall, North)

Like all my colleagues, of course, I support the social chapter. In the most unlikely event of a Tory Government being in office when the programme is being implemented by the other Community countries, I am sure that there would be a challenge on legal grounds to the European Court of Justice. People in this country will not wish to be discriminated against while those changes and advances are being made by fellow members of the Community.

As for the second so-called triumph of the Prime Minister at the summit—the proposed opting out of a single currency—although I am a Euro-sceptic I have little doubt that whatever party is in government Britain will join the single currency if it comes about. The pressure from the business community here and on the pound will be such that it will be most unlikely, to say the least, that Britain will stay out of that arrangement for long. Indeed, we joined the exchange rate mechanism under such pressure.

Much has been made of the exclusion of the word "federal" from the treaty, but that is irrelevant. It has been agreed to continue down the federal road, and the emphasis on the words "ever closer union" shows that that is precisely what the other members of the Community want. Whether one is for a federal Europe—I certainly am not—or against, we should be clear and honest about what is being fought for in the Community. It is nonsense, therefore, to say that because "federal" has been excluded there is no need to be concerned, because a federal arrangement is in the offing and could come about within the next few years. I cannot take the view that that further erosion of national sovereignty is desirable.

One should recall that at almost every stage of debating whether we should join the EC, and then in the 1975 referendum debate on whether we should stay in, little or no mention was made by the advocates of the substantial erosion of national sovereignty. If anything, it was played down. Those who expressed reservations about joining or staying in were told that we were exaggerating. In their statement recommending a yes vote in the referendum, the then Labour Government, with the full support of the Conservative and Liberal parties, said: No important new policy can be decided in Brussels or anywhere else without the consent of a British Minister answerable to a British Government and British Parliament. Without any further erosion of sovereignty, Ministers often now say, "Such and such is Community policy and there is nothing that British Ministers can do about it." The House no longer has power over that. Majority voting, let alone monetary and political union, would make a nonsense of what I have just quoted.

Paragraph 29 of the White Paper issued by the Conservative Government in July 1971, two years before Britain joined the Community, said: There is no question of any erosion of essential national sovereignty. I favour Britain remaining in the Community, but can any hon. Member argue that our present membership, let alone EMU and political union, will not lead to further erosion of our essential national sovereignty? If there was no question of such erosion, there would never have been the Single European Act, let alone the further steps that have been taken by the Community.

What surprises me—I am sure that I am not the only one—is that, although much emphasis has been placed on further union by its enthusiastic advocates, when we consider what is actually happening in Europe we discover that the picture is quite different. Let us consider, for example, one or two countries outside the Community. There is the bloody civil war in Yugoslavia. The federal arrangement which has existed there and which many of us took for granted would continue—as it did for 40 years —is crumbling.

Sir Russell Johnston

That was a federal arrangement imposed by the great powers after the great war.

Hon. Members

So is this one.

Mr. Winnick

I heard some of my hon. Friends say that this arrangement is also imposed. For the sake of argument, I am willing to concede that the rule of law and parliamentary democracy—which some of us are keen to retain in this country in addition to national sovereignty —did not exist in Yugoslavia. I accept that, but most people would argue that there were worse examples of communist dictatorship than that in Yugoslavia. However, that federation is crumbling, and whatever the outcome of the civil war in Yugoslavia it is certain that there will be no restoration of the federation.

Further east, there is the continued break-up of the former Soviet Union. It could be argued, again with justification, that that union was established without a mandate, but that does not alter the fact that now that the dictatorship is disappearing the people do not want to belong to a single union—hence the independent republics which will probably be the outcome of the rather muddled political situation there. We should take those issues on board.

Let us consider the Community itself, however. It is all very well for the Liberal Democrat spokesperson on foreign affairs to say what he did about Yugoslavia and for us to argue about the Soviet Union, but what about the Community itself? The administrative headquarters of the Community is in Belgium, and when we talk about the European Community we always associate it with Brussels. Belgium is a democracy, but there is little doubt that the federal set-up in that country is currently being seriously undermined and there is a question mark over whether Belgium will continue to exist as a state. Unfortunately—it is, indeed, unfortunate—the parties of the extreme right have been successful in the recent Belgian elections.

In the Community countries there is mounting unemployment, recession and deflation which is helping to feed the extreme right wing and fascist movements which have had electoral success in Belgium and France, and outside the Community in Austria. Surely, instead of emphasising EMU and further political union, it would be more relevant and sensible for us to take steps within the Community to reduce unemployment and to try to reverse the circumstances which cause so much economic misery within the Community as well as to help those countries —certainly the former communist countries—which are in a much worse economic plight than we are.

We have heard a great deal about conversion today. We heard my hon. Friend the Member for Newham, North-West (Mr. Banks) say eloquently that he has been converted. I am willing to accept that on occasions one must stand up and say in all honesty that one has changed one's mind. There is nothing especially wrong or dishonourable in holding a political view and then changing it. I cannot claim—nor would I wish to do so —that in my political time I have not changed my views on one or two subjects. On the Community, however, I do not believe that any further erosion of national sovereignty is in the interests of this country. We certainly do not have a mandate to transfer even more authority overseas from this House.

Clearly our predecessors on the Labour Benches were far more involved than we were in the process, but like the other Labour Members who argued for colonial independence—we were often harshly criticised by Conservative Members, who said that we were willing to defend every country but our own—we said that the countries which made up the empire had a right to national independence. What they made of it was up to them, but they had the right to rule themselves.

If I passionately believed that—as I did-—it is surely consistent that I should take the same view about my own country. I believe that Britain should continue to rule itself. Of course, we can remain in the Community, although with some erosion of powers—as with NATO, it could be argued—but at the end of the day the House of Commons should decide on major political and economic issues. That is what the House of Commons is all about.

This country has ruled itself for centuries. I cannot believe that the time has come when we should say to ourselves that the Community and the arrangements in Europe are so perfect or near-perfect that we should abdicate the ability that we have exercised throughout the centuries. I do not believe that I was selected, or elected, to do anything of the kind. I treasure the national independence that this country has had, and the sovereignty that the House has had, and I shall not be a party in any way to any further erosion of our sovereignty.

10.1 pm

Mr. Nicholas Soames (Crawley)

I agree with the hon. Member for Walsall, North (Mr. Winnick), who has just spoken with characteristic passion about people's right to change their minds on important issues. Unlike some others, I am delighted. I see it not as an object of derision but as a cause for pleasure and satisfaction that the Labour party should have changed its mind for the seventh time in 10 years, and finally come round to the European idea. It is good for the House and for Europe that it has done so.

The hon. Member for Newham, North-West (Mr. Banks) said that he had changed his mind on the subject, and we all now know him to be an ardent supporter of Europe and of the House of Commons, and a keen student of the present and future difficulties that we will have to overcome. Although we must have every suspicion of a convert, I am glad that the Labour party has thrown its weight behind the European idea.

We need not be equivocal about it: what my right hon. Friend the Prime Minister has brought back from Maastricht is, by any stretch of the imagination, a remarkable achievement for him, for the Chancellor of the Exchequer and for the Foreign Secretary—and for my hon. Friend the Minister of State, too. It is also a considerable achievement for the European experts at the Foreign Office, and especially for our people in Brussels, whose technical expertise is admired throughout the Community.

Sir Russell Johnston

Does the hon. Gentleman not think that that result was also a credit to the other European countries, which were willing to compromise with us, although they were not keen to do so?

Mr. Soames

The hon. Gentleman makes a respectable point, In any great negotiation, if an agreement is to be reached, compromises must be made on all sides. I am glad that we find friends in different areas where before we may have been devoid of friends. That is a cause for satisfaction. Of course we had to compromise, and so did everyone else.

The Community must now go carefully and slowly about its business. The upheaval in its structures and the dimensions of what it is about to absorb will make it a constitutional boa constrictor. It must now be careful how it proceeds. We must give time and careful thought to putting proper substance on the foundations of Maastricht. We must not close off too many of the avenues of the future by rigidly laying down the way forward through the minefields that lie ahead, through which common sense dictates that we proceed with the greatest care. No advantage will accrue to EC countries jointly or separately if the agreements reached cannot cope with the stresses and strains that are likely to arise in the future.

There is no doubt in my mind or in the minds of the vast majority of Conservative Members that it was in our national interest to reach agreement on the treaty at Maastricht in the light of the measured and sensible package which was negotiated there. My right hon. Friend the Prime Minister has put Britain back at the heart of the Community, where we shall have a far greater influence and from which we can be in the vanguard in shaping the future.

My right hon. Friends signed the union treaty having made a realistic assessment of Britain's national self-interest. They know that, with the huge upheavals taking place in eastern Europe, the debate about Europe's future is only just beginning. They know that many of the thoughts and assumptions of the past 40 years, as the hon. Member for Walsall, North rightly said, will have to be shaken off and that the European vested interests which have for the past 40 years been so much a part of European life will have to look at the facts of the modern world as it really is and respond accordingly. This weekend, the Community looked out over the future, and it has made an act of faith across all the people of Europe. For that reason alone, it was an important occasion.

It is a matter of pleasure and pride for this country that there was such a breadth of debate before the Maastricht summit. In France, in Germany, in Spain and in Italy, there was hardly any discussion. I understand that the Cortes debated the matter for half a day. In France and in Germany, countries that are instinctively so pro everything that happens within Europe because of their situation in Europe and their history, people have only just woken up to what has been done in their name at Maastricht. The right hon. Member for Leeds, East (Mr. Healey) had some important points to make on that.

Despite the vigorous public debate before the Council, I was sometimes saddened by the extraordinary lack of confidence that Britain seems to have in its own future. We must try to persuade our people that the treaty of union is not just about Britain—that its effects will be felt for the good, I hope, throughout the length and breadth of western Europe. We must persuade our people that it will reflect, and should reflect, the interests and commitments that are of vital significance for large sections of European industry, for agriculture and for the national policies of all the member states.

For many people in Britain who are involved in everyday commercial life, the transactions within and across Europe are quite matter-of-fact. In that respect, industry has for many years led opinion in the House into seeking far closer ties within the Community. I am a director of a subsidiary of one of our great British corporations which this year has opened new offices in its European network in Aix-en-Provence, in Budapest, in Oporto, in Warsaw and, with great pleasure, only recently in Watford.

Sir Trevor Skeet (Bedfordshire, North)

Well done.

Mr. Soames

I knew that my hon. Friend would be pleased.

To the people who work in that company, the idea of Europe means a great deal. The agreements at Maastricht will have given great encouragement to business men and women whose everyday work is the transaction of business on the European scale. Great will be the opportunities available and accruing to the United Kingdom with the completion of the single market.

The agreement will lead to a far greater appreciation by people in Britain of the idea that the United Kingdom is truly an integral and important part of the real Europe, by geography, by tradition, by history, by culture, by civilisation and, most importantly, by commerce and trade of every kind.

Other urgent and vital matters for the United Kingdom arise from the agreement. The first, which was raised by the Leader of the Opposition, is the critical necessity for a swift reform of the common agricultural policy. We really must get this matter resolved in the future interests of the whole European Community.

We and our partners must also set about the creation of a low-cost, free-trade, lightly regulated, low-taxed and high-productivity Europe. We have much work to do in that respect. We shall need more advanced technology, better education, higher investment and lower interest rates and taxation. We look to Ministers in our Government and to all the other Governments of the Community to ensure that the Community does not become an inward-looking, introspective entity; that it keeps its eye on the wider world; and that it is dedicated to the philosophy and ideal of free trade without which the Community and the world would perish. Without those highly desirable industrial essentials, we shall not be able to compete in the world and provide the standard of living that our people have come to expect.

For my own part, the argument in this respect is simple, and has been admirably put by my hon. Friend the Member for Chichester (Mr. Nelson). Do we want the people of our country to be increasingly better-off or to be poor? Do we want to be rich and prosperous in Europe, or do we want to become the poor cousins, living outside it? For far too long we have ignored what my hon. Friend called the bottom line of the European calculation and our duty to all our people to secure their prosperity, safety and security. Those are some of the most important thoughts behind my right hon. Friend's thinking in the lead-up to the Maastricht summit.

The future of Europe over the next 20 years will be one of dazzling opportunity, and I am glad that, as a result of the treaty, we are now back in a position to help to influence those opportunities for Britain's benefit. The Community will push on as the biggest single trading market in the world—bigger than the United States and Japan combined. It will attract global investment. It will develop and employ, in the most extraordinary manner, the very latest technology on offer. It will use all the skills of its many different peoples to provide goods and services to a market of nearly 380 million people.

My constituency—as well as the United Kingdom as a whole—has already been a major recipient of such investment and, following Maastricht and the Government's absolutely correct arrangement for an opt-in on monetary union, we shall have greater and better opportunities for more inward investment over the next few years. The reason for that is not only that we shall have taken an advantageous position at Maastricht, but that Britain has an excellent entrepreneurial climate, in which people are permitted to get on with their business and take advantage of Britain's proximity to, and partnership and arrangements with, Europe.

On defence and foreign affairs, my right hon. and hon. Friends have succeeded in developing the excellent concept of a common foreign and security policy but only for issues in respect of which we have interests in common. To my mind, the most serious matter for the Community is that the United Kingdom's freedom to act is safeguarded when we need to respond in an emergency to protect our own interests.

The most formidable difficulties exist in eastern Europe, and they must be dealt with. I hope that the new arrangements will allow the Twelve to act more efficiently and coherently. The crucial test for the arrangements will be whether the structures of the European Community are suitable for the post-cold-war world and the way in which they can be developed to meet the needs of a Europe entirely different from that which the Communities were designed to serve.

For example, Germany is now reunited. She has the most powerful economy in Europe, and is moving rapidly to recover her old spheres of commercial and political interest. Inevitably, Germany will replace the Soviet Union as the dominant power within Europe. Are the Community's institutions suited to such a change?

I believe that the conference really came three years too soon; it is far too soon to assess the shape of the post-cold-war world. This Gadarene rush for defence cuts is, I believe, a change that has been made far too soon. We need a long-term, fundamental rethink of the structures of political and economic co-operation in a Europe that is no longer embattled and on the defensive, and a rethink of Europe's relationship with a world in which communism has ceased to matter. That is a critical necessity for the future.

This year, the Twelve will have to deal with famine in several republics of the Soviet Union. They will also have to deal with explosive nationalistic hatreds in many ex-communist countries. We will see whether the systems are sufficient to cope with the great strains and problems that lie ahead.

My right hon. Friend the Prime Minister has brought back a splendid package from Maastricht. Negotiations started a year ago, with Britain in a highly defensive position. However, with exhaustive and patient skill, the Government have secured an agreement which has achieved all Britain's objectives and her interests, as well as being a most important step forward for the European Community. I will have great pleasure in supporting the Government tomorrow night.

10.20 pm
Mr. Robert N. Wareing (Liverpool, West Derby)

Earlier in the debate, my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) said that she had changed her mind. This debate is rather like a confessional. Hon. Members have described how they have changed their minds. However, I can tell the Government Front Bench that I have never changed my mind about the need for a united Europe, preferably one based on the principles of democratic socialism. However, I have changed my mind about what used to be called the Common Market.

At the time of the Schumann and Monnet plans, and during the 1950s and 1960s, I honestly believed that the Common Market covered only half Europe so it was wrong to talk about being pro-Europe and anti-Europe. I believed that it was a common market of the multinational corporations. I now believe that the multinational corporations have become sovereign states and the only way in which the people represented by democratic representatives can control the activities of those corporations is through elected supranational Governments. That is the stage that we have reached.

As late as 1975 and the referendum when I opposed our remaining in the Common Market, Britain was still a fairly substantial manufacturing power. However, since 1975 our manufacturing base has been decimated by the Government. One third of our manufacturing base has been lost despite the fact that we are the only country in the Community to have benefited from a North sea oil bonanza.

What would the Germans or the French have done with the revenues from North sea oil? This country wasted that great asset and we are now one of the weakest manufacturing countries in the Community—so weak, indeed, that the Government do not believe that our working people can be guaranteed the same rights as those in manufacturing industry in Greece, Spain and Portugal.

Some hon. Members have referred to opting out and oppose further loss of sovereignty, but what is that sovereignty? When I ask people on the doorsteps in my constituency about that, I find that they are not worried about sovereignty. If sovereignty means anything to them, it means the right to a decent home, a decent education and a decent chance in life. They are no longer interested in the nationalist nonsense that we hear from the Government, and which was the real motive behind the way in which the Government approached Maastricht.

I have no doubt that, once the election is out of the way, the Government will head in the direction of a single currency and the European central bank. Indeed, hon. Members have already alluded to that today. The Government have already lost the opportunity for that bank to be located in London, and that means lost job opportunities for our people—the people whom we represent.

The Government make this country the laughing stock of the world when they talk about the European Community and its social policies being the back door to socialism. O that such policies would lead to democratic socialism as an inevitability. That is something for which people such as myself would fight in Europe—in order to bring about a decent life for our people. The Government have found themselves in an ideological cul-de-sac which is not shared by even the most conservative parties represented in the Bundestag, the French National Assembly or any country in the European Community. The Conservative party, of all political parties holding any power within the European Community, does not believe in social progress and the concept of one nation. Where is one-nation Toryism today? We have only to go less than half a mile from this House to see how our nation is divided. On one side of the street there are banks which are rich on the profit that they have made out of ordinary people, and on the other side there is cardboard city. We have only to walk along Victoria street to see what the Government's social policies mean for ordinary people —the people whom we represent.

The Conservative party is the only major political party that is opposed to the social charter. Conservative Members are also trying to tell Mr. Kohl that the co-determination that Germany has had since 1952 is also a stepping stone to the horrors of militant strikes and trade union activity. They should ask the Germans whether co-determination has succeeded in their country. Nobody in Germany today wants to see the end of the co-determination statute. When our workers go to Germany and visit their opposite numbers, as our dock workers recently did during the passage of the Government's docks legislation, they were amazed that German workers were consulted about their place of work, production, and activity within their plants.

A blatant lie is being told. Time and again we are told that the Government's industrial relations legislation would have to be changed to what it was before 1979. I shall not deal with the arguments about that legislation, but it is a blatant lie that anything in the social charter would entail the repeal of one piece of industrial relations legislation. I defy any Conservative Member to tell me the name of any Act that has been passed since 1979 which would have to be repealed if we signed the social charter.

The Government talk about subsidiarity—it is the new word—and say that if a function is best performed at the national level rather than at the Community level, that is where it should be done. I do not disagree with that, but the Government denied the principle of subsidiarity to the Greater London council, the Merseyside county council, the West Midlands council and the Tyne and Wear council precisely because they were elected Labour councils with whom they happened to disagree.

The right hon. Member for Finchley (Mrs. Thatcher) has been tramping around eastern Europe and talking about democracy when she does not even believe in democracy in her own country. Let us not allow the Tories to tell us that they care about sovereignty because they are keen on the principle of parliamentary or local democracy in Britain because it is a blatant lie to suggest that that is the case.

Unfortunately, nationalism catches on with many people. We have seen how Milosevic used the nationalist card in Kosovo and eventually entrenched his power in Serbia. Tudjman in Croatia has used the same card. The same has happened in various parts of the Soviet Union. However, one does not have to look beyond our shores to see where nationalism is being used to engender support from the electorate. As I said before, when the Government went to Maastricht to negotiate on behalf of the United Kingdom, first they were more worried about the unity of the Tory party than that of Europe and, secondly, they were more worried about wrongfooting the Labour party. They hoped that the British electorate would think of the Labour party as anti-British.

I represent my constituents' interests and I believe that the way to achieve better conditions for them is not to opt out of Europe. Britain's manufacturing base cannot be restored outside the European scene. That is an absolute impossibility. We need the Siemens and other industrial concerns of Europe to help us build up our base.

The hon. Member for Derbyshire, South (Mrs. Currie) talked about Japanese investment, but who will control Japanese investment? Will it be controlled in Europe, London or Tokyo? I should have preferred to have the opportunity to elect a Parliament in Europe which could control the institutions of government—the Executive in Europe—and could see to it that multinational firms acted in the interests of the peoples of Europe.

We must think in terms of being in Europe. The Government were willing to sacrifice even one of their own principles because they were worried about what would happen in the general election. They gave up the possibility of having any say whatever in determining who will be the officials of the European central bank. We have lost all chance of ensuring that London becomes the financial centre of Europe. Undoubtedly, the bank will go to Frankfurt instead. Nothing was so cynical in the past week as the manipulation of the news in much of the British press. Headlines about the so-called "Triumph of Major" were signposted across the cheap tabloids. It was in fact an absolute disaster for Britain. It would perhaps be better to refer to what was said in the continental press. For example, the Rheinischer Merkur said: branding reasonable protection for workers as 'socialism through the back door' is throwing out the baby with the bath water. A Danish newspaper said that Maastricht exhibits Britain as a developing country which wants to compete on cheap labour. That is the truth of the matter. Those newspapers are not sycophants of the Tory party: they are telling what I believe to be the truth, and the truth that my constituents will believe when we come to the general election.

10.33 pm
Mr. Alan Haselhurst (Saffron Walden)

It worries me that our continuing debate about Britain's relations with her European Community partners is still dogged with overtones which I find unnecessary and, in some cases, unpleasant. I do not understand why the argument has reappeared that there is a political side to the enterprise which no one realised at the beginning and that, if they had done so, people's view would have been different about it.

I go back to the time when Mr. Harold Macmillan came to the House to make a statement on 31 July 1961. He had barely paused to take breath when he said: This is a political as well as an economic issue. Although the Treaty of Rome is concerned with economic matters it has an important political objective, namely, to promote unity and stability in Europe, which is so essential a factor in the struggle for freedom and progress through the world."—[Official Report, 31 July 1961; Vol. 645, c. 928.] How can anyone be in any doubt that that was the tone with which this whole debate began in this country and has continued since?

In 1971, throughout the debate over our decision to attach ourselves to the treaty of Rome, there were constant references to the political dimension. Sir Alec Douglas-Home's speech on 21 October was full of references to that, including use of the "F" word. How can anyone doubt that there was a political dimension to the Community?

In his winding up speech my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) said: I want Britain as a member of a Europe which is united politically, and which will enjoy lasting peace and the greater security which would ensue."—[Official Report, 28 October 1971; Vol. 823, c. 2212.] Those sentiments received an endorsement in this House of 356 votes in favour to 244 against. How can it be said, in this latter day, that there was some doubt about the political dimension of the European Community?

Mr. Winnick

Will the hon. Gentleman give way?

Mr. Haselhurst

No; we have only a short time available.

The political nature of the Community has been apparent to us all right from the start, and has never been omitted from the debate. It was certainly not omitted from the referendum debate.

I do not accept that we are the only country in the Community to obey the rules. We are very good at obeying the rules, but we only lie third in the league table of adopting and implementing Community regulations. It does not help to sneer at our Community partners because they are less good. The right approach—the approach adopted at Maastricht—is to ensure that we tighten up on implementation. Indeed, a country should face penalties if it does not obey the rules of the Community.

Nor does it help the debate if we suggest that somehow our democracy is superior to everyone else's and are rather scornful about democracy in the Community. We are entitled to be proud of our parliamentary democracy. I am intensely proud of it, but I do not spurn democracy in our partner countries. I recognise that some of them have had to fight to reassert their democracy and we should respect that. It may be a tender plant in some countries, but it is a plant which they revere considerably.

To suggest that if we progress to unification in Europe we shall lose our national identity is false and unreasonable. I do not detect any loss of identity among the Scots after 284 years of full political union with this country. Nor do I detect any move by the French or the Italians to erase their national identity, even though they may be the most enthusiastic in the terms with which they wish to embrace the idea of a united states of Europe.

Against that background I found the speech of my right hon. Friend the Member for Chingford (Mr. Tebbit) immensely depressing. It struck me as a speech full of bile and scorn, with hardly a respectful word for our partners in the Community, with whom, as a Minister, he must have worked closely at one time. He heard the debate in 1971. He should have known then what we were setting our names to and what he supported.

Mr. Tebbit


Mr. Haselhurst

I shall give him an opportunity to reply in a moment. He was a member of the Cabinet in 1985 when the Single European Act was introduced and he has the gall to complain about the transport regulations, which I am happy that my hon. Friend the Member for Southend, East (Sir T. Taylor) told the House had not a little to do with the Single European Act. How can my right hon. Friend the Member for Chingford say that he did not see all that coming? As he was a member of the Cabinet when those matters were discussed, how can he discover its great constitutional importance now? I do not think that it befits him well to complain to the House now.

Mr. Tebbit

I am happy to explain to my hon. Friend. At that time, I did not believe that the doctrine of subsidiarity would require that our speed limits be dictated by Brussels. Secondly, in Cabinet I believed, as hon. Members generally believed, the then Foreign Secretary when he told us things about the Single European Act that have proved not to be true in fact. He believed it to be true at the time, but that is not the way that it worked out. Having had my fingers burnt, I am damned if I am going to put my arm in the fire.

Furthermore, if my hon. Friend goes back to what my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) said when he came back from his famous meeting with President Pompidou, he will see that my right hon. Friend explained carefully to the House that the democratic line of accountability would be, exclusively, through the Council of Ministers to the national Parliaments. He further observed that the Commission was a bureaucratic organisation with limited terms of reference, and it would not have control over policy. That is why I voted for it.

Mr. Haselhurst

Out of courtesy, I gave my right hon. Friend the opportunity to intervene, but I did not expect him to make a third speech on Europe within such a short time. He must have had amnesia during his ministerial days if he failed to understand the importance of what he was apparently happily prepared to assent to.

Mr. Tebbit

Will my hon. Friend give way?

Mr. Haselhurst

I think that I have heard enough from my right hon. Friend.

Set out in the preamble of the treaty of Rome was ever-closer political union. That is what we signed for, and in the treaty of Maastricht it is repeated that we are moving towards an ever-closer union. I recognise that, as we move ever closer to an ever-closer union, hon. Members may have doubts about what that implies for the future of the House and its powers, but one has to look at it realistically. To say that we shall be denuded of our sovereignty is unreal.

Let us consider what we spend our time doing. The Order Paper shows the various matters that concern us. Our constituency mail bags show us the matters that our constituents want us to consider. We should recognise that we are not dealing with great international issues all the time. I must have had about three letters about the Maastricht treaty, but I had 10 times that number about Sunday trading and similar matters.

The House does not deal with the great issues all the time. For example, did the House go into solemn conclave to discuss whether interest rates should go up or down? In or out of the ERM, if the Bundesbank put up its interest rates, we followed within half an hour, without any debate in the House at all. Those are the realities that we must face. We may not like them, but that is the case.

I find the argument that democracy is under attack because of the ever-closer union with the European people difficult to understand. This argument can be raised at any level of democracy. Parish councils sometimes complain about the over-weaning power of the district councils, but we know that the power of planning, of deciding where new housing estates are to go, cannot be left to parish councils. The decisions cannot realistically be taken at that level; and so it goes on up the system.

No wonder that we hear complaints from the people of Scotland about the government that they are getting within the United Kingdom. I am, to my fingertips, a unionist. I want to unite Scotland with the rest of us in the British Isles, and if I want to convince the Scottish people that they are right to be part of this united kingdom, I do not see why I should adopt an entirely different attitude towards ever-closer union within the European Community.

Ms. Short

Will the hon. Gentleman give way?

Mr. Haselhurst

I am afraid that I must say no to the hon. Lady.

If we are always going to settle for a narrow view, by saying that it will always be the smallest group of people who must hold sway over every decision, we shall never be capable of taking the greater decisions with the greater vision that is necessary if we are to keep apace of events. I hope that we shall move on to closer union, but I hope that we shall do it at a reasonable and sensible pace. That is the tone that the Prime Minister has adopted in his negotiations.

If economic union and a single currency could be achieved, I should prefer that. There will be considerable difficulties, but if it did happen it would be for the benefit of British business, of British industry, and therefore of the wealth of the people of Britain.

I welcome the important progress that was made at Maastricht. I do not complain that it was not sufficient progress, and I certainly do not complain that it was too much. I return to the words of Sir Alec Douglas-Home in the debate in 1971 when, in answer to a question from Jo Grimond, he said: I said that the political processes in Europe would evolve, and that they would evolve by consent, because if one tried to go too fast and impose too much the Community could break up. The change will occur by evolution and by consent"— [Official Report, 28 October 1971; Vol. 823, c. 921–22.] I am content with that approach. I think that we are making good progress.

10.45 pm
Mr. Denzil Davies (Llanelli)

The hon. Member for Saffron Walden (Mr. Haselhurst) was present, as I was, during the debates in 1971 and 1972. I do not want to pursue this line, but I must say that I had a different impression of the way in which the EC was sold at that time. Being a Celt, I can smell a union wherever it may be. I was quite convinced that the matter was about union. The Prime Minister of the day, the right hon. Member for Old Bexley and Sidcup (Mr. Heath), and others did not convey that impression, nor did many of the so-called pro-marketeers on the Labour Benches. However, many of us were convinced that it was about union, and that is what it has been about from the beginning.

I am not sure whether the treaty of Maastricht has speeded up the conveyor belt to unionism or federalism—whatever the words mean—or whether it has slowed the process. I do not know what effect it will have. I suspect that the conveyor belt will keep moving for a while, but listening to these debates I also suspect that those on that conveyor belt—and those who cling on to it—do not know where they are going. They are not quite sure about the conveyor belt. Some of them are happy for it to go round and round and others are happy to jump on it because it is the only conveyor belt available and they think that they might get some benefit from it.

I am not convinced about the consequences of Maastricht. I have a feeling—it is just a feeling—that Maastricht was the high water mark of what I call the old Europe:the Europe of the Schumann plan and the European Coal and Steel Community; the Europe of the bureaucratic centralism of the Commission; the Europe of the Six, huddled around Paris, Bonn and Brussels.

I do not believe that the Europe of the Six has ever come to terms even with the Europe of the Nine. It is having even more difficulty coming to terms with the Europe of the Twelve. I have considerable doubts about how the Europe of the Six will manage the Europe of the Fifteen, the Eighteen or the Twenty. Of course, the old Europe that I have described had its roots in an older Europe, and that was the older Europe of congresses and chancelleries, of people who drew boundaries on maps and wrote irreversible treaties.

One abiding impression I had when watching what happened at Maastricht, mainly on the television, was the arrogance of some of the leaders of the Europe of the Six—the arrogance of Chancellor Kohl, President Mitterrand, Mr. Delors and the Dutch presidency. What about the arrogance of Chancellor Kohl, who announced to the world that Europe would have a single currency by 1 January 1999? What about the arrogance of the proclamation that it was irreversible?

There is also the arrogance that purports in the treaty to transfer for ever economic and monetary power from democratically elected countries to a non-elected Commission and a non-elected central bank. I suppose that those who took part in the congress of Vienna or in writing the treaty of Versailles also thought that the decisions that they took on Europe were irreversible, and proclaimed as much to the world.

This same arrogance decreed that elected Governments, even in stage 2, be pilloried, hounded, and coralled if they did not meet certain economic indices written into the treaty. They have to keep within a ratio of Government borrowing to gross national product of 3 per cent., for instance. Why 3 per cent.? Why a ratio of 60 per cent. for Government borrowing and GDP? We pride ourselves on our debates here, but I have not heard the 3 per cent. figure debated at all. Where did it come from? Why not 3.5 per cent.—or 3.99 recurring per cent.? Who decreed these figures? Are they the distillation of centuries of human wisdom, now written into the treaties?

More arrogance is to come with stage 3. The elected Governments of member states are to be fined for transgressing certain economic indices and statistics. Monetary policy is to be transferred, and with it control over economics, to a central bank whose president or governor shall sit for eight years-the equivalent of two terms of office for an American president. In that time, he cannot be sacked or replaced, whatever he does and whatever effects his decisions have on millions of people in Europe.

No doubt he and his colleagues will enjoy marvellous Euro-salaries and pay low Euro-taxes. They will also enjoy diplomatic status and immunity and all the trappings. If there are any members of Brezhnev's politburo left, they must be drooling at the mouth at the thought of such non-democratic perquisites. If these bureaucrats put curtains in their stretch limos and reserve the central lanes of the autobahns for themselves, the picture will be complete.

It is arrogant to transfer power to non-elected people. It is arrogant to subjugate politics to economics and to subordinate democracy to bureaucracy.

The treaty says nothing about the unemployed. It has plenty to say about price stability and debt, about borrowing and monetary policy—all good things in themselves—but there is nothing about the unemployed or about poverty. The treaty says that member states should avoid excessive budgetary deficits, so why does not it say that they should avoid excessive unemployment?

Sir Russell Johnston

If the hon. Gentleman will allow me to arrest his wonderful Welsh Periclean rhetoric for a moment, I must tell him that the social charter is about precisely the topics he has mentioned. It tries to create prosperous conditions for all the citizens of Europe.

Mr. Davies

No one is defending opting out of the social chapter. Monetary matters are at the heart of the social chapter, however, and if we lose control over our economy, high hopes for the social chapter cannot be fulfilled.

Why does not the treaty stipulate that member states shall keep unemployment below, say, 5 per cent?

Ms. Short


Mr. Davies

In that case, I do not understand why my hon. Friend, and many other members of my party, support the idea of a central bank, which will entrench monetarism in Europe for ever.

Mr. Christopher Gill (Ludlow)

Is it not obvious to the right hon. Gentleman that the reason why unemployment is not mentioned is that it will inevitably rise dramatically as a result of a single currency?

Mr. Davies

It seems that none of these matters should be mentioned. Debt, unemployment and price stability, for example, should not be mentioned, but if we mention some economic indicators, why not others? We are entrenching money and finance—they will be declared king. The poor, the underprivileged and the disadvantaged have always understood that money was king, but they have always had the hope that, somehow or other, Governments could dethrone the king; that democratic action could dethrone the king and that they could change the idea that money always controls everything.

Very often, that hope did not materialise, but they then hoped that the next generation would be able to do it. By entrenching money in the treaty, we are taking that hope from people—from the unemployed, the underprivileged and the poor of Europe. We are taking political choice and ideology away from them, together with the chance of their opting for a different monetary and financial system.

Ms. Short

I know that my hon. Friend understands economics very well, but does he not agree that the capacity of a state such as Britain to look after the poor and its unemployed has gone? Our interest rates are controlled by Germany. Therefore, although I agree that the terms on which economic and monetary union are discussed in the treaty are deeply deflationary, is not our only hope to parallel the power of money with democracy, to try to civilise the power of money, so as to create the possibility of dealing with poverty and unemployment?

Mr. Davies

But my point is that we are losing all democracy. We are losing even the little control that we have over money to the European bankers and financiers—and at a time of turmoil in Europe. Unemployment is extremely high at the moment in the Europe of the Twelve. The Europe of the Twelve will not be an economic panacea. In fact, Europe is no longer very productive. Perhaps the Europe of the Six was productive, but as it has moved to the Europe of the Nine and of the Twelve, so it is ceasing to be productive. Therefore, the problems of unemployment are built in.

On top of that, people will be coming from the east, where there are worse economic problems, and they will swell unemployment in Europe. In addition, deflation has been enshrined in the treaty. What Europe needs in the next 10 or 15 years is flexible politics, not entrenched economics and finances, which is what the treaty will give US.

I do not know where the conveyor belt is going and I suspect that many other people do not. Some people think that it will produce a great European consultative assembly, representing people stretching from Cape St. Vincent in the south-west of Portugal all the way up to the northern shores of the Baltic and even across, and perhaps beyond, the Hellespont. Who knows, it may stretch to Asia Minor. The very idea that such a huge assembly could, in any shape or form, be democratic is nonsense. It would be run by the imperial civil service, and the glue that attempted to keep it together would be some kind of currency—a latter-day Roman denarius. It would be impossible.

The only way for the new Europe to progress is for it to be a Europe of democratic, pluralistic nation states, co-operating, acting and deciding together. That is the only way forward. I do not believe in a Europe of bureaucracy or bankers. I believe in a Europe of democracy, but in this treaty we are moving away from democracy and towards bureaucracy and bankers.

10.58 pm
Mr. Toby Jessel (Twickenham)

Like the right hon. Member for Llanelli (Mr. Davies) and my hon. Friend the Member for Saffron Walden (Mr. Haselhurst), I too was here in 1971. In October that year, I was one of the 39 members of the Conservative and Unionist party to vote against the motion: That this House approves Her Majesty's Government's decision of principle to join the European Communities on the basis of the arrangements which have been negotiated."—[Official Report, 21 October 1971; Vol. 823, c. 911.] In 1986, I abstained in the vote on the Single European Bill and last month I abstained in the vote on the pre-Maastricht debate. I believe that I have been rather more consistent than the leadership of the Labour party, which has swung right across from one extreme to the other. As my hon. Friend the Member for Crawley (Mr. Soames) said, that has happened seven times. If it can happen seven times, perhaps it can happen eight. Perhaps the Leader of the Opposition believes, with Emerson, that consistency is the hobgoblin of little minds". The motion is in two parts. With the first part, which congratulates the Prime Minister on achieving all the negotiating objectives set out in the motion that was supported by the House on 21 November, I can agree. I can happily endorse that. Within the goalposts that my right hon. Friend set—which were rigorous—his tactics and those of his team, their persistence, sheer industry and application, were most remarkable. The Government have achieved, against the odds and courageously, a pause—an important and significant pause, but still a pause—in the seemingly remorseless process of swallowing up.

What I question are the goalposts. I do not want just a pause, or just to keep the status quo; I should like to see the powers of the European Community drastically curtailed. Basically, the concept of the treaty is to see the European Community more and more as one unit. The documents are shot through not only with the original words of 20 or 30 years ago about "ever closer union", but with many more words with the same emphasis and of the same genre. We must ask what it really means.

Let us take defence, and the references to the Western European Union and NATO. Defence is the first duty of any Government. The purpose of defence is, of course, to defend. It is not just some expression of foreign policy, but an end in itself, to keep our people safe and free.

All through human history people have attacked each other. It would be a dangerous gamble to assume that human nature has somehow changed so much for the better in our generation, or will in the next, that we shall be immune from that risk. Even though the Soviet Union is breaking up, we cannot know where the next threats may come from.

The Maastricht treaty upholds NATO as the main bastion of our defence, with the Western European Union within it, but its reference to the strengthened role of the WEU really means a strengthened role for the European Community. On page 114, we read that Member States agree to strengthen the role of WEU, in the longer term perspective of a common defence policy within the European Union which might in time lead to a common defence, compatible with that of the Atlantic Alliance…To this end, it will formulate common European defence policy". On page 115, it states: The objective is to build up WEU in stages as the defence component of the European Union"— that is, of the European Community. To this end WEU is prepared at the request of the European Union"— that is, the European Community— to elaborate and implement decisions and actions of the Union"— that is, the European Community again. To this end WEU will take the following measures to develop a close working relationship with the Union". The treaty then lists several measures, including arranging…to ensure that the Commission of the European Community is regularly informed and…consulted on WEU activities in accordance with the role of the Commission in the Common Foreign and Security Policy as defined in the European Union Treaty".

Mr. Garel-Jones

I am sure that my hon. Friend has been noticing as he reads that all of that makes it clear that the WEU is not subject to the union but is separate and independent from it. Our purpose, which was contained in the Anglo-Italian paper—as my hon. Friend, who follows these matters closely, will know—was to be able to build a European defence personality around the WEU, of whose parliamentary Assembly my hon. Friend is a member, to supplement and complement our role in NATO, which is the cornerstone of European defence.

Mr. Jessel

I am grateful to my hon. Friend. I accept what he says about NATO being the cornerstone. My point is that, for the first time, the European Community and its organs have the right to be consulted about European defence. In some sense, the WEU becomes answerable, through those procedures, to the European Community. I see it as the thin end of the wedge. The European Community will want more and more say on defence. It could have a real influence over defence in the end; and I believe that that will weaken our defences.

When Saddam Hussein attacked Kuwait, Britain—led by my right hon. Friend the Prime Minister—responded robustly, as did two or three other states in the Community. Most of the other member states, however, were vacillating, craven and supine. Some of them were much the same when Argentina attacked the Falkland Islands. I do not see how we can ever rely on them, or their representatives through the European union, to respond quickly, certainly and effectively in the event of an outside attack. For years I have heard the way that they talk in the Western European Union Assembly. I believe profoundly that our defences and our security will be far sounder if the European Community has no link with them.

Constitutions must reflect the public will, otherwise they will crack up as in the Soviet Union and Yugoslavia. We see centrifugal forces in Quebec, Kashmir and elsewhere. Within the European Community we see the growth of ugly forms of nationalism. In France, M. Le Pen is said now to be more popular than President Mitterrand. We see nationalism also in Belgium and Germany and Austria.

Sir Russell Johnston

Will the hon. Gentleman give way?

Mr. Jessel

No, I must get on. I said that I would be no more than 10 minutes, and I have only three more minutes.

In our own country, there is a deep instinct for and a healthy streak of stubbornness, which I share. There is a refusal to be pushed around. Can anyone imagine that in the end Britain will be more docile than France, Belgium or Germany?

The Community talks of "ever closer union", which means ever more ubiquitous interference. The European Community, in clasping the member states, or member nations, too closely is planting the seeds of its own destruction. I believe that some of the nations will break out. I do not believe that Britain will still be a member of the Community in 30 or 40 years' time. It is only a matter of time before small national or nationalist parties spring up in Britain. To occupy their ground and to stop their advance, both the main parties will have to become less Euro-centred and more national again. At some stage, one or other of the main parties will campaign on a European issue. It may be that we can no longer steer our own course between inflation and unemployment, or the issue might be immigration. There are any number of issues that might arise.

In the end, I believe that one party or another will secure a majority in the House on the platform of flouting the European Community, its institutions and its courts. We shall then have a constitutional crisis, and it will be a question of who the army and the police obey. I would rather have a smaller constitutional crisis now than a big one later on.

I recognise that some economic functions have to be pooled, but beyond that most of the British people do not want any power over, say, Italy or Spain. They certainly do not want the Italians or the Spanish, for example, to share in ruling Britain. That is what I feel deep in my bones. I feel that I have no sense of duty, owe no loyalty and have no sense of belonging to any of them. I believe that I speak for the majority of my constituents. That view is in stark conflict with the spirit of the treaty of the union. That is why I cannot endorse the latter part of the motion, which contains the words "warmly endorses" the Maastricht agreement. Despite my great admiration for the negotiating skills of my right hon. Friend the Prime Minister, my right hon. Friend the Foreign Secretary, my hon. Friend the Minister of State, Foreign and Commonwealth Office, and the rest of the team, that is why I cannot vote for the motion.

11.9 pm

Mr. Harry Barnes (Derbyshire, North-East)

The Government have complimented themselves on their achievements at Maastricht, but they concentrated their opposition on the wrong subjects. The obvious ones are the social chapter and economic and monetary union, but there are a number of others.

The social chapter is a continuation of the social charter of 1989. We are outside the agreement on the social chapter that was reached by the other Eleven. By exercising our veto, we have ensured that shall be unable to influence the policy of the other 11 nations.

My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) suggested that the social chapter is unnecessary because a Labour Government could enact all the measures contained in it. He is mistaken. The social chapter is not a detailed programme for legislation but a hook on which a range of policies can be hung, which can then be taken up by the institutions of the Community.

My right hon. Friend the Member for Llanelli (Mr. Davies) correctly said that the social chapter should be used to tackle unemployment and poverty. Democratic socialists should be explaining their views on the purpose of the social charter and seeking to extend the bland provisions of EC treaties. It is the duty of democratic socialists to argue for social provision.

Mrs. Dunwoody

Does my hon. Friend believe that it is the role of democratic socialists to consider economic planning, and particularly to exercise control over the taxation policies of their own Governments?

Mr. Barnes

Democratic socialists should be concerned about such major economic matters, which is why the Maastricht treaty's provisions on economic and monetary union should apply to not only this country but other EC countries.

We have an essential role to play in overcoming the democratic deficit in the European Community. My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) mentioned democracy in the House, but democratic provisions must be fought for on a European basis.

The Government have complimented themselves on the deletion of the word "federal", which was only ever a pious goal mentioned in the original draft. Nevertheless, it is relevant to social provision and economic measures. The United Kingdom's initial democratic developments came within the economic field. Those developments came from the industrial revolution. As a result of the development of the railways, many small market economies became interlinked and developed into a national economy. Working people then had to struggle for the franchise which was granted first to various men in the 19th century and then granted on a universal basis at the beginning of the 20th century. The franchise was granted to women as a result of the suffragette movement. The development of democracy led to social provision and that is how we got the people's budget of 1909 and the welfare state from 1945 onwards.

Democratic socialists should now impose that pattern on the developments in Europe. Social and democratic elements must be added solidly to the current developments in commerce and trade. We should not allow the EC to be merely a common market based on the principles required by the Government. Our agenda should be excluded because the struggle in which we engaged for democracy and social provision was also undertaken by the other 11 nations of the Community.

It is disturbing that the Government believe that they also achieved a victory in that there are a number of pillars outside the provisions of the institutions which are part of intergovernmental conference decisions on defence and foreign affairs. Surely EC institutions should be involved in such matters, especially if those institutions operate through parliamentary democracy at European level with a federal division which allows us to act on our own concerns. If not, royal prerogative powers will be used by Governments in, for example, defence and foreign affairs and they will be kept outside any democratic checks and balances at either European or national level.

The one thing that the Government have got right is that the European Community requires expansion and that we should be outward looking and should seek to involve some of the new democracies in eastern Europe in that framework. If we do so, we cannot allow a situation to develop in which countries such as Czechoslovakia, which has just achieved democracy, become involved with us in a structure in which they will lose out on their democratic arrangements.

The present structure of the European Community is a democratic disgrace in that its major decisions are made in secret conclaves by Ministers and there is no possibility of our knowing exactly what takes place. There is no possibility—even through the scrutiny arrangements in the House—of influencing the decisions made by Ministers on certain subjects. It would be preferable if the major decisions in Europe were made by a European Parliament with a European Government held responsible to us and if we had a clear separation of powers to say what areas we are to be involved in. Those areas can be significant because federalism can provide for considerable elements of decentralisation. It is folly to argue that getting rid of the word "federal" has improved matters and prevented a drift towards centralism.

We have a European union and institutions which are geared towards the development of a unitary state. Federalism is a democratic argument and it can operate only within democratic areas. We have heard some nonsense this evening about Yugoslavia, Russia and other countries, but we should consider the example of the United States of America which has developed federal institutions but which is not in danger of breaking up.

11.20 pm
Mr. James Paice (Cambridgeshire, South-East)

I express my appreciation for having been called relatively early in the debate, Madam Deputy Speaker—at least, some of my hon. Friends may still consider this early.

The European ideal was the reason why I originally came into politics. I spent much of the 1970s representing the British young farmers movement in Brussels soon after we joined the Community, and that experience made me decide that I wanted to go into politics properly. That desire was based on two fundamental perceptions about the future of Europe.

The first perception was that the rest of the Community wanted Britain to play a full part in its organisation and development, and the second was that the Community would never really fulfil its primary purpose until there was a single currency. I have little doubt that the necessary degree of convergence will be achieved one day, but I do not believe that will happen quickly. It may take many years—indeed, it may never happen. If and when it does, if I am still fortunate enough to be a Member of the House, I shall vote in favour of Britain's becoming part of it.

The speeches that we have heard tonight have displayed two distinct approaches. Some people want no part of a single currency and wish that my right hon. Friend the Prime Minister had said from the outset, "No; no for ever." Such people, both among my hon. Friends and among Opposition Members, would like us to be able to buy short-term competitiveness by devaluing our currency when necessary. But where would that get us?

When I was a boy—that was not too long ago—a dollar was worth five shillings, and not long ago a deutschmark was worth 25p. Values have gone a long way down since then, and we must ask where we are to stop, if we continually use devaluation as a means of achieving competitiveness. What sort of people are we that we are afraid of the economic might of Germany? Have we so little faith in the ability of British business and in the skills of the British worker and the British entrepreneur? I f those people do not have the skills or the ability, this country is sunk, whether we are part of the Community or not.

The sooner that we realise that the major advances of the past 12 years have been made because we have accepted that politicians are not good at running things—then perhaps we shall see the odd man out—and the sooner that the Bank of England is made independent, the better. That would be a useful major staging post towards the goal of a central European bank. I should like such a bank to be as independent as possible, too. Much has been said about its political accountability, but I am not sure whether I want a bank that is controlled by politicians. If we can achieve our aim, it will give us the conditions for business to prosper—the stable exchange rate and the low inflation that it needs.

The other group of hon. Members that has emerged this evening is to be found almost entirely on the Labour Front Bench. I have great sympathy with the Labour spokesman who will have to wind up for the Opposition, because he is almost without friends, judging by the speeches that we have heard from his Back-Bench colleagues tonight. I do not say that he has no friends, but few speeches from Back-Bench Members have supported their leadership.

The second group would like to say yes to a single currency today, regardless of what may happen. That is a cavalier approach to our future. How can those people be certain that, by 1999, the extremely severe conditions of convergence will have been achieved? Of course they cannot be. I wonder how they—and other states—will try to extricate themselves from an agreement. When it comes to the crunch, they may not be able to fulfil the conditions.

Do Belgium and Italy really expect to get their deficits down, or will the rules have to be slackened? In either event, something will have to give; somebody will have to backtrack. It is far better now that we should hold back and say that we shall decide when the time is right rather than have to go through the application for derogation so that we do not have to fulfil what may not be achievable.

I believe that economic and monetary union will become a necessary development, but that a commitment now would be gambling on an outcome later this decade that no one can prophesy. As my right hon. Friend the Prime Minister said, a commitment to a single currency would be unthinkable without a prior decision by the House.

Political union is a matter of many strands; it is a complex issue. Primarily, it is a matter of vision. There is the vision of a uniform Europe, and that is the path down which we appear to have been headed for the past few years. Such a Europe would consist of the EC standard European—a BSI standard, although BSI standards would not be allowed. That is the Europe in which harmonisation means uniformity, from the content of a sausage to dictating the day of the week on which we should rest.

It is small wonder that, when Mr. Delors told the Labour party conference two or three years ago that only through Europe could Labour's dreams of socialism be fulfilled, the Damascene conversion was outshone by the red star that beckoned Labour Front-Benchers to Europe. They dream of a continent controlled by Brussels, where every human activity is dictated, controlled, regulated and harmonised by Brussels. The only amazing thing is that it has taken Labour so long to realise that.

There is another vision of Europe—a far more exciting, colourful and progressive vision. That is the vision that my right hon. Friend the Prime Minister brought on to the stage of Europe at Maastricht last week. In that vision, each nation and state maintains its own traditions, cultures and practices, in which individual Governments work together for mutual benefit and in which decisions are taken on a European level which are best taken at that level. Those decisions may be not necessarily taken under the umbrella of the treaty of Rome, but by other agreements.

That vision also encompasses the emerging democracies of central and eastern Europe. That vision will allow businesses to prosper, with fewer and not more regulations. There will be less intervention, and from that prosperity will flow benefits to all the peoples of Europe. That vision will, sooner or later, be seen as the better way for Europe and it is a vision whose time has probably now come.

Mr. Spearing

Will the hon. Gentleman give way?

Mr. Paice

I will not, because so many hon. Members wish to speak tonight.

I welcome the many measures that we have already adopted through the social charter, especially those which affect competition, such as health and safety regulations. They should be dealt with at European level, and once dealt with, and almost more importantly, they must be implemented, monitored and enforced at European level. One of our major achievements at Maastricht is a system of far better enforcement of agreed directives with heavy penalties for those who flout them.

The other side of the coin is the clear definition of the many policy areas in which European competence is unnecessary and undesirable. If, for example, we get the details of our education policy wrong, that is our problem. If the Greeks get theirs wrong, it is their problem. In a single market, with full free-trading opportunities, those chickens will come home to roost. Central regulation will not be needed, because economic pressures will bring the necessary changes in policy. The market effect will come to bear on policy.

The proposed extension of the social affairs function, as proposed in the social chapter, shows unacceptable aspects. Our primary role here is to stimulate prosperity through the economy. Prosperity will provide the public revenues for all our vital services. Profitable businesses will provide better terms and conditions of employment and many trade unions on the continent recognise it. Sadly, many of our trade unions do not recognise it. That is why our trade union reforms are as important today as when they were first begun more than 10 years ago.

It would be bad enough if a Labour Government here abolished that legislation so that restrictive practices and picket lines were free to flourish. However, it would be far worse if that was forced on an unwilling Britain by a majority vote in Brussels.

Mr. George Robertson (Hamilton)

How can that be forced?

Mr. Paice

If the hon. Gentleman reads the treaty he will discover that article 182 clearly states that working conditions are to be dealt with by a majority vote. "Working conditions" is a pretty all-embracing heading. Mr. Delors and Mrs. Papandreou intend to use the health and safety majority voting procedure to deal with the working time directive. If they can wangle that, what can stop them wangling under "working conditions" virtually anything that they want to bring in?

Mr. Robertson

Will the hon. Gentleman give way?

Mr. Paice

No, I will not give way.

It is rubbish to suggest that it is not possible—although I accept that it is not certain as the details are not clear—for what I have described to happen.

As a result of my right hon. Friend the Prime Minister forcing into the treaty the provision for fines on member states that flout agreements, particularly on health and safety, my right hon. Friend has done more to help the work force of Europe than could have been achieved by signing the social chapter. That is crucial for the safety and welfare of workers throughout the Community.

However, the storm warnings are out. As I have said, Mr. Delors and Mrs. Papandreou want to use the majority voting provisions on health and safety to force through that directive. That would be an abuse of the rules. That is exploitation of a possible loophole, and I hope that, when my hon. Friend the Minister replies, he will make clear that the Government will resist and if necessary will take the matter to the European Court to make the choice of article under which that directive is pursued absolutely clear.

My right hon. Friend the Prime Minister has exhibited brilliant leadership to our country in the way in which he has handled himself over Maastricht. He laid his criteria out clearly to the House, he went to Maastricht, and he has delivered. He should be proud of that record. He stood up to the pressure and to the bullying, and, significantly, he has retained his composure throughout the proceedings. That is a rare contrast with the Leader of the Opposition and to the "sign anything" brigade on the Opposition Benches.

The Maastricht agreement will go down in history as the turning point, when the Community began to turn away from drab uniformity towards a future in which it will be a kaleidoscope of individual peoples stretching from the Atlantic to the Urals—a kaleidoscope of peoples that are unique, with their own traditions and practices, but working together under a variety of arrangements and agreements for their mutual benefit. I believe that I saw that future coming nearly 20 years ago, and I am delighted to have been able to speak about it tonight.

11.33 pm
Mr. Derek Enright (Hemsworth)

On the 30th anniversary of the signing of the treaty of Rome I was the European Commission's delegate to Guinea Bissau and we were given a small amount of money to celebrate the fact—[Interruption.] Hon. Members may not know where Guinea Bissau is, but they might learn something if they listen. I used that small amount of money to buy a football cup because it gave pleasure to all the people and not just to a few diplomats from the Foreign Office and elsewhere. That is what the signing of the treaty of Rome was about. It was about people.

Throughout my 37-year membership of the Labour party, I have believed in what Jean Monnet said. I have believed that Europe is for the citizens of Europe, and not just for the economics of Europe. Jean Monnet made an important point—I hope that the Foreign Secretary pays attention and remembers it—when he said that we should not just look to negotiations, negotiations and negotiations; we should prepare the common task beforehand and then work out how to achieve the common task of all the peoples of Europe. That is precisely what the Government have not done in the negotiations.

The Government have talked, often long, about sovereignty. My right hon. Friend the Member for Llanelli (Mr. Davies) also talked about sovereignty. What are the sovereignty and arrogance of which my right hon. Friend talked? It is arrogant of the Government to talk about sovereignty when they cannot even control their own civil servants. Anyone who has been in local government and who knows how latter-day viceroys—regional civil servants—work knows that there is no subsidiarity there. Local government is controlled centrally by Ministers, whether it be in Yorkshire, Scotland or Wales. As I discovered last week, regional civil servants are authorised—indeed, they are told—by Ministers not to reveal road plans to local councillors and to reveal them only to officials. That is a negation of democracy.

Let us consider the word "federal". The Foreign Secretary went to a decent school, so he should know the origins of the word. Its origins are in foedus. The treaty served the peace. The induciae led to the cessation of war for a time. The federation was under an agreement. The federated allies were treated more fairly than anybody else. That provided greater democracy at the very lowest level. That is a long historical tradition on the continent of Europe—indeed, it stretched to part of the United Kingdom. That point should be remembered.

Essentially, we are pooling our sovereignty in getting rid of the national egoisms that I have heard expressed on several occasions, so that we can have more control over our affairs. Time and again it has been said—it was also said by one of my hon. Friends—that we cannot control our currency unless we have a say in other people's currencies. That is precisely what economic and monetary union does.

The Government have not yet said, and probably will never say, why they have set up, helped to set up or gone along with methods of adopting a common currency without committing themselves. If the conditions that they lay down are reasonable, it is reasonable to go along with them. The hon. Member for Saffron Walden (Mr. Haselhurst) mentioned that matter, and I commend him on his splendid speech.

I now refer to the social chapter. Europe is not about supply and demand—it never has been. It is clear from the treaty of Rome and from the writings of those who had the foresight to set up the European Community that Europe is about the social side of life as well as the economic side of life. Economics is only the handmaiden of society. Economics is not the end of a society. That is why it is important that social legislation be integrated into the economic demands of the Community. The Government are strangely ambivalent. Let us take RECHAR as an example. Some Government Departments are enlightened on it. Thank heavens that the Department of the Environment is one. But the Treasury is not. What is more, the Department of Trade and Industry, as I heard in the early hours of Friday morning, is far from enlightened on RECHAR. It is cheating on European rules and it should do something about it.

Then I hear that on no account will we let these nasty foreigners control our hours of work, which are for us to decide. But that is not the case when it comes to the repeal of the Coal Mines Regulation Act 1908. The Secretary of State for Energy, who made a fleeting appearance in the Chamber tonight, said on that subject: The proposed new European Directive, which would regulate the working hours of industry throughout the Community, would necessitate the agreement of new working arrangements for British Coal's workforce. The repeal of the 1908 Act would be an essential part of that process. Those are the two voices of the Government. There is no cohesion whatever.

The Government do not look at the European Community as a market in the traditional sense. In the traditional sense, the market is a social market in which there is social intercourse between people, as well as buying and selling. That is not for this Government. They look on the Community as a hypermarket which must be open on Sundays. They go dashing around with a trolley. They have no sense whatever of culture, coming together, amity or a social dimension. That is truly appalling. They say, "Get on your trolley and go round but do not look to the quality of life." But it is the quality of life that is important. The right hon. Member for Chingford (Mr. Tebbit) can smirk for all he is worth. He applauded the Prime Minister's statement. The Prime Minister said that we have longer maternity leave than any other country in the Community. That is true. Women in the United Kingdom are allowed longer maternity leave than women anywhere else in the Community, but we pay the lowest amount. We pay less than any of the Twelve, including Eire, Portugal and Greece. That is a damning indictment of the Government.

We need to fight unemployment and inflation and renew the industrial structures of Britain. To that end, in cohesion with Europe, we can pursue research and development that will start to put us on the right way. It will not be the solution to everything—I would not dream of suggesting that—but it will be a start.

As some hon. Members have said, we must look outwards. I ask the Minister of State to consider one issue that has not been mentioned tonight. We tend to look at the Community as if it is the Community looking back at us. We consider how we are affected by the Community. But the Community looks outwards. The general agreement on tariffs and trade talks are an obvious example. The development and co-operation section of the Maastricht agreement was an absolute disgrace and should have been tightened. The budget for the Lome convention is still not transparent. That is undemocratic because what results is a gang of twelve who come together to pursue their ideas in secret. That mirrors the institutional reform that we need in the Community.

The right hon. Member for Chingford said that nothing functions unless there are decent institutions. He is right that we must examine our institutions all the time to tone them and make them better. The one truly awful institution in the European Community is the Council of Ministers. It meets in secret. It is not open. It does not tell us what is happening. For example, we see John Selwyn Gummer, to name but a few, on television having just come out of the Council of Agricultural Ministers. He says what has happened and how he has won the battle of agriculture for the United Kingdom. If one is in Brussels, it is even better. One can watch the Ministers from member countries come out of the Council and say how they won for France, Italy or wherever. There is no cohesion because the Council of Ministers is egotistic and nationalistic. It would be much less so if Ministers were more open about what happens.

Ministers go off without consulting the House, make an agreement—they may have consulted the Cabinet—come back and say, "This is the agreement". Then the Government put a three-line Whip on it and there is an end to the matter. That is not a party-political point, as the Labour party did the same. There is no examination of what the Council of Ministers do. That means that we must give more powers to the European Parliament.

I have strained your patience for too long, Madam Deputy Speaker, as I have spoken for longer than 10 minutes, which I did not intend to do.

The people who have no vision will perish. The Government have no vision. In Europe they have been like porkers with their snouts in the trough all the time. We need to have an ideal and a vision of Europe which will also be a vision for the rest of the world. The Labour party is capable of doing that.

11.46 pm
Mr. Tim Rathbone (Lewes)

This is not too late an hour, as some hon. Members have pointed out, compared with the late hours that we spent here discussing Welsh and Scottish assemblies years ago—and this debate is just as important, if not more so.

I welcome and endorse the motion. I believe that the Maastricht treaty is a further step in our efforts to avoid the damage of another territorial war in Europe, or harm between the nations of Europe, and to embrace the need for and have the fortitude to seek common ground, common goals and sensible common methods to achieve them with our European partners.

Britain's prosperity and security depend on working more closely with the very Europeans whom, for too long, too many people in this country have been trying to ignore or even disdain. Even our trading relations with the rest of the world are important and demand greater coherence—as my right hon. Friend the Member for Shoreham (Sir R. Luce) said at the beginning of the debate-in the pan-European position on the general agreement on tariffs and trade.

I welcome confirmation of Britain's full involvement in shaping the European monetary system and the disciplines attached to the adoption of a single currency. I should have liked greater British commitment to be expressed on meeting the established criteria, and a firmer desire to adopt a single currency at the earliest opportunity. However, there are strong indicators—not only in the House—that sufficient doubts about swift monetary and financial coherence remain in many people's minds in our island kingdom. Buying further time to consider, to persuade and to study developments towards greater convergence must be a wise approach. Our Prime Minister is to be congratulated on obtaining that time, not only for Britain but for other European countries. There is an old Sussex saying, "We won't be druv." He obviously espouses that.

In foreign affairs, a system has been established for better co-ordination and better joint action where possible, although a Community approach to the problems of Yugoslavia in the week after Maastricht—as well as before it—shows how difficult that process may be.

On defence, I welcome the reinforcement of the Western European Union so that it may become the ever-stronger European defence pillar within NATO. The WEU must and will become stronger and more important. It was described by Mr. Genscher as being at the service of all Conference of Security and Co-operation in Europe member states.

I must put in a plea to our Government. The value of the democratic element within WEU—its assembly—must be better appreciated and better supported. It is of paramount importance. The assembly is made up of representatives from the democratically elected Parliaments of member states. It requires proper funding to perform its increasingly important role, just as our Parliament could not function properly without appropriate funding. Yet Governments, including our own British Government, have not granted the necessary funds to the WEU Assembly year after year. Already, its ability to function properly is undermined, and that does not bode well for its enlarged future role. That must be corrected, and I hope that the Government will respond more positively to operational suggestions and budget requests when they are next made.

I welcome the steps agreed for further co-operation in combating international crime, including most particularly drug trafficking. This builds on the considerable achievements of my right hon. Friend the Foreign Secretary, in his present and previous offices, and of other British Ministers in the Pompidou group of the Council of Europe and elsewhere. There has been a growing need for a European drugs intelligence unit, and the European police office will provide that.

In social policy, it is correct and important to re-accent that Britain has already signed up to the social provisions of the treaty of Rome, and shares with Germany the best record for implementing European Community social measures. That is quite the opposite of what has been said by the Opposition. There is much further to go in adopting the Community's existing social action programme before extending further the social dimension of the Community. Greater support for the reasonable, pragmatic and yet important social charter of the Council of Europe could be valuable as well.

Even though this is outside the treaty of Rome, I hope that Britain can still influence the extent and direction of broader Community social policy. If evolution of the social charter goes too far too fast, it will create even greater difficulties in developing special relationships with, or eventually membership for, the emerging democracies of central and eastern Europe. That would be going against the grain of history.

Britain must still play a part in the process, not least through its Members of the European Parliament. Will it be able to play a strong part as a gap is created between them and the representatives of other countries? Will British parliamentarians in Europe still play as strong a role in the committee work and the debates there? That point requires clarification.

Mr. Dykes

Will my hon. Friend give way?

Mr. Rathbone

If my hon. Friend will forgive me, I shall not, as other hon. Members wish to speak and time is short.

This is all the more the case since giving the European Parliament additional powers. Increased control of the Commission and of the way it spends our money is to be welcomed. Each Member of the European Parliament does not yet carry equal political and constitutional authority, because of the varying methods of national elections to the European Parliament. Greater coherence in this is also long overdue. That is not to say that electoral systems in all countries must be identical, although that would be ideal, but they should be as similar as possible, so that all are reasonably uniformly represented.

Reform of the British electoral system for the European Parliament must be part of post-Maastricht planning. The British pragmatism that we have applied to all representative bodies in the United Kingdom, with the sole exception of our Parliament, should be applied to the choice of electoral systems for the European Parliament. Even more than in English and Welsh districts or in Northern Ireland, the European parliamentary chamber is not one in which executive decisions have to be taken, so a system such as we have for our House of Commons, which is biased to give an overall majority most of the time, is infinitely less important than it is here. Better and more even representation everywhere is all the easier. That nettle must be grasped.

That does not mean, nor does anything in the Maastricht treaty mean, that we have denied or should deny the forces of nationalism or individualism. The power of a nation and of individuals in a nation to harness human spirit and encourage endeavour is undoubted, considerable and extremely valuable. No lasting union could ever be built on a desire to submerge individual and national characteristics, identity and culture. Nothing in the Maastricht treaty threatens in that way. It is therefore to be welcomed.

My right hon. Friends the Prime Minister and the Foreign Secretary, the Foreign Office Ministers and their teams deserve our complete support on the treaty and in the Lobby tomorrow.

11.55 pm
Mr. Alistair Darling (Edinburgh, Central)

I shall resist the temptation to follow the hon. Member for Lewes (Mr. Rathbone) down the road of electoral reform in the European Parliament, or I shall be in trouble.

This is certainly the first, and I hope the last, occasion on which I shall make a short speech that spans two separate days. Those who talk of our Parliament as though it were somehow a perfect institution compared with those in Europe might reflect on the fact that we are discussing an important issue quite literally in the middle of the night.

The question before us in this two-day debate is whether we are to be part of the development of Europe over the next 10 to 20 years. I deliberately make the point that we are talking about a process spread over a number of years. We are talking not about a momentous decision that must be made today and that will irrevocably change the face of Europe, but about gradual development. The difference between Labour Members and most Conservative Members is that we believe that our future lies in Europe and that we must be at the heart of the development of Europe.

If we are not at the heart of Europe, we will have to sign up for something that others have devised to suit their national needs. That has been the history of the British attitude to Europe over the past 20 to 30 years. We have always come to Europe after the European institutions have been established by others. We have therefore always found that those institutions were not ideal and not set up in the way that we would have set them up had we been in Europe from the start.

It is precisely because of that attitude that we fear that the Prime Minister, because of his concern to keep the Tory party united between now and the general election, has relegated Britain to the second division in Europe. Britain has now opted out of two crucial matters—the social chapter and the terms of the development of EMU. I believe that that will lead us to be regarded by our partners in Europe—and, perhaps, just as importantly by outsiders—as having committed ourselves to the second division, the slow lane, of Europe, all because the Prime Minister felt that the most important job that he had to do in Maastricht over the past couple of weeks was to keep the Tory party united.

I also believe that the question of a federal relationship is a bit of a red herring. I know that federalism has different meanings in different parts of Europe. I do not think that Europe is ever likely to have a proper federal relationship such as that in Germany or the United States. I certainly do not envisage that happening in the foreseeable future. I know that some of my hon. Friends envisage such a possibility, but I do not think that one central Government attempting to govern the whole of continental Europe from Greece to the Baltic, from the Hebrides to southern Portugal, could really be effective. The worst forms of centralisation that we complain about in Britain would be writ large if that system were ever to be established in Europe.

I believe that a gradual convergence of interests will mean that there will be a confederation—a coming together, a convergence of policies—which is different from a formal federal relationship. To some extent, the Government have set up the straw man of federalism simply to shoot it down to show that they have had some success. I do not believe that a formal federal relationship is on the cards now or will be within the next 10 years. This red herring has enabled the Government to bring some of their anti-marketeers within their ranks.

I would settle for the definition in the treaty—"an ever closer union" among the peoples of Europe. We need to keep the constitutional changes in Europe under review. There is bound to be organic change.

If the United Kingdom is to be part of Europe, we must play a full part in it. The irony is that, next July, the United Kingdom assumes the presidency. In a year's time, the summit will be held in Edinburgh, in my constituency. It is absurd that, at that summit, the United Kingdom will have to leave the room when the others discuss social policy and when they start to discuss developments in monetary union. Our Ministers will not be in the palace of Holyrood house; instead, they will be huddled together in Princes street while the others get on with discussing the main business of Europe.

Mr. Garel-Jones

Will the hon. Gentleman be kind enough to explain on what basis he says that the Government will not be able to take part in any of the discussions on economic and monetary union?

Mr. Darling

I am glad that the Minister does not dispute what I have said about the social charter. On monetary union, the Prime Minister has made a virtue of saying that we will decide in 1996 or 1997 whether to opt in. That means that we will decide whether to opt in to something designed by others, because we have abdicated our responsibility to draw up the plans for EMU, should it come to that. It is perfectly clear from everything said to pacify the right hon. Member for Finchley (Mrs. Thatcher) and others that Britain has no intention of being in at the start.

Mr. Garel-Jone


Mr. Robertson


Mr. Darling

I shall give way to the Minister. Perhaps he will have more success explaining this than the Chancellor did earlier today.

Mr. Garel-Jones

The House will have noted that the hon. Gentleman declined to answer my question. Where does the treaty mention the non-participation of Britain in any aspect of stage 2 or in the transition to stage 3, should it come to pass?

Mr. Darling

I shall draw the attention of the House to the answer to that, but first I give way to my hon. Friend the Member for Hamilton (Mr. Robertson).

Mr. Robertson

Should my hon. Friend wish to prove to the Minister that, in the unlikely event of his being re-elected, he will find himself standing in the windy and probably cold Princes street offices, he could draw his attention to the protocol on social policy, which states: The United Kingdom shall not take part in the deliberations on and the adoption of Commission proposals relating to fields covered by the above-mentioned Agreement.

Mr. Darling

That is an extremely good point. If the Prime Minister is still in office—I do not think that he will be-he has said that we will have to decide in 1996 or 1997 whether to opt into a phenomenon that we had no part in creating. If I am wrong, perhaps the Minister will explain how we are committed to the development of EMU and whether we are to be allowed to participate in building the structures of the central bank and even in bidding to house it in this country. That is definitely not what the right hon. Gentleman said earlier today and on previous occasions.

Mr. Garel-Jones

Great Britain will certainly take part in all discussions relating to stage 3. I ask the hon. Gentleman to point—if he cannot, perhaps he will withdraw what he has said—to a single reference in the treaty which excludes Britain from any discussion related to stages 2 or 3 of economic and monetary union.

Mr. Darling

I have made my position clear. The whole thrust of what the Prime Minister said this afternoon and last week was that Britiah reserves its position, leaving others to develop policy; and that we will not take part in drawing up the plans to set up a central bank. If the Minister says otherwise, he should have listened more carefully to what the Prime Minister said last week and this week. It is clear that the Government do not intend to play a central role now, although they may do after the election, if they win. They are staying out of those discussions now to hold their party together.

I want to deal with four matters that cause me concern. I turn first to the fact that foreign affairs, justice and home affairs are regarded as matters for intergovernmental discussions rather than as part of the treaty. I do not disagree with that in relation to foreign affairs, but it does not seem a satisfactory basis for decision-making on home affairs, especially for this House. We do not have the opportunity to question Ministers effectively. It is clear, for example, that Ministers go to the Trevi talks and hold intergovernmental discussions there, but are not properly answerable to this House because we do not have the structures in place properly to question them. I ask hon. Members to reflect on that.

Although I accept that every country, including our own, has to have a system of immigration that is suited to its own needs and traditions, as my right hon. Friend the Member for Leeds, East (Mr. Healey) said, there will be more and more matters of common interest. With the prospect of the breakdown of the former Soviet Union and its satellite countries, we could face a large-scale movement of refugees into western Europe. It may therefore make sense for us to have a common policy on immigration and asylum. But if that is the case, why was that matter not considered suitable for inclusion in the treaty?

Perhaps it was because the Government did not want the European Court to have any influence on that matter, especially in the light of the Home Secretary's unfortunate experiences in the past few weeks. The right hon. Gentleman seems to have been up before the courts more regularly than any Minister ever. If matters are to be decided on an intergovernmental basis, we should look at our own procedures because they are not effective at present.

I have looked at the definition of "subsidiarity". The only matter on which I agree with the right hon. Member for Chingford (Mr. Tebbit) is that it is an interesting definition. Its meaning is not entirely clear, but the Government should give some attention to subsidiarity, especially within the United Kingdom. If we are to build on the advantages and developments in Europe, we should consider devolving more power to the regions and nations of this country. Brussels already recognises the English regions for various purposes, so perhaps we should let those English regions have more direct dealings with Brussels.

We should certainly do so for Scotland and Wales. Indeed, many people believe that, in the years to come, Scotland will develop a more federal relationship with the rest of the United Kingdom, but there are no structures at present to allow Scotland to deal directly with Brussels. That is ironic, given that much of Scottish industry, especially its financial sector, has bypassed the City of London, yet we do not have the corresponding structures. It is not surprising that the Government have ignored that matter, but they must turn their attention to it if we are to benefit from the advantages that Europe can bring.

It has been said many times today that the social charter or chapter that was discussed at Maastricht is not about strikes or bad industrial relations. It is about extending many of the things that other European countries can accept, and I do not see why we should not accept them. It is no great advertisement for this country for the Government to say that we shall benefit by staying out of the social chapter because we will have cheaper labour costs. That means that, Britain is, to use the common word, a sweatshop. It means that companies will come here because we have lower standards than the rest of Europe.

Given the performance of economies in the rest of Europe, the Government are not in any position to say that Britain has been a success story. The Germans, however, can say that their performance has outpaced ours, but they had no difficulty in accepting the social chapter, so why did we have such difficulty? Because, for 12 years, the Government have opposed just about everything in the social chapter—and it is no wonder that they oppose it now.

The argument that, with the social chapter, the Japanese and other investors will not come here does not stand up. The Japanese who have invested here, ICI and other such companies that are already here are good employers, and precisely the sort that we should be encouraging.

Turning to inward investment, I do not know whether the rest of Europe will sign up to a single currency. We shall have to wait and see. As everyone knows, the economy will not stand still in this or any other country. If the Community expands to bring in other countries—particularly members of the former eastern bloc, which are much less developed than western European countries—I am not sure that the convergence that is envisaged will be achieved in 1997, or even at the end of the decade.

If, however, the other countries—or, at least, the major ones—can sign up for a currency, it is inconceivable that we shall be able to stand aside and say that we will have nothing to do with it. We shall end up having to shadow that European currency; we shall be a satellite country on the fringe of a massive economic power bloc. The Chancellor's failure to answer the questions put by my right hon. Friend the Leader of the Opposition shows that many Conservative Members realise how futile Britain's position would be if that happened. I do not believe, however, that we shall ever be in such a position; I do not think that the Prime Minister believes it either, and I suspect that, if he won the next election, he would change his tune promptly thereafter. We should be alive to the fact that, if there is to be a common European currency, there is no alternative to Britain's being a part of it.

I believe that Britain is part of Europe. Everyone must have known—certainly after 1986—that a single European market will have certain inescapable consequences. I do not believe that, at this stage, we are in a position to sign up for any system along the lines of federalism or monetary union; but I do believe that we should be in there, at the heart of things, arguing for institutions and systems that will suit the British economy and British political arrangements.

If we do not do that, I fear that history will repeat itself again and again. We shall sign up for an arrangement that we did not make, which does not suit Britain, and we shall be dragged along at a slow pace that will be thoroughly unacceptable not only to Europe but to our own country.

By the actions that he has taken over the past week, the Prime Minister has put Britain in the second division. He has failed to take the opportunity of allowing Britain to catch up with the rest of Europe. That is because he is not master in his own house; he is a slave to the Tory Members who are holding him back. The right hon. Gentleman may have done a good job for the Tory party, but he has failed the people of this country. They will not forget that when they have an opportunity to express their views in a few months' time.

12.12 am
Sir Anthony Meyer (Clwyd, North-West)

I must say that that was not one of the better speeches that I have heard from the hon. Member for Edinburgh, South (Mr. Darling).

It has been a particular pleasure to an avowed and unabashed federalist to discover four more on the Opposition Benches. I knew already that one could be so described, because he, like me, is a member of the British section of the European Movement; but I was pleased to find that the hon. Members for Newham, North-West (Mr. Banks) and for Norwich, South (Mr. Garrett)—and even the hon. Member for Derbyshire, North-East (Mr. Barnes)—admit to accepting the doctrine to some extent. I take that to mean two things: first, that relations between states should be governed not by their ability to push one another around by force but by some framework of law; and, secondly, that there should be some element of subsidiarity. By that I mean that decisions are made at the centre only when they have to be.

I praise my right hon. Friends the Prime Minister and the Foreign Secretary—and also the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Watford (Mr. Garel-Jones), who has sat patiently on the Front Bench throughout our debate. I hope that he will not object to my calling him the Talleyrand of the Conservative party, although I doubt whether Prince Talleyrand would have submitted himself to the ordeal that my hon. Friend has endured tonight.

The achievements of my right hon. Friends are a tribute to the trust and, indeed, affection felt by their European Community partners—and, of course, in this country—and, in particular, to the special relationship that my right hon. Friend the Prime Minister has established with Chancellor Kohl. Without that factor, I do not think that it would have been possible for my right hon. Friends to secure a settlement that would enable them to claim that Britain was still at the heart of Europe, while preserving considerable freedom of manoeuvre—or, at the very least, a substantial reprieve for our country.

The effect here has been all that my right hon. Friends could have desired. There remain a mere handful of the rugged individualists on both sides of the House—but, none the less, outside the mainstream of politics—who wanted Britain to sabotage the conference by using our vetos. How ineffectual the veto would have been. I think that that has been demonstrated—[interruption] I am having some difficulty hearing myself because of the interjections of the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) and others. How ineffectual the veto would have been has been demonstrated by the decision of the other 11 members to press on with the social charter.

I know that there are some who still cling to the theory that the 11 are dismayed at finding that Britain is no longer there to block progress on the social charter and think that the entire edifice will collapse from overweight. I must remind them of a gentleman called Russell Bretherton, whose name may not be familiar to everyone in the Chamber. He was the senior official at the then Board of Trade, who was sent by the British Government as an observer to the Messina conference in 1956, at which there was talk about setting up a common market. He reported back confidently that the negotiations would probably come to nothing, and would certainly do so if Britain stayed out of them. The British Government took his advice. It turned out to be a rather expensive mistake.

Mr. Wareing

That was the Administration of Sir Anthony Eden.

Sir Anthony Meyer


It would be almost equally mistaken to assume that we shall be able indefinitely to insulate ourselves from social developments in the rest of the European Community, or that we shall be able effectively to influence events from outside the room in which the discussions are taking place and from which we have excluded ourselves. I know that on this matter the Government have the support of the overwhelming majority of Conservative Members and of British industry and business. I find it astonishing, however, that a party that numbers Disraeli and Lord Shaftesbury among its heroes should refuse to contemplate limits on hours of work. I spent last Saturday evening at my local post office, where postmen were heroically working long hours of overtime. I asked how many temporary workers were taken on for the Christmas period, and the answer was none. I was told that the workers wanted the overtime. That attitude does not seem a recipe for creating more jobs.

Mr. Garel-Jones

I agree with my hon. Friend that the party that produced Shaftesbury and Disraeli needs lectures from no one about the social dimension of life in this country. Does my hon. Friend agree that many of the practices that we are seeking to defend are national characteristics, and that it just happens to be the case that in Britain many people have a working week of 42, 46 or 48 hours, and they rely on overtime for as much as a third of their income? That happens to be the way in which labour relations have traditionally been structured in this country. Does my hon. Friend agree also that as the United Kingdom is the only country in Europe that pays a pension to a spouse, even though that spouse has not been a contributor to the fund, we need no lectures on social dimensions from others in Europe? Surely we need subsidiarity in these matters.

Sir Anthony Meyer

We have things to learn from one another. God forbid that the social charter should be a way of enabling trade unions to recover the ability that they previously enjoyed of being able to hold us all to ransom, but had we been prepared to negotiate throughout on the social charter, I do not believe that that would necessarily have been a consequence.

I always knew that I would be slightly disappointed by the outcome of the Maastricht negotiations. Of course I am disappointed. That is because I wanted the moon. I shall, however, be voting to support the Government's motion at the end of the debate as, I believe, will pretty well all those Members whose views are diametrically opposed to my own. Those who call themselves Euro-sceptics no longer have the brazen trumpeter—my right hon. Friend the Member for Finchley (Mrs. Thatcher)—to lead them into battle. They have to rely on the rumblings from the deep of that Kraken of the modern political world, my right hon. Friend the Member for Chingford (Mr. Tebbit).

I think that the Euro-sceptics are probably right when they say that the movement towards a single currency is a movement towards a federal Europe, but not for the reasons that they adopt. Neither the rigid timetable nor the complex procedure laid down for the movement to a single currency will take us in that direction. The solution advanced by my right hon. Friend the Prime Minister of the hard ecu was the best way of achieving a single currency.

However it is achieved, once the movement towards a single currency gets going, the City of London will want to be at the centre of things and British industry will want to be in the single currency. Those hard material considerations will soon overwhelm reservations based almost entirely on an ideological concept of sovereignty which is beginning to look distinctly quaint.

The somewhat excessive attention that has been focused on the two areas where Britain has, as it were, opted out—or chosen to opt in—has distracted interest away from the substantial agreements that were reached on other matters. The skills of British diplomacy were freely acknowledged by all other participants, and it is right to pay tribute to the much maligned Foreign Office officials.

I am delighted at the strong declaration on the urgency of widening the Community and bringing in the newly free countries of eastern Europe, but it would have been vain to embark on a widening of the European Community without having first taken the decisions that were taken at Maastricht to strengthen it.

Amid our preoccupations with the economic aspects of Europe, we must never forget that the Community came into being to ensure that the nations of Europe could never again resort to slaughtering one another or reducing their cities to rubble. They bound themselves to accept certain rules and to set up institutions to enforce and adapt those rules as the need arose. The rules have to be binding, enforceable and freely accepted, not imposed.

That is the priceless gift that the European Community has to bestow on an unstable half continent to the east of it. The Prime Minister and the Foreign Secretary have contributed notably to the renewal of that by far the most important of the European Community's qualities, and they deserve the thanks of the House and support in the Lobby tomorrow.

12.22 am
Mr. Ron Leighton (Newham, North-East)

All sensible people want the maximum co-operation in Europe, especially when we remember the horrific wars our continent endured. We want the maximum unity, friendship, co-operation and trade to raise the standards of living and prosperity of all our peoples. The questions are: how do we achieve that and what sort of an alliance and what model of European unity do we want? Do we want to create a megastate or a union or commonwealth of democratic, self-governing countries?

Once again at Maastricht, Britain appeared as the odd man out. Throughout this story, Britain has often appeared to be the odd man out. On one issue, we said no, but on another we said maybe. We should ask why, time after time, Britain seems to be the odd man out. One of the main reasons is that our system of democratic parliamentary self-government is incompatible with the Brussels machine, which has an unelected Commission with the sole power of initiative and right of veto, a Council of Ministers which legislates in secret, the so-called Parliament, which is not really a Parliament, has no roots in this country and will never be the focus of the hopes, aspirations and loyalties of our people, and a Community court, which in many ways is a political court and engine of federalism, standing above Parliament. That apparatus does not fit with parliamentary self-government. It already makes us do things that we do not want to do and stops us doing things that we want to do.

A second reason is perhaps that we have not obtained many of the much-trumpeted benefits that we were promised from the original Common Market. We were told that there would be substantial benefits to our balance of trade, but, in fact, we had a multi-billion pound deficit inflicted on us. There has been no reform of the common agricultural policy and the average British family now pays about £17 a week extra for its food.

This year we are paying into the Common Market budget about £2.5 billion more than we receive in order to subsidise richer countries. We give more money to the Common Market budget than we give in aid to the third world. What sense is there in that? Let us think what we could do with that £2.5 billion in the health or education services.

Another possible reason is the deceit. Our people have often not been told the truth. Our political leaders have always moved in a crab-like fashion, saying one thing but doing another. Let us cast our minds back to the referendum. In the Government's manifesto which was sent to every household it was clearly stated that there would be no political union. The manifesto also said that there had been a threat of economic and monetary union which would have brought unemployment, but that that threat had been removed.

We often hear talk of trains. We were not told where the train was going, but we were told that we must all clamber aboard or we should be left behind. I always objected to the idea that everything is predetermined and that we have no choice. That is a fundamentally undemocratic argument. Maastricht has brought us some clarity, because we now know where the train is supposed to be heading.

The original draft treaty spoke blatantly of a "federal vocation". Those words have been taken out and replaced by "an ever closer union" but what is the difference? There is none—it is merely semantic juggling. The people who inserted those words have not changed their minds. They made great strides at Maastricht and moved the train or conveyor belt a long way forward towards federalism. Of course, they did not get all that they wanted, but they will be back for more. Already, there are plans for another intergovernmental conference in 1996 and they already have a timetable for economic and monetary union. The mythical train has not only a destination but a timetable.

We are told that federalism means different things to different people, that it is a benign arrangement which does not centralise but pushes power downwards to the people and the regions and that it is based on subsidiarity. I think that that is another deception. Let us consider economic and monetary union and a single currency. What happens to economic and monetary policy, to interest rates, exchange rates, budgetary policy, taxing and spending which are the substantial bread-and-butter issues of our politics? Where do they go? Do they go downwards? Of course—not they go upwards. All those vital issues are to be rigidly centralised and that is the crux of the matter.

All of our economic life is to be decided by an unelected, unaccountable single central bank. That is not democracy or power to the people—it is all power to an autarchy of unaccountable conservative central bankers. That might be the heart of Europe, but it is certainly not the heart of socialism. The highly centralised single bank will be a law unto itself. It will be beyond the reach of the ballot box. Governments would have to undertake solemnly not to seek to influence it. I cannot conceive of anything more objectionable, more retrograde or more reactionary. If such highly centralised decision-making——

Mr. Quentin Davies (Stamford and Spalding)

Will the hon. Gentleman give way?

Mr. Leighton

No, because we do not have time.

If we had such highly centralised decision-making it would not matter who won elections or who was Chancellor of the Exchequer, because such issues would be decided elsewhere. The electorates of each country would be stripped of their powers. There would be no subsidiarity in monetary policy. Short-term interest rates would be uniform—identical throughout the area. Regardless of local circumstances, they would be the same in Glasgow as in Naples; the same in Lisbon as in Berlin. There would be no local flexibility.

We already have the first stage of economic and monetary union—the exchange rate mechanism—and it is already doing great damage to Britain. Everybody agrees that the present rate of inflation would justify a cut in interest rates—British industry is crying out for one. Yet we cannot have a cut because interest rates are now set, not according to the needs of our domestic economy, but for the sole purpose of propping up the pound in its ERM band, thus prolonging the recession. That will do great damage, but even after all the pain that it will inflict, it will fail. It is always dangerous to prophesy, but I am prepared to do so and say that it will not be possible to hold the pound at DM2.95.

Our inflation rate is now coming down to approach German levels—but any fool can do that by recession, by knocking the economy flat on its back and by causing mass unemployment. That is the economics of the graveyard. We are also told that wage increases have to come down to German levels, and there has been some movement in that direction.

The important factor, however, is unit labour costs, and they are decided by productivity. As a result of deflation, productivity in Britain went down last year, whereas in Germany it went up. So while unit labour costs in Germany increased by 3 per cent., in Britain they increased by 11 per cent. With a fixed exchange rate, that means that Britain loses competitiveness, and will continue to do so on a cumulative basis.

That all means that we pretend that the pound is worth what it is not. To see what happens when people pretend that a currency is worth what it is not we have only to consider Germany's monetary union. The Germans pretended that an east mark was worth the same as a west mark. At a stroke, overnight, east German industry was knocked out, and the work force was made redundant.

The exchange rate mechanism benefits the stronger economies, especially the German economy. It builds in and reinforces their dominance, but it damages the weaker economies.

The Select Committee on Employment took evidence from a variety of sources on the effect of ERM on Italy and France. It found that the system had inflicted an extra I million unemployed on Italy and more than half a million on France, and had slowed both countries' economic growth. The ERM is a high-unemployment club, with a slow growth rate. Already it is having the same effect on Britain. We have high and growing unemployment, and under those policies that high unemployment is built in for the whole of the 1990s, along with recession and slow growth.

Our public services are crumbling, our schools are rotting, our health service waiting lists are growing and our railways are not working—all because our economy has not produced the growth to pay for them. The ERM means that that situation will be perpetuated throughout the 1990s.

While we have separate currencies a poor economic performance will show up as a balance of payments deficit—but with a single currency that warning signal would disappear, and a poor performance would show up by whole regions or countries becoming depressed and blighted areas afflicted with mass unemployment.

As my right hon. Friend the Member for Llanelli (Mr. Davies) explained, at Maastricht not a single word was spoken about full employment. Full employment is no longer an aim of economic policy. Everything-growth, employment and prosperity-is to be subordinated and sacrificed to pegging the exchange rate of the pound. That means that people-human beings, flesh and blood-are sacrificed to an arid, dogmatic, mistaken theory of money. Money is to be the master, not the servant. The Labour party's role should be to bring those matters under democratic control and not to surrender them to remote, unaccountable central bankers.

What we had at Maastricht was old hat; it was living in a time warp. Since the Delors committee reported, the whole world, especially Europe, has changed. The Berlin wall has come down. We have had the collapse of the totalitarian regimes. New democracies have been born, struggling against appalling odds to find their feet, with hyper-inflation and national rivalries. Those are the new issues, priorities and dangers. What was the response to all that at Maastricht?

Half our continent is an area of instability and need. There are a dozen states asking to join and participate in an all-European economic and political arrangement. That is the great historic opportunity. What did we do? What happened at Maastricht? The whole issue was virtually ignored. Instead, they want to waste the next decade poring over the details of economic and monetary union rather than dealing with the real issues confronting Europe. The more we deepen—to use the jargon—the Community, the more obstacles we put in front of eastern Europe. How do we imagine that the Poles could put the zloty in the exchange rate mechanism? How could the lev or the rouble be put in the ERM? We are building new obstacles and barriers.

Our experience of multilingual and multinational federations has not been very good. There was one in central Africa, which collapsed. There was one in the Caribbean, which collapsed. Even in Canada, there are problems in Quebec. After the recent elections, even Brussels cannot govern itself and it looks as if the multilingual state of Belgium is about to collapse. There are the problems in Yugoslavia and in the Soviet Union, where a federation is moving towards some kind of commonwealth of independent states.

Maastricht was not the last word on the development and future of Europe. It was the wrong agenda. In the next decade—and let us bear in mind the next intergovernmental conference—there will be different Ministers who may have different ideas. They will learn from experience. I am convinced that the prospect held out at Maastricht will not be the prospect that we shall have at the end of the 1990s.

12.36 am
Mr. Bowen Wells (Hertford and Stortford)

I hope that the Maastricht treaties will be the high water mark of federalism in Europe. That will be proved to be so because of the dogged, persistent and brilliant negotiating work by the Prime Minister, the Foreign Secretary and his two Ministers of State, especially my good friend the Member for Watford (Mr. Garel-Jones). They have persistently insisted that the treaty we signed contained agreements to enhance democracy within Europe, within the Commission and within the European Parliament, and at the same time embraced closer European union by means of getting agreements between the Governments of the Twelve on foreign policy, security matters and matters connected with home affairs.

The means of negotiation has profound implications for our democracy, for the accountability of Europe to the electorates of Europe and for the accountability of Ministers to their national Parliaments. It is right that we should consider tonight the question how we enhance the democracy, responsibility and accountability of the European institutions and of our own Ministers to the national Parliament.

On European monetary union, it seems to me that it has long been the cherished aim of Conservative Governments to find a means by which we could control the value of our currency—to make it predictable in its exchange rate, as it was for much of the 19th century. In that time, we were tied to the gold standard, which we found to be inadequate and inflexible, especially as it depended in part on the mining activities in the gold mines of South Africa and the Soviet Union. We abandoned that after the war for the Bretton Woods system of fixed exchange rates. We did not at the time think that we were sacrificing sovereignty to join that system. It ushered in a period of expansion over the 1950s, 1960s and 1970s the like of which the world had rarely seen.

It is essential that we should find a way to control our currency and to make it stable. I believe that joining a European monetary union with a single European currency would be a good way to achieve that. However, we should not do that if we joined at the wrong exchange rate—as happened, as the hon. Member for Newham, North-East (Mr. Leighton) explained, with eastern Germany. We should have the right not to join when the timetable date is reached in respect of the present European monetary union treaty.

We would be foolish to join if that meant serious dislocation of our social, economic and unemployment situations. I wish that all members of the Community had reserved a similar power not to join, but that was not to be. We have an extra lever in the establishment of European monetary union, because, in contradiction of what the hon. Member for Edinburgh, Central (Mr. Darling) and the Leader of the Opposition said, we are going to be fully involved in the negotiations for the establishment of the central bank and the way in which it will operate.

I hope that we will now discuss how to make that central bank responsible and accountable. That must be achieved not simply through ECOFIN, but through all 12 national Parliaments involving the Finance Ministers and Prime Ministers of the 12 countries. The decisions taken in the three pillars to which I have referred—security, foreign affairs and home affairs—should come back to this place for a decision whether the policies adopted at those Councils are correct.

We must pay particular attention to the declaration at the end of the treaty about the role of the national Parliament. We in this House have a serious point to address in that respect. In addition to the three pillars that I have mentioned, we must consider the accountability of the European Council that will be the principal means of establishing policy.

The Council of Heads of Government meets without a published agenda that we can discuss before meetings are held, and it meets in absolute secrecy. At the moment, we in the national Parliaments simply receive the press releases that the Heads of Government decide to release after the events have occurred and policies have been made. That is a thoroughly unsatisfactory way of calling our Heads of Government and that Council to democratic account for their actions to this House and to our people.

The increased qualified majority voting in the Council of Ministers, to which we have agreed in the treaty, means that we must have a way of keeping our national Parliaments better informed than they are at present. The word "federalism" is seriously misinterpreted and misunderstood. It is an example of the ability of the Twelve to misunderstand one another. Only if delegations from this House regularly meet delegations from other national Parliaments will we be able to understand the arguments, appreciate them and become sympathetic to the problems facing other member states. In that way, we will generate the consensus that is absolutely essential in a democracy ruled by a democratically elected Parliament and, indeed, by an executive in Brussels.

As soon as we can after the next election, we must consider how we are able to carry out those essential functions if the European union is to be democratically accountable. That means bringing members of the European Parliament into the House and into our Committees. Members of the European Parliament receive warning of matters that are to be discussed by the Commission and by the various pillars and councils that have been established by the treaty.

The treaty has advanced Europe, but it is a Europe of nations which is on trial. Unless the European union works properly, democratically and accountably, we will begin to revert to the horror of a supranational federal Europe which we all fear, and which the majority of people in this country and most hon. Members will reject.

12.46 am
Mr. John Home Robertson (East Lothian)

As one who joined the Labour party to support my predecessor John Mackintosh as a great European enthusiast, I take great pleasure in the position that has been taken by my party in recent months on this important issue. I passionately favour the increased co-operation within the European Community and the developments that are taking place. However, I am very sad that the Government—for the next few months, anyway—are trying to drag their heels and opt out of so many important aspects of what the Community is doing.

The hon. Member for Hertford and Stortford (Mr. Wells) said that he wanted more democratisation of the institutions of the Community. I heartily agree with him, and I suspect that that is really an argument in favour of federalism in due course—I would not necessarily be too frightened of taking that course. It probably will evolve, but no doubt slowly. However, the hon. Gentleman cannot expect me to agree with his preface, in which he said that his right hon. Friend the Prime Minister had negotiated brilliantly. If the Prime Minister was brilliant, he was certainly spectacularly outshone in the opening speeches. My right hon. Friend the Leader of the Opposition wiped the floor with the Prime Minister, and never has that been more spectacularly done.

The Prime Minister must be a considerable disappointment to his hon. Friends. He is certainly a bitter disappointment to people in this country. He will be labelled the drop-out Prime Minister. He is dropping out of progress for our people in the European Community. It is worth dwelling for a couple of seconds on what he has dropped out of.

It is a great shame that the social chapter has been excised from the treaty. Annex IV of the draft treaty on European union refers to the Agreement concluded between the member states of the European Community with the exception of the United Kingdom. It goes on to state: The undersigned eleven have agreed" to article 117, which states: The Community and its Member States shall have as their objectives the promotion of employment, improved living and working conditions, proper social protection, dialogue between management and labour, the development of human resources with a view to lasting high employment and the combating of exclusion. That is what the Prime Minister went to Maastricht to exclude Britain from.

It seems extraordinary that a British Prime Minister can represent such a betrayal of the interests of millions of people in Britain as a victory for British interests. Yet that is the giant con that has been peddled in the Conservative press in recent weeks. It will not stand up to examination by the electorate in the coming election campaign.

One aspect of Britain's opting out of the social charter is that it must surely undermine the single market. The Prime Minister says that it is an advantage to have low wages and longer working hours and that that will attract investors who want to take advantage of bargain basement labour. If that is so, presumably costs to industry will be that much lower here than in the rest of Europe, so there will not be equal competition with enterprises in the other 11 nations of the European Community. There will no longer be a level playing field and the single market will be undermined.

Mr. Quentin Davies


Mr. Home Robertson

The hon. Gentleman should perhaps concentrate on feeding his sheep rather than intervene in the debate at this stage.

Mr. Quentin Davies

The hon. Gentleman has obviously recognised that the Prime Minister secured for us a major competitive advantage at Maastricht. The hon. Gentleman said so himself. We have a different regime from the other 11 member states, one which is more competitive. Is it not a considerable tribute to our diplomacy that we were able to persuade our Community partners to allow us to gain an advantage over them?

Mr. Home Robertson

The hon. Member for Stamford and Spalding (Mr. Davies) seems to want to treat the work force of the United Kingdom in the same way as he treats his sheep. Yes, the Prime Minister has negotiated a set of circumstances in which it will be possible for employers in Britain to pay lower wages and work their employees for longer hours in worse conditions than their competitors on mainland Europe. That may be the competitive advantage that the hon. Gentleman wants for his constituents, but I do not want it for mine.

It is important that we should recognise that Britain's opting out of the social chapter will create difficulties because the European single market will no longer be a level playing field. There will be a downside to that. We cannot expect our competitors on mainland Europe to put up with such discrimination. We are building up problems for ourselves. It must be a matter of concern that Britain will become a semi-detached part of the European Community. In this debate, we are confronted with a squalid abdication by the Government of responsibility to the British people. The Government deserve to be condemned by the electorate, as they surely will be.

However, I am confident that the European Community will continue to progress in the direction in which it has been driving—and rightly so—for the benefit of all our citizens and citizens on the mainland of Europe. I am confident that the Labour party will put Britain back into the main stream of Europe as soon as a Labour Government is elected. That will be a good thing for our citizens and for business and enterprises in the United Kingdom.

We keep hearing comments tonight—we also heard them in the debate before the Maastricht summit—about sovereignty. People talk about the great sanctity of the sovereignty of Parliament. Who is kidding whom that a middle-size country such as the United Kingdom is sovereign in the modern world? Are we sovereign in defence, in our dealings with multinational corporations or in any significant matter? No, we are not. The only way in which we can achieve sovereignty is by sharing it. By sharing our sovereignty with our partners in the European Community, we can begin to achieve some realistic control and influence over events. I say that with the most heartfelt ——

Mr. Richard Shepherd (Aldridge-Brownhills)

Will the hon. Gentleman give way?

Mr. Home Robertson

The hon. Gentleman must forgive me: I want to be fair to other hon. Members who have been here for a long time.

As a Scot, I speak about shared sovereignty with great feeling. I am grateful to the hon. Member for Saffron Walden (Mr. Haselhurst), who acknowledged that there was shared sovereignty within the United Kingdom. The sovereignty of the people I represent has been shared with the English since 1707. It has not necessarily been a good thing in all ways, and there has certainly been a downside. We have lost a lot, and there are ways to improve the structure of the United Kingdom which would improve democracy and accountability in our government. That is why I am passionately committed to establishing a Parliament in Scotland, and home rule for Scotland within the United Kingdom and within Europe. However, it has surely been to the mutual advantage of the people of Scotland and England that we have had that union for the past two and a half centuries. It has been of considerable economic advantage to both countries.

I am sad to say that some Conservative Members and one or two of my hon. Friends seem to have a little Englander mentality. The narrow nationalism expressed by people who want to cling to total sovereignty for the United Kingdom is rather like the arguments we hear from Scottish and Welsh nationalists—unrealistic and out of date. It is wrong for any realistic person to pursue such outmoded attitudes, especially anyone in government.

I am sad that the Government, in their dying months, have decided to cop out of the main stream in Europe. I look forward to the day, in a few months' time, when my right hon. Friend the Member for Islwyn (Mr. Kin nock) will be getting back into the main stream of that debate and participating fully in the European Community for the benefit of all our citizens.

12.56 am
Mr. Robert G. Hughes (Harrow, West)

Thank you for calling me, Mr. Deputy Speaker. I know that the winding-up speeches have to start soon, so I shall be brief and leave out much of what I wanted to say. I can cover the issue by associating myself wholly with the speeches by my hon. Friends the Members for Saffron Walden (Mr. Haselhurst) and for Crawley (Mr. Soames), who said precisely what I think. European idealism brought me into politics in the first place. I fundamentally believe in Britain as a part of Europe. Therefore, I welcome the tone and scope of the treaty that my right hon. Friend the Prime Minister negotiated at Maastricht.

I shall home in on the social action programme arid the declaration on racism and xenophobia, which was separate from the main treaty, but was signed at Maastricht. As background, there is no doubt that many black, Asian and Jewish British people are deeply concerned at racial attacks in the United Kingdom and even more concerned about what is happening in continental Europe. They ask what 1992 means for them.

They are especially worried about the success of the Vlaams Blok party in the elections last month in Belgium, about the rise of the Deutsche Volksunion and Republikaner parties in Germany and by the high opinion poll ratings of the national front, led by the odious Jean-Marie Le Pen in France. They will welcome enormously the steps forward that have been made in the signing of the new declaration on racism and xenophobia, especially the penultimate paragraph, which states: The European Council asks Ministers and the Commission to increase their effort to combat discrimination and xenophobia, and to strengthen the legal protection for third country nationals". Although the declaration was proposed by the Dutch presidency, British Ministers were its main friends during the discussions. They stopped it being watered down and prevented the part about combating discrimination from being taken out. I also welcome the role that the British Government played in this important new move.

There is no doubt that Britain does lead, in the sense that it is the only country with a comprehensive framework of race relations law. Our reputation is high on this, as is that of the Commission for Racial Equality. However, freedom of movement is limited to EC nationals only, and a significant proportion of Britain's ethnic minorities have citizenship of their country of origin and therefore will not be able to move freely within the Community.

There have been some moves forward on this. The Commission, the European Parliament and the International Labour Organisation have discussed extensively the possibility of extending freedom of movement to third-country nationals. My concern is that the single market simply will not be able to operate effectively while one important part of the labour force lacks mobility.

I look forward to a directive under the social action programme. I welcome the declaration, which is a big step forward, but, given British experience and law, we could have had a directive in which we could have taken the lead. I ask my hon. Friend the Minister to look at that. Britain has set the European Community on a course that I wholly applaud—an ever closer union of nation states. We have set the tone for the future, and that is to be greatly welcomed. I have been looking for that ever since I first became involved in politics.

1.1 am

Mr. George Robertson (Hamilton)

This has been an interesting and wide-ranging debate, in which some notable contributions have been made. It is unfortunate that some speakers in the debate—for example, the Prime Minister—have cast doubt on the quality of the debate on these momentous issues in other European Community countries. We have had more debates on these issues, but it is insulting to suggest that our partners do not give them sufficient attention. A debate that starts at 3.30 in the afternoon and goes on until 2 o'clock in the morning is hardly an advert for open government. It would have been better to hold the debate during the day, when television coverage would have taken the views of hon. Members to a wider public.

Mr. Andrew Hargreaves (Birmingham, Hall Green)

The hon. Gentleman has referred to what my right hon. Friend the Prime Minister said. However, to take an example at random, how many times does the hon. Gentleman think that the Bundestag discussed the Maastricht agreement before it was signed?

Mr. Robertson

Regularly. If the hon. Gentleman had been in earlier, he would have heard the hon. Member for Harrow, East (Mr. Dykes) saying that last week he had attended a debate on this subject in the Bundestag. The hon. Gentleman would do better if he chose his targets with more precision. Much discussion took place in both the Bundestag and the federal German Bundesrat about the content of the intergovernmental conferences. Although our debates on this subject have attracted a flurry of interest, attendances at debates on the European Community are not noted for their large size.

Among the outstanding speeches made today, I have to mention that of my right hon. Friend the Leader of the Opposition. I hear from those who have not been imprisoned in the debate for a long time that the electronic media have reported well the exchanges that took place. The political reporters on all stations have paid tribute to the outstanding contribution made by my right hon. Friend, and the way in which he trumped the sporting aphorisms of the Prime Minister, used in the orchestrated triumph that we have had to live through in the past few weeks from a Government rocked on their heels by the assault from the Opposition today.

I start on the same note as the Prime Minister and my right hon. Friend—by recognising the historic nature of the events through which we are living. Last night—or was it the night before?—I was in the House of Commons Library when a number of hon. Members commented when the Ceefax screen put up the headline Soviet Union to end on 31st December. We can now believe that nothing is impossible in politics. Everything is changing rapidly and beyond all recognition.

That is why the Maastricht summit was always going to be important well beyond its paper agenda. It represented a unique western European opportunity to grab control at that supreme moment of time and to consolidate the structure of what is one of the few secure fixtures in this fast-changing continent that we inhabit. In many senses Maastricht did just that. Deepening the foundations of the Community represented a quantum leap forward in the integration and the internal strengthening of what is the most successful voluntary grouping of nation states.

What happened at Maastricht last week—and I am not passing judgment; hon. Members have expressed differing views today—was the start of the European common foreign and security policies, with their structures established in the treaty. There are to be powers of co-decision for the European Parliament. Although they were called negative assent procedures and now they are called article 189b procedures, the fact is that there has been agreement on areas where the European Parliament will share with the Council of Ministers the power to make legislation. They will have a veto that will allow them to complement, but not to rival, any of the powers that exist in this national Parliament.

The principle of qualified majority voting has become the norm rather than the exception in decision making and in European law making. The scope of the Community's interest has now been extended, whether through the treaty or through intergovernmental co-operation, into home affairs, health, education, research and development, trans-European transport and communication networks, industry and even culture.

The principle of creating a European Community defence arm has been conceded and is included in the treaty. Given the nature of the reply that the Minister gave earlier to one of his hon. Friends, it is worth reminding the House of precisely what the treaty says about defence. The Government moved dramatically from their previous negotiating position. The treaty says in the declaration on page 114: WEU will be developed as the defence component of the European Union and as the means to strengthen the European pillar of the Atlantic Alliance. To this end, it will formulate common European defence policy". In article A3, it states: The objective is to build up WEU in stages as the defence component of the European Union. To this end, WEU is prepared, at the request of the European Union, to elaborate and implement decisions and actions of the Union which have defence implementations. All that was agreed to and signed by the Government in Maastricht last week. However, all that happened despite the Government. All that was signed up, yet every one of those items was opposed by the Government. Their role in Maastricht was only in obstruction, in an attempted dilution and in a vague and futile effort to stop it all.

Mr. Garel-Jones

The hon. Gentleman has been fair up to now in what he has said. Surely he will recall that it was my right hon. Friend the Foreign Secretary who, more than a year ago, first proposed that the WEU should be developed into a European defence personality. He will also recall, because I know that he wants to be fair in these matters, the paper that was produced by the United Kingdom and Italy. The wording in that paper is what is reflected in the final treaty.

Mr. Robertson

If the Minister looks back slightly more than two weeks, he will find that the Government set themselves firmly against the idea of the European Community having a separate defence identity. The Government moved through the Anglo-Italian proposals and edged their way, crab-like, towards what came out of it, but, as with all these other areas, it represented a retreat.

I offer one example of many that I could give the House. No doubt my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) will give more tomorrow. The Foreign Secretary said on 6 December last year: We are not persuaded by the case…for adding again to the legislative powers of the European Parliament."—[Official Report, 6 December 1990; Vol. 182, c. 483.] That is not what the Government signed up to in Maastricht last week.

There has been a comprehensive series of cave-ins. And what was obtained in return for all the concessions made as grudgingly as possible by the British Government? The two words "federal vocation" were surgically removed from the treaty and replaced by the words "ever closer union". In addition, the Government got the two opt-outs —on the central, pivotal issues of monetary union and on the social provisions in the draft treaty. Some triumph for the Government; some negotiation breakthrough; some game, some set, some match.

No wonder the Frankfurter Allgemeine Zeitung, one of the principal conservative newspapers in Germany, described the Prime Minister as the winner of empty victories". No wonder Mr.Ian Davidson, the distinguished correspondent of the Financial Times, probably the most influential newspaper in Europe today, described Maastricht as a hollow victory for the Prime Minister". From the point of view of the British people and of those of us who put their interests above the convenience of the unity of any party, the saddest aspect of the isolation of our Government last week was not just the pig-headedness on display or the defensive and negative posture that they always seem to strike but their inherent dishonesty. At the very core of the Government's attitude to the negotiations is a fundamental and deliberate deception. On economic and monetary union the Government have no intention of exercising the opt-out clause about which they make so much noise. They may still resist saying that they accept the principle of the single currency. They may still avoid telling the people of this country of any advantage that there might be in being part of the single currency regime. They may go on pretending that the calculation on whether to go into the third stage of EMU is exactly equally balanced, with no real penalties involved in staying out while everyone else is in.

The policy is based not on an economy of the truth but on a complete absence of truth. That is an accusation of some seriousness, but it is necessary to make it and I make it neither lightly nor alone. The right hon. Member for Chingford (Mr. Tebbit) made the same accusation earlier this evening.

The Government know—the Minister knows—that Britain must he in if everyone else is in: that we cannot possibly afford to be outside an economic and monetary union with the other 11 inside it, while it is driven in every detail of policy by those who have fully signed up to it. It is just that the Government cannot admit this. They will not admit it; they dare not admit it, lest they offend or alert some dissident elements on the Benches behind them—and we have heard several of their voices this evening.

The Government are frightened; they are running away from this admission. They hide behind the right of Parliament to make the final decision. But the Prime Minister announced in the debate last month that the final decision on the ratification of the treaty—the European Communities (Amendment) Bill that will be necessary to enact the treaty of Maastricht—will come in the new Parliament, after the election, so Parliament will have a decision to make even then. There is no real question about the Government needing to hide behind the figleaf of a parliamentary vote because we know that that is not the reason. However, some members of the Conservative party have the honesty to say things outright. In the European Parliament last week, Sir Christopher Prout, the leader of the Conservative MEPs, said: I do not believe that my country will wish to remain outside this arrangement when the moment for decision comes".

Mr. Garel-Jones

I am interested to hear the hon. Gentleman describe this House as a "figleaf". Not today but in our previous debate, my right hon. Friend the Prime Minister said to the House that, if the conditions were met, a single currency could bring advantages to this country, but if those conditions were met, political sacrifices would need to be made. If that situation arose, the House would have the right to consider whether it wished, in the balance of advantages, to make those political sacrifices. Is the hon. Gentleman telling us that the Labour party is prepared to commit itself now to a single currency and to say that it is not prepared to give this House the political choice that it should have?

Mr. Robertson

I did not say that the House was a figleaf; I said that the Government's hiding behind the right of the House to make a decision was a figleaf. That is not in question. The House will make its decision in the new Parliament. When the Government have the courage and the guts to ask the people to choose a new Government, this Parliament will make its decision. We are not scared of Parliament making a decision. Parliament must and does have the right to make such decisions. We are clear—as are all other 11 countries—about where we intend to be—and that is in the first division of Europe. We intend to be among the top countries in Europe. In exchanges earlier this afternoon, the Chancellor of the Exchequer was unable to answer the question that my right hon. Friend the Leader of the Opposition asked him time after time. In every living room in the country, people saw that exchange and saw that the Chancellor was unable to answer the question: if our country satisfied the convergence conditions, under what circumstances would he recommend that we should be outside?

As I have said, other people are more honest. In the European Parliament, Conservatives were willing to speak out last week. Sir Christopher Prout is not an obscure Back-Bench MEP; he is the leader of that fighting force of Euro-Tories who want to join up with the European People's party, the federalist organisation in the European Parliament. That group of Euro-Tories carry the Conservative party's limited flag in that Parliament. In last week's debate, Mr. Ben Patterson said: One of the areas of light is clearly the economic and monetary union decision. Indeed, the most important decision taken at Maastricht was that there will be a single currency for Europe by the end of the century. This is an objective which the European Democratic Group—which is 99 per cent. made up of British Conservatives—has supported from the very start. All the Prime Minister's praise last week, meticulously orchestrated from the boardrooms to the editorial floors, was predicated on exploding the Prime Minister's explicit view that we can still make that choice, without penalties.

Mr. Ashdown

I have been listening carefully to the hon. Gentleman and agree with most of what he is saying, but surely the point that was not raised when his right hon. Friend the Leader of the Opposition was speaking was that there is nothing in the treaty as it stands, without the opt-out clauses, to insist that Britain will eventually join a monetary union if the convergence conditions were met. Even if we were a nation that conformed to those convergence conditions, the Government could still choose not to join. In other words, the opt-out clauses for which they argued so much are completely unnecessary as that provision already exists, but they place a real question mark against this country's good faith and against the certainty that will be necessary in future. Surely that is the point.

Mr. Robertson

That is absolutely true, and it illustrates the fact that the opt-out clause exists for the purpose of patching up Conservative unity rather than doing anything for the country.

Last Friday, 23 leading bankers and industrialists—including the right hon. Member for Ayr (Mr. Younger), who is the chairman of a bank as well as, temporarily, a Tory Member of Parliament—signed a letter to The Times. Those distinguished people, who wrote to support the Prime Minister's view, made their feelings clear. They said: The City of London, as Europe's leading financial centre, contributed over £14 billion last year to the United Kingdom's invisible earnings. The idea that the City can enjoy separate laws and regulations outside, or only partially inside, Europe and still maintain its pre-eminence is untenable. In that letter, the Government's friends were telling them that their position, and the current prospect, were entirely untenable.

No wonder the Chancellor of the Exchequer was exposed this afternoon as he sat mumbling, unable to answer the question put to him by my right hon. Friend the Leader of the Opposition. Time and again, the same case has been made by people who ostensibly support the Government; as it has done before, the Conservative party has shamelessly puts its interests before those of the British people.

Then there is the social dimension. Here we see another deception—another contrived pitched battle, designed not to make a point or to protect Britain's national interest but to serve as another figleaf to cover the splits. Today, someone handed me a document that had been found in one of the well-known Westminster photocopiers. It is headed: From: Lawrence Vince, Sir Teddy Taylor's Office. To Members and correspondents of the Conservative European Reform Group. The hon. Member for Southend, East (Sir T. Taylor) has a long history of voting against the Government in every European debate since 1973. If, as he says, he is going to reverse that tomorrow night, it will be an historic moment. All Conservative briefings must, it seems, be phrased in the form of questions and answers. The document asks: What about the Social Chapter? The answer is: Again from a constitutional standpoint, this is a major point. We have never before had a situation when one member state has opted out of a common policy. The 'two tier' principle or twin track principle has been established. No wonder the hon. Member for Southend, East was given a knighthood. He has hit the nail on the head. We shall be on the twin track, in the second division and moving at a slow speed.

Britain alone opposed the social chapter in the treaty. Britain alone opposed even the diluted compromise that was offered on Tuesday morning by the Dutch President. Britain is isolated and alone, with 11 out of 12 Governments and 12 out of 12 Oppositions taking the opposite view.

Among all 12 Community nations and all seven EFTA members, John Major and Jean-Marie Le Pen of the French national front stand alone, opposed to the concept and practice of providing for basic minimum rights for employees in the new single European market. That is some company for the right hon. Gentleman. As I intended to say this afternoon, I have found a new companion: in the whole of Europe, we have John Major and Jean-Marie Le Pen, but we also have the right hon. Member for Yeovil (Mr. Ashdown). Remarkably, he is in the same company.

I was glad to receive some support earlier; praise sometimes makes people uncomfortable, as I found when the hon. Member for Derbyshire, South (Mrs. Currie) praised me in our earlier debate. My right hon. Friend the Member for Gorton, the shadow Foreign Secretary, almost sacked me on the spot. In an interview with Brian Walden, the right hon. Member for Yeovil said the social chapter in the Maastricht agreement it seems to me is a really worrying attempt by Europe to try and rebuild in Britain the things that we have dismantled over the last twelve or fifteen years. That was a fascinating interview. Apart from that small treasure—which gives Mr. Le Pen and the Prime Minister some company—there was a remarkable interchange between the right hon. Gentleman and Mr. Walden, which I think that I should share with the House. I crave your indulgence, Mr. Deputy Speaker, because I wish to read it out to you. A breach of parliamentary protocol is involved, but I must read the script as it stands. The passage reads: Paddy Ashdown: Look, you describe it … Brian Walden… between nation states… Paddy Ashdown…you describe it to me then. Brian Walden:…but the… Paddy Ashdown: Describe the Britain to me that you think could be prosperous safe and secure if the other 11 go ahead and we're outside, describe it to me. Brian Walden: Don't, you tell me why it's wrong. Paddy Ashdown: No come on Brian I've said to you… Brian Walden: No come on, now I'm asking the questions and you're answering. Paddy Ashdown: Ah, you don't, you don't like it when I turn it on you. But that's the whole question… Brian Walden: I don't mind it, but I… Paddy Ashdown: But, but, but, that's … Brian Walden:… and if you want to interview me … Paddy Ashdown:… No, no no, I think … Brian Walden:…I'll certainly agree to that … Paddy Ashdown:… I think if you were to ask me questions … Brian Walden:…it seems a silly idea…. The document reads: This transcript is the property of London Weekend Television and Walden who must be credited if any part of it is used. I am glad to do so.

There are some amazing dissidents when it comes to the social charter, and even inside the Cabinet. There is not unity on the opt-out from the social charter or on the social charter. One of the great absentees from any of these debates—they range across the whole area of space—is the right hon. Member for Henley (Mr. Heseltine), the Secretary of State for the Environment. The right hon. Gentleman resigned from the Cabinet on Europe and crusaded through the country on Europe. He challenged the previous Prime Minister on Europe and after that he became a member of the Cabinet. Since then we have not seen hide nor hair of him on Europe, and small surprise that is.

In an article in the Daily Mail in November of 1989, the right hon. Member for Henley, who is now the Secretary of State for the Environment, was quoted as saying that the growing success of European companies will gradually enable them to buy up more and more of our industries, and their social charter will come here—not because the British Government wanted it but because our companies were not strong enough to resist it. I would rather be at the conference table, setting the terms, than at the receiving end of a process others had designed. When did the big Cabinet argument take place that led to the position that the Government took at Maastricht last week? If the right hon. Member for Henley still holds the views that I have quoted, it must have been a fairly colourful demonstration of debating styles that took place in the Cabinet. Or has the right hon. Gentleman been forced to change his mind as other Cabinet members were over the poll tax? Deep inside the Cabinet and the Conservative party there are these divisions.

Mr. Tebbit

Will the hon. Gentleman give way?

Mr. Robertson

I regret that the right hon. Gentleman has come in, as it were, only at this stage in my speech. Only one or two minutes are left to me to reply on behalf of the Opposition. I resist the temptation and forgo the pleasure that I would derive from crossing swords with him.

Mr. Tebbit

I want only to help the hon. Gentleman.

Mr. Robertson

I am sure that the right hon. Gentleman wants to help. I bet that he can help me, but he cannot help his right hon. and hon. Friends on the Government Front Bench.

The reality is that the opt-out on the social charter means that we shall be locked out from influence, from decisions, from the moulding of policies and from institutions that will yet determine the future of our country. The Maastricht summit was a rare opportunity for Britain to make a positive contribution to momentous discussions. We had a new or newish Prime Minister, who came to power on the ruins of a Prime Minister who failed to read the British people' thinking on Europe. It is sad that the right hon. Gentleman has fallen into some of the traps of the right hon. Member for Finchley (Mrs. Thatcher). Instead of ideas we had bluster. Instead of initiatives we had threats of vetoes. In the place of constructive dialogue we had obstruction. The saddest feature of the "tennis match", as the Prime Minister trivialisingly called the occasion, was the sheer lack of ambition for Britain that the Government displayed.

We have no need of empty seats and opt-outs to make Britain's impression on fast-flowing events in Europe that will affect us all. When the Prime Minister stops talking, lecturing and preaching about democracy and the will of the British people and their Parliament and gives the people a chance to choose a new Government, we shall grasp the chance to lead this country in Europe because we are ambitious for Britain in Europe.

1.29 am
The Minister of State, Foreign and Commonwealth Office (Mr. Tristan Garel-Jones)

Few spectacles are less attractive than the House in self-congratulatory mood. Nevertheless, it is right to say that we have had a good debate. About 40 Back Benchers have spoken and substantially more will speak tomorrow.

To deal with the point that the hon. Member for Hamilton (Mr. Robertson) has just made, I do not think that my right hon. Friend the Prime Minister was saying other than what he and many other Conservative Members have said—that these matters are debated not only in the House but in the press and among the general public in a way which goes much wider and deeper and generates much greater passion than in other Community countries.

Mr. Enright


Mr. Garel-Jones

Will the hon. Member allow me to continue?

That point is made not only by my right hon. Friend the Prime Minister; European partners frequently comment on the standards of debate in the House. I think that that is right. I was particularly pleased that my hon. Friend the Member for Hertford and Stortford (Mr. Wells) noted the declarations at the end of the treaty, which refer to the House's further involvement in the workings and institutions of the Community and the exhortation—it can be no more than that—to other Parliaments in the Community to emulate the scrutiny of the Danish Parliament and of this Parliament and the Select Committee on European Legislation under the chairmanship of the hon. Member for Newham, South (Mr. Spearing).

We need not apologise, either as a Government or as a party, for the attention that we have given to the opinions of hon. Members, because it is to the House that the Government must give the results of the Maastricht treaty and it is in the House that the legislation giving effect to the treaty will be considered. The House remains the cornerstone of our democracy.

I was particularly pleased that the hon. Member for Linlithgow (Mr. Dalyell) spoke because these debates are read and followed in the Community with some fascination. I hope that the hon. Gentleman will forgive me if I do not reply to the legal points that he made about Libya and the terrorist atrocity at Lockerbie. He pointed out that there is a declaration on the matter in the treaty, so his comments were perfectly in order. He rides a high hobby horse and has the respect of hon. Members for doing so. He made the startling admission that he was not prepared to refer my right hon. Friend the Member for Finchley (Mrs. Thatcher) to Colonel Gaddafi's courts for trial, so his attitude is obviously softening.

Mr. Dalyell

Having exercised that restraint, and as the learned Attorney-General is present, may I ask for an official statement to be made soon on the legal basis for the request for extradition, because if military action is not ruled out it is terribly important?

Mr. Garel-Jones

I assure the hon. Gentleman that he will receive a reply on that point.

My hon. Friends the Members for Carshalton and Wallington (Mr. Forman), for East Lindsey (Sir P.Tapsell), for Thanet, South (Mr. Aitken) and for Hertford and Stortford and my right hon. Friends the Members for Selby (Mr. Alison) and for Chingford (Mr. Tebbit) referred to intergovernmental co-operation.

It is worth saying that the first stone, as it were, of intergovernmental co-operation was laid in the Single European Act by my right hon. Friend the Member for Finchley. I was especially pleased that in her remarks to the House on 20 November she should have taken credit for it. She said that the important thing to remember was that that agreement was never made a part of the treaty of Rome-and quite rightly not. She reminded the House: There are two ways to go—the treaty of Rome, with the European Court's interpretation of it, which is quite different from ours, or an intergovernmental agreement which is binding upon us but which does not have to enter into our law and is not part of the treaty of Rome."—[Official Report. 20 November 1991; Vol.199, c. 293.] What has attracted a number of my hon. Friends to the success that the Prime Minister has had is the way in which he has built on that aspect of intergovernmental co-operation.

I think that many hon. Members are about the same age as me—I am just 50. I was 16 years old when the British and French Governments went into Suez. Hon. Members will recall that there was a passionate debate in this country at the time about whether that was a wise thing for our Government to do. For a 16-year-old boy, that debate was not of great consequence. I simply supported the British troops in Suez and I remember feeling rather disappointed and let down when it began to dawn on me that we had not won in the traditional sense of the word. I also remember a growing feeling of anger as I became aware that one of the reasons why we had not won in the traditional sense was that someone had picked up a telephone and told us to go home. For me, and for many others at that time, that was something of a turning point in the political history of this country.

My right hon. Friend the Member for Shoreham (Sir R. Luce) and. I think, my hon. Friend the Member for Norwich, North (Mr. Thompson) referred to the remark made by Dean Acheson that Britain had lost an empire and failed to find a role. For me, that circle was closed this very year when my right hon. Friend the Prime Minister arrived at the European Council with his proposal for safe havens for Kurds. The proposal was approved by the Council and we could claim within a week to have picked up an important international issue, to have influenced the policy of the United States of America and of the United Nations and, through our membership of the Community, to have shaped an international event. That is the reason why my right hon. Friend the Member for Finchley was right to claim credit for having laid the first foundation stone of what will shortly be the common foreign and security policy, now known as European political co-operation.

My right hon. Friend the Prime Minister has achieved what is called the pillared structure of the European union. I shall deal first with that structure, beginning with the common foreign and security policy. It remains outside the competence of the Community. All decisions on key issues within that policy will be taken by consensus. There is an explicit recognition—and this was raised by my right hon. Friend the Member for Chingford—of the United Kingdom's responsibilities as a member of the United Nations Security Council under paragraph 4 of article E.

On defence, my right hon. Friend the Prime Minister and many of us realised—beginning with a speech made about 18 months ago by my right hon. Friend the Foreign Secretary—that the changes in the world in the past two to two and a half years meant that not only the United Kingdom but all our allies and NATO itself had to reconsider strategic and defence postures. It was the Secretary of State for Foreign and Commonwealth Affairs who first proposed that it should be the Western European Union that formed the nucleus of the developing European defence personality built on the Western European Union. Of course, the WEU must remain autonomous, and the European defence dimension must not be under the aegis of the European Council. That European pillar must reinforce and complement the cornerstone of our defence, which must remain NATO.

Mr. Tebbit

I have read carefully paragraph 4 of article E, in page 110, and it does not seem to say clearly that it overrides the Declaration of the Conference at the foot of page 106, at the end of article C. Is my hon. Friend the Minister telling me that that declaration has no applicability to the United Nations? Or is he saying that it has no applicability to the Security Council? I find it difficult to read either of those interpretations into paragraph 4 of article E.

Mr. Garel-Jones

Paragraph 4 of article E refers to Member States which are also members of the United Nations Security Council —that is, to France and Britain. As my right hon. Friend has correctly seen, it ends with the following words: without prejudice to their responsibilities under the provisions of the United Nations Charter. I think that that is sufficiently clear.

Mr. Tebbit


Mr. Garel-Jones

I hope that my right hon. Friend will forgive me, but I am not giving way to him.

Mr. Tebbit

I have misinformed my hon. Friend by saying——

Mr. Garel-Jones


Mr. Tebbit

The passage was actually at the foot of page——

Mr. Deputy Speaker (Sir Paul Dean)


Mr. Garel-Jones

My right hon. Friend has addressed the House at considerable length, and also intervened in the speech of one of my hon. Friends to explain why he voted for the Single European Act. As I hope to answer as many as 40 hon. Members who have taken part in the debate, I hope that he will forgive me if I continue.

The other pillar of intergovernmental co-operation is the inferior and justice pillar, to which my hon. Friend the Member for Lewes (Mr. Rathbone) referred. The House and the country are aware that many of the problems that we face—such as crime, drugs and terrorism—call for transnational solutions. European co-operation in that area is right, and is widely supported on both sides of the House.

Those aspects of intergovernmental co-operation have been well received—certainly by Conservative Members. Many of my hon. Friends see it as a way forward for co-operation within the European union.

I must refer, too, to the treaty of Rome and the Community proper—in particular to the enforcement of the rule of law. The House and the country can take some pride in the fact that our record in enforcement and compliance has been described by the European Court of Justice as exemplary. Alas, the record of many of our Community partners is not, perhaps, as exemplary as our own. The action taken by the Government under article 171 of the new treaty, which enables the European Court to fine non-compliant nations, will be not only a good thing in itself but will ensure that many such nations are rather more careful in future before undertaking obligations—as we have to be.

Mr. Robertson

I have heard the Minister's script about the United Kingdom's exemplary record before. However, the latest Commission report, published in the past few weeks, says that the United Kingdom is now in third position in terms of overall compliance. For directives applicable to the customs union, Britain is in eighth place —only Greece, Spain, Italy and Belgium are worse than us. For directives applicable to the environment, the United Kingdom is in seventh place—only Greece, Italy, Ireland, Belgium and Luxembourg are worse.

Mr. Garel-Jones

The hon. Gentleman refers there to implementation, and not to compliance. It is true that generally Denmark is a bit ahead of us, but that we are normally in the first three in terms of implementation. Implementation is not the most important point, important though it is. Compliance with the European Court of Justice is the most important point. We have only one European Court of Justice decision uncomplied with; one member state has 38.

Other areas in which the United Kingdom has taken initiatives within the treaty of Rome, an area to which the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) referred, is in improving the institutional arrangements of

the Community on fraud, on financial accountability, on rights of inquiry and on setting up a European ombudsman.

In the area of legislative powers, the House will be aware that the original and more ambitious proposals from the Federal Republic of Germany and the European Parliament were for what was called co-decision, which sought to give to the European Parliament an equal status with the Council of Ministers. That was not acceptable to us or to some other member states. We have ended up with what is called the "negative assent" article 189b procedure, which has been well received by Conservative Members and by many Opposition Members.

Subsidiarity, which has been mentioned by a number of hon. Members, was principally pressed by the United Kingdom and by the Federal Republic. The subsidiarity text appears under article 3b of the treaty and is also referred to in a further two articles, articles A and B, in what is called the chapeau of the treaty. My hon. Friends the Members for Carshalton and Wallington and for Hampshire, North-West (Sir D. Mitchell) and the hon. Member for Caernarfon (Mr. Wigley) laid particular stress on subsidiarity.

It will not surprise hon. Members when I say that subsidiarity will not be a catch-all which will resolve all the problems that we see of the Community seeking to exceed its competence and seeking to extend its activities into what my right hon. Friend the Foreign Secretary has called every nook and cranny. Nevertheless, a strongly worded article on subsidiarity such as we now have will certainly be taken into account by the European Court in any decisions that it makes, and it will begin to shore up the principle of subsidiarity to which the House rightly attaches considerable importance.

Mr. Spearing

I raised this matter directly with the Prime Minister in his opening speech this afternoon. I pointed out that the wording in the treaty is: In the areas which do not fall within its exclusive jurisdiction, the Community shall take action, in accordance with the principle of subsidiarity. The article goes on to give two tests, which are a little difficult to understand. Can the Minister give us a quick definition of "exclusive jurisdiction", which I should have thought was a pretty wide term, or does he have to leave the definition to the European Court? Will he tell us now or later what it all means?

Mr. Garet-Jones

The hon. Gentleman should look at the last sentence of article 3b. He has rightly focused his attention on the main body of the text in the second paragraph. The last paragraph says: Any action by the Community shall not go beyond what is necessary to achieve the objectives of this Treaty. That is a catch-all which answers the hon. Gentleman's point.

Mr. Wigley

The Minister rightly referred to the fact that the Federal Republic of Germany, as well as Britain, laid a lot of emphasis on subsidiarity. Will he confirm that the Federal Republic sees subsidiarity as going considerably further than just the relationship between the so-called "national" Governments and the EC government, and as taking in the Lander level and other levels? Will the United Kingdom apply the same approach?

Mr. Garel-Jones

No, because the Federal Republic of Germany, as its name indicates, is a federal state. We are not a federal state and our reasons for supporting subsidiarity may be different from those of the Federal Republic of Germany.

Mr. Harry Barnes

Will the Minister give way?

Mr. Garel-Jones

No, I want to make more progress.

My right hon.Friend the Member for Chingford, my hon. Friends the Members for East Lindsey, for Chichester (Mr. Nelson), for Southend, East (Sir T. Taylor) and for Hertford and Stortford and the right hon. Members for Bethnal Green and Stepney (Mr. Shore) and for Ashton-under-Lyne referred to economic and monetary union and to stages 2 and 3 of that process. I will not try to answer all their points in detail because my right hon. Friend the Chancellor of the Exchequer will reply to the debate tomorrow and will no doubt wish to pick up many of those points.

However, it is not the case, as the hon. Member for Edinburgh, Central (Mr. Darling) pointed out, that the United Kingdom will not be participating in those decisions. We have participated in the negotiations on the treaty and in the chapter referring to stage 3. As my right hon. Friend the Member for Finchley originally explained, we are not prepared to accept an imposed single currency in this country.

My right hon. Friend the Prime Minister has negotiated strict convergence criteria. If they are met—and they may not be—my right hon. Friend the Prime Minister made it absolutely clear to the House that some benefits could flow from a single currency. However, if we were to go down that route, substantial political sacrifices would have to be made, not least by this House. Therefore, it is right that this House should be given the final decision if and when that stage is reached.

Mr. Darling

I am sure that the Minister will accept that it is common ground that every country in the Community will be able to decide whether to move to the third stage and proceed thereafter. Does not the Minister accept that paragraphs 1,7 and 10 of the protocol, which this country signed, were clearly designed to flag up the fact that the United Kingdom was setting itself apart from the other EC members simply to placate Conservative Back Benchers, possibly including the right hon. Member for Chingford (Mr. Tebbit)? Because of that, Britain's commitment will not be taken seriously and that is a very serious point.

Mr. Garel-Jones

That is not the case.

Mr. Ashdown

If, as the Minister claims, the hon. Member for Edinburgh, Central (Mr. Darling) is not correct, perhaps the Minister will consider the following point. Let us imagine a position in which at one or other of the two prescribed dates a sufficient number of countries voted for a single currency to go ahead because a sufficient number had reached the terms of convergence, and let us suppose that Britain had reached the terms of convergence but did not vote to go ahead. Would there then be any compulsion on this country to join a single currency? If not, what on earth is the opt-out for?

Mr. Garel-Jones

In the circumstances that the right hon. Gentleman describes, of course there is no compulsion on this country.

I do not wish to be quite so partisan as the hon. Member for Hamilton, but I think that I should refer to Labour's attitude to these matters, not least because many Labour Members have spoken in the debate. Most fair-minded observers would agree that the Labour party has steered what might charitably be called a wayward course in respect of this matter over the past 10 years. We heard public confessions from the hon. Members for Newham, North-West (Mr. Banks) and for Birmingham, Ladywood (Ms. Short) that they have finally seen the light.

Perhaps the most interesting speech was that made by the right hon. Member for Leeds, East (Mr. Healey). He said that everyone had a short memory, but I do not think that the memories of Conservative Members are that short. We well remember the right hon. Gentleman's last intervention on a foreign policy matter when he described the likely outcome of events in the Gulf war. I do not think that he did himself or his party any credit with that speech. The right hon. Gentleman—I told him that I intended to refer to him—is a good example of a good mind serving a bad cause for a very long time. The Labour party's record, not just on Community matters but in general, is that it has been wrong about almost every issue relating to foreign policy and defence, certainly throughout my political lifetime.

I am bound to say—this point was made by my hon. Friend the Member for Crawley (Mr. Soames)—that I very much hope that, for the country's sake at least, this latest change in policy is the last that we shall see. However, there is one partisan point that I am entitled to make, and I can put it very simply and in the way that members of the British public would put it. My political point is this: Hurd-Kaufman, Kinnock-Major. That point is understood on both sides of the House.

My right hon. Friend the Foreign and Commonwealth Secretary is listened to with respect not only in the House but in the country and in the Community. The House will judge whether the right hon. Member for Manchester, Gorton (Mr. Kaufman), with his customary sheaf of press cuttings in his hand, is the kind of person who will be listened to and command respect in the chancellories of Europe.

I have spent 18 months doing little other than Community business. I cannot claim to know the treaty and its provisions as well as some of my officials do, but at least I am moderately familiar with it. When I take part in European councils, I am surrounded by well-briefed officials who give me every piece of advice that I can possibly need. European councils do not work like that. My right hon. Friend the Prime Minister, accompanied by my right hon. Friend the Foreign Secretary, and sometimes alone, has to sit alone and negotiate alone. To do that, he not only has to command the respect of colleagues—he must also command a very complicated brief.

Mr. Enright

Will the Minister give way?

Mr. Garel-Jones

I will not give way at the moment.

Again, the House and the country will have to judge whether the right hon. Member for Islwyn (Mr. Kinnock), who is noted in the House for his attention to detail and for his choice of and enthusiam for the use of words, would be able to serve the interests of Britain with the same skill and authority as my right hon. Friend the Prime Minister.

My right hon. Friend the Prime Minister said that the union treaty is a challenge as well as an opportunity. However, he rightly warned the House that the argument about the future and whether we are to have a united states of Europe—what we would call federalism, which the hon. Member for Foyle (Mr. Hume) and my hon. Friends the Members for Harrow, East (Mr. Dykes) and for Clwyd, North-West (Sir A. Meyer) support—or whether we are to proceed with a Europe based on intergovernmental co-operation as well as co-operation within the treaty of Rome is not yet settled. We have to win that debate.

I was particularly pleased to hear the speeches of my hon. Friends the Members Thanet, South and for Southend, East. If we are to win the debate, we need the support not just of my hon. Friends who have always been committed to the Community but of hon. Friends such as my hon. Friends the Members for Thanet, South and for Southend, East and, I hope, my right hon. Friend the Member for Chingford too, who are sceptical about the Community. They need to join us in making those intergovernmental pillars work and in making sure that the sort of Europe that we build is not only based on a single structure through the treaty of Rome but enables the Community to develop through intergovernmental co-operation in foreign policy, defence and interior justice to which Conservative Members attach such great importance. Part of the great achievement of my right hon. Friend the Prime Minister is that he has kept the debate open and laid the foundations for us to move forward together and win it.

Like every hon. Member here, I am intensely proud to be a Member of the House, but I am not so proud as to believe that the House is without fault and cannot learn things from our European partners. Nor am I so faint-hearted as to believe that if the House, and especially the Conservative party, unites behind the vision of Europe that my right hon. Friend the Prime Minister has made possible through the negotiations at Maastricht, we cannot win the debate and provide a European union that will enable us to develop under a common European roof with respect for all our traditions and the democratic basis on which we run the House of Commons.

It being Two o'clock, the debate stood adjourned, pursuant to Order [13 December].

Debate to be resumed this day.

Mr. Dalyell

On a point of order, Mr. Deputy Speaker. The Attorney-General has most courteously attended this debate late at night. Before he goes, I wish to make a perfectly serious House of Commons point.

I was lucky enough to be called before half-past six. I would not dream of suggesting that Foreign Office lawyers should he pulled out of their beds at this time of the night. However, with respect to the Minister, when a Member of Parliament is fortunate enough to be called by Mr. Speaker at a reasonable hour and asks for a reply on specific legal questions some reply should be forthcoming. My questions about Libya cannot have been exactly unexpected by the Government.

In the hearing of the Attorney-General, I ask for some statement tomorrow on the matter that I raised. If military action is not ruled out, for heaven's sake we must know the legal basis of what we are up to in asking that alleged criminals be extradited from a country with which we have no diplomatic relations.

Mr. Deputy Speaker

That is not a matter for the Chair, but I am sure that what the hon. Gentleman has said will have been heard.